State Republican Party Chairman Jerry Labriola wrote Wednesday to the state attorney general and chief state’s attorney, pressing his request for official inquiries into the propriety of an April 23 conference call, in which state energy Commissioner Dan Esty gave a briefing to clients of the investment firm UBS Securities.
In a letter to Chief State’s Attorney Kane, who is Connecticut’s top prosecutor, Labriola wrote: “I specifically request that you examine the appropriateness and legality of Commissioner Esty, in his regulatory capacity, participating in such a call. Whether or not the information was privileged, his participation in a conference call organized for the purpose of providing information to profit-making entities is antithetical to his regulatory role.”
Labriola Monday had written to state Attorney General George Jepsen, the state’s top legal official in non-criminal matters, asking for an investigation into the propriety of Esty’s participation in the UBS conference call. Jepsen referred the matter to the Office of State Ethics. Labriola wrote to Jepsen again Wednesday, saying that the attorney general still should conduct an investigation of his own.
A spokesman for Kane said late Wednesday afternoon the letter had just been received. \”Mr. Kane hasn’t seen it yet, but as with all communications to this agency it will be reviewed and the appropriate action taken,\” said spokesman Mark A. Dupuis.
Jepsen said: “As I stated previously, the Office of State Ethics, not this Office, is the appropriate agency to consider the principal issues raised in the letter. I forwarded Mr. Labriola’s original letter to the Office of State Ethics. As a result, it would be inappropriate for me to comment further at this time.”
In the April 23 conference call, Esty talked about state energy policies and a pending renewable-energy bill, which the state Senate had been scheduled to vote on the following day.
That vote was postponed, however, after environmentalists questioned Esty\’s participation in the call. The environmentalists said the bill could help Northeast Utilities, which paid Esty $205,000 in consulting fees from 1997 to 2005, six years before he became commissioner. They also noted that a week before hosting the call, UBS upgraded its assessment of NU\’s stock from \”neutral\” to \”buy,\” based largely on the pending bill\’s possible effect on the utility.
The renewable-energy bill was taken up again in the Senate on Wednesday, and won approval in a 26-6 vote. It now goes to the House for action.
In Wednesday’s letter to Jepsen, Labriola referred back to the request he had submitted Monday. “In my original letter to you, I asked if it is appropriate or desirable public policy when a regulatory agency is advising private investors and providing information that was confidential at the time of its release on a conference call; and specifically, whether that is the proper role of the regulator,” Labriola wrote. “As Commissioner, Daniel Esty is supposed to protect the interests of the State of Connecticut and its ratepayers. As the ‘People’s Lawyer,’ you have pledged to protect the interests of the people you serve.”
“In my letter to the Chief State’s Attorney, I am asking him, and I pose the same question to you: does the issue of this potential conflict raise at least enough of a question to warrant an investigation in the best interests of the citizens and ratepayers of Connecticut?”
Esty, who is head of the state Department of Energy and Environmental Protection, apologized last week for the timing of his participation in the UBS call on the eve of the scheduled vote, saying his participation in the call had been scheduledweeks in advance.
But he maintained his position that there’s nothing wrong with his having participated in the UBS conference call, and said he had not revealed confidential information.
Responding to Labriola’s original letter to Jepsen Monday, DEEP spokesman Dennis Schain issued a statement saying: \”As the Commissioner has said, the timing of the call was unfortunate but participating in such a call is very much in keeping with his responsibilities for the development and implementation of energy policy. One of the guiding principles of [Connecticut\'s] energy strategy is to attract private investment for our efficiency and renewable energy initiatives– instead of relying only on taxpayer or ratepayer dollars. If we are going to be successful with this approach you simply have to talk to the investment community.\”
On Wednesday, in response to Labriola\’s new letters, Schain said: \”As we have said, the timing of the call was unfortunate but participating in such a call is very much in keeping with Commissioner Esty\’s responsibilities for the development and implementation of energy policy.\”
Labriola, in his letter to Kane, said that some issues he should consider concerning the conference call are:
- “Why did the Commissioner even participate in this call in the first place? There appears to be no State or public interest served by participating in the conference call. Was Commissioner Esty, who received hundreds of thousands of dollars in consulting fees from energy companies and other DEEP regulated companies prior to being appointed as DEEP Commissioner, seeking to accommodate some of the entities that formerly employed him? The only parties that could possibly benefit from Esty’s participation were only UBS’ clients — not the public, whose duty to protect is Commissioner Esty’s sworn responsibility.
“The appearance of a conflict is overwhelming. The relationship between Commissioner Esty and his former corporate employers appears to have remained far close after his entry into state government – to maintain public confidence in his impartiality as a regulator.
- “In addition to this particular briefing for investors, has Commissioner Esty participated in any other briefings with other investment firms at any other time?
- “If not, why did Commissioner Esty brief this particular firm?
- Who asked Commissioner Esty to brief UBS? Did UBS request the briefing? Did Governor Malloy ask Esty to participate in the conference call? Or did Commissioner Esty initiate the action?
- ‘Did Commissioner Esty share the non-disclosed legislative language with any other public or private entity? If so, who and why? If not, why was UBS given preferential treatment? Did Commissioner Esty ever do consulting or any kind of other work for UBS or any of its affiliates prior to becoming Commissioner?”
Labriola concluded: “As you know, Commissioner Daniel Esty has regulatory power over the utility companies who could have benefited from information provided in the briefing. The question is whether providing that information compromises the Commissioner\’s statutory and regulatory authority over regulated entities. Whether or not the Commissioner gains personally does not matter. What matters is whether his actions compromise his role, or his agency’s role, as a regulator.“