Insufferable Self-Righteousness

Michael Bills, a former Goldman Sachs executive and chief investment officer of the University of Virginia, is so outraged by what he calls the “legalized corruption” of Dominion Energy’s outsized campaign contributions that he says he’ll donate thousands of dollars to legislators who pledge not to accept money from the power company and to divest any personal investments in the company.

The Clean Virginia Project will offer $5,000 per election cycle to participating delegates and $20,000 per cycle to senators, reports the Richmond Times-Dispatch. “Democrats and Republicans should represent their constituents and not powerful corporate interests, and Clean Virginia will be holding them accountable if they don’t,” Bills said in a prepared statement.

That’s really rich coming from a guy who made $1,344,500 in Virginia political contributions in 2017 — compared to $913,646 for Dominion.

Puh-leeease. If Bills and his buddies in the Charlottesville gentry want to criticize the legislation working its way through the General Assembly, I’m fine with that. There are a lot of pros and cons to most recent version of the bill that would rewrite the process for regulating electric utilities in Virginia. Does it lock in utility profits at an unacceptably high level? Does it undermine the State Corporation Commission’s powers of regulatory oversight? What form should electric grid modernization take? Those are all legitimate questions that would benefit from a robust public discourse.

But when it comes to criticizing Dominion for contribution to political campaigns, Bills sounds like the pot calling the kettle black. Spare me the insufferable self-righteousness.

When “Dominion” makes political contributions, the money isn’t coming from rate payers or even shareholders. The money is collected from Dominion executives and employees. If I understand the mechanics correctly, the Dominion political action committee aggregates the donations of individual employees, some of whom are wealthy executives and some of whom are every-day employees. Somehow, we’re expected to believe that Bills’ donating more than a million dollars from his massive personal wealth is less “corrupt” than hundreds of Dominion employees pooling their smaller donations.

Last year, Bills donated $416,000 to the Northam for Governor campaign. Dominion donated $50,000 — which it offset by donating $55,000 to the Gillespie campaign. If money corrupts the political process, one would think that Bills sank his talons far deeper into Northam than Dominion did. Yet Northam helped work out the legislative compromise with Dominion that Bills’ friends at the Clean Virginia Project find so objectionable. What happened? Is Bills upset that he bought Northam but he didn’t stay bought?

Clearly, money talks. If it didn’t, special interests wouldn’t dole out so much of it. But it’s not so clear that money buys much more than access — the right to be heard– as opposed to a politician’s undying fealty.

The irony is that in the past year or two, Charlottesville’s landed gentry has emerged as a much bigger source of political contributions than Dominion could dream of becoming. Just look at all the money donated to left-wing populist Tom Perriello last year. At least the Dominion PAC represents the interests of thousands of employees around the state. Who does Bills represent other than himself?

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22 responses to “Insufferable Self-Righteousness

  1. “When “Dominion” makes political contributions, the money isn’t coming from rate payers or even shareholders. The money is collected from Dominion executives and employees.”

    Jim, that is an extraordinary statement! It may be that there is an employee PAC also, to which employees give personally, but do you really mean to say there are NO corporate political contributions made by Dominion Energy or any of its subsidiaries, therefore, that ALL contributions by “Dominion” come from individuals who work there, not e.g. from shareholders?

  2. Judged by today’s rules, Michael Bills is acting like a world-class A and arguing speech should be restricted based on content and by the identity of the speaker. And more often than not today, this comes from the Left. The First Amendment protects speech irrespective of its content. (And “yes,” Larry, I know there are limited exceptions such as not yelling fire in a movie theater or using bullhorns at 2 am.) But, the overwhelming rule is Free Speech covers all speech, not just the stuff we like.

  3. Does Mr. Bills also get to write his own legislation that will then be considered by legislators that received contributions from him?

    If that’s TRUE -then yes.. the pot, kettle, black analogy is fair , not withstanding the wicked level of corruption it represents.

    Used to be a dirty-little secret that lobbyists “helped” to write legislation but now it’s all out in the open.. heckfire.. the lobbyists just carry the the exact written legislation, verbatim, from the corporation to the legislators.. and make no bones about it.

    but ..that’s a serious notch up in the ordinary run-of-the-mill “donations” to legislator when the money is folded inside the “proposed” legislation… sorta like “gift wrapping”.. eh?

    • I agree, Larry. It is simply amazing that so few bat an eye that lobbyists are writing bills now. And this is a bi-partisan problem. It it’s the least bit complicated, both parties in Richmond will simply rely on lobbyists to write the bills.

      What is the prime culprit? The GOP’s unending war on lawyers. Every election, they love to trot out, “our guy’s a businessman, the other guy or gal is a lawyer” line. The problem is that so much of the legislation before the GA on big issues (utilities, criminal justice, telecoms, land use, etc.) can only be deciphered by attorneys or public policy professionals. So, when voters go and vote for that “noble businessman”, they need to understand that most of those businessmen basically have no conception of how the words on the paper will actually come to life in terms of being a law. They’re “taking the word” of lobbyists and their party’s caucus and just voting whichever way they’re told. They’re not reading AND understanding the bills.

      Who actually understands the current utility bill, and not just the broad contours and talking points? Maybe Chap Petersen, Jennifer McClellan, Tommy Norment, and Scott Surovell. I’d be shocked if any of the rest of them can actually tell you anything more than the lines they’re being fed by various lobbyists and PR folks.

      • “Who actually understands the current utility bill, and not just the broad contours and talking points? ”

        With respect to this bill, many of the patrons of all the baubles and enticements incorporated into HB1558 understand neither the language of the resulting bill or the language of their incorporated bills, also likely drafted by lobbyists.

        As a result, chaos reigns, chaos actively furthered by Dominion in the multiple stories they are spreading to multiple delegates depending on their particular stance on the issue. I’m starting to get the sense this may not be quite the done deal I thought it was two weeks ago.

  4. Back in the early 1980s, my then employer wanted a small, but important, change to the Iowa Utility regulation law in order to compete with growing competition. I went with a company lobbyist to see the chairman of the appropriate House committee to discuss the issues. He asked me to write the language we thought was appropriate, which I did. We sent him and a couple other legislators the draft language. They further distributed it to key stakeholders, including the Iowa Commerce Commission staff. Finding it acceptable, the language was sent to the legislative staff for inclusion in a draft bill. It passed both houses with bipartisan support and was signed by the Governor. What’s wrong with this?

    • Nothing is wrong with that, so long as it’s “small.” What I’m talking about are pages of new text that rewrite how a utility is regulated written by lobbyists in which 95-97% of the GA will never read and/or understand the bill.

      And that’s happening in Virginia and across the nation. It’s not a technical change we’re talking about. It’s lobbyists rewriting nearly all the rules about a specific topic and the legislators not even understanding what they’re voting on.

      On another of this blog’s hobbyhorses (higher ed)….isn’t it clear to everyone that 95%+ of the legislators didn’t have a clue what they were voting on with the Restructuring Act?

      Or 2016’s proffer law? How many legislators had a clue about what they were voting on?

      This happens over and over and over….a group of lobbyists are rewriting rules and legislators don’t have a clue.

  5. re: ” What’s wrong with this?” ..

    two things:

    1. -when that “legislation” is going to legislators that you’ve contributed money to…. if you don’t see that – then no wonder
    it’s deemed “okay” now days… but used to be they called it corruption.

    2. – when your “legislation” is not looked at by others who may also be affected by that legislation and it is incorporated without any real review by other interests – then it basically is custom legislation dedicated to your own interests and that in my view is how bad legislation gets written.

    there is a purpose to a public process… and it’s important who the “key stakeholders” are .. if that is not a truly process that lets everyone know and let them identify themselves as stakeholders vice you deciding who is or is not.

  6. While we’re on the subject of C’ville gentry (or lack thereof in this case), this story boggles the mind: http://freebeacon.com/politics/democrat-running-virginia-discovers-new-southern-accent-new-home-state/

    Yet another homeless political transplant turned loose on the fine folks in VA.

  7. Nothing new here, this is the nature of the utility/state joint venture. It’s a private industry run by our GA…but unfort it is not really a private industry, it is s state-run business.

  8. Speaking of insufferable self-righteousness, the House of Delegates just handed Dominion a real defeat by adopting an amendment to remove the opportunity for Dominion to double recover on those investments (which of course they denied was in the bill, with the support of Jim here….)

    The remaining bill still stinks but now the real work begins, now that the House has realized they’ve been misled about one element….more enlightenment may follow.

  9. http://leg1.state.va.us/cgi-bin/legp504.exe?181+vot+HV0569+HB1558

    Another roll call that matters, this one the first floor vote on the Toscano Amendment. It was soon followed by reconsideration and on the second vote the tally was 96-1. I watched the faces of a half dozen Dominion lobbyists as this unfolded on the floor. They looked like people who just saw a billion dollars or more of revenue disappear before their eyes.

    At this time looking at the Senate bill the vote text on a similar floor amendment, rejected 26-12 (meaning 26 Senators are on record supporting the double dip, along with the 41 delegates) – well that roll call is not available on line yet, on a vote from Thursday. Hmmmm.

    • The question that now begs to be asked is “What’s Next?” One has to wonder how Dominion/Kilgore will react to yesterday’s amendments and floor speeches. Similarly, what are Wagner, Saslaw and Norment plotting in the other chamber. Further, what does the House do with the Senate version and lastly, who will sit on the seemingly inevitable Conference Committee/

      If this goes far enough south, does Dominion still have the firepower to kill an amended bill?

      • If Dominion, as a regulated monopoly, were prevented from giving money to legislators… I suspect the votes would be even more adverse.

        yeah.. yeah.. I know… some say this money is “free speech”…. and
        I’m fine with “free speech” when it does not involve specific legislation especially legislation written by the same corporation giving money to the legislators who will consider it.

        What we are seeing is the tail wagging the dog.. in any way it can…

  10. Reading these comments, one could could be driven to print up some placards and head for the capital building to protest rampart bribery of imbecilic, manipulable legislator pawns, lackey lobbyists, and greed-driven corporations and their feckless leaders who would pillage the public coffers and rob the poor taxpayer in their anti-social pursuit of shareholder enrichment.

    He would presumably be deeply unsatisfied with a company which continues to have among the lowest rates in the nation, whose outage times have steadily decreased, whose customer satisfaction rates have steadily improved, whose Citizenship report is second to none and whose scorecard is an exemplary model of commitment to sustainability, renewable energy and social consciousness.
    http://www.domcitizenship.com/assets/pdf/Dominion_CR_Performance_102016.pdf
    In medieval times, one’s tenure in purgatory could be reduced with protestations of faith in Catholicism and healthy contributions to religious projects. Our modern protester establishes his moral bone fides and procures indulgences with condemnation of business and virtually anything it might do.

  11. No – “Good” Corporate citizens do not write legislation for their own benefit and contribute money to the same legislators who will consider that legislation.

    Your “good corporate citizen” label goes away when you do that.

    This is sorta like saying Bernie Madoff had “many good qualities”…

    This is not a contest to weigh “good works” versus bad behavior.

    No regulated monopoly should be making cash donations to legislators in the first place much less sending those same legislators legislation that was custom-written by the regulated monopoly.

    I’m quite sure if George Soros or Mills submitted legislation they wrote that benefited their investments – along with some cash contributions…we’d not be talking about all their other “good qualities”.

    We seem to be trying to “normalize” what used to be called bribery… and corruption – as long as they are otherwise “good” corporate citizens.

    NOPE!

  12. Don’t get me wrong. If the current regulatory framework is obsolete and no longer appropriate in the electric energy world – then we definitively need to alter it – but you DON’T do it like this. This is a bad process that reflects badly on Dominion as well as legislators who appear to be their lackeys…

    The only reason why this continues is that the average Virginian is pretty much a rube on the issue and is easily influenced by good PR.

  13. Larry,

    I do not believe that much of the money to legislators comes from Dominion Energy Virginia (VEPCO), the regulated monopoly. I believe that most of the funding comes from the parent company, Dominion Energy, and their various PACs.

    But this also raises a significant issue that goes largely ignored.

    About 20 years ago, the holding company, now called Dominion Energy, absorbed the board and took over the operation of Virginia’s largest regulated monopoly, Virginia Electric & Power Company, now doing business as Dominion Energy Virginia.

    Dominion Energy is a private, unregulated corporation. About 80% of its income and over half of its profit is contributed by VEPCO. Over time, in order to maximize shareholder returns (a typical activity of a private corporation), Dominion Energy has used its political clout to reduce and now nearly remove state regulatory oversight from the monopoly public-service company VEPCO.

    It has been more than a century-long agreement that companies obtain freedom competition in exchange for fair rates to customers and a fair return for shareholders, as determined by regulators. This is what has severely eroded in Virginia.

    With all of the companies now called “Dominion” of one sort or another it is easy to confuse them.

    The parent company milks the utility like a cash cow. Any interference in those plans from regulators is harshly dealt with by pulling the levers at the General Assembly.

    As a former utility executive, I am astonished to see the erosion in regulatory oversight allowed here in Virginia. It is always a delicate and sometimes contentious process to get the balance right. But it normally takes place in an open forum, subject to an evidentiary process.

    Replacing that with a partially informed legislative process, initiated by a law written by a private company that benefits most from the law, is a dangerous choice.

    The regulatory process can be quite simple. First, establish of a fair rate of return and the rates needed to achieve that return. This is usually done by examining the allowed returns of a group of peers that operate in similar circumstances. Second, frequently (every year or two) review the actual returns versus the authorized amount. Third, make adjustments. If the utility has over-recovered, refund the balance to ratepayers. If the utility is under its profit target, rates can be adjusted to get profits to the level that they should be.

    The regulatory process has the flexibility to consider unforeseen circumstances such as storm damage, atypical weather, and new regulations (such as the CPP). It does not require a convoluted process, or legislative interference, such as we have in Virginia.

    The rates can be adjusted to reflect inflation, interest rate changes, etc. to keep things fair for ratepayers and shareholders.

    Utilities have the lowest cost of capital of almost any industry. Mainly because regulators provide a steady stream of revenues and adjust rates to cover the cost of borrowing while still yielding the necessary amount of profit.

    A utility’s primary exposure is when executives make decisions that are not prudent or in the public’s interest. Then it is expected that shareholders must bear at least some of the burden.

    It would be healthiest for the state economy, and families and businesses in Virginia, if we returned to a more typical regulatory process. I would also recommend we investigate a modern scheme that detaches generation from the rate base and gives the utility the opportunity to earn more when it performs better and opens up the opportunity for third-party collaboration with energy services that will lower our bills and create many more jobs.

    For too long the table has been tilted in favor of Dominion at the expense of its customers and the state economy. We can develop a solution that is good for the utilities and the rest of us.

  14. I guess I don’t really care WHERE the money comes from on behalf of Dominion; the point is that it’s there and the people that receive it KNOW
    that it comes to them from Dominion… and again.. if that’s all there was, it would be no different than other corporate or interest group contributions.. not a good thing .. but it is what it is.

    It’s when legislation is written by – or for Dominion – customized to their interests that is then considered by the same people that received donations that things go sideways.

    And I agree with Tom – is Dominion still a monopoly that still should be subjected to regulation OR does this new paradigm of energy justify cutting Dominion loose from regulation and let them do their own thing without interference and restrictions?

    If that is the case or the belief of some then make that case up front – on the merits and not through this quasi-stealth process of trying to enact legislation that Dominion essentially wrote – that in my mind designates the SCC as a pretty much toothless agency… a rubber-stamp agency.

  15. So, should the protester of ever-evil corporate and legislative actions waver in face of facts showing the corporation delivering a good product at fair prices with improving service and customer satisfaction and great expense and effort to satisfy a wide range of criteria for good corporate citizenship, he need only turn to the new prelates of eco-social morality who seem represented here.

    A recent decree published here that following lawful practices which include donations and suggested wording with required transparency to influence legislation the corporation views as beneficial to its and its customers and shareholders benefit is equivalent to the criminal defrauding of millions with falsified statements and other ruses should ease his mind that his protests are morally required

    Apparently our protester should also be reassured by the conviction of these prelates that there are morally enlightened taxpayers, regulators and disinterested parties who will elect superior politicians and craft laws which will produce much better results than the good results we have for taxpayers and customers than the flawed results inevitable if the corporation has any financial or programmatic influence.

    • For the record, I would NOT consider ANY corporate as inherently “evil” whether they are a regulated monopoly or not. Entrepreneurship is what makes the American economy one of the best in the world…and it needs to stay that way but on the other hand “regulation” is also NOT inherently evil. It too has a legitimate place in the economy and those that think regulation is “evil” or really no better than those who think corporations are “evil”.

      Regulated monopolies do have an inherent conflict of interest when they contribute money to legislators who will determine the terms of the regulations. It becomes even more problematic when the regulated monopoly is itself – writing – fairly complex legislation – explicitly to benefit it’s own interests and suggests that legislation is “fair” and appropriate.

      Most folks do not believe that regulated monopolies should be able to earn more than a fair ROI… that’s the basic premise of granting a monopoly that is protected from competition. Beyond that – it’s regulation that keeps would-be-competitors at bay and at a disadvantage that is equally harmful to consumers who may well be paying what appears to be a “fair” price but, in fact are actually paying twice for grid improvements by allowing excess profit to be used for grid improvements – at the same time rate adjustments will also be allowed.

      Yeah – you can see where the utility would want terms like that. The question is do they get to write those terms and present it for approval to people lwho have received money from the same entity suggesting they approve those terms?

      FYI – there is not just one “protester” on this issue in case you have not noticed… and those who think regulation of monopolies if “evil” might need to reconcile their views with many others who think that kind of arrangement inherently is a conflict of interest and borders on corruption.

      it’s NOT a question of “evil” at all. It’s a question of how any entity granted a monopoly should be able to operate with no competition present. It’s at best an artificial arrangement and I’d agree that the terms of the regulation might need to evolve over time – but the idea that no regulation is needed and any entity granted monopoly status is essentially no different from other corporations … might give pause to more than a few folks.

      If Dominion wants to change the terms of the regulation and regulator – it needs to make that case up front in a meritorious way rather than the pernicious stealth legislation and compensated legislators.

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