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Reader View: Meetings with stock analyst raise more questions

Arthur Bailey III advocates for a closer investigation into the meeting between PRC officials and a Wall Street stock analyst. Curious about who set up the meeting, how the PRC's lawyers didn't see a problem with it, and about what was actually discussed before PNM's stock was upgraded, Bailey points out there is more than enough reason presented in Terrell's “So, why did PNM get a stock upgrade?” article for the New Mexican and the Attorney General to investigate this serious matter.

Posted: Saturday, June 27, 2015 7:00 pm

Santa Fe New Mexican

By Arthur Bailey III

Good grief! Talk about shedding light on the odd goings-on behind closed doors at the Public Regulation Commission.

Apparently from Steve Terrell’s June 14 reporting (“So, why did PNM get a stock upgrade?” Roundhouse Roundup), neither three PRC commissioners nor the PRC’s chief legal counsel or its past chief counsel (currently assistant to Commissioner Sandy Jones) saw anything wrong with meeting privately to discuss their views with a stock analyst who recommends whether investors should buy or sell Public Service Company of New Mexico stock during the ongoing PNM San Juan coal plant case.

According to Terrell, that meeting took place before the commission voted on May 27 to reopen its record to give PNM yet more time to provide documents proving that its proposal to acquire more San Juan coal capacity is justified (perhaps that was the “fishing” one commissioner claimed they discussed).

However, the concerns by participating commissioners and their lawyers (and a former PRC commissioner) about “ex parte” communications reported by Terrell missed the point. Anyone who reads the PRC’s “ex parte” statute (NMSA 8-8-17) understands that, unless PNM helped arrange those private meetings with commissioners (now there’s a good question), that stock analyst wasn’t representing any party before the PRC, so that law didn’t apply.

Nevertheless, there are a great many more obvious questions for citizens. The New Mexican and New Mexico Attorney General Balderas should be questioning those PRC commissioners and their lawyers in the wake of that report. When that stock analyst contacted their offices to set up a meeting, did those commissioners understand that his job is to recommend whether investors should buy, hold or sell PNM’s stock, and that the PRC’s future decisions could affect PNM’s stock price? (Or did they think he had only cutthroat trout on his mind?) And did those commissioners understand that telling that stock analyst their views about an active PRC case would provide him and investors (including top PNM managers who own PNM stock) with a form of regulatory “insider” information not otherwise available to the public?

Not even the lawyers attending saw anything wrong or to steer clear of with that? Huh, why not? I wonder who bought PNM stock before the PRC voted the way they told the analyst they would vote, in favor of PNM? Where, when and for how long did that stock analyst meet with those PRC officials and their staff? He couldn’t remember who exactly he met with and the details of when and where they met? How odd for someone in that profession. What, no day planner? No notes? No New Mexico restaurant receipts?

Why was the assistant for a third commissioner (Jones), who is no longer a member of the PRC’s General Counsel Office, invited to attend as a “lawyer” as reported? Was that a deliberate attempt by the commissioners involved to circumvent the New Mexico Open Meetings Act, which prohibits the discussion of “public business” behind closed doors?

To paraphrase Shakespeare’s Hamlet, “something’s rotten” with this latest PRC disclosure. New Mexico has a history of politicians using so-called “rolling quorums” and other schemes to avoid compliance with the Open Meetings Act, which our attorney general is supposed to enforce. Terrell’s reporting provides Mr. Balderas with more than enough basis to promptly investigate this serious matter before the PRC decides the San Juan case, presumably later this year.

Arthur Bailey III is a concerned citizen of Santa Fe.


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