Commerce report:  Scott acted unethically
But lawyer defends ex-PUC member's job search
By Leslie Brooks Suzukamo
St Paul Pioneer Press
Friday, September 2, 2005

Former Minnesota Public Utilities Commissioner Gregory Scott knowingly committed "inappropriate, unethical and illegal" acts when he pursued a job last year with Integra Telecom while still a commissioner, the state Department of Commerce said Thursday.

Commissioners are not supposed to take jobs with companies they regulate for at least one year after leaving their posts.

"Mr. Scott's and Integra Telecom's conduct cannot be condoned", the report signed by Commerce Commission Glenn Wilson said.  "It must be condemned and consequences imposed."

Scott served as a PUC Commissioner from August 1997 to May 2004.  He relocated to Portland, OR., and became Integra's vice president of regulatory affairs on June 16, 2004.  Scott has denied violating the law.  He left the company a week ago Tuesday, Integra said.

Scott's attorney, Doug Kelley, of Minneapolis, said Thursday that Scott, a lawyer himself, researched the state's conflict-of-interest laws before pursuing the job with Integra.  Scott also consulted with an attorney hired by Integra who said he was not violating the law, Kelley said.

But Kelley also said the law was open to differing interpretations.  The advice Scott sought was evidence of his good faith in trying to follow the law, he said.

"Regarding the Department of Commerce, we thoroughly disagree with their conclusions," Kelley said.

Integra hired a legal expert "to clarify ambiguities of the law," John Nee, Integra vice president of marketing, said Thursday.

The Commerce report came in response to a PUC investigation of an anonymous complaint that Scott violated Minnesota conflict-of-interest laws when he took the executive position with Integra.  Though based in Portland, the phone company serves businesses in Minnesota and also owns the suburban Twin Cities Scott-Rice Telephone Co.

The PUC investigators' report reached no conclusion about whether Scott violated the rules.  The deadline for more comment on the report is today.  The PUC is expected to hear the matter later this month.

Scott has argued the state's conflict-of-interest laws did not apply to Integra because its rates are not directly regulated by the PUC.  Instead, its rates are governed by an agreement with the PUC called an Alternative Form of Regulation, or AFOR.

But the Commerce report said, "An AFOR plan diminishes but does not eliminate Commission authority to establish rates."  It also said both Integra and the Scott-Rice Telephone Co. had matters pending before the PUC.

Scott aggressively initiated and pursued employment at Integra, accepted an all-expenses-paid trip to Portland worth $706.23 to further discuss the matter and put Integra into a "no-win situation" where it might feel pressured to hire him, the Commerce Department report complained.

Scott could face fines of up to $10,000 for every violation if the PUC finds he violated state statutes, PUC Executive Secretary Burl Haar said.

Separately, the PUC said it would take public comment on whether to proceed with a separate investigation into allegations by Qwest Communications that Scott held private discussions with an AT&T lobbyist that should have been handled in public meetings.

Leslie Brooks Suzukamo covers telecommunications and technology and can be reached at lsuzukamo@pioneerpress.com or 651-228-5475.

http://www.twincities.com/mld/twincities/12538541.htm