NEWS

By Rebecca Kern

June 10 — The head of the Federal Energy Regulatory Commission directed agency staff to determine by Sept. 1 whether a former agency chairman violated the confidentially of investigations and decide whether FERC should impose any sanctions.

FERC Chairman Norman Bay also said staff are evaluating a recommendation for the agency to determine whether it has the necessary authority to prevent disclosure or misuse of nonpublic information and whether statutory or regulatory changes are needed.

The move follows release of an Energy Department inspector general report that found former FERC Chairman Jon Wellinghoff improperly disclosed confidential information in a March public meeting.

The report, dated June 4 from DOE Inspector General Gregory Friedman, confirmed along with FERC, Wellinghoff's unauthorized disclosure of a nonpublic video during a public meeting March 9.

Wellinghoff was FERC chairman from 2009 to 2013, and he was serving in his current position as a partner at Stoel Rives LLP when he moderated a panel at the Western Systems Power Pool’s spring operating committee meeting, in Sonoma, Calif.

Wellinghoff said the video was already public at the time he showed it. “There was no confidential information released to anybody,” Wellinghoff told Bloomberg BNA in a June 10 phone interview.

Guidance, Exit Processes Updated 

Bay, who was the director of FERC's Office of Enforcement from July 2009 to August 2014, said in a June 1 response that he agrees with all three of the report's recommendations, including whether FERC should impose sanctions and whether changes are needed to prevent disclosure or misuse of non-public information.

A third recommendation called on FERC to speed up efforts to update and strengthen its post-employment guidance and exit processes, including what constitutes “non-public information.”

Bay said that since the March 9 incident, FERC has updated its post-employment guidance and improved its exit processes. He also said he directed the FERC Office of General Counsel and Office of the Executive Director to include these topics in employees' annual ethics training.

Video Intended as ‘Object Lesson.'

“There was a nonpublic investigation being undertaken at FERC at one time, this snippet of a video tape was shown,” Wellinghoff said, adding “several years after an investigation was closed and the commission had already issued an order.”

“The minute-and-a-half snippet had no information about the company involved, substantive information, names of individuals involved,” Wellinghoff said.

He said the video showed a trader who failed to tell the truth during a deposition to a FERC attorney. “Ultimately they should be telling the truth, and they should be answering questions in a forthright manner,” he said.

Wellinghoff said his reason for showing the video to a conference of market traders was to be “an object lesson for any trader who's under investigation by FERC.”

Wellinghoff said he showed the video several times as FERC chairman as well. He said Bay gave him the video.

Showed Video to Multiple People 

“When I was chairman, I showed it to multiple people outside of the agency at multiple times and proceedings after the investigation was concluded and after the commission had already issued an order on the case,” he said.

Wellinghoff said he no longer has the video; he lost it when his computer crashed.

“There is no basis for sanctions that I know of,” he said.

To contact the reporter on this story: Rebecca Kern in Washington at rkern@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

The DOE Inspector General report is available at http://op.bna.com/der.nsf/r?Open=rken-9xcq48.