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Council Questions MLGW’s ‘Condensed’ Financial Disclosures

IPSR investigation spurs more City Council questions about city-owned utility’s transparency

Power lines in Memphis’ eastern reaches. (Marc Perrusquia)

Few people in government in Memphis are as financially successful as Steven Wishnia.

An appointed member of city-owned Memphis Light, Gas & Water’s board of commissioners, Wishnia works professionally as an investment adviser overseeing $2.5 billion in assets.

He lives in a $1.3 million East Memphis home, owns a Florida condominium and a home in the Vermont countryside, and has served on the governing boards of some of Memphis’ venerable institutions, including the Plough Foundation and Methodist Le Bonheur Healthcare.

Steven Wishnia

But Wishnia’s evident wealth and influence aren’t at all clear to anyone reading his MLGW financial disclosure statement intended to alert the public to sources of income that might pose a conflict of interest.

Unlike forms that officials across Tennessee must file, MLGW’s form doesn’t require a listing of personal investments – a shortcoming that Memphis City Council is expected to discuss today (March 1) when its MLGW committee meets at 10:15 a.m. to review the public utility’s failure to post disclosure forms on the web.

“Transparency and accountability are foundational elements for our public institutions. As a publicly owned utility, MLGW is certainly no exception to those expectations,’’ said Chase Carlisle, the MLGW committee’s vice chair, who added the ethics policy discussion to the committee’s agenda.

“… We will be asking about how the disclosure forms were designed and located. It seems simple to adopt a similar format to that of the Tennessee Ethics Commission to ensure the intent of the disclosure is represented.’’

By law, the council oversees MLGW’s operations. It approves MLGW contracts greater than $50,000, sets utility rates and confirms nominations made by the mayor to MLGW’s board.

Carlisle added the item to the agenda after stories by the Institute for Public Service Reporting revealed that MLGW was  opens in a new windowfailing to honor a transparency pledge in its 2007 ethics policy which requires the utility to “promptly and prominently” post personal disclosure statements of board members, top executives and other key employees on the Internet.

The policy requires MLGW to post the forms on the website of the joint Memphis-Shelby County Board of Ethics, an agency once planned but never formed. MLGW never pivoted to find another website to post the forms.

opens in a new windowThe utility said last week it was reviewing the policy and should decide by the end of March whether to start posting disclosure statements on the web.

But as MLGW prepares for arguably its biggest decision ever — whether to sever ties with the Tennessee Valley Authority in search of cheaper electricity rates — some transparency-minded council members also are concerned with the adequacy of the utility’s disclosure statements. MLGW’s forms require far less detail than the forms that the Tennessee Ethics Commission requires from members of the City Council and other elected officials across the state.

Carlisle says MLGW’s forms appear “condensed” — and deficient.

Both the state and MLGW require filers to list sources of income greater than $1,000, though neither requires a specific amount. Both also require filers to list loans greater than $1,000.

But the state also requires items that MLGW doesn’t: Details about business investments as well as any compensated lobbying services or professional services, including a listing of general client interest areas if the filer is an attorney, accountant or architect. State filers also are required to list any bankruptcy discharge in the past five years.

MLGW’s ethics policy originally contemplated that the utility’s financial disclosures would “be the same as the Statement of Disclosure of Interests that candidates must file with the Tennessee Ethics Commission.’’

How MLGW’s forms came to differ so substantially from the state’s forms isn’t clear.

Neither the utility’s board members nor J.T. Young, MLGW’s CEO, have agreed to an interview despite repeated requests.

One key difference in the forms involves investments.

The state’s investment disclosure requires a brief accounting of any investment “in any corporation or other business organization’’ greater than $10,000 or any totaling at least 5% of a company’s total assets.

Responding to that prompt,  opens in a new windowCarlisle and another wealthy member of the council,  opens in a new windowWorth Morgan, list dozens of stocks and other holdings.

Given his investment background, one might expect Wishnia to also have a variety of holdings.

Yet a review of his annual  opens in a new windowdisclosure form for 2021, the latest available, revealed no such listing of investments — he was never asked for such information. Though MLGW asks board members to disclose sources of “reportable income’’ of $1,000 or more whether “earned as salary’’ or “through an ownership interest’’ it does not seek a listing of holdings. Because stocks aren’t taxed until they are sold, MLGW’s disclosure requirements appear to overlook holdings that remain unsold in a portfolio. 

In fact, records obtained under the Tennessee Public Records Act show none of the  opens in a new windowstatements filed by Wishnia or his board colleagues between 2014 and last year included any listing of personal investments resembling those often found in state disclosure forms.

Ethics reform advocate Craig Holman said that is unacceptable.

“Any kind of effective disclosure requirement, whether or not they live by it, would have to include any sort of investments, major investments, you know, above a certain threshold,’’ said Holman, a legislative representative for Public Citizen, a Washington-based watchdog group that advocates for transparency in government. 

“That’s the whole purpose of these disclosure laws is so the public and the press can discern whether or not official actions are being taken on behalf of merits or on behalf of one’s own self-enrichment.”

Wishnia, 74, did not respond to a series of messages left on his email and cell phone and at his office.

Each of his annual disclosure forms since 2014 lists his employment at Highland Capital Management LLC, where according to the company’s website, he serves as chief executive officer. The firm manages fixed income and equity portfolios. According to its website, Highland Capital oversees more than $2.5 billion in assets, serving a variety of individuals, public institutions, foundations and 401K plans.

Wishnia was first appointed to the MLGW board in 2008 by then-Mayor Willie Herenton. His most recent appointment came on Dec. 13, 2016, more than five years ago. That term expired on Nov. 1, 2019 — more than two years ago.

A loophole in the City Charter has allowed him and the other four board members to continue to serve, all past the expiration of their three-year terms.

Mayor Jim Strickland said last month in a brief written statement issued through a spokeswoman that he decided to not appoint or reappoint any MLGW board members until the bidding process has ended for seeking power suppliers that might replace TVA as the city’s exclusive supplier of electricity.

Carlisle has said he never heard of Strickland’s decision, saying the mayor should have alerted the council.

As for MLGW’s ethics policy, Carlisle said he’s prepared to ensure that MLGW adopts proper reforms.

“I think we have to take a firm stand that these policies were put in place for the protection of the public good,’’ he said. “They’re going to need an explanation of why they don’t want to adhere to their own policy.’’

This story first appeared at dailymemphian.com under an exclusive use agreement with The Institute.

The Institute for Public Service Reporting is a nonprofit news organization on the campus of the University of Memphis that accepts financial donations from individuals and organizations with the explicit understanding in our  opens in a new windowTransparency & Editorial Independence policy stated on our website that our news judgments “are made independently’’ and that we do not “give supporters the rights to assign, review or edit content.” A material subject of this story, MLGW board member Steven Wishnia, donated $1,000 to The Institute in December.

Written By

Marc Perrusquia is the director of the Institute for Public Service Reporting at the University of Memphis, where graduate students learn investigative and explanatory journalism skills working alongside professionals. He has won numerous state and national awards for government watchdog, social justice and political reporting.

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