In a recent influential article in the Energy Law Journal, former FERC General Counsel William Scherman made a number of bombshell claims regarding what he and two co-authors described as the “lop-sided and unfair” FERC enforcement process. If true, these allegations raise troubling concerns about the absence of due process at FERC’s Office of Enforcement, including a putative practice of withholding exculpatory evidence from investigation subjects.
Unsurprisingly, the law review article has figured prominently in the confirmation process for President Obama’s nominee for FERC chair, Norman Bay, who has served as the head of FERC’s Office of Enforcement since 2009 and was, therefore, at the center of the allegations. During Bay’s May 20th confirmation hearing, Bay was questioned about Scherman’s law review article by Senator John Barrasso. In response, Bay said that he would be “very concerned” about the article, but only if it is true. And in follow-up, written responses to questions from Barrasso, which I’ve excerpted below the break, Bay states that none of the allegations in the law review article are true.
So, a prominent person is lying. Either former FERC General Counsel William Scherman is telling fibs about FERC’s Office of Enforcement, or current FERC chair nominee Norman Bay is being duplicitous in rebutting the allegations. Given the gravity of the charges leveled in the law review article, I’d want to find out who’s lying before I supported Norman Bay’s nomination, if I were a Senator.
[Senator Barrasso’s second written question for Norman Bay] In their article, Mr. Scherman and his co-authors made the following statements about the Enforcement Staff and its actions regarding exculpatory materials
A. “[I]n many instances, Enforcement Staff has failed to produce exculpatory documents when requested [by subjects of FERC enforcement actions].” Is this statement true (yes or no)? If “no,” please provide evidence and explain in detail why this statement is not true?
Answer: This is statement is not true. I am not aware of any instance in which Enforcement staff has failed to produce exculpatory documents when requested.
B. “Enforcement staff denies, in case after case, the existence of exculpatory or exonerating materials, only to belatedly produce a subset of those materials too late in the process to be of use to subjects in raising defenses or presenting their case to the Commission.” Is this statement true (yes or no)? If “no,” please provide evidence and explain in detail why this statement is not true?
Answer: This statement is not true. I am not aware of any instance in which Enforcement staff has failed to produce exculpatory materials. I would challenge the authors’ assertion that receiving exculpatory evidence, at any stage, would be “too late in the process to be of use to subjects in raising defenses or presenting their case to the Commission.” If staff members become aware of exculpatory materials, they produce them either at the time they are discovered or, at the latest, long before any order to show cause, the point at which the subject is asked to formally present its case before the Commission. Even if exculpatory information were discovered after the order to show cause stage (and I am not aware of any such instance), the subject would have the opportunity to use it in preparation for any adjudicatory proceeding.
It goes on in this vein for many more questions. Here is a copy of all the questions and Bay’s responses. Again, someone is lying, and the Senate should find out before it votes on Bay.