Daniels Administration Belatedly Removes IURC Ethics Officer From Role In Duke Case

The IURC ethics officer who used smoke and mirrors to make it appear there was no problem with the IURC's general counsel Scott Storms leaving his job to join Duke Energy despite his direct participation in matters affecting the utility has been belatedly removed from her position by the Daniels administration. The Star's John Russell continues to best other reporters in coverage of this ongoing scandal:

The ethics officer at the Indiana Utility Regulatory Commission has been reassigned amid questions over her role in Duke Energy's hiring of a high-ranking commission attorney who was later embroiled in a conflict-of-interest scandal.

Loraine L. Seyfried, who also holds the title of chief administrative law judge at the IURC, was removed Monday from all cases connected to Duke's massive coal-gasification plant in Edwardsportat the IURC, was removed Monday from all cases connected to Duke's massive coal-gasification plant in Edwardsport, a commission spokeswoman confirmed Tuesday

The commission also took away Seyfried's duties as ethics officer and gave them to another IURC official, Doug Webber, who joined the commission this week as general counsel. Webber previously was chief legal counsel for the Indiana Department of Insurance.

The move comes less than a week after The Indianapolis Star reported that Duke's top Indiana executive on Aug. 1 e-mailed the then-chairman of the IURC, outlining what Seyfried should include in her ethics review of Duke's hiring of Scott Storms.

Storms then was general counsel and chief administrative law judge at the IURC but was negotiating a job offer from Duke, one of the state's largest utilities. While discussing employment with Duke, Storms was presiding over numerous cases involving the company, including cost overruns at the $2.9 billion coal-gasification plant in southwestern Indiana.

The Duke executive -- Mike Reed, then-president of Duke Energy Indiana -- e-mailed David Lott Hardy, then chairman of the IURC. Seyfried "must clearly spell out how [Storms] would be walled off from Edwardsport and therefore meet the [ethics] test," he wrote.


On Aug. 25, Seyfried sent a three-page memo to Storms, stating her opinion that his prospective employment with Duke would not violate the state ethics code, as he had not negotiated or administered a contract with Duke while with the IURC.

"It is my understanding that upon submission of your resume to Duke Energy Indiana, you took steps necessary to immediately screen yourself from pending Duke Energy Indiana proceedings to which you were assigned . . . and to reassign the cases to other administrative law judges," Seyfried's memo read . . .

Seyfried did not return phone calls from The Star on Tuesday seeking an explanation of her role in the ethics review.


The IURC declined to answer numerous questions about Seyfried's role in reviewing the Storms affair, including what steps Seyfried took to verify whether Storms had recused himself from Duke cases, when Storms submitted his resume to Duke and whether she was asked to conduct her review in a certain way. Danielle McGrath, the IURC spokeswoman, referred those questions to the Indiana inspector general's office, which could not be reached for comment late Tuesday.

She said the Edwardsport cases have been assigned to another administrative law judge, David Veleta.

Asked why the commissioners removed Seyfried from the Edwardport cases, she said: "Reassigning the cases is one of the many steps the commission has taken, and will continue to take, to ensure public confidence."


Her removal as ethics officer was "part of a broader restructuring effort" at the IURC, McGrath said.

Part of a broader restructuring effort? Yeah, right.