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Sun Doesn’t Set On MLGW Board Members’ Power

All 5 utility commissioners are serving on expired terms. It’s legal. But as a monumental decision looms, activists say the mayor’s failure to reappoint or replace board members denies public a voice in governance — and in exploring an alleged conflict of interest.

A Memphis Light, Gas & Water truck drives down Beale Street near MLGW headquarters in downtown Memphis. (Karen Pulfer Focht)

Still wrestling with the fallout of a major power outage and bracing for a polarizing decision on whether to exit the Tennessee Valley Authority, Memphis Light, Gas & Water can add this to its list of controversies:

The three-year terms of all five members of MLGW’s governing board are long expired — and four of the five ended nearly three years ago.

Michael Pohlman, the most recently appointed commissioner, saw his term expire more than 18 months ago.

According to MLGW records, the other four members of its five-member board remain seated despite last being appointed nearly six years ago. Each of their three-year terms expired in 2019, nearly three years ago.

“It’s unfathomable,’’ said former MLGW president Herman Morris.

Technically, the situation isn’t prohibited. Terms do lapse at times without a reappointment, and a commissioner can continue to legally vote on MLGW matters after his or her three-year term expires.

But what’s unusual, Morris says, is that the terms of all five are expired and for so long.

How it happened isn’t entirely clear.

MLGW declined comment. Mayor Jim Strickland would not agree to an interview.

Jim Strickland

Issuing a single-sentence statement, Strickland’s office said the mayor made a decision to not appoint or reappoint anyone to the MLGW board until officials closed the bidding process for seeking power suppliers that might replace TVA.

City Councilman Chase Carlisle said Tuesday he never heard about the mayor’s decision.

“It should (have been) disclosed to the council,’’ said Carlisle, vice-chair of the council’s MLGW committee.

For Dick Williams, failure to keep those terms current denies the public a voice in the governance of city-owned MLGW, which faces arguably its biggest decision ever: Whether to sever its decades-long relationship with TVA and seek new electricity suppliers who might save ratepayers money.

By rule, MLGW commissioners are nominated by the mayor and confirmed by City Council. Failing to reappoint a sitting commissioner or appoint a replacement means there is no public hearing before council where citizens can voice support or opposition to a nominee.

“In principle, I think it’s a bad thing for the powers that be to let that happen,’’ said Williams, chairman of Common Cause Tennessee, a nonpartisan group that promotes ethics and transparency in government.

“Even if it’s reappointing the same people at least … with council confirmation you get the chance for public input or transparency.’’

Williams said such transparency and input might be particularly helpful in the case of MLGW commissioner Carlee McCullough, who’s come under criticism recently for reported business opens in a new windowties she has to a TVA vice president.

Last appointed in October 2016, McCullough has not responded to repeated requests for comment regarding a popular restaurant she operates with the wife of TVA regional vice president Mark Yates.

Ethics experts told the Institute for Public Service Reporting that while McCullough may not have an actual conflict of interest that would prohibit her from voting on any move to sever TVA’s power contract, much more needs to be known to make that determination.

“The answer here is to insist on full disclosure of these relationships,’’ said opens in a new windowRichard W. Painter, a law professor at the University of Minnesota and former chief White House ethics lawyer under President George W. Bush.

“None of this should be in the dark.’’

Expired terms

MLGW released these details about its five governing commissioners:

Leon Dixon: Last appointment on Oct. 25, 2016. Term expired: Oct. 30, 2019.
Mitch Graves: Last appointment on July 1, 2016. Term expired: June 30, 2019.
Carlee McCullough: Last appointment on Oct. 25, 2016. Term expired: Oct. 30, 2019.
Michael Pohlman: Last appointment on March 20, 2018. Term expired: July 30, 2020.
Steven Wishnia: Last appointment on Dec. 13, 2016. Term expired: Nov. 1, 2019.

MLGW commissioners Leon Dickson and Mitch Graves. (Patrick Lantrip/Daily Memphian)

Repeating language in the City Charter, MLGW’s communications office noted that commissioners serve “until the expiration” of their three-year terms and “until their successors are elected and qualified,’’ which technically allows a commissioner to serve longer than three years without a reappointment. 

Still, it’s not clear why all five commissioners have gone so long without being reappointed.

Former MLGW president Morris said his team tried to monitor board appointments closely.

“Back in the day we kept a pretty good track of the board members’ terms,’’ said Morris, who served as CEO and president of MLGW from 1997 to 2004. When a board member’s term was about to expire MLGW would notify the mayor’s office, which, in turn, either renominated the incumbent or recommended a successor for council consideration.

“The council votes pretty much routinely to approve the nomination,’’ said Morris. “So, it’s a small thing to do.’’

If MLGW is making timely referrals to the mayor’s office, it won’t say. Efforts to interview current CEO J.T. Young were unsuccessful.

“Questions related to the Board appointment process should be directed to the City Administration,’’ spokeswoman Angelika Woods said in an email Monday.

Mayor Strickland’s spokeswoman, Ursula Madden, issued this statement late Monday:

“The mayor decided to wait until the RFP bid submission portion of the process was closed before appointing or reappointing members to the MLGW board in order to maintain consistency on this first part of the RFP process.”

The RFP or Request For Proposals process refers to bids that MLGW solicited from power suppliers that might replace TVA. That process arguably started in September 2020 when the MLGW board hired GDS Associates of Marietta, Georgia, to oversee bidding. By then, the terms of four MLGW commissioners had been expired between 10 and 14 months.

But the council overturned the MLGW board’s decision days later. The council finally approved the GDS contract last April. Bidding closed in December.

The mayor’s office did not respond to a variety of questions submitted by The Institute, including whether Strickland had made any previous public announcements that he wouldn’t appoint or reappoint members to the MLGW board until the bidding process was complete.

Three activists monitoring the TVA controversy said Tuesday that Strickland’s decision was news to them.

“If you want to maintain consistency, reappoint them,’’ said Morris, an attorney who represents the Friends of the Earth clean energy group.

Herman Morris

Morris said he didn’t know all the commissioners’ terms had expired and hadn’t heard of Strickland’s decision until a reporter told him. Others — Scott Banbury, lobbyist for the opens in a new windowTennessee chapter of the Sierra Club, and opens in a new window$450M For Memphis co-founder Jim Gilliland — said the same.

Carlisle, the councilman, said he didn’t know about the mayor’s decision either.

“I do understand the mayor’s position,’’ said Carlisle, who believes the power supply study is too important to disrupt. “A significant change in the board who started this process could potentially slow down or disrupt (it) in a significant way.’’

At the same time, Carlisle said the council should have been notified.

Strickland has said before it can be difficult getting citizens to serve on boards and commissions. He made the comment earlier this year as he nominated a candidate to the Memphis-Shelby County Airport Authority.

Former MLGW commissioner Rick Masson said pressures of dealing with the pandemic and other high-priority concerns such as crime and a shortage of police officers might have factored into the failure to reappoint.

“There have been times when there have been a lot of appointments (on various city boards and commissions) that have expired. Five in one board is unusual,’’ Masson said. “But, you know, is a worldwide pandemic unusual? Yes. So, I mean, you have to kind of put it in perspective.’’

Masson enjoys a rather unique perspective: In addition to serving on MLGW’s board for several years he also served briefly as MLGW’s interim CEO and was Mayor Willie Herenton’s chief administrative officer from 1996 to 2003.

It’s often difficult to say who is responsible when appointments remain unfilled, he said.

“To some degree, yes, it is the agency,’’ he said. But, then too, mayors often keep a staff person whose job includes overseeing appointments, he said.

Still, Masson said keeping all five commissioners on without reappointments may not be as bad as it seems. MLGW board members must deal with technical, esoteric issues unique to the utility industry. Maintaining experienced commissioners is essential when faced with issues like possibly leaving TVA to find new, reliable power sources, Masson said.

“It will be probably the largest decision they will make. And so, if I wanted the err, I would rather err on the side of having experienced board members that understand the utility industry and the risk that’s associated with the utility industry … .

“In an ideal world you want experienced board members whose terms are current. But if I had to choose between two, I would rather have experienced board members.’’

McCullough issue

One of those experienced board members is McCullough, 53, a Memphis attorney first appointed in 2014 by then-Mayor AC Wharton and reappointed in 2016 by Mayor Strickland.

The Institute reported earlier this month that McCullough is in the middle of a controversy involving ties to a TVA vice president.

Carlee McCullough

The federal power supplier created the new, Memphis-based vice presidency in January 2021 to help shore up relations here after MLGW’s board first voted to seek bids from alternative electricity suppliers. The loss of its exclusive Memphis contract could cost TVA $1 billion a year in revenue.

TVA filled the position with longtime local businessman Mark Yates, whose wife, Veronica, teams with McCullough in operating Mahogany Memphis, a popular Midtown restaurant that opened in the fall of 2018.

The two women describe themselves as the restaurant’s co-owners in a promotional video. Mark Yates also is described as “an owner of the restaurant Mahogany in Memphis’’ in opens in a new windowadvertising materials that recently had been posted on the website of the Tri-State Defender promoting a variety of features including “The Profit Margin,” an Internet TV program he hosts in conjunction with the news organization.

Internal business records listing any owners, partners or investors are unavailable. Despite repeated requests, neither Mark Yates, McCullough nor TVA will agree to discuss the matter. “Please direct all inquiries to TVA Communications,’’ Yates said in a text message Monday. TVA spokesman Scott Brooks said later in an email, “We will not have any further comments beyond what we have already provided.’’

Singer Jonte Mayon and guitarist Steve Bethany perform outside Mahogany Memphis earlier this year. (Courtesy Marc Perrusquia)

Vocal TVA critic Jim Gilliland contends McCullough has a conflict of interest and should have recused herself last March when she voted for MLGW President J.T. Young’s unsuccessful proposal to indefinitely suspend the search for bidders and begin negotiating with TVA for better rates.

An independent review by The Institute found no evidence McCullough was under any explicit obligation to disclose her business association with Veronica Yates then or that she has violated state or local conflict-of-interest regulations.

Government ethics experts told The Institute, however, that McCullough’s ties to the Yateses pose an appearance of partiality and that she should fully disclose her involvement with the couple.

“A reasonable person knowing about human relations would think that that could influence how she votes. So, yeah, I think that she (should) disclose it,’’ said opens in a new windowKathleen Clark, a law professor at Washington University in St. Louis where her specialties include the study of government ethics.

Clark’s view stems in part from a prompt in MLGW’s annual financial disclosure forms to which commissioners are asked to answer yes or no. In part, it reads: “I have Personal Interests that might affect — or would lead a reasonable person to infer that it could affect — the performance or non-performance of my duties and decisions at MLGW.’’

McCullough’s involvement with the Yateses in Mahogany Memphis appears to trigger disclosure, Clark said.

“If they were co-investors in AT&T along with millions of other people, then no, a reasonable person would not think that had to be disclosed under that standard,’’ Clark said.

“But that’s not what we’re dealing with. It’s actually a small business. They appear to be co-owners. And a reasonable person would believe that her close business relationship with this guy’s spouse could affect her judgment.’’

In the end, Tennessee’s conflict-of-interest law may not require McCullough to recuse herself from any vote to sever ties with TVA because there is no evidence she has a direct financial interest in the TVA contract, said Clark and Painter, the former White House ethics lawyer.

But both said much more needs to be known about the situation.

“We don’t have enough information here to know whether a recusal is required. And probably there’s not enough right on the surface to say it definitely is,’’ Painter said.

“But what I can say is all of this information about these relationships should be fully disclosed. And fully disclosed to the public so there is public scrutiny of these decisions and whether these decisions are, you know, disinterested or not. And, so, I think that’s the way to go at this point is push for full disclosure.’’

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

Daily Memphian reporter Bill Dries contributed to this story.

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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