State GOP Chairman Seeks AG Probe On DEEP Commissioner\’s Conference Call With Investment Firm

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\"labriolaState Republican Party Chairman Jerry Labriola asked the state attorney general Monday to investigate the propriety of a conference call last week in which the state\’s energy and environment commissioner, Dan Esty,  gave a briefing to an investment firm\’s clients about state plans and pending legislation concerning energy.

Labriola wrote a letter to state Attorney General George Jepsen, asking that he \”investigate the actions of Daniel Esty, Commissioner of the state Department of Energy and Environmental Protection, regarding his participation in a conference call conducted by a private equity company, UBS Securities.\”

Labriola said that in the conference call last Tuesday, Esty spoke with UBS\’s \”investment clients and possibly others concerning legislative language that had yet to be publicly released or discussed by the Connecticut General Assembly.\”

A vote on the pending legislation had been planned for Wednesday, but news of Esty\’s participation in the conference call caused a controversy that contributed to postponing the vote — possibly to this coming Wednesday. Esty apologized last week for the timing of his participation in the conference call, saying it had been planned weeks in advance and, if he had it to do over again, he wouldn\’t have done it a day before a scheduled key vote.

Labriola added: \”I specifically request that you examine the appropriateness and legality of Commissioner Esty, in his regulatory capacity, participating in such a call. There are several troubling questions that must be explored and answered regarding this incident.\”

\”The first question is 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,\” Labriola wrote.

Labriola noted that Esty was paid $205,000 by Northeast Utilities as a consultant from 1997 to 2005, before he became Gov.  Dannel P. Malloy’s DEEP commissioner in 2011, and wrote:  \”It appears that Commissioner Esty…was trying to curry favor with an entity that formerly employed him.\”

\”The only parties that could possibly benefit from Esty’s participation are UBS’ clients, including NU,\”  Labriola wrote.  \”The incident strongly suggests that Commissioner Esty has continued his close relationship with NU and that he continues to be accommodating by making continued deposits into the corporate \’favor bank.\’\”

The Republican Party released the letter Monday afternoon to the media, saying it was being mailed and faxed to Jepsen.

DEEP spokesman Dennis Schain responded late Monday afternoon, 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 CT\’s energy strategy is to attract private investment for our efficiency and renewable energy initiatives – instead of relying only on taxpayer or ratepayer dollars,\” Schain said.  \”If we are going to be successful with this approach you simply have to talk to the investment community.\”

Last week, Esty told The Courant in an interview that there was nothing wrong with his participating in the conference call to talk about the state’s renewable energy plans and pending legislation on that topic. He said it’s his job as commissioner to get the word out about the administration’s programs for cleaner and renewable energy — adding that nothing about the state’s policies or his participation in the phone call favored NU over competitors.

Labriola continued in his Monday letter: \”By statute, the Commissioner is charged with protecting the State of Connecticut, the public trust and the interests of ratepayers.  Instead, he has taken an action that serves and benefits only specific investors. The appearance of a conflict is overwhelming.  The relationship between Commissioner Esty and his former corporate employers appears to have remained close after his entry into state government – far too close to maintain public confidence in his impartiality as a regulator.\”

Labriola said \”this incident raises other questions that Connecticut residents deserve answers to and that must be addressed:

\”In addition to this particular briefing for investors, has Commissioner Esty participated in any other briefings with other investment firms at any other time?

\”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?

\”If the action emanated from the Governor’s Office, why did they get involved?

\”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? Taxpayers deserve to know who else – if anyone – benefited from information provided by the Commissioner.

\”Did Commissioner Esty ever do consulting or any kind of other work for UBS or any of its affiliates prior to becoming Commissioner?

\”Why did Commissioner Esty believe it was appropriate to share unreleased and confidential legislative language pertaining to a bill that was scheduled for a vote the very next day?

\”These questions deserve a thorough investigation and the people of Connecticut deserve answers.  I have submitted an FOIA request of DEEP, Commissioner Esty and Governor Malloy’s office for any emails, memos, text messages, phone messages and any other correspondence on this incident and any other matter involving UBS between February 1, 2013 and today.  You may wish to request copies of any responses provided to me under this request.

\”There does not appear to be any public or State benefit to Commissioner Esty participating in a conference call to brief one investment firm for the benefit of its clients.  I can determine no possible compelling State interest that would have the Commissioner participate in this conference call. If there is another interest involved, I believe Connecticut taxpayers deserve an explanation of what it is.\”

Labriola was the second Republican Monday to raise a question relating to Esty\’s past consulting relationship with NU. Hours earlier, Republican 5th District congressional candidate Mark Greenberg criticized Esty\’s wife — Democratic U.S. Rep. Elizabeth Esty — over what he called her belated return $3,500 in campaign contributions  from NU  executives and lobbyists.

Elizabeth Esty had returned those contributions after news of her husband\’s conference call sparked criticism by the National Republican Campaign Committee.

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12 thoughts on “State GOP Chairman Seeks AG Probe On DEEP Commissioner\’s Conference Call With Investment Firm

  1. Chuck

    The article says, “Elizabeth Esty had returned those contributions after news of her husband’s conference call sparked criticism.”

    Gee, ya think? Thank you – all of you – for my $1,000 a month heating bill.

  2. jeff1962

    Why aren’t any of our state senators or state rep’s calling for this? Could it be due to their own conflicts?

    Foley was right. They all, D&R, need to go.

  3. Palin Smith

    Tom Foley is a soothsayer. Connecticut’s misfortune to have lost four years of his leadership. Why are Connecticut voters so un-informed? Why do they always seem to vote AGAINST their best interests? And that’s a non-partisan statement.

  4. for now a free man

    Obvious corruption. So rampant that those guilty of the corruption have no idea it is corruption. Corrupticut, what else is new?

  5. for now a free man

    not a detective nor a journalist, but find a strange coincidence that the same investment firm was a large donor to Esty campaign. Nothing to see here, move along.

  6. jeff1962

    Labriola: “I can determine no possible compelling State interest that would have the Commissioner participate in this conference call. If there is another interest involved, I believe Connecticut taxpayers deserve an explanation of what it is.”

    Schain: “One of the guiding principles of CT’s energy strategy is to attract private investment for our efficiency and renewable energy initiatives – instead of relying only on taxpayer or ratepayer dollars,”

    It wasn’t Esty or Malloy who decoupled generation from transmission. It was a D Assembly and an R Governor.

    It wasn’t Esty or Malloy who gave the state five major power outages in the past two years. It was the weather.

    If NU can’t build the generation, then somebody else has to do it. Who does Labriola propose pay for it? Does he want to invest hundreds of millions of dollars of his own money to build the generation plants and harden our distribution lines? I doubt that’s going to happen.

    Maybe Labriola will want to consider the impact of his statements on the investment community and their willingness to build here? Investors are not stupid. They know that Foley may be Governor in two years. Will they invest here, if they think Labriola is the spokesperson for Foley?

    1. johngaltwhereru

      Did you read the part about discussing “pending legislative language which which has yet to be publicly released or discussed by the Connecticut General Assembly”?

      You honestly don’t have a problem with that?

      And you have the gaul, as an obvious Malloy supporter, to question whether the investment community will want to do buisness in CT because of Labriola’s questioning why Esty was divulging legislative information prematurely?

      Have you not noticed what Malloy is doing to the business community? Have you not noticed where CT ranks in favorable business envoronment?

  7. jeff1962

    “You honestly don’t have a problem with that?” I would, if it happened. But UBS recorded the conversation, released the verbatim transcript and there wasn’t anything in there. CT Mirror has it.

    Form was bad. Substance was fine. I don’t place form over substance.

    “as an obvious Malloy supporter” I’m undecided on 2014. But on this topic (bringing energy investors to Connecticut), Malloy is doing the right thing. He’s trying to keep the lights on. I like it and about 3.5million other Connecticuters agree with me.

    I’m not defending Malloy on any other issues. First Five and some other decisions were pretty bad. But scaring infrastructure investors is just as bad and it reflects poorly on the whole republican party.

    1. Johngaltwhereru

      So you think it is appropriate for Esty to meet alone with UBS, after having received substantial compensation from that company’s energy client, and discuss different “traunches” of procurement, prior to public disclosure of the legislation?

      What was UBS’s goal in this informational meeting? Do you think they wanted a head start on knowing how and where CT was going to spend it’s energy dollars? Do you think NU and UBS’s competitors would have preferred to learn this at the same time as UBS and NU. Do you think it is possible Esty had any conversations that were not part of the recorded session?

      By the way, if you are undecided as to whether Malloy deserves another term at this point, you are going to vote for Malloy.

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