FORT WORTH -- It may be an inherent conflict of interest to allow gas company employees to serve on committees that oversee their industry, the city's Ethics Review Committee ruled Thursday.
The panel made the ruling in a case about the makeup of the city's Air Quality Study Committee, which was formed to examine potentially toxic emissions at natural gas sites.
If upheld, the ruling could have far-reaching ramifications because most of the city's regulations on gas drilling were written by committees that included representatives from the gas industry. At least one of the companies plans to appeal the ruling to the full Fort Worth City Council.
The council appointed the air quality committee in March to find a way to determine the level of toxic emissions around gas sites, and its findings could lead to new gas drilling regulations in the city.
The 10-member committee includes three representatives from major drilling companies: Devon Energy, XTO Energy and Chesapeake Energy.
Chesapeake Vice President Julie Wilson said the company will vigorously appeal.
"Chesapeake finds it ludicrous that three individuals employed by energy companies have been cited for an 'ethics conflict' due to their service on a city-appointed task force," Wilson said. "It is an affront to every citizen who serves at the request of the City Council and brings into question the conflict other members on the same task force may have, not to mention numerous other citizens on other task forces."
Jim Ashford, an east Fort Worth resident who is suing Chesapeake over noise and air pollution from a compressor station near his house, filed the ethics complaint in the spring. He said it was improper for the gas companies to have representatives on a committee that is studying pollution potentially caused by their industry.
Albon Head, an attorney who represented all three gas company employees, said Ashford should have complained to the City Council, which appointed the air quality committee. He pointed out that Ashford didn't complain about other members of the committee who have a vested interest in its work, including an environmental lawyer and a scientist who works for a nonprofit environmental group.
Head said conflict-of-interest rules are meant to keep people from representing their own companies before city boards or profiting from city contracts. Neither of those situations exist in this instance, he said.
"They are not representing their companies before the [air quality] board," Head said. "There is no evidence that these members received any benefit."
Ashford stressed the importance of barring the gas industry from having control over the city's regulations. "We have one attorney representing all three individuals -- this would indicate the three members are speaking as one voice," he said.
The gas company employees didn't testify. Head said outside the committee room that he didn't know why the three companies had hired one attorney.
'Wearing two hats'
The ethics committee sided with Ashford after a three-hour hearing. Rebecca Lucas, a lawyer on the ethics committee, said that the gas employees have a "total absence of malice" but that "the level of their loyalty to their employers has put them in a position of wearing two hats."
It's unclear whether the three employees can stay on the committee, because the Ethics Review Committee does not have the authority to remove them.
The three members can appeal the decision to the City Council, which appointed the air quality committee.
"We'll have to look at those issues and advise the committee and the council," City Attorney David Yett said.
Susan Alanis, the city's planning and development director, noted that it's not unusual for industry representatives to get such appointments, and that the committee's decisions have not been unduly swayed by votes from the three gas company representatives. "We have committees all the time that include professionals" who are affected by the city's ordinances, Alanis said.
Royalty issues
The ethics committee ruled against Ashford on another complaint. He argued that Councilmen Jungus Jordan and Danny Scarth shouldn't vote on issues related to gas drilling because they receive gas royalties.
Jordan's wife inherited an interest in the mineral rights to a Johnson County farm and gets royalties from Chesapeake. Scarth said his parents gave him and his siblings a share of gas royalties from XTO earned from acreage they own in Burleson. Jordan routinely recuses himself from votes involving Chesapeake and Scarth recuses himself from issues involving XTO.
Ashford said the two should not vote on any gas industry issue, including the city's drilling ordinance and the air quality committee.
But Ashford didn't cite those votes as evidence. Instead, he showed a videotape of a Feb. 2 work session in which the council discussed appointing the air quality committee. Some council members wanted to appoint a task force to revisit the entire gas drilling ordinance, including the setbacks between gas wells and houses. Scarth and Jordan argued against it.
"We need to be very careful about the idea of opening up a gas drilling task force," Scarth said.
No vote was taken, although the council decided informally not to revise the ordinance.
"I think Mr. Ashford confuses general discussion [in a work session] with the council voting on an issue," said Don Herrmann, who represented Jordan and Scarth.
Jordan and Scarth said they relied on a legal opinion that allows them to continue to vote on general issues related to gas drilling."I've fully disclosed my financial position and followed the directions of the city attorney," Jordan said.
Scarth said, "Just because someone doesn't like what we do from a policy standpoint doesn't mean it's an ethics violation."
The committee sided with the council members, although they said Ashford can revise his complaint to include specific votes. "At the present, I think we have no choice but to say it's insufficient," Chairwoman Hortencia Laguna said.
MIKE LEE, 817-390-7539
Read more: http://www.star-telegram.com/2010/06/24/2292054_p2/fort-worth-ethics-panel-questions.html#ixzz0rvW2lpuo
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