Washington Governor Jay Inslee has set his sights on a clean energy future for the state. Since taking office he’s helped convince the legislature to put $75 million into a Clean Energy Fund.
But questions have been raised about how former government insiders came to work for companies that are now benefiting from some of that money.
And this is something you don’t often hear from the head of a state agency.
“I would say in hindsight, I wish I would have asked more questions,” said Brian Bonlender, director of Washington’s Department of Commerce. He’s reflecting on the fact that three former Commerce officials now work for private subcontractors on state-funded clean energy projects.
This has given ammunition to critics of the governor -- like Republican state Senator Doug Ericksen.
“And that’s the type of thing where the people of Washington state look at it and say ‘that’s too cozy of a relationship to be occurring in Washington,’” Ericksen said.
So what actually happened? Last year, Commerce awarded more than $14 million in matching grants to three utilities. The purpose of the grants was to help the utilities experiment with battery storage. Batteries are a way to harness wind and solar power. They can also be used to store energy from the grid during non-peak times.
The grants were awarded through a competitive process designed and scored by an outside panel. After the grants were awarded, the utilities subcontracted out much of the work. Two of those subcontracts went to a Seattle startup called 1Energy Systems. 1Energy makes software that tells batteries when to charge and when to discharge.
That’s where two former Commerce officials come in.
Rogers Weed runs product management and Daniel Malarkey leads the business development and public policy efforts at 1Energy Systems. Previously, Weed was director of the Washington Department of Commerce under former governor Chris Gregoire. Malarkey was Weed’s deputy.
Both men are named in anonymous ethics complaints that allege violations of the state’s law regulating employment after public service. The complaints were filed with the Washington State Executive Ethics Board and name several current and former Commerce officials.
Weed thinks they’re politically motivated and says the order of events is important.
“My chronology is I was gone from state service before the Clean Energy fund was even proposed, much less contracts evaluated and awarded,” he said.
Malarkey stayed on under Governor Inslee and helped write a policy memo that formed the basis for Inslee’s Clean Energy Fund. Malarkey said 1Energy approached him about a job in June of 2013. One of his duties would be helping 1Energy’s utility customers apply for state clean energy grants.
Malarkey said he consulted the state ethics law and sought legal advice.
“And the conclusion that I reached then and still hold is that my activities at 1Energy are completely compliant,” he said.
Malarkey said before he left Commerce he took no action to benefit 1Energy. Once he started at the company, Malarkey said he did help with the clean energy grant applications, but currently has no role with the grant funded projects.
Full compliance or ethical malfeasance?
A third former Commerce staffer, lawyer Michael Carr, went to work for a different subcontractor, battery maker UniEnergy. At Commerce, Carr helped negotiate the clean energy contracts between the state and the utilities.
“I was in the room,” Carr said. “But it wasn’t my decision. I was sitting next to Richard.”
Richard is Richard Locke, who oversaw the Clean Energy Fund at the Department of Commerce.
“He was more than just the attorney,” Locke said.
A letter sent to the winners of the grant competition said Carr would “lead negotiations.” Locke said he found out Carr was leaving to work at UniEnergy the day the last contract was signed. That’s the day Governor Inslee announced the grant winners at an event at UniEnergy.
“I was told as I was leaving the event that Mike’s taking a job [at UniEnergy],” Locke said. “I was shocked. I frankly didn’t believe it.”
Carr insisted that Locke is “wrong” and said he wasn’t even approached about the new job until later.
“After the announcements were made,” he said.
Carr said he too consulted ethics advisors at Commerce about taking a job with a subcontractor. The answer back was that it was OK, but that Carr would be wise to wall himself off from working on the clean energy grant projects.
Carr said that firewall is in place at UniEnergy and his focus is on business development.
“I’m helping us build markets elsewhere,” he said.
Carr is also one of the eight people named in the series of anonymous ethics complaints. All three former Commerce staffers are adamant they didn’t violate state ethics rules. And it all may have been perfectly legal.
‘A perception of misuse and favoritism’
But Richard Locke worries this revolving door gives the appearance of conflict of interest. That concerns him because he’s a huge supporter of the state promoting clean energy.
“I think it damages the mission to have this sort of perception of misuse and favoritism,” Locke said.
When questions were raised, current Commerce Director Brian Bonlender did make some changes at his agency: he required additional ethics training and added new conflict of interest rules for contractors. He also asked the state ethics board for an opinion on whether any rules were violated.
But that request was trumped by the anonymous ethics complaints. The board could decide in January whether to dismiss or pursue those complaints.
This story was produced in collaboration with The Seattle Times.