Monday, April 23, 2018

Watchdog group wants new Tennessee Valley Authority (TVA) audit: Environmental, consumer groups call for firing of TVA CEO over use of jets



KNOXVILLE, Tenn. (WATE) - A regional watchdog group is calling on the Tennessee Valley Authority to expand its March audit into aircraft use that said a recent $17.7 million purchase of two planes was not justified. 

The Southern Alliance for Clean Energy has submitted a letter to TVA's Acting Inspector General asking his office to expand a recent audit that determined their $17.7 million purchase of two private jets was not justified.

SACE wants a new audit that includes a 2015 of a luxury helicopter and a second Cessna Citation jet in 2017. They also want another investigation into all five TVA aircraft to determine if any TVA executives, such as CEO Bill Johnson, engaged in fraud, abuse and/or whether any violations of federal or company policies occurred through the use of TVA aircraft. 

The TVA Office of Inspector General is an independent body that oversees applicable laws and regulations to try to ensure TVA's own policies are consistently followed. On March 30, their audit "Fixed Wing Aircraft" determined the purchase of two jets was not justified, money could've been spent more efficiently and that TVA failed to comply with federal and TVA's own regulations. The audit concluded with ten recommendations to TVA management for future purchases and regulation compliance.

SACE contends that the self-regulation of TVA through the OIG in addition to high salaries and bonuses given to top TVA executives foster a culture of misconduct. TVA CEO Bill Johnson is the highest paid federal employee in the nation, making over $6.5 million dollars annually. He's been a frequent target of SACE ire and the group has repeatedly asked for his resignation. 

“The regulatory scheme that allows TVA to be a self-regulated, federal monopoly is broken and leads to bad behavior and abuse. We are seeing these patterns in a lack of transparency, excessive executive pay, and now misuse of federally-owned aircraft,” said Dr. Stephen A. Smith, Executive Director of SACE, “Our congressional delegation is missing in action when it comes to oversight of TVA and this exacerbates these problems.”

SACE say TVA may have violated federal laws and regulations by using government aircraft for personal use. New information obtained from the Federal Aviation Administration (FAA) since the OIG audit revealed that Johnson took 31 flights to  Raleigh, North Carolina, where he owns a home. 

FAA records also show that various TVA aircraft flew to Oxford, Miss., home of TVA Board Chairman Richard Howorth, no less than 76 times between 2013-2017.

“It is clear that the original audit has only just scratched the surface of what appears to be an ongoing pattern of CEO Bill Johnson’s abuse of power, lack of transparency, and complete disregard for the customers that he is supposed to be serving,” said Debbie Dooley, President of Conservatives for Energy Freedom and co-founder of the National Tea Party . “Along with the request for continued investigation, I am repeating my call for Johnson’s resignation, as he is clearly not deserving of our trust.” 

The letter, along with SACE’s FOIA requests and TVA’s response, can be found here.

Original article can be found here ➤ http://www.wate.com



Tennessee Valley Authority CEO Bill Johnson answers questions during an interview with The Associated Press Tuesday, April 18, 2017, in Nashville, Tenn. The CEO of the biggest public utility in the country says the agency is not going to reopen coal-fired power plants under President Donald Trump.


The Tennessee Valley Authority frequently used its jets and airplanes to transport TVA's president and its chairman back and forth to their respective homes in North Carolina and Mississippi in what an environmental activist group says may have violated federal travel regulations.

According to FAA flight logs, TVA's aircraft in less than three years were dispatched 31 times to Raleigh, N.C., where TVA President Bill Johnson lives and TVA's jets or airplanes were sent 76 times to Oxford, Miss., where TVA Chairman Richard Howorth resides.

The Southern Alliance for Clean Energy, a Knoxville-based environmental group which compiled the flight information based upon FAA records, is questioning the need for TVA to provide such personalized air travel and urged the TVA Inspector General today to conduct a full investigation of such trips.

"Based on our preliminary research, we have serious concerns about abuse of power by TVA's CEO, executive staff and board of directors and see clear signs of waste, and potential fraud," Stephen Smith, executive director of the Southern Alliance for Clean Energy, said in a letter to the Inspector General.

An earlier Inspector General audit of only one of TVA's two jets and another turboprop airplane said TVA had not adequately demonstrated the need for its jets or justified its sole source purchase of one of its aircraft. The audit also found that TVA had not properly disclosed the value of aircraft trips for personal use by Johnson in the agency's annual executive compensation disclosure to the U.S. Securities and Exchange Commission.

"Some aircraft usage appeared to be for the personal preference and convenience of TVA's chief executive officer, including flights to and from his second personal residence that is located outside the TVA service area (in Raleigh, N.C.)," TVA's Inspector General concluded in a report released earlier this year. "If any of the travel was for personal reasons (for either the CEO or his spouse), TVA should have imputed the fringe benefit income to the CEO for the value of the transportation.

Debbie Dooley, president of Conservatives for Energy Freedom and co-founder of the National Tea Party, said the initial Inspector General's report on only some of TVA's executive aircraft "only just scratched the surface of what appears to be an ongoing pattern of CEO Bill Johnson's abuse of power, lack of transparency, and complete disregard for the customers that he is supposed to be serving.

"Along with the request for continued investigation, I am repeating my call for Johnson's resignation, as he is clearly not deserving of our trust," Dooley said.

TVA has acknowledged that it needed better record keeping and disclosure, but agency officials said last month that the jet aircraft are safer and more efficient and are in line with industry practices. Although not covered in the first Inspector General's audit, TVA officials also have defended their $10.6 million purchase last July of a second Cessna Citation jet and the $6.95 million purchase of an executive helicopter previously used by Dallas Cowboys owner Jerry Jones. Mike Skaggs, executive vice president of TVA, said the new aircraft are safer, quicker and better able to show off the assets of the Tennessee Valley to industrial prospects.

Skaggs said TVA actually has fewer aircraft than most of its investor-owned utility peers and the upgraded aircraft has ensured greater safety and speed.

But the Inspector General said the faster speed of the Cessna jets compared with the King Air turboprop airplanes they replaced is negligible within 600 miles and more than 95 percent of TVA's private aircraft flights were under 600 miles Over half of the flights were under 200 miles, including 129 flights between Chattanooga and Knoxville. Each jet trip between Lovell Field in Chattanooga and Knoxville's McGhee Tyson airport cost $2,574 for the jet and two pilots and the audit found the jet saves only 26 minutes, at most, compared with simply driving between the two cities. The average flight between Knoxville and Chattanooga took 34 minutes, but it takes at least another 44 minutes drive time between the airports in each city and TVA's offices downtown. 

Smith said TVA has yet to turn over requested records about who used the aircraft and for what purposes, but SACE said their review of FAA records shows that the use of the aircraft for transportation of Johnson and Howorth was more than what the initial audit by the Inspector General showed since the IG review didn't look at the newest aircraft added by TVA at the direction of Johnson and the board who are some of the biggest users of the jets and airplane.

The Inspector General's report, which only covered aircraft travel though February 2017 before TVA bought another jet and executive helicopter, identified 13 days when TVA aircraft "appeared to be used for the personal preference and convenience of TVA's CEO." Johnson was accompanied by his wife, Sally, on three of the trips on TVA aircraft.

Even before the second jet and executive helicopter were bought last year, Johnson flew on the corporate aircraft 132 times and his wife flew 18 days, while TVA board members flew a total 264 days during the audit period.

But the Inspector General said no such personal travel benefits were recorded or disclosed as required in the compensation report to the Securities and Exchange Commission or the Internal Revenue Service. That could be a potential violation of tax and SEC rules, although TVA told auditors that the extra trips to Raleigh were to pick up Johnson when he was on leave and needed for an emergency. The auditors found, however, that "TVA had no policies in place for reporting personal use of TVA aircraft.

Despite such concerns from consumer and environmental groups, members of Congress, at least so far, have voiced little concern for TVA's activities even though the heads of other federal agencies, including former Health and Human Services Secretary Mike Price, EPA Administrator Scott Pruitt and Treasury Secretary Steven Mnuchin have all come under fire for flying first class or using private planes for their travel.

As an independent federal agency, TVA is not subject to all of the General Services Administration requirements for travel although TVA does report to the GSA about its aircraft travel.

U.S. Lamar Alexander, R-Tenn., said he wouldn't question TVA's decision to buy the jets for executive travel

"That is why we have a TVA board of directors to make decisions like that and to run this $10 billion-plus agency," Alexander said. "The argument that I have seen is that the jet is four or five times safer than the turboprop plane."

U.S. Sen. Bob Corker, R-Tenn., said he "has a lot of faith" in Johnson's leadership "and I tend to focus on major issues and let others focus on these kind of issues."

Smith said TVA needs to conduct a complete investigation of the executive aircraft purchases and use to include the second jet and executive helicopter TVA bought last year and to detail how the aircraft were used since the earlier audit said the records for such travel were sometimes lacking or improper.

"Periodic reporting on the cost and use of the aircraft to the General Services Administration has been inaccurate and incomplete," the Inspector General said in its audit findings on TVA's fixed wing aircraft.

Original article can be found here ➤ http://www.timesfreepress.com

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