Five employees of the Virginia Department of Environmental Quality (DEQ) have financial interests in Dominion, the stateโs largest utility and energy company. The officials are involved, in one way or another, in permitting or overseeing the companyโs activities, ranging from water discharges to emissions controls on powerย plants.
According to financial disclosures filed with the stateโs ethics council, four of them directly own stock in the company, while the wife of a fifth official works forย Dominion.
Dominion, DEQ, and Regulatoryย Decisions
Documents obtained by DeSmog through a series of open records requests show that the DEQ officials are all involved in decisions concerning Dominion facilities andย projects.
Three of them work in the Valley Regional Office, which oversees three of Dominionโs power stations in the state โ the Bremo, Bath County, and Warren County stations. Amy Owens, the regionโs director, owns Dominion stock. In 2016 she signed off on a controversial permit that allowed Dominion to discharge treated water from the Bremo power stationโs retired coal ash ponds into the Jamesย River.
The permit was met with strong criticism by environmental groups. โWhen it [coal ash] comes out of that pipe, it wonโt meet the required standards of water quality,โ Pat Calvert, the Upper James River Keeper with the James River Association, said at the time. โThe river is going to be used to dilute the wastewater to permit levels. Those are the shores of Fluvanna County that will be essentially a sacrificeย zone.โ
Owensโ deputy, Bryan Fowler, also owns Dominion stock. Documents obtained from DEQ show that he supervised an inspection at the companyโs Bremo power station in July last year. Another employee in the regional office, air permits manager Janardan Pandey, who is responsible for permitting Dominionโs three power stations in the region, owns Dominionย stock.
Emails show that both Fowler and Pandey were recently involved in discussing Dominionโs plan for shutting down parts of the Bremo power station during certain winterย periods.
According to their financial disclosures, Owens, Fowler, and Pandey each stated that their Dominion stocks are worth between $5,000 andย $50,000.
In DEQโs northern regional office, air permitting program manager James LaFratta also owns Dominion stock, which he listed as worth between $5,000 and $50,000. Documents and emails from the past year and a half show that LaFratta has been involved in permitting decisions concerning Dominionโs facilities in the area, including the Gordonsville, Remington, and Possum Point power stations (where Dominion requested approval for new emission controls for one of the units), and Ladysmith combustion turbines station.
He was also involved in decisions concerning the Quantico compressor station (where Dominion sought to install an emergency generator), and Leesburg and Loudoun compressorย stations.
In one email, LaFratta discussed with colleagues a meeting requested by Dominion representatives, including from its media department, to apparently prepare the DEQ on how to deal with โconcerned citizens & neighbors who may be next contacting usโ in relation to the Leesburg and Loudoun compressorย stations.
Such stations, which are built in intervals along gas pipelines, propel the gas running through the pipeline system. Since the stations emit various toxic substances, they require air pollution permits in accordance with federal and stateย laws.ย ย
From an internal DEQ email, discussing a meeting between officials and Dominion about preempting โconcerned citizens & neighborsโ near the companyโs compressorย stations.
Another DEQ employee has an interest in Dominion through a family relationship. Michael Kiss, whoโs in charge of the office of air quality assessments at the DEQโs main office, disclosed that his wife, Rebekah Kiss, works as an environmental manager at Dominion. Michael Kiss has been involved in recent years in permitting Dominionโs Buckingham compressor station as part of its Atlantic Coast pipeline project. The DEQ recently issued a draft permit for the station.ย ย
Does Owning Stock Create a Conflict ofย Interest?
It bears mentioning that internal DEQ documents obtained by DeSmog give little if any indication these links to Dominion mean the officials in question automatically side with theย company.
In fact, in at least one instance, Bryan Fowler sought a more stringent regulatory approach to the company. Reacting to Dominionโs proposal for decommissioning parts of its Bremo power station during winter, Fowler suggested adding new reporting requirements, saying, โI donโt like open-ended reporting theyโve proposed if they have an activeย permit.โ
Joe Maschman, a legal fellow at Common Cause, a watchdog group which monitors money in politics and government, points out that Virginiaโs ethics laws generally prohibit state employees to receive money or business opportunities that โreasonably tends to influence him in the performance of his officialย duties.โ
Recusals are required when a personal interest is involved. However, Maschman says, the bar for the existence of such an intertest is relatively high and includes an ownership in an interest exceeding 3 percent of the total equity of the business and an annual income that exceeds $5,000 from the ownership of theย business.
Since individual stock ownership of large publicly-traded companies like Dominion rarely exceed 3 percent of its total issued stock, โthis suggests to me that the four officials who own stock in Dominion would not have a conflict,โ saysย Maschman.
โMr. Kiss, on the other hand, assuming his wife receives compensation from Dominion greater than $5,000 per year, wouldย have a personal interest in matters concerning Dominion Energy and the DEQ,โ Maschman adds. โHe would need to recuse himself from such matters to maintain compliance with the ethicsย laws.โ
Ann Regn, a DEQ spokesperson, said that according to the stateโs ethics laws and the agencyโs own policies, the DEQ does not believe the five officials have a conflict of interest. However, the DEQ is consulting on the matter with the state attorney generalโs (AG)ย office.
โIn addition to the state code, DEQ has its own standards of ethics policy,โ Regn told DeSmog via email. โWe don’t believe there’s conflict of interest with any of the staff, but to be sure, we reached out to the state AG‘s office for their concurrence.โ The DEQ has not heard back from the AGโs office by the time ofย publication.
Regn added that in addition to filing disclosure forms, staff are required to take conflict of interest training every twoย years.
Asked whether the five officials would like to provide comment, Regn said: โDEQโs Communications Office coordinates agency media requests and have informed staff of your questions. No one indicated they have anything else toย add.โ
Dominion Energy did not respond to a request forย comment.
More Fuel to the Criticsโย Fire
Ethics laws differ from state to state, as definitions of what constitutes a financial conflict of interest vary widely. While in some states, the definitions remain vague and general, prohibiting the holding interests that hinder sound judgment, others โ like Arkansas โ mandate clearer restrictions on the percentage of stock ownership.ย ย ย
Whether recusals are in order or not in the case of Virginiaโs DEQ, such financial ties are likely to be seen by long-time critics of the DEQ as more evidence of Dominionโs long arm in Virginian politics and government. Environmental activists were outraged in recent years to learn that DEQ Director David Paylor accepted $2,300 from Dominion to attend a golf tournament and a dinnerย engagement.
Soon after, opponents of the mammoth Atlantic Coast pipeline, which would carry fracked gas from the Marcellus and Utica shales to West Virginia, Virginia, and North Carolina, harshly criticized two DEQ decisions. One was to yield the review of the pipelineโs waterway crossings to the Army Corps of Engineers and the second was to separate the agencyโs review of erosion and sediment control plans for the pipeline from the water-quality certification โ moves that were interpreted as a nod to Dominionโsย interest.
And as DeSmog revealed last year, a contractor hired by the DEQ to review a portion of the pipeline was already working directly for Dominion on anotherย project.
Main image:ย Dominion’sย coal-fired power plant located in central Virginia beside the James River at Dutch Gap. Credit:ย Edbrown05,ย CC BY–SAย 2.5
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