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Santee Cooper board can have one master, not two


Published Monday, May 16th, 2005

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Look for fireworks this week in another showdown between the legislature and Gov. Mark Sanford.

On Tuesday morning, a Senate Judiciary subcommittee is scheduled to take up the nominations of four gubernatorial appointments to the Santee Cooper board. Later in the morning, the House likely will give final approval to a Senate bill that would curb gubernatorial oversight of the state's large public-owned utility by limiting the governor's ability to fire board members at will.

Essentially, it's a brouhaha that pits legislative power versus loyalty to the executive. A betting person will stick with state lawmakers.

Before the term of Gov. Jim Hodges, members of the Santee Cooper board generally served seven-year terms. When vacancies arose, governors filled slots with their nominees.

But Hodges started a bad precedent in which he got rid of board members -- or even whole boards in the case of the S.C. State Ports Authority Board -- and replaced them with choices more friendly to his way of political thinking.

When Sanford became governor, he continued the precedent by appointing ideologically-friendly pals to the Santee Cooper board. But some of the bond-rating agencies in New York appeared to find the practice "too political" because they thought it decreased the stability of the board, which oversees $5 billion in assets and the company that supplies power to millions of people in the state, including customers of Palmetto Electric Cooperative.

So the bond agencies put Santee Cooper "on watch," which meant its bond rating could go down, and which, in turn, would make it more expensive to borrow money. The watch essentially was a red flag that conditions weren't optimal.

So what happened? Sen. Glenn McConnell, the Charleston Republican in charge of the Senate Judiciary Committee, introduced legislation to rein in gubernatorial meddling.

Essentially, the Senate bill would allow a governor to continue to recommend appointees to the board, but would take away the ability for a governor to fire members at will. The measure would, however, allow a governor to remove members for cause. In other words, if appointees were not doing their duty or were involved in malfeasance, the governor could remove a member. At the same time, the bill calls for increased qualifications of board members and allows citizens to sue to remove members who aren't performing their duties.

While all of this has been going on, some members of the Santee Cooper board (i.e., Gov. Sanford's appointees) have become increasingly activist in nature. Charges are flying that board members are micromanaging everything from corporate contributions and power contracts to working intimately on a privatization study.

For example, published reports show the governor's office and some board members pushed for a six-figure Wall Street study to determine the utility's value and assets and to study the question of selling the utility. One board member even wrote a forward to the study that only can be characterized as a pro-privatization editorial version of the utility's history. When Santee Cooper management provides copies of the study, it includes an amazing disclaimer that says, in part, "This study was not requested or directed by Santee Cooper."

When the Senate subcommittee starts the confirmation process Tuesday, Santee Cooper Chairman Guerry Green, one of the four on the hot seat, will have a lot of questions to answer. Senators say they want to make sure board members look at the big picture and stop micromanaging.

After the House gives final perfunctory approval to the anti-meddling legislation Tuesday, it may be vetoed by the governor.

But House and Senate members say they have more than enough votes to override.

Santee Cooper's struggles should serve as a reminder to members of state governing boards that public service requires them to carry out two duties. First, there's a "duty of care," which calls for board members to ensure an organization is running effectively and efficiently. (This gives an entrée for meddling.) But board service also carries a "duty of loyalty," which means members must serve the interests of the organization over interests of anyone else, such as a governor.

In Matthew 6:24, we're reminded that "No man can serve two masters." For Santee Cooper board members, that means their responsibility is to Santee Cooper, not any governor.

Andy Brack is editor and publisher of S.C. Statehouse Report. He can be reached at .

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