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Federal prosecutors says Duke Energy’s guilty plea and agreement to pay a record $102 million fine for seepage from its coal ash ponds should ‘speak loudly’ to other corporations that fail to protect the environment.

EPA Assistant Administrator Cynthia Giles told reporters while the agreement requires Duke to comply with the law, they are no longer willing to take Duke’s word for it that the clean-up is being done in a timely and satisfactory manner:

“An independent, third party monitor appointed by the court is going to audit their operation nationwide, not just in North Carolina, to make sure they are meeting their responsibilities,” explained Giles. “Those reports are going to be made public so Duke is held publicly accountable. We are sending a clear message to managers and businesses across the country take your responsibility to protect communities seriously.”

Duke will also be required to set aside $3.4 billion, a guarantee that it has the money necessary to address the seepage problems as it works to close 32 ash ponds across North Carolina.

Prosecutors noted Thursday that Duke Energy executives brought much of this trouble on themselves, failing to approve $20,000 for a robotic camera to inspect an aged stormwater pipe that failed in February 2014 dumping 39,000 tons of coal ash into the Dan River.

To hear more from the EPA’s administrator for enforcement, click below. To read the plea agreement, click here.

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News

PfizerA movement by shareholder groups across the country to force transparency about political activity upon their companies is gaining some traction as annual meeting time approaches.

Those efforts aren’t necessarily new. According to CitizensVox,  shareholders have filed more than 500 resolutions calling for more transparency in corporate political activity since the U.S. Supreme Court’s 2010 decision in Citizens United, holding that corporations had the right to spend unlimited amounts of money calling for the election or defeat of candidates.

What are new are the bills being introduced in state legislatures across the country, including House Bill 636 filed here, requiring corporations to make disclosure and in some cases get shareholder consent before spending company dollars on political contributions or expenditures.

Companies and trade groups gave more than $48 million to races for state-level candidates in 2014, and more than $211 million to state-level ballot measure campaigns, according to the Center for Public Integrity.

Here’s Maryland state Sen. Jamie Raskin, who’s also a professor of law at American University, explaining the underlying concept:

Even if citizens cannot keep executives from spending corporate money in elections, surely shareholders can stop it. After all, it’s their money, right?

Indeed, it is.

In fact, Supreme Court Justice Anthony M. Kennedy’s majority opinion in Citizens United essentially invites a shareholder solution. The premise of the decision was that government cannot block corporate political spending because a corporation is simply an association of citizens with free-speech rights, “an association that has taken on the corporate form,” as Kennedy put it. But if that is true, it follows that corporate managers should not spend citizen-shareholders’ money on political campaigns without their consent.

Kennedy wrote that, if shareholders oppose political expenditures made by management, they will be able to correct the situation “through the procedures of corporate democracy.” This will be easy to do, he predicted, because all political spending will be thoroughly disclosed online: “With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters.”

A number of corporations face shareholder proposals at meetings this spring, including two of interest in North Carolina: Duke Energy and Bank of America.

Duke Energy shareholders have refiled a request made last year that the company disclose the details of its corporate political spending, including amounts and recipients.  As noted in the company’s shareholder meeting notice, that proposal garnered approval from close to half of Duke Energy shareholders last year.

Here’s the Duke Energy shareholder proposal:

Duke shareholders

In Bank of America’s case, shareholders are asking for better disclosure of lobbying expenses. Below is their proposal:

BOA shareholders

Not surprisingly, the board of directors for each company oppose the proposals.

 

Commentary

Coal ash spillWe humans have a way of ignoring unpleasant facts as long as we can keep them out of sight — especially when paying attention would require us to change (and maybe even sacrifice some small measure of convenience or habit). That’s why the stories in newspapers across the state this morning (Earth Day morning) about Duke Energy’s coal ash pollution and its increasingly destructive impact on our health and well-being are so important. As the Charlotte Observer reports:

“Most of the private wells tested near Duke Energy’s North Carolina coal ash ponds show contaminants above state groundwater standards, state regulators said Tuesday.

Of 117 test results mailed to power plant neighbors in recent days, 87 exceeded groundwater standards, the Department of Environment and Natural Resources said.”

In other words, there it is once again: concrete evidence that we are, increasingly, burying ourselves in our own effluent and jeopardizing human health and survival prospects in our blind and foolish refusal to quickly and radically alter our use of fossil fuels.

As Joe Romm pointed out on Think Progress  yesterday in a provocative Earth Day critique, this helps highlight one of the problems with the typical environmental protection messaging (including that of the Obama administration’s) on the subject: the message that moves people isn’t the threat to “mother Earth”; it’s the one about the threat to human survival: Read More

News

Duke EnergyFor a short time this past week, it looked like Duke Energy’s negotiated plea agreements resolving coal ash-related federal criminal charges might be coming apart.

Under the agreements, as detailed by the company in a February 20 filing with the Securities and Exchange Commission, Duke Energy’s North Carolina subsidiaries would plead guilty to four Clean Water Act misdemeanors related to violations at Duke Energy Progress’ H.F. Lee Steam Electric Plant, Cape Fear Steam Electric Plant and Asheville Steam Electric Generating Plant, and five Act misdemeanors related to violations at Duke Energy Carolinas’ Dan River Steam Station and Riverbend Steam Station.

Together the companies would pay a total of $102 million in fines and penalties and for community service and mitigation expenses and serve five years of probation – during which time they would establish environmental compliance plans subject to the oversight of a court-appointed monitor.

Approval  of the agreements had been set by the United States District Court for the Eastern District of North Carolina for this Thursday, April 16 and, by all appearances  —  at least from the court records — the parties were on pace with that schedule.

Until April 6.

That’s when David Buente, a high profile environmental defense attorney with Sidley & Austin in Washington D.C. appeared as a new attorney on the Duke Energy team.

A day later Duke Energy asked the court for more time, filing motions to continue the April 16 plea and sentencing to a later date.

The reasons for the request remained a mystery, though, as the court had placed the motions under seal.

A new attorney and a request for a delay for undisclosed reasons cast the plea deal in doubt — until this morning, when U.S. District Judge Malcolm Howard entertained Duke Energy’s request in open court.

As it turned out, there was indeed a hitch in consummating the plea deal, though not nearly as dramatic as the build-up appeared.

Duke Energy wanted more time to wrap up administrative negotiations with the U.S. Environmental Protection Agency relating to the companies’ criminal pleas.

Under the principal of “debarment,” entities pleading guilty to a crime can be prohibited from doing business with the government.

In this case, according to Duke Energy, once the involved companies enter guilty pleas the facilities subject to the agreements could be barred from doing future business with the government.

The companies can get around that by persuading the EPA that they’ve satisfied the issues giving rise to the plea agreements and convincing the agency to waive debarment.

The government objected to Duke Energy’s request for more time, saying that the company knew for some time that it had to wrestle with the EPA over the issue.

“What about the lights going out at places like Fort Bragg,” Judge Howard asked – a scenario he alluded to as having been painted in Duke Energy’s motion.

Debarment is prospective only, Assistant U.S. Attorney Banu Rangarajan pointed out, and Fort Bragg’s contract doesn’t expire until September.

Plus, she added, military officials have the authority to override debarment.

In the end, Howard agreed to reset the plea and sentencing hearing for the court’s own reasons, saying that conditions of probation and other details still needed to be finalized.

Practically speaking, debarment might not have any teeth as a possible sanction when it comes to a regulated utility like Duke Energy that operates as a monopoly.

But getting a waiver of debarment was important for Duke Energy customers, spokeswoman Paige Sheehan said after the hearing, pointing out that getting service otherwise would become much more complicated.

“This is about getting certainly for our customers,” she said.

When asked what ultimate impact a ruling on debarment would have on the plea agreement, Sheehan said none.

“We’re not walking away from this agreement.”

Per this order, the court reset the plea and sentencing hearing for 10:00 a.m. on May 14, 2015 at the federal courthouse in Greenville, N.C.

News

The good people at Democracy NC released the following this morning:

Duke Energy Gives $3 Million to Committee Tied to Gov. Pat McCrory as He Guides Coal Ash Response

A new analysis of government records reveals that Duke Energy – the world’s largest private electric utility – began writing unusually large checks to the national Republican Governors Association while Gov. Pat McCrory and Republican lawmakers debated how to respond to the company’s giant spill of coal ash sludge into the Dan River.

In four payments from June to December 2014, Duke sent the Republican Governors Association a total of $3,050,000 – more than 10 times its previous record donation to the RGA. Duke’s contributions made it the top corporate donor to the RGA in 2014 and the second largest donor, behind the $3.5 million given by billionaire Sheldon Adelson, owner of the Las Vegas Sands.

In 2012, the RGA spent $5 million to boost the election of Pat McCrory as governor, and it is expected to be a major financial backer of his 2016 bid for reelection. Records show McCrory has attended numerous RGA events and helped the association raise funds.

“Duke Energy’s large donations raise questions about the governor’s ability to serve the public interest more than his own political interest,” said Bob Hall, executive director of the nonpartisan watchdog group Democracy North Carolina. “Critics say the coal ash regulation law passed in 2014 was too soft on Duke. Is this money the reason why?” Read More