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DENRpicIn papers filed yesterday, the state through the Department of Environment and Natural Resources asked the court hearing the enforcement actions against Duke Energy to stay the proceedings with respect to ten of Duke’s 14 coal ash plants, saying that a delay would allow the department and Duke Energy to classify and prioritize the ten sites as required under the new Coal Ash Management Act.

The four plants not included in the request are the Asheville Steam Electric Generation Plant, Riverbend Steam Station, Dan River Combined Cycle Steam Station and L.V. Sutton Steam Electric Plant — which the General Assembly already classified as high-risk and are subject to motions for judgement pending in court.

DENR contends that a stay would allow members of the public to participate in the assessment of the ten plants, touting provisions of the Act.

But the Southern Environmental Law Center, which represents advocacy groups that had early on pushed the state to take action and have been permitted to intervene in the enforcement actions, called the motion just another delay tactic, illustrating how DENR continues to work side-by-side with Duke Energy as opposed to aggressively enforcing state regulations.

According to Frank Holleman, senior attorney with the Center, DENR has done nothing to pursue the enforcement cases and never asked the Court to order a cleanup of any site.

“We learned this month that DENR has even agreed with Duke Energy that it will not seek any information from Duke Energy through the enforcement proceedings,” Holleman said in a statement.

“Now, DENR is trying to stop the citizens groups from obtaining from DENR and Duke Energy information to enforce the law. This attempt to stop the enforcement of the law follows DENR’s incomprehensible attempt to stop the Court from ordering the cleanup of three dangerous and polluting coal ash sites, even though Duke Energy agrees they should be cleaned up. DENR has become a bureaucracy that puts its bureaucratic turf issues ahead of its mission to protect North Carolina’s communities and clean water.”

 

News

Duke Energy Coal Ash Spill in North CarolinaAs Triangle Business Journal first reported late last week, Duke Energy has been hit with yet another shareholder lawsuit arising out of the coal ash mess, this time by shareholder E.F. Greenberg and filed in federal court in Raleigh.

Greenberg contends that Duke Energy’s directors made significant admissions regarding their conduct in response to coal ash problems weeks before board elections took place, yet failed to disclose as much to shareholders and to the Securities and Exchange Commission.

“Despite their obligations under applicable federal law, the director defendants caused Duke to prepare, file and disseminate the proxy statement to Duke shareholders in materially incomplete and misleading form in order to secure the election of directors supported by the director defendants,” the shareholder alleges in her complaint.

Admissions of misconduct, and underlying facts, only became public a week after elections at Duke’s May 14 criminal sentencing hearing.

Here’s more from the complaint:

17. To be clear, plaintiff is not contending that any plea agreements, plea negotiations, sentencing memoranda, or even the Statement of Facts itself were required to be included verbatim in the Proxy Statement. However, the substance of the salient factual matters admitted to by Duke were highly material to shareholders called upon to vote upon directors, and should have been included in or referred to some meaningful extent in the Proxy Statement, just as the Judgment of Sentence, at paragraph 3B requires that Duke advise shareholders of the “criminal behavior.”

18. Further startling disclosures concerning the matters to which Duke had previously admitted and agreed to, including appropriately imposed far reaching and stringent monetary and non-monetary therapeutic relief and judicial oversight are set forth in the Judgment of Conviction and Sentencing entered by the Court following the sentencing hearing on May 14, 2015.

19. The substance of these highly relevant and material facts that Duke admitted to in February of 2015 but did not disclose until one week after the Annual Meeting of Shareholders, involved a documented course of environmental recklessness.

20. These admitted facts were so serious and so extensive that Duke’s management and Board were deemed to be so unreliable and untrustworthy as to environmental matters, that Duke was appropriately required, as part of the Court’s sentence, to agree to cede extensive control of the Company’s operations for the foreseeable future to the management of a Court Appointed Monitor ).

21. Therefore, the substance of the facts to which Duke had admitted in February of 2015 was such as to demonstrate that the very individuals who had been entrusted to manage and oversee Duke’s compliance with its responsibilities under the environmental laws (including the defendants named in this Complaint) had failed so utterly and so completely, that they could no longer be trusted to run the Company on their own, without extensive and invasive outside monitoring and oversight.

That makes at least seven shareholder lawsuits filed against the company arising out its coal ash debacle.

Five had already been filed in Delaware Chancery Court and one in North Carolina Business Court – alleging that the company knew about the clean water act violations at its coal ash plants but failed to take action and exposed the company to potentially billions of dollars in liability. All seek changes in corporate governance and damages from losses resulting from clean-up and fines.

Company officials had asked both the Delaware and North Carolina courts to stay proceedings in the shareholder suits until after the criminal cases have been resolved.

Read the Greenberg complaint here.

News

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