Apr 16 2009

Pious Mouse Wash 4

Spectra Energy’s “Inquiry Report” – Will This Dog Hunt?

With all of its piety in preparing a 32-page inquiry into improper and unethical behavior toward landowners, what is the toughest conclusion found by Spectra Energy?

We might hold a contest modeled after “American Idol” to see which statement in the report would get the most votes. The problem is the lyrics in this 32-page report are hard to follow – in fact, the writing is downright convoluted.

To set the stage, however, remember this inquiry involved at least:

  • 5 high-level officers of the company (perhaps more in reality);
  • 1 VP who was not supposed to be involved, according to company protocol (but that was not disclosed except on this blog – see post for April 10, 2009, Pious Mouse Wash 2);
  • Some number of outside lawyers;
  • Interviews with multiple Right-of-Way (ROW) agents and project engineers;
  • Interviews with 17 landowners

As we have previously noted, the mountain labored mightily and brought forth a mouse – a pious mouse. Does the pious mouse have any teeth when it comes to speaking truth to the power of Spectra Energy?

One modest candidate for a best-in-class admission by a gas industry company is the following, found near the end of the report. Let’s step through key excerpts in this chain of pain and you will begin to see the challenge.

Feel free to consult the attached pdf to better follow the music and lyrics: “Inquiry Report – Response to Benard Allegations” filed with FERC 1-22-09 (pp. 26-27 of report, pp. 29-30 of pdf). spectra-energy-inquiry-report-1-0931

“Allegation #3 (Finding 8) – There was no general disposition or tactical effort for Project Representatives to use eminent domain as a threat to coerce landowners to execute agreements. … There was no evidence that Project Records or Project Representatives participated in or witnessed any threats to use eminent domain. (Finding 8(a))” [p. 26 of report, p. 29 of pdf]

BUT:

“There may have been a single ROW agent that [sic] diverted from the principles of the ROW Training in dealing with certain members of the Landowner Group. … Taking the landowners allegations at face value but without admitting the truth of the allegations, this particular ROW agent’s behavior may have been considered intimidating or bullying with the ROW agent’s alleged statements referencing the certainty of the Project’s approval by FERC and emphasizing the issue of eminent domain.” [emphasis added, pp. 26-27 of report, pp. 29-30 of pdf]

You’ve got to love the line, “Taking the landowners allegations at face value but without admitting the truth of the allegations….”

Therein lies the code breaker to Spectra Energy’s Inquiry Report: The object was never to admit the truth of any of the allegations.

Think about it:

  • What kind of liability would that create for a publicly held corporation like Spectra Energy?
  • Every executive involved in this inquiry depends on Spectra Energy for his or her economic livelihood. What are the odds that a zealous investigator would emerge? This was the “clean up” crew.
  • A serious finding on unethical behavior would likely embarrass the executive leadership team and the board of directors. (Collectively, this is a group of 22 individuals, nearly all white males with the exception of 2 white females and two persons of color, from a company that says it is committed to “embracing diversity and inclusion” in its corporate charter. Perhaps they should be embarrassed already.)
  • A serious finding on unethical behavior might also impact Spectra Energy’s relations with the Federal Energy Regulatory Commission (FERC).
  • And what about Spectra Energy’s reputation inside the gas industry? (As in, “You people are attracting unwanted attention to gas industry activities – what are you thinking!”)

Too much risk – legally and from a reputation standpoint. Spectra Energy might have gained some credibility if it had added one outsider to the inquiry team (which I suggested to them); but that would have threatened control of the “lid” on this inquiry.

This dog was never going to hunt, not publicly anyway.

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