The N.C. Attorney Generals office on Wednesday released documents from Duke Energy that suggest that just months after the Progress-Duke merger was announced, Duke CEO Jim Rogers and Progress Energy CEO Bill Johnson were in tense discussions about Johnsons future role with the utility.
Johnson was slated to become CEO of the combined company. Instead, he was fired the day the merger was completed.
In two emails to other Duke executives on April 27, 2011, Duke chief financial officer Lynn Good referenced a meeting between the two men in which it appeared as if Johnson was concerned about a change in his job description.
Bill said several times that he didnt want a COO (chief operating officer) job, Duke chief financial officer Lynn Good wrote. Jim suggested he sleep on it and they talk further in a few days.
The emails are part of the public portion of 7,750 pages of corporate records Duke submitted to the Attorney General last week as part of that agencys investigation of the merger. The company has also submitted almost 6,000 pages of documents to the N.C. Utilities Commission, which is conducting a separate investigation. Most of the documents have been filed under seal as trade secrets.
Dukes secrecy claim for the filings is now being challenged and could result in the eventual public disclosure of an additional trove of internal documents that could damage the Charlotte companys claim that it had not schemed to jettison Johnson.
The Utilities Commission has begun reviewing thousands of pages of documents Duke filed under seal to determine whether they meet the legal standard of a trade secret. Filings that are deemed not to meet the standard would eventually be posted on the commissions web site.
The state Attorney Generals staff and Dukes lawyers could not agree as to which company documents contain trade secrets. Duke designated most filings as confidential, allowing the public release of several hundred pages on Wednesday.
To shield the rest, Duke is seeking a protective order in Mecklenburg County Superior Court to keep hundreds of documents filed so far and additional filings expected next week from the public eye.
An investigation cannot be used as a vehicle by which Duke Energys private and proprietary trade secrets can be disclosed to the public, the company wrote in its petition for a protective order.
Some are predicting that a significant portion of Dukes filings could become unsealed because the company wont be able to justify all internal documents as trade secrets.
Theres zero chance that all of those filings meet the standard of being able to keep them confidential, predicted Jim Warren, director of the N.C. Waste Awareness and Reduction Network in Durham. We may find out where some of the bodies are buried when all this comes to light.
The parallel investigations by the AG and Utilities Commission are the fallout from Dukes $32 billion merger with Raleigh-based Progress, which created the nations largest electric utility and spawned a major public relations debacle. The utilities commission approved the merger on the understanding that Johnson would run the combined company.
The commission is now investigating whether it was deliberately misled and has already held public hearings to take testimony from Johnson, Rogers and four Duke board members.
On Tuesday, Warrens organization, along with media outlets, successfully won the unsealing of confidential settlements Duke and Progress reached with large customers to win their support for the utilities merger. N.C. WARN opposes the Progress-Duke merger and is trying to get it reversed or modified.
The commission agreed that the utilities claim of trade secrets was too broad, and the portions of the settlements will be posted online unless Duke appeals and a court overrules the commission.
In the merger investigations, Duke says the documents it has submitted to state authorities include confidential business plans, strategies, discussions, earnings estimates, financial projections, executive compensation and other personnel matters.
Like the Utilities Commission documents released last week, the AGs cache shows that the Progress-Duke merger ran into trouble early on, just months after it was announced in January 2011.
By April 2012, the companies were awaiting word from federal regulators on modifications made to address monopoly concerns. The feds later approved the merger, but in the interim a Wall Street stock analyst issued a report predicting chances of approval were not looking good.
Progress executives suspected that Duke CEO Rogers planted the story, working behind the scenes to sabotage the merger, according to Johnsons testimony last month before the Utilities Commission.
The negative analyst report, issued in mid-April by the ISI Group, was a bombshell for Progress management, showing the two North Carolina utilities to be at cross-purposes.
The incident also suggests that within Progress, executives were highly distrustful of Rogers.
A copy of the ISI report was forwarded by email to Progress chief financial officer Mark Mulhern by another Wall Street bank from Deutsche Bank Securities. Mulherns reply was included in the AGs document release.
Got it, Mulhern replied. JR wants to be CEO for life....