1. ENERGY POLICY: Lawmakers back energy companies with their private dollars (E&E Daily, 06/18/2009)

Anne C. Mulkern, E&E reporter

This story was updated at 12:45 p.m.

Members of Congress with key roles crafting legislation that would transform the United States' energy portfolio laws own as much as $22.8 million in stocks, bonds and other assets of companies potentially affected by policy changes.

An analysis of personal finance disclosure filings released last week shows that 45 members of seven committees last year owned stakes in utilities, fuel and natural gas businesses, mining, coal, solar, wind, exploration and production companies.

Lawmakers put their private dollars into household names such as Exxon Mobil Corp., BP, ConocoPhillips, Edison International, Duke Energy Corp. and Southern Co. They also invested in energy businesses the average person might not have heard of, such as Transocean Ltd., an offshore drilling company.

Senate and House ethics rules allow it. With very narrow exceptions, lawmakers can invest in companies that could be affected by congressional action. But the widespread holdings by those in a position to influence energy and climate change legislation highlight the need for full and better disclosure, watchdog groups say.

"There's a fine line we're walking here with a member of Congress who's going to have a role in really seminal legislation," said Leslie Paige, spokeswoman with Citizens Against Government Waste, a nonpartisan government watchdog group. "It is incumbent upon them to make clear what their personal stake in it is."

E&E analyzed the personal finance disclosures of members of the House Energy and Commerce Committee, Select Committee on Energy Independence and Global Warming, and the Senate Energy and Natural Resources, Finance, and Environment and Public Works committees. Additionally, E&E looked at the assets of the subcommittee chairs and ranking members on House Ways and Means and Agriculture committees, who are involved in crafting the final House version of H.R. 2454..

The disclosures, which cover last year, provide only ranges of assets. The total owned by those lawmakers could be worth anywhere between $12.3 million and $22.9 million.

The total includes stocks or bonds in energy-related companies or mutual funds that have strictly energy holdings. It does not include other industries that lawmakers own stock in that also could be affected by the legislation, such as the timber and steel industries. Eleven members of the committees that E&E examined received an extension to file their report for 2008 from the relevant House or Senate Ethics panel.

All of the members who responded to questions about their holdings said none of their investments influenced their decisions, such as Environment and Public Works Committee ranking member James Inhofe (R-Okla.), who owns between $75,000 and $250,000 in energy-related businesses, including oil and gas company Suncor Energy Inc.

"For 15 years he's opposed cap and trade legislation, so his position hasn't changed based on his investments," said Inhofe spokesman Matt Dempsey.

Some of the key crafters of the energy and climate bills did not report owning energy stocks, bonds or funds that are solely energy-related. Environment and Public Works Chairwoman Barbara Boxer (D-Calif.), for instance, has her money in a blind trust where she is not aware of her holdings.

Energy and Commerce Chairman Henry Waxman (D-Calif.), who is leading the House charge on the climate bill, has the majority of his investments in index mutual funds. Waxman's co-sponsor, Rep. Ed Markey, (D-Mass.), chairman of the Select Committee on Energy Independence and Global Warming, owns four mutual funds. His spouse owns several mutual funds. None of those are exclusively energy funds, though at least one has a few solar energy stocks.

The ranking member of the Energy and Commerce Committee, Rep. Joe Barton (R-Texas), at the end of last year owned between $15,001 and $50,000 in EOG Resources Inc., a Houston based oil and gas company. Barton also received between $2,501-5,000 in royalties from Carrizo Oil and Gas Inc. for gas obtained at his Texas home. Barton voted against the climate bill in committee.

Another lawmaker playing a major role in energy legislation held a variety of energy assets last year. Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) reported owning energy investments valued between $20,005 and $129,995.

The Energy and Natural Resources Committee yesterday approved a major energy bill that would, among other things, impose a national renewable electricity standard, overhaul federal financing for "clean energy" projects, establish a suite of efficiency measures, mandate new federal electricity-transmission siting power, and allow wider oil and gas leasing in the eastern Gulf of Mexico (Greenwire, June 17).

Bingaman's holdings included Arch Coal Inc., a St. Louis, Mo.-company that on its Web site says it contributes "roughly 12 percent of America's coal supply." Bingaman held that stock only briefly last year. Bingaman also held stock in Transocean Inc., the offshore drilling company; China Risun Coking Group, which produces and sells byproducts of coal; and CS Wind Corp., a wind tower factory in China. Some analysts have said coal companies in China could benefit from a U.S. cap-and-trade law that penalizes U.S. companies for carbon emissions.

China Risun Coking Group and CS Wind, along with other energy assets Bingaman still holds, are part of a Goldman Sachs equity fund that he invests in but does not control, said Bingaman spokeswoman Jude McCartin, who said the senator and his wife "make no decisions over what is being bought and sold or the timing,"

Of his energy sector total, Bingaman holds between $15,001 and $50,000 in the Energy Future Holdings Corp. That is another trust that he does not control, McCartin said.

"Senator Bingaman is influenced in no way by his investments," McCartin said.

Lawmakers holdings vary

Members who with their spouses held some of the highest dollar totals of energy assets include Sen. John Kerry (D-Mass.), Rep. Jane Harman (D-Calif.), Rep. Jim Sensenbrenner (R-Wis.), Sen. David Vitter (R-La.), Rep. Ed Whitfield (R-Ky)., Inhofe, Rep. Dave Camp (R-Mich.), Rep. Jerry Moran (R-Kan.), Rep. Shelley Moore Capito (R-W.Va.), and Sen. Tom Carper (D-Del.).

Carper is chairman of the EPW Committee's Clean Air and Nuclear Safety Subcommittee. His energy assets and those of his wife were valued between $23,010 and $170,999.

Carper held between $15,001 and $50,000 in Duke Energy and owned stock worth between $1,001 and $15,000 in Spectra Energy Corp., a natural gas infrastructure company. Carper's wife owns stock in companies that include integrated energy company Marathon Oil Corp., Exxon Mobil and ConocoPhillips.

"Senator Tom Carper and his wife have a diverse portfolio of investments and no policy decisions are influenced by their investments," said Carper spokeswoman Bette Phelan.

Lawmakers' stake in Exxon Mobil Corp.

Exxon Mobil Corp is one of the most popular stocks for members of Congress on key committees crafting energy legislation. It is owned by the following lawmakers: • Rep. Mary Bono Mack (R-Calif.) • Rep. Dave Camp (R-Mich.) • Sen. Tom Carper (D-Del.), held by spouse • Rep. Charlie Melancon (D-La.) • Rep. Shelley Moore Capito (R-W.Va.), held by spouse • Rep. Jerry Moran (R-Kan.) • Sen. John Kerry (D-Mass.) • Rep. Jim Sensenbrenner (R-Wis.) • Rep. Cliff Stearns (R-Fla.) • Rep. Fred Upton (R-Mich.), held by spouse • Sen. David Vitter (R-La.) • Rep. Ed Whitfield (R-Ky.)

Source: legistorm.com.

Kerry and Harman are near the top of the list in terms of total value owned because both are married to very wealthy people with vast holdings. Kerry's wife, Teresa Heinz Kerry, is heiress to the H.J. Heinz Co. ketchup fortune.

Chairman of the Senate Foreign Relations Committee, Kerry is also a member of the Finance Committee that will have a say in the tax provisions of climate legislation. Kerry reported energy holdings with his spouse that range between $8 million and $13.6 million.

The holdings that are in Kerry's name, without his wife, include between $15,001 and $50,000 in Exxon Mobil, and between $1,001 and $15,000 each in utilities General Electric Co., Southern Co., Wisconsin Energy Corp., Alliant Energy Corp., Exelon Corp. and oil and gas company ConocoPhillips.

The value of the total reported that Kerry owns by himself is about $100,000, said Kerry spokeswoman Jodi Seth. That money, she said, is in a trust he does not control. "It's Grade-A bologna to suggest that inherited trusts that he doesn't control would affect one iota the progressive values John Kerry has fought for his whole life," Seth said.

Paul J. Bschorr, Teresa Heinz's Kerry's chief of staff, said her energy assets are "held almost entirely in family trusts of which she is a beneficiary. Senator Kerry is not a beneficiary of any of these trusts." She does not control the trusts, he said.

Harman, married to Sidney Harman, who sold his electronics-maker company Harman International Industries Inc. for a reported $100 million, declared energy assets valued at between $897,005 and $1.9 million. Harman sits on the House Energy and Commerce Committee.

Her holdings included between $50,001 and $100,000 in utility group First Energy Corp., between $15,001 and $50,000 in a holding company for Pacific Gas & Electric Co., and between $500,000 and $1 million in an asset connected to a San Antonio, Texas, utility. The entry is abbreviated on the disclosure form and Harman's office did not respond to a request for more information.

Sensenbrenner, the ranking member on the Select Committee on Energy Independence and Global Warming, was one of the few members of Congress who listed exactly what he owned with precise dollar values. Sensenbrenner held $1,018,501 in four energy companies. Of that, $662,477 was in Exxon Mobil. The rest was invested in three utility companies.

"Congressman Sensenbrenner votes in the best interest of his constituents, regardless of his own personal holdings, even if that means he takes a financial loss," said his spokeswoman, Wendy Riemann.

Watchdogs want more information

Senate and House rules for the most part maintain public disclosure is sufficient to police lawmakers' personal assets, because lawmakers act on laws that affect all industries, said Robert Walker, counsel at Wiley Rein law firm and former chief counsel and staff director of the both the Senate and House Ethics committees.

"If a member were to have to recuse for every area of the economy over which they might legislate, they'd have to recuse for everything ... or they'd have to divest of everything," Walker said. "That's just not viewed as a practical legislative approach."

Even using third parties to make investment decisions, as some lawmakers do, does not eliminate the perceived conflict of interest, Walker said, because the lawmakers still know what they own.

The main limitation in congressional rules prohibits a lawmaker from voting on a bill that directly benefits that lawmaker or a member of his or her family. But even then, the company would have to be one of a very few benefiting for the prohibition to apply. With legislation as broad as the climate and energy bills that Congress is crafting, a lawmaker virtually could own a power company and still vote on the bill, Walker said.

Tyson Slocum, director of the energy project at Public Citizen, a watchdog group, said additional information is needed to put members' investments in perspective. That might include knowing how many times representatives from a company that a lawmaker has stock in speaks to that lawmaker or his or her aides. "You can't look at this in a vacuum," he said.

The energy assets should also be compared to a lawmaker's total worth, Slocum said. There are many members of the Senate in particular who are very wealthy, said Paige, the spokeswoman with Citizens Against Government Waste.

And the disclosures need improvement, Paige said, adding that in many cases it is difficult to determine exactly what the asset is. Lawmakers or aides sometime write the entries by hand or use shorthand. And more should be willing to be clearer about exactly what they have, she said.

"If you're investing because you want to make money," that is not a bad thing, Paige said. "But just put it out there and be willing to defend that choice."

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