More than a dozen former regulators of Illinois utilities have found lucrative employment with companies they once were responsible for overseeing or have joined consulting or law firms hired by utilities, state records show. The state`s largest utility, Commonwealth Edison Co., has the longest list of former regulators who have been or remain on its payroll. That list includes three former chairmen and three other top officials of the rate-setting Illinois Commerce Commission.
One of the former chairmen`s law firms has been paid hundreds of thousands of dollars annually by Edison for legal work, lobbying and consulting.
Edison also has employed two former chairmen and two other top officials of the U.S. Nuclear Regulatory Commission, which oversees safety and regulations at nuclear power plants.
Edison is not alone in hiring its former regulators. Illinois Bell Telephone Co., Peoples Gas Light and Coke Co. and other utilities have done the same.
Indeed, it is common for former federal or state regulators to go to work for companies or individuals they used to regulate. There is nothing illegal about it if regulators follow federal and state laws designed to avoid conflicts of interest.
In Illinois, former Commerce Commission members are the only state officials who must wait a year before going to work for companies they once regulated. Former federal officials are barred from representing clients before their former agencies for two years.
There is no evidence that the former state and federal officials who have been hired by Illinois utilities have violated those laws.
But consumer groups say the frequency with which former regulators have gone to work for Illinois utilities, especially Edison, raises disturbing questions about the relationships between the utilities and government officials.
At least 13 former state and federal officials have gone to work for Illinois utilities or their consulting or legal firms in recent years. All but two have done at least some work for Edison or have joined firms retained by Edison.
”It undermines consumer confidence in the fairness of the rate-making process,” said Howard Learner, associate general counsel of Business and Professional People for the Public Interest, a consumer group.
”The public perceives that the regulators bend over backward in accommodating the utilities, knowing there is a potential pot of gold at the end of the rainbow when they finish their jobs,” he said.
But utilities say they hire former regulators because they are the experts.
Edison spokesman John Hogan said the utility`s employment of the former officials or their firms is simply a case of Edison ”selecting the best people for the business at hand.”
The former regulators also defend what they have done.
”I don`t spend every waking hour working with utilities; I do other work,” said Michael Hasten, chairman of the Commerce Commission from 1979 to 1983. ”But that they call on me occasionally to give them advice is indicative of the fact that I know something, I hope.”
Hasten has done legal work and consulting for Edison and Bell through the law firm of Winston & Strawn.
Commission records show Hasten`s firm received nearly $1.2 million in legal fees from Edison from 1988 to 1990 and more than $2 million from Bell during the same period.
Bell spokesman Larry Cose said that less than 10 percent of Winston`s annual billings to Bell are related to work performed by Hasten.
Neither Edison nor Hasten could say what share of Winston`s billings to Edison were for Hasten`s work. But Hasten said he suspected it was small. Hasten most recently has represented Edison in franchise negotiations with the City of Chicago.
Edison and Bell have not filed their 1991 annual reports showing how much they paid Hasten or other contractors last year. Under state law, utilities are not required to divulge payments of less than $25,000.
In addition to Hasten, Marvin Lieberman, commission chairman from 1973 to 1977, has done consulting and legal work for Edison and Peoples Energy Corp., the parent company of Peoples Gas. Philip O`Connor, commission chairman from 1983 to 1985, formed a consulting firm, Palmer Bellevue Corp., that has advised Edison, Bell and at least one Downstate utility.
O`Connor`s partners in Palmer Bellevue were Gerald Keenan and Sam Xanders, two former top commission staffers, and Gerald Benson, a former Edison regulatory affairs director. Benson and Xanders left Palmer Bellevue in 1986 to advise Edison on a proposed rate increase for three new nuclear power plants.
From 1989 to 1990, Palmer Bellevue received $220,467 from Edison for consulting work. O`Connor said the work involved acid-rain and conservation issues, in which he said his company is nationally recognized for its expertise.
O`Connor said his work helped keep Edison`s rates from rising because it lowered the utility`s cost of complying with federal clean-air laws.
While Hasten, O`Connor and Lieberman have worked as outside consultants, Raymond Romero, a commissioner from 1985 to 1990, went to work directly as a senior lawyer for Ameritech Corp., the parent company of Illinois Bell.
While on the commission, Romero gained a consumerist reputation mostly for opposing Edison rate increases. But he was an architect of a 1989 Illinois Bell rate plan that allowed Bell to earn higher profits. The Illinois Appellate Court struck down the plan as illegal in 1990.
”The appearance you want to avoid is the appearance of featherbedding,” Romero said. ”The idea is you don`t want commissioners making favorable decisions in exchange for the promise of a job.”
Romero said that while he was a commissioner, he was never approached about future employment with Ameritech or Bell and took the job only after spending a year with a private law firm.
One of Romero`s former commission assistants, Ricardo Tostado, also now works for Ameritech. Clyde Kurlander, the commission`s former general counsel, left to join a law firm that Edison paid $59,331 for legal advice in 1990. Kurlander`s firm also has worked for several Downstate utilities.
And E. King Poor left his job as a commission lawyer and joined Winston & Strawn, Hasten`s law firm. Poor said he has done only limited work for utilities since leaving state government.
In addition to former state regulators, Edison has sought the services of former NRC officials, including former NRC Chairman Lando Zech Jr. and another former chairman of the nuclear-safety agency.
The NRC is a key regulator of Edison, which, with its 12 nuclear plants, produces more of its electricity through atomic power than any other U.S. utility.
Zech is a member of Edison`s board of directors, for which he was paid $42,350 in 1990.
Edison hired former NRC Chairman Marcus Rowden as a consultant in several Commerce Commission cases. It also hired Darrell Eisenhut, a former NRC licensing director, and James Keppler, a former NRC Midwest regional administrator, as consultants.
NUS Corp., a firm for which Eisenhut is a senior vice president, received more than $3.6 million in architectural and engineering fees from Edison from 1988 to 1990, state records show.
The same records show Edison directly paid Keppler $35,850 for consulting in 1989. Rowden`s name does not show up on Edison`s disclosure form as receiving more than $25,000 from 1988 to 1990.
