USM Board of Regents Finds Chairman did not Violate Board's Ethics Policy

Adelphi, MD (April 12, 2006)-The University System of Maryland Board of Regents has concluded that Board Chairman David Nevins did not violate the regents' ethics policy during the February 2006 meetings of FPL Group and Constellation Energy officers with members of the Maryland General Assembly.

Specifically, the board has concluded that:

• the meetings at issue were not intended as lobbying meetings, but rather, as courtesy calls to introduce the CEO of FPL to key legislators;
• Nevins did not arrange the meetings; his only roles were to coordinate meeting logistics and make social introductions;
• Nevins did not attempt to use his status as a member of the board to gain favor for himself or Constellation;
• ambiguities in the board's ethics policy must be resolved and the board must clarify the policy's scope and meaning of certain terms.

The board based its conclusions on a thorough five-week review conducted by a three-member panel of regents: Orlan Johnson, Clifford Kendall, and Robert Mitchell. The board's Audit Committee appointed the panel to review allegations that Nevins may have violated the "Policy on Public Ethics of Members of the Board of Regents" during the February meetings. The panel's work related only to the board policy; the members did not explore matters regulated by the State Ethics Commission.

Adopted in 1999, the policy states that: "A member of the Board of Regents shall not, for compensation, assist or represent any party in any matter before the General Assembly . . . Questions or concerns about compliance with this policy may be brought to the Board of Regents Committee on Audit."

In assessing the allegations related to the board policy, the panel:

• reviewed the policy and the 1999 legislation that mandated the policy's creation;
• consulted with the Maryland Office of the Attorney General on the standards to be used in assessing possible violations of the policy;
• reviewed media stories regarding Nevins' possible violations of the board's policy;
• conducted in-depth interviews with each individual who attended the meetings-Nevins, Mayo Shattuck (chairman of the board, president, and CEO) and Thomas Brady (executive vice president, corporate strategy and retail competitive supply) both of Constellation, FPL CEO Lewis Hay, Senate President Thomas V. Mike Miller, Speaker of the House of Delegates Michael Busch, Senator Thomas Middleton, and Senator Paula Hollinger.

As part of its review, the panel found no difference of opinion among those interviewed regarding the factual circumstances of the February meetings. Further, the panel found that the participants did not believe that the meetings were set up for lobbying purposes and did not perceive that lobbying actually took place.

The panel presented its findings and conclusions to the board's Audit Committee on April 4. The committee accepted the conclusions and forwarded them to the full board on April

7. The meetings in question occurred in early February. Nevins, Constellation's chief marketing officer, accompanied FPL and Constellation officers to the meetings with the four members of the Maryland Legislature named above. According to the panel's findings, Nevins' participation was limited to making introductions and facilitating the movement from meeting to meeting. The panel also found that Nevins did not participate in any of the limited substantive discussions that took place during the meetings.

As part of its review, the panel consulted with counsel from the Office of the Attorney General who pointed out ambiguities in the board's policy. Based on a review of the limited legislative history of the 1999 bill that mandated the board's ethics policy, counsel also explained that the legislation was intended to prevent board members from lobbying for pay. Counsel also advised the panel to consider applying the standards established in the state's Public Ethics Law in areas where the board's policy is unclear.

Following the advice of the board counsel, the panel explored whether Chairman Nevins, for compensation by another party, communicated with an official or employees of the General Assembly to influence any legislative action. Based on its review, the panel found that the meetings in question did not take place to influence any legislative action; rather, the meetings were opportunities for legislators to meet FPL's Hay and learn more about the company's proposed merger with Constellation.

In reaching its conclusions, the board restated its determination to operate fully within the expectations of the board's ethics policy and the state's ethics laws (the State Ethics Commission oversees compliance with state ethics laws). In addition, the board's Audit Committee is developing recommendations for all USM regents to participate in an annual briefing on board policy related to ethics.

During the coming months, the board, in consultation with the Attorney General's Office, also will work to clarify the scope of its ethics policy.

Contact: Anne Moultrie
Phone: 301.445.2722
Email: amoultrie@usmd.edu