Government & Politics
 

Entergy leverages charitable giving to avoid City Council fine

A letter from City Year New Orleans in support of Entergy.

To avoid a $5 million fine from the city, Entergy New Orleans is recycling a tactic they used in the campaign that led to the potential sanction: leveraging their donations to lobby the City Council.

Communications obtained by The Lens show that in response to the possible fine — over the use of paid actors who appeared at public meetings to support a proposed power plant — several beneficiaries of Entergy’s charitable giving sent letters supporting the company to New Orleans City Council members. At least two of the authors were directly asked to write the letters by an Entergy employee who oversees the company’s charitable giving.

That Entergy employee didn’t appear to disclose that the letters were related to the potential fine.

“I wasn’t aware of the fine, no I was not,” said Joshua Joachim, the CEO of the Louisiana Region of the American Red Cross, who sent one of the supportive letters this month. “The Entergy rep reached out and asked if I’d be willing to write a letter. The only reason that was given was that there was some education needed on our partnership with Entergy.”

On Halloween, the City Council held a special hearing to discuss the blistering results of its independent investigation into Entergy’s role in the payment of actors to support the company at city council meetings. The scheme was one part of Entergy’s broader, $1.3 million campaign to garner support for a proposed $211 million gas plant in eastern New Orleans.

The investigation found that Entergy “knew or should have known” that people were being compensated to make favorable, pre-written speeches.

“ENO subverted the process with fraudulent support,” the investigators, including retired Judge Calvin Johnson and former federal prosecutor Matt Coman, concluded.

The City Council approved the power plant last March. But at the hearing in October following the investigators’ report, two council members, Jared Brossett and Jason Williams, said they were open to a revote.

The Council also unanimously passed a resolution that could force Entergy to pay a $5 million fine for the astroturfing campaign. Entergy was given 30 days to make its case as to why it shouldn’t have to pay the penalty. Members of the public had 30 days to submit comments as well. The resolution requires the council to make a final decision by the end of the year.

Letters sent to the City Council, obtained by The Lens, show that Entergy is contacting organizations it donates to, asking them to lobby the City Council on its behalf — a tactic the company used during its original campaign to gain council approval for the plant.

“Patty Riddlebarger at Entergy asked me to describe our work through Entergy’s support,” wrote Melanie Bronfin, the Executive Director of the Policy Institute for Children, in a recent email to council members and the Council Utilities Regulatory Office. The Institute receives funding from the Entergy Charitable Foundation, which is overseen by Riddlebarger, Entergy’s Director of Corporate Social Responsibility.*

“She explained that the Council had requested public input on Entergy’s involvement in the community,” Bronfin wrote.

That’s not exactly correct. The Council opened the docket for comments on Entergy’s potential sanctions, not on its charitable giving or community involvement. Council members also received letters from the New Orleans Recreation Development Foundation, City Year New Orleans, the New Orleans Council on Aging and College Beyond, all of which have benefited from Entergy’s charitable giving. Only the American Red Cross could be reached for comment.

This blurred line between Entergy’s for-profit activities and charitable giving has been a theme throughout the power plant approval process, and has caused consternation among some councilmembers in the past.

On July 25, 2016, an Entergy contractor billed the company for drafting “remarks of support for the [power plant] on behalf of the N.O. Council on Aging.”

The next day, a Council on Aging employee spoke in favor of the plant at a public hearing. “I hope you will consider what this power station will represent for the elderly community,” she said.

Two days later, Entergy announced it had recently given the group $308,323.

In September 2017, as the power plant debate was heating up and Entergy launched the paid actor scheme, Kim Mitchell, Entergy’s community development program representative, sent an email to several other Energy employees, including former CEO Charles Rice.

“We need your help recruiting our community partners to speak on our behalf at the NOPS public hearing on October 16,” she wrote. She attached a template letter that they could send to Entergy’s beneficiaries.

“As a company that’s been here for the community for many years and contributed millions of dollars to hundreds of nonprofits to support their programs, we find ourselves in need of your assistance,” it said.

Entergy executive Demetric Mercadel responded, discussing plans “to bring Head Start parents from New Orleans East – we need to get them minimal statements to make in support.”

She added that they would use a van service to shuttle them to the hearing. Entergy is a major donor of the Boys Town Early Head Start Program, and an Entergy employee is on the board.

“They called everyone I know that got a dollar from them,” said Susan Henry, the general manager at WBOK.

Entergy famously rescinded a $20,000 sponsorship from WBOK in March after the radio station aired unfavorable coverage of the power plant.

People representing at least 19 organizations funded by Entergy spoke at two subsequent council utility hearings in 2017 and 2018 to bolster the company’s community credentials. At the February hearing on the plant, Williams asked why the company’s charitable giving was relevant to the debate on the plant.

“Entergy may have done some great things, but it has nothing to do with whether or not this plant is right for this community,” Williams said at a February hearing on the plant.

At the same hearing, then-Councilwoman Stacy Head likewise criticized the approach.

“It’s politics,” she said. “I cannot tell you how happy I am to get away from it. I hope we will learn lessons from this because it cheapens the discussion and it cheapens the argument. We really should be focusing on whether or not this before us today is in the best interest of the ratepayers of New Orleans.”

Entergy New Orleans did not respond to requests for comment on this story.

*Correction: As originally published, Entergy employee Patty Riddlebarger’s last name was misspelled.

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About Michael Isaac Stein

Michael Isaac Stein covers New Orleans' cultural economy and local government for The Lens. Before joining the staff, he freelanced for The Lens as well as The Intercept, CityLab, The New Republic, and Pacific Standard. He was recently awarded a fellowship from the Heinrich Boll Foundation, which he used to report on water scarcity, division, and colonialism in Cyprus.