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MLGW Launches Ethics Review As City Council Questions Mount

IPSR investigation prompts council questioning of the city-owned utility’s failure to post financial disclosure forms

Memphis Light, Gas & Water power lines in Midtown. MLGW is reviewing its failure to “promptly and prominently” post financial disclosures of board members and key employees. (Marc Perrusquia)

Just as City Council members are starting to ask critical questions about Memphis Light, Gas & Water’s failure to post financial disclosure statements on the web, the city-owned utility is shifting gears.

MLGW now confirms it is reviewing its lack of Internet posting after all.

“The MLGW Ethics Policy is currently under review. We expect that the Amended policy will be ready for consideration by the Board by the end of the first quarter,’’ the agency said in a statement issued Tuesday through spokeswoman Stacey Greenberg.

“Whether or not financial disclosure statements will be posted on the MLGW Internet site will be determined as a part of that review taking into consideration state law requirements and best practices of governmental entities in Tennessee.’’

The statement follows an inquiry by the Institute for Public Service Reporting that found MLGW was not adhering to its 2007  opens in a new windowethics policy posted on the utility’s website. That policy requires MLGW to “promptly and prominently’’ post financial disclosure statements filed by board members, top executives and other key employees to help the public identify sources of income that may pose a conflict of interest.

The policy, still on the books, calls for the forms to be posted on the website of “the joint Memphis-Shelby County Board of Ethics,’’ an agency that doesn’t exist. Officials briefly contemplated creating it in 2007 but never did.

A separate statement released by the utility earlier this year said MLGW’s disclosure forms “are not currently available on the internet’’ because the joint ethics board and its website were “never formed.’’ MLGW later declined comment when The Institute followed up by asking why the utility never pivoted to find another website or if it now plans to post the forms.

Then came Tuesday’s statement, issued as City Councilman Chase Carlisle said he’s considering a hearing to explore the matter.

“It’s never been more important to ensure public trust,’’ said Carlisle, asserting that transparency is a premium as MLGW weighs contentions that Memphis could save millions annually by severing its decades-old ties to the Tennessee Valley Authority as the city’s exclusive supplier of electricity.

Chase Carlisle

“And the best way to do that is to have these disclosures updated and available.’’

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 five-member board of commissioners.

MLGW emphasized again in its statement Tuesday that its financial disclosure forms are available to any Tennessee citizen by filing a request in accordance with the state’s public records act. The Institute filed such a request earlier this month and posted the most recent disclosures of MLGW’s five board members and CEO J.T. Young  opens in a new windowhere.

But the Internet age mandates greater access, Carlisle said. That’s one reason the council recently began posting its members’ financial disclosure forms on its website.

By law, local elected officials are required to file those forms, technically known as “Statements of Disclosure of Interests,” with the Tennessee Ethics Commission, which posts them on its site. But the council elected a few years ago to also post the forms on its  opens in a new windowwebsite below the biography and contact information of each member.

“We shouldn’t (force) people to go fish this stuff out,’’ said Carlisle, vice chair of the council’s MLGW committee.

Councilman Worth Morgan said he pushed a resolution to double post the disclosures because they were so hard to find on the state’s site. 

“You had to navigate through the Internet in order to find them,’’ he said. “So, even though the City Council is filing these disclosures, they were so tucked away nobody even knew about them.’’

MLGW should post its disclosures as well, Morgan said:

Worth Morgan

“There’s no valid reason for politically appointed and elected leaders not to disclose their financial interests. When we assume public roles, we work on behalf of the people. It’s public service not self service. Transparency through reporting helps give the people the assurance they need and are owed.”

But accessibility isn’t the only concern regarding MLGW’s policy. Another emerging issue appears to be the lack of detail in MLGW’s financial disclosure forms.

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.’’

But those forms are substantially different.

“I was kind of surprised at how, I’ll use the term ‘condensed,’ their forms were,’’ Carlisle said.

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 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. Filers also are required to list any bankruptcy discharge in the past five years.

The requirement for investment listings can get tedious for individuals of substance like Carlisle, a real estate development adviser.  opens in a new windowHe lists more than 30 investments ranging from holdings in FedEx to First Republic Bank in response to a prompt that requires disclosure of any investment greater than $10,000 or any totaling at least 5% of a company’s total assets.

Such a requirement is not unreasonable for MLGW board members, Carlisle said.

MLGW commissioners should be required to either disclose such investments, dispose of them “or resign from the board,’’ Carlisle said.

“Look, that’s also an option for people. If they’re uncomfortable with (that), they can voluntarily excuse themselves from the board.’’

How MLGW’s forms came to differ is unclear.

MLGW’s ethics policy says the form of its disclosure statements will be devised and revised by the joint Memphis-Shelby County Board of Ethics, the agency that was never created.

Despite repeated requests, neither the utility’s board members nor CEO Young have agreed to an interview.

MLGW adopted its ethics policy in June 2007 in the wake of the Tennessee Waltz, an FBI public corruption sting that yielded convictions against 12 elected officials and lobbyists across the state.

The scandal stirred the Tennessee General Assembly to pass the Comprehensive Governmental Ethics Reform Act of 2006, requiring each municipality to adopt an ethics policy. In response, the Memphis City Council adopted such a policy on June 5, 2007, that applied to its elected officials and employees as well the city’s boards, commissions and authorities.

Though MLGW was established by the Memphis City Charter as a division of city government, the city doesn’t apply its ethics policy to the utility, officials said.

Two weeks after City Council acted in 2007, the MLGW board passed its own ethics policy.

The General Assembly’s ethics reform act didn’t require utility boards to create ethics policies. However, MLGW’s policy states the utility “desires to adopt an Ethics Policy in compliance with state law and, at a minimum, in accordance with the policy adopted by the Memphis City Council.’’

Jerry Collins, who headed MLGW at the time of the policy’s passage, has said he doesn’t “recall the discussion that took place” that led to the creation of MLGW’s ethics policy and its financial disclosure requirement but said “it certainly was the right thing to do.’’

Morgan concurred.

“I’ve always been a big fan of disclosure,’’ he said. “Lay it out there. Be open, honest about what potential conflicts there are. It can be part of the discussion and then if you’re legally required to recuse yourself, you can.

“If you want to do it out of an abundance of caution, you can. But at the end of the day, it’s more information for the public to be aware of. And it just provides a different level of oversight and trust into our government to make that information available.’’

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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