Trump Picks FERC Official With Potential Conflicts Of Interest

By choosing a longtime corporate attorney to head the nation’s top energy regulatory agency, President Donald Trump stuck to his practice of nominating officials riddled with potential conflicts of interest to high-ranking roles in the U.S. government.

As a partner with Jones Day, a prominent Washington, D.C. law firm, Kevin McIntyre’s ties to energy companies that fall under the Federal Energy Regulatory Commission’s (FERC) jurisdiction were so numerous and ran so deep that his swearing-in as chairman of the agency was delayed to give him more time to sever the relationships.

After his first meeting as chairman on December 21, McIntyre explained to reporters that unlike most commissioners, he worked in private practice for almost 30 years representing companies that are regulated by FERC. Unwinding all of the obligations to his clients and business relationships was a slow process. “Each of them took some time and had to be done with care and done properly to my responsibilities,” he said, according to S&P Global News.

Last summer, McIntyre, who joined Jones Day in 1999, submitted his financial disclosure form to the Office of Government Ethics, showing that in the previous two years he had represented a wide variety of energy and utility companies — from electric utility giant American Electric Power Corp. (AEP) to natural gas company Enable Midstream Partners LP — that had cases under consideration by the agency he now heads, DeSmog Blog reported.

Subsidiaries of AEP, for example, have been accused of generating profits that exceed the rates allowed by FERC. Another subsidiary of AEP has filed a complaint with the agency accusing an electric grid operator of unfair treatment. Unless the parties in the disputes reach settlement agreements, the cases would need to be decided by McIntyre and his colleagues on the five-member agency. The agency is composed of three Republicans, including McIntyre, and two Democrats.

It’s already a familiar pattern just one year into the Trump presidency. Trump has filled top positions at other federal agencies with corporate lawyers and lobbyists who are now supposed to regulate the interests on behalf of which they recently lobbied. In July, the Senate voted to confirm industry lobbyist David Bernhardt to the No. 2 position at the Department of the Interior. Bernhardt is a “walking conflict of interest,” said Aaron Weiss, spokesman for the Center for Western Priorities, a nonprofit conservation group.

William Wehrum, an industry lawyer and lobbyist, has represented companies who regularly filed legal challenges to the Environmental Protection Agency’s clean air regulations. In November, the Senate confirmed Wehrum to head EPA’s Office of Air and Radiation. EPA Administrator Scott Pruitt also hired chemical industry representatives to fill top positions at the agency, including Nancy Beck, who came to the agency from the American Chemistry Council, the industry’s leading lobbying group.

McIntyre’s path from Jones Day to FERC marks the first time in almost 30 years that a nominee has gone directly from representing energy companies to leading the agency that regulates those clients. In 1989, President George H.W. Bush nominated Martin Allday, who represented oil and gas companies at the law firm of Lynch, Chappell, Allday and Alsup in Midland, Texas, to head the agency.

Even though he resigned his position at Jones Day, McIntyre still is bound by legal ethics rules as a member of the D.C. Bar. “He has a duty not to reveal or use client confidences or secrets to the disadvantage of the client, or to the advantage of himself or a third person — which would include the agency he is leading — and that duty continues even after the lawyer-client relationship ends,” David Luban, a professor of law at Georgetown University who specializes in professional ethics, told ThinkProgress.

“In other words, he can’t use information he’s learned from or about Jones Day clients either to disadvantage them or to help the agency,” Luban said. “The rules are worded differently in other jurisdictions, but basically the duties are the same for lawyers everywhere.”

As a public official, McIntyre is also bound by federal conflict-of-interest laws and anti-corruption laws, which means he cannot do favors for his former clients or other Jones Day clients, Luban added.

During his legal career, McIntyre has focused on energy compliance and enforcement matters, energy marketing and trading, energy exports, electric reliability standards, and utility mergers and acquisitions, Jones Day said in a news release issued after the Senate confirmed his nomination to chair the commission.

“Flying below the radar … has been a function of what my role has been in private practice where typically I and my law firm colleagues were retained not to land our client in the headlines, but in most instances just to serve as a forceful advocate and — I hope — an effective one,” McIntyre said in a podcast posted on FERC’s website last month.

McIntyre pledged in an ethics letter that he would not “participate personally and substantially in any particular manner involving specific parties” with ties to Jones Day unless he first obtains a waiver from a FERC ethics official. McIntyre also stated he would not not participate in any cases that involve a former client, unless he receives prior authorization.

Financial disclosures and ethics agreements are mandatory for certain executive branch nominees, including FERC commissioners. McIntyre was among more than a dozen Jones Day lawyers who left the law firm to take various positions in the Trump administration, according to the National Law Journal. The Washington-based law firm represented Trump during the presidential campaign.

“Public officials are basically public fiduciaries. We put them in a position of trust to act on our behalf and always in our best interest,” Hana Callahan, director of government ethics at the Markkula Center for Applied Ethics at Santa Clara University in California, said in an interview. “As public fiduciaries, they have a duty of loyalty, which means they have to put the public’s interest before their own personal interest.”

A variety of outside organizations have been pushing for FERC to create an office that caters to the public interest. In 1978 Congress directed FERC to create the office, but it has yet to happen. In 2016, dozens of groups representing consumer advocates and environmental organizations filed a petition asking FERC to create an office of public participation.

David Pomerantz, executive director of the Energy and Policy Institute, said he has no reason to distrust the promises that  McIntyre made in his ethics letter or his general integrity. But Pomerantz believes McIntyre’s appointment follows a pattern at FERC where corporate attorneys and officials are getting picked to work in a position where they are expected to serve the public’s interest, not in the interest of their former clients or employers.

“If Commissioner McIntyre wants to demonstrate his independence from the companies he once represented, one concrete step he could take would be to finally fund a FERC Office of Consumer Advocate and Public Participation that represents the public,” he told ThinkProgress.

McIntyre joins a long list of Trump appointees with strong corporate ties. A large number of these appointees hold radical views, far more extreme than policy positions espoused by officials in previous presidencies — either Republican or Democratic. But there are a lot of unknowns about how McIntyre will manage FERC as he completes his first month on the job.

McIntyre is a longtime Republican donor. He and his wife — Jennifer Brosnahan, a former associate counsel to President George W. Bush who currently works as chief counsel of Boeing’s Washington Operations — gave money in 2016 to the presidential campaign of Sen. Marco Rubio (R-FL), E&E News reported. He also contributed money to Wisconsin Gov. Scott Walker’s short-lived campaign for president, and other political donations have gone to the Republican National Committee, Sens. Tom Cotton (R-AR), Pat Toomey (R-PA), and Rob Portman (R-OH), along with prior Republican presidential nominees Mitt Romney and John McCain, according to RTO Insider.

McIntyre was preceded by a placeholder chairman, Neil Chatterjee, who had close connections to congressional Republicans. During his brief tenure as agency chairman, Chatterjee fit the stereotype of a Trump appointee. He was described as “political,” both for his previous role as energy policy adviser to Senate Majority Leader Mitch McConnel (R-KY) and his willingness to promote Energy Secretary Rick Perry’s proposal to subsidize coal and nuclear power plants.

Like other Trump appointees, Chatterjee has shown a willingness to confront members of the public with whom he disagrees. During his time as chairman, Chatterjee criticized actor James Cromwell, a longtime environmental activist, in personal Facebook posts that critics described as unusual behavior for the nation’s head energy regulator, Utility Dive noted.

The third Republican on the commission, Robert Powelson, served as a leading advocate for Pennsylvania’s natural gas industry in his prior role as a commissioner on the state Public Utility Commission. Powelson has not been shy about his support for gas production, or his antipathy toward environmentalists, the Energy and Policy Institute, an industry watchdog group, wrote in a profile of Powelson. Speaking in March at a gas industry conference, Powelson said environmental advocates were on a “jihad” to keep natural gas from reaching markets.

Unlike other top Trump appointees, McIntyre’s arrival at FERC generated positive buzz from both industry and some environmental groups. Observers pointed out that McIntyre’s affable manner stood in contrast to the abrasive demeanor of Trump and many of his acolytes in Washington.

“If there are two things that can be said of President Trump’s appointees, it is that that they are often ill-qualified for the positions that they are given, and that they attract opposition due to extreme and obvious political views,” PV Magazine, a publication that covers the solar industry, reported last summer. “Kevin McIntyre is an exception to both of these.”

The magazine noted that McIntyre has worked on a number of cases before the agency, including those involving approval of gas pipelines and mergers and acquisitions. “And while he is a member of the Republican Party, little has been published regarding his political and energy policy views,” it said.

Immediately upon taking over as chairman, McIntyre requested a 30-day extension to make a decision on Perry’s controversial proposal to support coal-fired and nuclear power plants. On December 8, Perry granted McIntyre’s request for the extension on the Department of Energy’s so-called Grid Resiliency Pricing Rule. McIntyre said the extension was needed simply because he had just been sworn in and needed more time to review the proposal.

At his first public meeting as chairman on December 21, McIntyre said FERC would review its policies on certification of natural gas pipelines, an announcement that gave some hope to environmental groups and landowners who believe the agency’s 1999 policy statement on pipeline reviews lends itself to the “rubber-stamping” of applications.

“In very encouraging news, the chair of the Federal Energy Regulatory Commission today announced that FERC will revisit its 1999 Statement of Policy for evaluating whether to approve proposed interstate gas pipelines, a policy that has remained unchanged for almost two decades even though the energy industry is far different now,” Montina Cole, a senior attorney with the Natural Resources Defense Council’s Energy and Transportation Program, said in a statement.

McIntyre did not promise any major changes to how the agency reviews pipeline applications. In comments since taking over as chairman, though, he has stated his desire to make the agency’s deliberations more transparent so that energy companies awaiting decisions and the public are not left in the dark.

Maya van Rossum, the head of the Delaware Riverkeeper Network, was not impressed with McIntyre’s planned review of the agency’s pipeline approval process.

“The recent comments by Commissioner Chatterjee disparaging states’ rights and Commissioner Powelson talking about communities opposed to pipelines as jihadists support my concerns,” van Rossum said in a statement.

Until the review of its pipeline policies is completed, the agency is likely to continue its practice of approving almost every natural gas infrastructure application it receives from companies. Even if McIntyre works to protect the agency from White House interference, FERC will remain a political organization for its role in promoting the delivery and use of fossil fuels, according to Lee Stewart, an organizer with Beyond Extreme Energy.

“At a time when the impacts of fossil fuels on the climate are devastatingly clear… FERC must be active about ushering in a just transition off fossil fuels,” Stewart said.