Daniels Fires IURC Chairman Over Ethics Flap

Gov. Mitch Daniels has shown just how far he is willing to go to demonstrate his own outrage over the IURC's chief legal counsel leaving his position to become counsel for Duke Energy, a move a state ethics panel ruled was permissible, notwithstanding the state's one-year revolving door law against certain employees and officials accepting outside employment pertaining to their government positions. The AP reports on Daniels' firing of IURC Chairman David Lott Hardy:

Gov. Mitch Daniels has fired the chairman of the Indiana Utility Regulatory Commission and sent an ethics memo to state agency heads following Duke Energy's hiring of the panel's former top attorney.


The governor's office said the dismissal of David Lott Hardy on Tuesday is effective immediately. Daniels named IURC Commissioner Jim Atterholt the new chairman.

The commission's former general counsel, Scott Storms, left that job last month for a new position as an attorney in Duke's regulatory division. That prompted criticism from watchdog groups since Storms had handled matters related to a $2.9 billion coal-gasification plant the utility is building in southwestern Indiana.

Daniels' general counsel David Pippen sent a memo to all executive branch agency heads saying the governor will "not tolerate even the appearance of impropriety."

The IBJ's Chris O'Malley has more on why Daniels decided to take such swift action against Hardy:

Pippen said an internal review found that Storms was communicating with Duke about a job even while he was presiding over administrative hearings concerning Duke.


"Additionally, the agency head (Hardy) was aware of the communications and did not remove the lawyer from matters for which the lawyer was now conflicted,” Pippen told agency heads.

He added: “I wrote a letter to the IURC explaining the governor’s interpretation of the spirit and intention of the ethics reform he spearheaded when he came to office.”

Moreover, Daniels has directed that administrative opinions over which Storms presided will be reopened and reviewed “to ensure no undue influence was exerted in the decisions.”

It was not immediately clear which Duke cases those involved.

Daniels also directed that a one-year cooling off period for decision makers is to be considered for those at the administrative law judge level, as well.

Further, the administration said it has referred the matter to the Inspector General to determine if any laws were broken or whether misinformation was presented to the Ethics Commission.

Hats off to Daniels for taking a strong position against the revolving door problem with influence peddlers within state government. Let's hope he uses a Republican-controlled legislature next year to push through even tougher ethics laws to prevent this sort of thing from happening in the future.

UPDATE: Duke Energy announced it has placed its head of Indiana operations, Mike Reed, on administrative leave after learning the latest in the circumstances surrounding the hiring of IURC's chief legal counsel, Scott Storms, according to the IBJ's Chris O'Malley. Duke is also placing Storm on administrative leave from his position in the legal/reguatory department of the utility pending the outcome of an internal investigation.