Duke Energy CEO Caught Lying Under Oath, Media Sleeps
--by John Titus
Yesterday was like any other in post-Bailout America. A corporate tool lied to the public about his handlers’ scheme to rip off everyone in sight with increased prices, while also eliminating thousands of local jobs.
But yesterday was at the same time very unusual because this particular tool, James Rogers, is the CEO of the nation’s largest electric utility, Duke Energy—the spanking new corporate spawn of Progress Energy and… Duke Energy.
Yesterday was also unusual because Rogers, his voice nearly cracking at every turn, lied under oath to a public official. What made yesterday even more unusual still was that a state government official caught CEO Rogers in his lie, and then rubbed his nose in it as TV cameras and a videographer and a court reporter all recorded the entire circus of deceit.
Now, you wouldn’t have the first clue that any of this went down because, in the end, yesterday was like any other day in another very big way: the media, either asleep or bought off, dutifully reported Big Duke’s version of events without once questioning Rogers’ scripted “recollection” of events—and without so much as mentioning the hottest action at the hearing.
Yesterday’s hearing before the North Carolina Utilities Commission was the second in two weeks about the merger of Duke Energy and Progress Energy, an in-your-face bait-and-switch act starring old Progress Energy CEO Bill Johnson as Bait and old Duke CEO Rogers as Switch.
There was only supposed to be one hearing, which happened on June 27. But that was back when everyone, including the Utilities Commission, erroneously thought Bill Johnson, then the CEO of Progress, would become the CEO of the newly merged utility company. And technically, when the merger went through, Bill Johnson did become the new CEO—for about 20 minutes on July 2nd.
But at 4:22 p.m. EST that day, the newly constituted Duke Board, out of the clear devilish blue, ousted Johnson, whose role as the new CEO is the undisputed reason that the huge merger went forward to begin with.
Everyone was shocked by the betrayal, including the commissioners, who thus convened the second hearing yesterday to discuss, among other things, why Duke had concealed the imminent CEO switch throughout the first hearing.
And concealment is exactly what went on in the first hearing on June 27, according to Rogers’ own testimony. Rogers admitted that on June 23, he had dinner with old Duke Board members, who casually informed him that they planned on installing him as the new CEO as soon as they could jettison Johnson, which they knew they could do since they’d constitute a majority on the merged Board.
Attempting to rationalize Duke’s skullduggery, Rogers—as if satisfying a quota—stated at least five times that the CEO bait-and-switch was perfectly proper because the CEO “serves at the pleasure of the Board.”
Other than cementing Rogers as a corporate stooge, that testimony is really neither a here nor there. The two questions everyone wanted answered yesterday were (1) what changed the Duke Board’s mind, and (2) when did it change? After all, the Duke Board unanimously approved the installation of Johnson at the helm of Duke-Progress some 18 months ago.
To the astonishment of everyone paying attention at the hearing, Jim Rogers—a trial attorney by training—was not prepared even on these narrow issues, and got absolutely crucified by the Commission when he lied about the reason for Johnson’s ouster.
As an initial matter, the Commission asked solid, thoughtful questions. While no commissioner appeared to have much experience examining witnesses, their questions were clear enough—and in a sufficiently organized sequence—to elicit some fantastically telling testimony from Mr. Rogers.
For his part, Mr. Rogers was downright amateurish insofar as witnesses go: his voice faltered, creaked, and paused for long stretches over the many key questions he faced. For a CEO, I’ve never seen more nervousness so clearly telegraphed.
At any rate, in response to the $64 billion question about the Duke Board’s change of heart, Rogers pointed to costly problems at the Crystal River nuclear facility. (He also pointed to Johnson’s “management style,” which the media swallowed hook, line, and sinker, even though Rogers separately conceded that the Duke Board decision was driven by money, not style.)
Advancing Crystal River as the reason for the coup cannot—and more importantly did not—withstand even a hint of scrutiny. Duke’s Board knew all about problems at the idle Crystal River nuclear facility when it approved the merger deal.
Rogers’ transparently ridiculous answer at first appeared to go unchecked, at least, that is, until the examination was turned over to Commissioner Bryan Beatty, who proceeded to poleax Jim Rogers.
In his very first question, Beatty pointed out that Duke itself had actually filed papers with the Commission arguing that Crystal River provided no grounds for the second hearing because—get this—nothing at Crystal River had changed in the intervening months.
The contradiction between Rogers’ account of Crystal River (changes there poisoned the Duke Board against Johnson) and Duke’s representation to the Commission about Crystal River (it’s exactly the same as before) could not have been any sharper—and Beatty made Rogers pay for it.
How was it, Beatty asked in essence, that Duke was using Crystal River both as a sword (to cut off Bill Johnson’s head, since Crystal River had supposedly deteriorated on his watch) and as a shield (to avoid new Commission inquiries, since there was supposedly nothing new about Crystal River)?
Rogers had no response whatsoever to the question, which only got bigger as the stupefied CEO let it float about the hearing room like an unmoored zeppelin for several seconds.
“Could you repeat the question?” Rogers asked.
The crowd was stunned. A few people actually laughed.
To anyone who’s spent even a few hours in depositions or in court—which of course includes Jim Rogers himself—that threadbare response is the most transparent ploy in the book to buy some time to answer a question for which every possible answer is: All Bad. That the CEO of a major company, and a trial lawyer no less, would resort to very first move in the JV playbook is nothing short of astounding.
Bryan Beatty must be one cool cat, because he appeared totally unfazed by Rogers’ naked attempt to avoid having his nose rubbed in the crystal river of piss.
Beatty’s poker face may have unnerved Rogers, because when Beatty calmly repeated his question, Rogers launched another jaw-dropper.
“I didn’t draft that pleading,” Rogers said.
Roger’s second evasion drew even more laughter from the twenty-odd crowd of observers who’d been shunted into the overflow room due to the packed hearing.
In the hearing room, the Commissioners stared at Rogers blankly, as if in disbelief that a major CEO just attempted to disown his company’s legal representation and throw its lawyers under the bus.
Rogers then took a breath and tried again, this time emitting a thick nimbus plume of corporate nonsense-speak, meandering tendrils of vaguely responsive jargon, layered one upon the other, which at long-winded bottom came down to this: the Board’s perception of Crystal River had changed, even though changes at the facility itself were not significant.
Again Beatty was unfazed by Rogers’ preposterous answer, which implied that the Duke Board had failed to do its due diligence before signing on to the merger—the $32 billion merger—since Rogers himself admitted that the changes at Crystal River were insignificant at best.
“They were significant enough to change the CEO,” Beatty responded.
With that, Beatty annihilated the remaining shreds of credibility that Jim Rogers had following his earlier testimony.
Rogers, apparently unaware of the blow that had been struck, tried wafting another cloud of nonsense talk. But it was hopeless, counterproductive even. In the overflow room, folks hissed and snorted their incredulity at the CEO’s exculpatory prattle, which did nothing but waste everyone’s time.
You didn’t read about any of this in the corporate media, of course, since one of its vaunted masters suffered such a public humiliation.
But even aside from the media’s abject failure to report Rogers’ beat down for being caught in a lie—and a bad lie at that—the press did the public an even bigger disservice by failing to praise either Bryan Beatty or the North Carolina Utilities Commission.
Beatty is an example of the type of public official that no one seems to believe even exists these days: a regular guy who has the brains and the balls to speak truth to the barrage of corrosive lies that enable arrogant companies like Duke Energy to continue robbing the middle class out of its very existence.
The Commission, which has reminded the public of its power to rescind the merger more than once, has signaled that it may not yet be through with Duke Energy’s shameful mess, which promises to erase thousands of jobs.
For the first time in a long while, I’ll be seriously disappointed if Wall Street gets its way.