Today, the 8 Directors who sit on the Board of the Tennessee Valley Authority gathered in Columbia, TN for one of its quarterly board meetings (the 9th Director seat remains open after the failure to reappoint Dr. Marilyn Brown). As usual, the board meeting began with a public listening session, in which members of the public may sign up to directly address the TVA Board for no longer than 3-minutes. Speakers often cover a wide range of topics, anywhere from TVA’s management of recreation facilities in the region to pushing the Board to develop more renewable generation resources. Today, however, one speaker’s message to the Board touched on a topic more scandalous than usual – suggesting that TVA Board Chairman William Sansom may have vested, personal interests in the fossil fuel sector.
Garry Morgan, from Hollywood, AL, spoke during the public listening session and questioned Chairman Sansom’s alleged ties to companies that supply materials and equipment related to coal mining and coal plant operation.
“It is time to take a hard look concerning the direction TVA will proceed in the rest of the year and the next couple of years,” Morgan asserted today. “Mr. Chairman, due to your holdings in mining and businesses in and out of the valley, there appear to be conflicting issues with your business and stockholding and the TVA. There must be transparency in these very complex relationships.”
“It is my and others’ belief that there are apparent conflicts of interest, Mr. Chairman, involving your various positions, stockholdings and directorship and the TVA. There must be complete transparency and no appearances of questionable conflicts.”
In a subsequent conversation with Mr. Morgan after the Board meeting, we were able to glean more information regarding the assertions made during the public listening period. It would appear that Chairman Sansom owns a significant amount of stock in Astec Industries and Martin Marietta Materials; both are companies that supply either equipment or materials that are commonly used to retrofit and operate coal-fired power plants. TVA’s own conflict-of-interest policy states that Directors, at the very least, must disclose any financial and/or ownership interests exceeding $25,000 in companies that do business with TVA.
Chairman Sansom has an extensive background in business and is historically known as a force to be reckoned with if you should happen to disagree with his business practices and beliefs. Although Sansom has only dabbled in the civil service arena, serving as Tennessee’s Commissioner of Transportation in 1979 and Tennessee’s Commissioner of Finance and Administration in 1981, he continues to have a strong presence among top Republican leaders in the state and assert his influence behind the scenes. Sansom left the public sector for good in 1983, when he became chairman and CEO of H.T. Hackney Co.
These financial connections to companies within and related to the coal industry, as well as his own history as president of the American Limestone Company, raise the specter of impropriety around Sansom’s position as Chairman of the TVA Board. Sansom joined the American Limestone Company in 1964 as an engineer and served as its president from 1974 – 1979. Limestone is used in flue-gas desulfurization (FGD), a technology used to remove sulfur from a coal plant’s air emission stream.
Under a 2011 consent decree, TVA must either retire or install FGD technology at a significant amount of their outdated coal plants in the next 3-5 years. So, you have to ask: if a person would benefit financially from TVA’s future reliance on coal-fired generation, can we trust that same person to make objective decisions about whether to invest $1 billion in retrofitting a coal-plant OR invest in developing renewable energy generation sources?
We believe Mr. Morgan has brought an important issue to the forefront. Given the billions of dollars that TVA has in play at their coal facilities – in making decisions about the future of the plants and their ongoing operations – we believe it is important that all TVA board members fully disclose all of their connections and go the extra mile to make sure that there are no conflicts of interest. We do not have enough information at this time to definitively characterize Mr. Sansom’s holdings as conflicts; however, there is enough appearance of potential conflict to warrant that Mr. Sansom fully disclose any and all holdings that could be construed as such.