070217 BR Aquifer cross-section.jpg

Five years before five members of a Baton Rouge-area groundwater commission were charged with conflict-of-interest violations, an attorney for the commission warned of exactly the problem that led to the charges,  commission records show.

In mid-2015, former Assistant Attorney General Megan K. Terrell, then the groundwater commission's legal advisor, concluded that state ethics law could bar commissioners from drawing a salary from the big groundwater users they were supposed to regulate, like Baton Rouge Water and ExxonMobil.

The 18-member Capital Area Ground Water Conservation Commission manages the Southern Hills aquifer, the drinking water source for nearly 600,000 people in the Baton Rouge area. The aquifer also supplies industries, farms, cattle ranches and others.

In a July 15, 2015, memo, Terrell pointed the volunteer commissioners to two state ethics opinions from the mid-1990s involving other state boards.

She wrote that, while the ethics opinions don't prevent industrial and other major users from nominating representatives to the groundwater commission, as state law allows them, it "may affect the ability of these users from nominating their own employees."

"Based on the above analysis," Terrell wrote, "it would appear the Ethics Code ... prohibits a person who is employed by, provides services to, and received a salary from an entity that is regulated by the" commission.

Terrell's conclusions, which the commission's former director says were shared with the commissioners at the time and with Gov. Bobby Jindal's administration, called into question a longstanding practice of big users' employees serving on the panel.

Four years later, in May 2019, the Louisiana Environmental Action Network filed an ethics complaint over the same potential conflict.

In July and November, the ethics board charged five members with conflict of interest violations: then-outgoing commission chairman Nelson Morvant; a previous chairman, Dennis McGehee; then-outgoing vice chairman Todd Talbot; and Commissioners Ronnie Albritton and Ryan Scardina.

Morvant works for Entergy; Talbot for ExxonMobil; Albritton for Georgia-Pacific; and McGehee and Scardina for Baton Rouge Water Co. All of the private employers are major users of the aquifer regulated by the commission.

The ethics charges accuse the five commissioners with the exact violation cited by Terrell. That may force a reevaluation of the commission's structure and the outsized role that some critics say executives of industrial users and drinking water providers have played on the panel.

Terrell, who is in private practice and continues to attend commission meetings, declined to comment. The ethics charges are being adjudicated by a state administrative law judge.

Conflict or experience?

By law, the groundwater commission has seats set aside for nominations from state agencies and various economic sectors with financial or regulatory interest in the critical groundwater source. 

The idea has been that these employees could put their own work-related experience toward science-based and consensus-driven ways to properly managing the aquifer.

But the commission has also come under fire from environmentalists, some legislators and state agencies for not doing enough to halt the spread of salt water into the groundwater source. Some have accused the commission of being beholden to industries with a financial stake in lighter oversight.

Terrell's warning reflected a smoldering concern that commissioners who work for regulated users would have a hard time taking actions that would protect a community asset like but that also could affect individual users' bottom lines.

Critics say these employees have also had an outsized influence on the commission. A state Office of Conservation report in February noted that the chairman of the commission was an employee of a regulated user 80% of the time between 1974 and 2004. Since 2013, "employees of these companies all have either served as board chairman, vice-chairman, or committee chairmen, often multiple times," the report added. 

State Rep. C. Denise Marcelle, D-Baton Rouge, who has advocated for forcing larger industrial users off the aquifer and onto the Mississippi River to ease pressure on the groundwater, proposed legislation in 2018 that would have blocked employees of users from serving on the commission. The bill would have also added seats for LEAN and the Sierra Club.

She said several visits to commission meetings made clear to her that the change was necessary.

"It was like common sense to me," Marcelle said. "Why would these folks, you know, why would they vote against the industry where they work?"

Commissioner Matt Reonas, who represents the state Office of Conservation, which has been critical of the commission, pointed out that those conflicts can emerge in various ways, from consideration of potential pumping fee increases to limiting future groundwater use. He added the issue is even more significant through the influential position of commission chairman.

He pointed to an example in 2017 where a former chairman issued a subpoena to force Baton Rouge Water to produce company water use data that the commission sought.

"Could one of the BR Water employees, or any of the other company employees in that same position as chairman as they have been in the past, have signed off on that subpoena?" Reonas asked. 

Rep. Marcelle's bill died in committee in 2018, like a similar effort in 2015 had. Marcelle said she didn't learn about Terrell's opinion until later.

In May 2019, almost four years after Terrell weighed in, the Louisiana Legislative Auditor's Office issued a broad and scathing report on the commission's regulatory rigor that also raised the same potential ethics violation and urged the commission to seek an ethics opinion about the matter.

The commission had previously decided against seeking such an opinion. Since that report, it hasn't directly asked the ethics board about the possible conflict, ethics officials said.

Attorneys and other defenders of the commissioners say the practice is legal and, Baton Rouge Water officials add, that the Board of Ethics has engaged in a "hyper-technical reading" of the ethics code that ignores the commission's history. 

Baton Rouge Water officials point out that Leo Bankston, a long-term employee of the company, "was the driving force in the creation" of the commission, its first chairman and now has a commission award for groundwater conservation named in his honor. 

"In fact, there is no party more keenly interested in the mission of the (commission) than the Baton Rouge Water Company as providing high quality drinking water at the lowest possible cost is the very mission of the company," a company statement says. "For the Ethics Board to suggest that the continued service of employees of (Baton Rouge Water) is somehow improper does a tremendous disservice to the residents of Baton Rouge."

It's a view shared by new commission chairman William Daniel. He said he believes the connection between an employee and a large multi-billion dollar company's bottom line is too tenuous to pose a conflict, and he doesn't believe the commissioners have been acting in bad faith to benefit one company over another.

"I understand that the ethics board had job to do. We'll just see where it goes," Daniel said.

Where did the memo go?

It's not fully clear how widely Terrell's memo was shared, but her finding and the later warning by the state Legislative Auditor's Office failed to halt such appointments. 

In fact, since Terrell issued her opinion, each of the five commissioners who has been charged with the conflicts was nominated by a major user, confirmed by the state Senate and appointed or reappointed to the commission by Gov. John Bel Edwards -- in some cases twice, according to ethics and legislative records obtained by The Advocate.

Senate confirmation questionnaires show each of those commissioners informed the Senate about his current employment with a large groundwater user and his belief that he didn't have any personal situation that could pose a conflict of interest by serving on the commission. 

Defenders and attorneys for the charged commissioners say the appointments are legal and are rooted in the commission's origins and the Senate and Governor's actions show that.

"They've done everything in accordance with the guidelines and guidance of the board and the Governor's Office," said Alesia Ardoin, an attorney who is representing three of the men charged.

Tony Duplechin, the former long-term director of the commission, said it was up to the Senate and the Governor's Office of Boards and Commissions to vet candidates.

Commission minutes show he informed the commission in September 2015 about the substance of Terrell's opinion, described as an Attorney General's Office opinion because of where Terrell worked then, and said he was passing it on to Boards and Commissions.

In an interview last month, Duplechin said he never heard back from the Governor's Office about Terrell's memo. The Advocate has a records request pending with the groundwater commission about Duplechin's correspondence over the opinion.

After being provided a copy of the memo, a spokeswoman for Gov. Edwards didn't directly dispute the former director's claim about having submitted the document.

"The memo was written prior to Gov. Edwards taking office and is not something we have seen. All of the appointments made by the Governor are made in accordance with the statute that governs the Capital Area Groundwater Conservation Commission," spokeswoman Shauna Sanford said in an email.

Morvant, Albritton and McGehee were on the commission at the time of the September 2015 meeting. But only McGehee and future Commissioner Talbot were present among those charged, minutes show. Scardina didn't join the commission until 2017.

Email David J. Mitchell at dmitchell@theadvocate.com

Follow David J. Mitchell on Twitter, @NewsieDave.