Mongiardo blasts Conway for taking utility money

lblackford@herald-leader.comApril 23, 2010 

Lt. Gov. Daniel Mongiardo criticized his rival in the Democratic primary for the U.S. Senate on Thursday for taking money from utility companies as a U.S. Senate candidate while intervening in those utilities' rate hike cases as the state's attorney general.

In appearances in Louisville and Lexington, Mongiardo asked Attorney General Jack Conway to return more than $60,000 in contributions from utilities and their employees and to recuse himself from future rate hike decisions.

"Conway has taken thousands of dollars from utility executives and their employees, and he is supposed to represent ratepayers," Mongiardo said. "It's akin to a courtroom, being a lawyer representing a defendant and taking money from the plaintiff. ... It's clearly unethical; it's clearly a conflict of interest."

In the run-up to the May 18 primary, the rhetoric has gotten increasingly rough. Conway's camp has sent out numerous releases about Mongiardo using his state housing allowance to help buy a Frankfort farm that he once planned to develop; Mongiardo is hitting back on the utility issue.

As attorney general, Conway is required to represent ratepayers before the Public Service Commission when utilities request a rate hike. Most negotiating with utility companies is handled by the AG's Office of Rate Intervention.

In 2008 and 2009, Conway represented the public in three rate cases before the PSC — involving Louisville Gas and Electric and Kentucky Utilities, both owned by E.On US, and Atmos Energy .

In a 2009 settlement of the rate cases for KU and LG&E, the PSC lowered the electric bills. The average LG&E gas bill went up about $5.10 a month, according to previous reports.

This year, KU and LG&E are asking for rate hikes worth a combined $262 million.

In the Atmos case, Conway announced March 12 that he had reached an agreement that reduced by 38 percent the company's original request for a rate hike of $9.4 million, cutting it to $5.9 million. He has received $10,000 from Atmos employees.

Conway spokeswoman Allison Haley said Conway did not think he needed to recuse himself. He actually saved ratepayers $100 million by forcing proposed rate hikes to be lower in 18 cases before the PSC since 2008, Haley said.

"This is Daniel throwing baseless accusations at Jack in response to the fact that they're losing momentum," said Haley, who attended Mongiardo's news conference.

Late Thursday, the Conway campaign released a letter written to Mongiardo from House Speaker Greg Stumbo and U.S. Rep. Ben Chandler, both of whom served as attorney general before Conway and have endorsed him. In the letter, they said they wanted to set the record straight on the "false attacks" on Conway.

"The public interest is not served when one constitutional officer makes misleading statements about the record of another," the letter says. "Jack Conway is continuing a Kentucky Democratic tradition of attorneys general who stand up for working families by opposing utility rate increases."

Mongiardo noted that after the most recent rate hikes were requested, lobbyists for E.On held a fund-raiser in Lexington. Terry McBrayer and two of his employees at McBrayer, McGinnis, Leslie & Kirkland, one of the state's most powerful lobbying firms, held the March 30 fund-raiser with businessman Tracy Farmer. The suggested minimum contribution was $250.

As a group, MML&K employees have given more than $23,000 through 2009 to Conway's campaign, according to the Center for Responsive Politics.

McBrayer said the fund-raiser had nothing to do with E.On, but if Mongiardo wins the primary, "we'll co-sponsor a fund-raiser for him."

Mongiardo said Conway's actions form a pattern of conflicts of interest.

Last summer, Conway joined 30 other state attorneys general in asking the federal government to temporarily suspend a rating system for nursing homes while taking numerous contributions from nursing home operators.

Conway's office would not release the names of people he talked with about the rating system before sending the letter, but nursing home patient advocates told the Herald-Leader it wasn't them.

The Center for Responsive Politics reports that Conway has received almost $50,000 from representatives of hospitals and nursing homes.

In particular, he has received more than $18,000 from Kindred Healthcare and its employees. Kindred is a Louisville-based nursing home that owns hundreds of nursing homes across the country.

Nursing homes say the rating system is unfair. Less than 10 percent of Kentucky's nursing homes have the top rating of five stars.

"Here he takes thousands of dollars from the nursing home industry and turns around and sends a letter asking to eliminate the only rating system we have for nursing homes," Mongiardo said. "Again, it's a conflict of interest."

A statement issued by Conway said he had a record of helping seniors by prosecuting elder-abuse cases.

"The rating system was confusing, complicated and didn't help consumers," the statement said. "But you don't have to take our word for it; 31 other attorneys general agreed, as did Mongiardo's own administration. This was a first step to making the rating system more useful."

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