It’s the sort of basic question that would seem to prompt a quick, ready answer: How much is Mark Yates paid?
After all, critics note, Yates is a public employee subject to open records laws.
But details about his salary and his sudden rise to prominence at the Tennessee Valley Authority have proven elusive amid a growing controversy over the beleaguered federal power agency’s refusal to release employee salary data, which it maintains is legally protected proprietary information.
Battling critics and a bill in Congress that would require public disclosure of many of its salaries, TVA says it must protect the information to maintain an edge against competitors.
“We compete for talent with Entergy, Duke, Southern and other utility systems,’’ said Buddy Eller, TVA’s vice president for communications and public relations, who emphasized that the agency operates on revenue from energy sales, not any taxpayer subsidy.
But some see another motive.
“I think it’s old-fashioned government secrecy,’’ said Herman Morris, a former utility executive who’s pushing for Memphis to leave TVA for cheaper electricity rates and is critical of what he sees as a lack of transparency at the agency. That includes TVA’s launch of a Memphis-based vice presidency, a position the East Tennessee-based federal agency created last year to improve relations here.
It filled the position with Mark Yates, a well-connected Memphis businessman and political adviser whose wife operates a popular Midtown restaurant with a commissioner at Memphis Light, Gas & Water, which will have a primary voice in deciding if Memphis severs relations with TVA.
Yates’ hiring followed months of debate on whether Memphis should replace TVA as its exclusive supplier of electricity, a decision that could cost the federal power supplier $1 billion a year in revenue.
So, how much Yates is paid and how he landed his job are concerning to Morris and other critics. But answers have not come easy.
Just last week, TVA denied a freedom of information request filed by the Institute for Public Service Reporting seeking salary and compensation details for Yates. Despite questioning that started nearly two months ago, TVA also has failed to produce details surrounding Yates’ hiring, including how many people applied and whether the job was advertised.
TVA is a corporate entity of the federal government required to provide salary data for a handful of top executives in annual reports it files with the Securities and Exchange Commission. The release of that data, which involved six executives last year, often stirs outrage from critics who believe the agency is overly generous to its executives.
TVA reported that its CEO, Jeff Lyash, received $9.9 million in salary, bonuses and benefits in the 2021 fiscal year. That’s more than 20 times President Joe Biden’s salary, yet still below energy industry averages.
Though TVA has released the salaries of its nearly 10,000 employees in the past, it has denied recent requests to produce salary and compensation data.
That stance led Democratic Memphis Congressman Steve Cohen and two Republican colleagues to opens in a new windowfile a bill last month that would require TVA to release salary and benefit data for employees making 120 percent of the GS-15, the government’s pay scale for top professionals, technical specialists and supervisors.
“Salary information for government-owned entities like the Tennessee Valley Authority should be readily available as a matter of course,’’ Cohen said in a statement.
“TVA is a massive organization, and we only have limited knowledge of its top executive pay scales. Expanding that scope of knowledge gives oversight bodies and the public a much more complete picture into how well the TVA is serving its ratepayers.’’
Information is hard to access
Countering criticisms about Yates, TVA spokesman Eller said Monday that as vice president of the agency’s West Region, Yates is responsible for much more than Memphis. Though Yates is based in Memphis, the region includes 51 local power companies stretching from western Kentucky to West Tennessee and central Mississippi.
“I think Mark is in Tupelo, Mississippi, today,’’ Eller said.
TVA has said the new position was the “pilot’’ in a larger bid to improve relations across its seven-state service area by creating four new regional vice presidencies. TVA later filled the other three vice presidencies with veteran TVA employees.
“When our new CEO, Jeff Lyash, came on board (in 2019) he really wanted to make our relationship with our power companies more of a partnership,’’ Eller said.
“And the natural evolution from that was to really have more of a presence in the local regions where we can better serve the customers and the local communities.’’
Eller said TVA hired Yates for “his extensive business background,’’ which includes stints as chief financial officer at LeMoyne-Owen College, senior vice president at First Horizon National Corporation and vice president at the Morgan Keegan investment firm.
At the same time, details about Yates’ hiring have been hard to come by.
The Institute emailed a series of questions to TVA on Jan. 11 seeking details about the hiring process used in the creation of the West Region vice presidency. TVA has not answered those questions.
On Jan. 30, The Institute filed a request under the federal Freedom of Information Act seeking records related to any advertising, short-listing, interviewing and other concerns related to filling the position. TVA responded on March 1 saying it needs more time to search for records.
Yates, 55, who’s also served as chief of staff for former Congressman Harold Ford Jr. and CEO of the Black Business Association of Memphis, has not agreed to an interview despite repeated requests. He told a reporter via text message last month to direct all inquiries to TVA’s communications office.
Eller said Monday TVA would not make Yates available for an interview.
“I think we looked at a lot of different candidates for all four of those (regional vice president) positions, both internally and externally,’’ Eller said.
“… I don’t have the specifics on that. But we don’t get into specifics on hiring. But I’m sure it was a very competitive process for all four of those positions.”
Second FOIA request denied
The Institute filed a second FOIA request on Jan. 30 seeking records reflecting “the salary and total compensation for each of TVA’s four regional vice presidents.’’
TVA denied the request on March 1.
The denial letter cited two primary grounds: Invasion of privacy and the protection of “confidential business information”.
“Public disclosure of the detailed and personally identifiable compensation information you request would cause TVA harm by allowing competitors insight into confidential pay and business plans and practices,’’ Denise Smith, TVA’s FOIA officer, said in the letter.
The letter cites a 2005 amendment to TVA’s enabling legislation that required its board to set a competitive compensation plan through an annual survey of similar positions in private industry as well as publicly owned electric utilities and federal, state and local governments. The action was part of larger reforms pushed by then-Tennessee Sen. Bill Frist to make TVA more accountable and attract skilled workers.
“Unlike the (general federal pay schedule), which is publicly available, TVA’s compensation information is proprietary and is kept confidential,’’ the letter said.
The Institute has appealed the denial.
One specialist in federal FOIA law says he doesn’t believe TVA’s denial rests on solid ground.
“I don’t think it’s going to hold up,’’ said opens in a new windowAdam A. Marshall, a senior staff attorney at the opens in a new windowReporters Committee for Freedom of the Press, who reviewed TVA’s denial letter at the request of The Institute.
The Reporters Committee is a Washington-based nonprofit that promotes open government and pursues freedom-of-information litigation on behalf of news organizations.
The specific provision of law that TVA cites to withhold the salary information involves opens in a new windowExemption Five of the Freedom of Information Act, which shields records for a range of reasons including attorney-client privilege, attorney work product, and something known as the deliberative process privilege. That latter element is designed to protect an agency’s “pre-decisional deliberations’’ conducted prior to a final decision such as issuing a regulation or adopting a public policy position, Marshall said.
But language in the denial letter suggests TVA is asserting a more arcane Exemption Five privilege stemming from the Supreme Court’s 1979 opens in a new windowFederal Open Market vs. Merrill decision that protects “a trade secret or other confidential research, development or commercial information.” The rationale behind this qualified privilege is that information released early could put a government agency at a disadvantage by interfering with the awarding of a contract.
According to a Department of Justice analysis of the decision, however, the privilege “expires upon the awarding of the contract or upon the withdrawal of the offer.’’
For Marshall, that means TVA could withhold data compiled while conducting a survey for future salaries. But once those salaries are awarded the privilege “evaporates,’’ he said.
“Exemption Five … is frequently cited and miscited by government agencies to withhold a whole variety of information, including information that doesn’t really fall within the scope of the privilege but is inconvenient or embarrassing,’’ Marshall said.
Competing for talent
Nonetheless, Eller said TVA’s unique mission — providing low-cost, reliable energy, protecting the environment and promoting economic development — demands protection of competitive information.
“The proof’s really kind of in the pudding,’’ he said. “We have mechanical engineers, civil engineers, nuclear engineers across the energy spectrum. And, so, we compete for those types of disciplines in the area of energy … In the environmental space we have aquatic biologists, we have archeologists and today we have, we’re a national leader in carbon reduction side from an environmental leadership standpoint.’’
TVA’s role in economic development is a massive undertaking, Eller said.
“In the past five years we’ve attracted 350,000 jobs and $46 billion in capital investment to this region.
“So, yeah, it is very competitive. But it benefits the customers, the 10 million people we’re privileged to serve across seven states and the communities across this region. So, that’s why it is competitive. That’s why we seek out the best talent because it serves the people of this region.’’
However, open government advocate opens in a new windowDeborah Fisher said the same rationale — competing for talent — could be used to seal off salary information for a number of government undertakings.
Public schools compete for talent with private schools and state-run prisons contend with competitive, private-run prisons seeking government contracts, she said.
“There are lots of situations where you could say that a private company could get some of our information and compete against us … and they can try to build a better mousetrap,’’ said Fisher, executive director of the opens in a new windowTennessee Coalition for Open Government, a Nashville-based watchdog group.
In the Internet age, the public has come to expect instant access to government salary data. Online payroll data is readily available for opens in a new windowcity of Memphis employees as well as workers for the opens in a new windowstate of Tennessee and the opens in a new windowfederal government.
Indeed, TVA released salary data for all its employees in 2012 in response to a FOIA request from the Chattanooga Times-Free Press, which published those salaries on its website.
Yet Congressman Cohen said in a statement last month that his “repeated requests to the TVA for salary information have been rebuffed.”
What’s changed since the 2012 release isn’t clear. But TVA’s Eller said he wasn’t aware of any statute that specifically exempts the agency’s salaries from public disclosure.
Fisher said she believes salary data is more of a “public relations problem’’ for TVA than a legitimate competition concern.
Every time TVA’s top salaries are reported “there is some public concern” about excess, she said.
“And then they come out and they say, Well, that’s what everybody’s paid in the utility industry at these levels. And they have to explain it,’’ Fisher said.
“I think what TVA is doing here is they don’t want the public to know how much they’re paying people. They can use any excuse that they want. But I think that is the end game. They do not want the public to know.’’
This story first appeared at dailymemphian.com under an exclusive use agreement with The Institute.