News Release > Entergy Corporation Letter to the New Orleans City Council on its Investigation Final Report
Entergy Corporation Letter to the New Orleans City Council on its Investigation Final Report
October 31, 2018
Via Electronic Mail
Council President Jason Williams
Council Vice-President Helena Moreno
Councilmember Joseph Giarrusso
Councilmember Jay Banks
Councilmember Kristin Gisleson Palmer
Councilmember Jared Brossett
Councilmember Cyndi Nguyen
Re: Entergy New Orleans, LLC Investigation Final Report
We have received the report completed by the independent legal team you retained to review grassroots advocacy practices related to the New Orleans Power Station (NOPS). We would like to acknowledge the effort undertaken by the City Council to thoroughly review this matter. We also wish to acknowledge the seriousness of this issue. We understand that public discourse about important projects such as the New Orleans Power Station must be rooted in integrity and transparency, and we believe that the City Council was right to be concerned and ask necessary questions.
Furthermore, even though there are no facts in either our investigation or the one performed by the independent legal team to support the conclusion that Entergy employees “knew” about the hiring of Crowds On Demand (“COD”) or their payments to individuals to show support for the NOPS, we do agree that by providing sufficient oversight and asking the right questions, we could have either prevented the actions of The Hawthorne Group and COD or discovered them and stopped them. In essence, we should have been more diligent and we “should have known.”
As we have noted before, we recognize that we are ultimately responsible for the actions of people working on our behalf. We have outlined and continue to implement steps to ensure a situation like this does not happen again. These steps include significant changes in leadership, additional training for employees and vendors, specific contract provisions with all our vendors to prohibit this type of behavior and conducting periodic contract assessments to verify compliance.
That said, we have serious concerns about characterizations in the report and the omission of key facts which confirm Entergy did not know about or authorize any payments to individuals to attend or speak at the City Council meetings. We would like to emphasize, though, these concerns are specifically about the report itself and certain characterizations and omissions within it, and not the overall process the Council has undertaken to address the question of paid speakers at City Council meetings. In addition, we recognize the report’s mischaracterizations and omissions do not diminish the underlying importance of protecting the integrity of public meetings nor our responsibility as a corporate citizen to ensure our business protocols are structured to both detect and prevent the activity in question.
Specifically, our concerns are about email communications that Entergy provided to the independent legal team, dated March 2018, which confirm that when Entergy heard about claims regarding payments made to Council meeting attendees and speakers, we twice contacted Hawthorn Group to inquire about those claims. The evidence Entergy provided to the independent legal team, which was omitted from the final report, clearly shows Entergy was assured by Hawthorn that no payments were made. Those emails are attached to this letter for your reference.
Without any reason to doubt the veracity or integrity of Hawthorn at the time, we accepted their assurances at face value with no further inquiry. On that basis, certain statements by Entergy executives in emails and text messages that are highlighted in the third-party report were made on the belief that Hawthorn was prolific in recruiting legitimate grassroots supporters. Had we known about any type of payments at that time, we would have immediately ended the engagement.
As we noted in our May 2018 investigative report, Entergy began an internal investigation after a lawsuit was filed on April 19, 2018, that included credible and specific allegations that people had been paid to attend or speak at public meetings. We learned through that investigation that, in fact, without our knowledge or consent and in violation of our contract, Hawthorn hired the firm COD which in turn paid individuals to attend and speak at Council meetings. We immediately severed our relationship with Hawthorn and placed both firms on Entergy’s “do not hire” list. We acknowledged all of this in the investigative report we released to the public on May 10, 2018.
Hawthorn also acknowledged and took accountability for its actions in a letter to Entergy dated May 9, 2018. We provided this letter to the third-party legal team, but it was also omitted from the final report. A copy is attached to this letter.
For these reasons, we take strong exception to characterizations in the third-party report that Entergy “knew” about payments made by Hawthorn and COD to individuals who attended or spoke at the City Council meetings.
In closing, we again apologize to the City Council, the community, the many authentic supporters of the New Orleans Power Station and our employees. We recognize that we have distracted this Council from doing its important work for the citizens of New Orleans and we want to focus on constructive efforts to address challenges in our City. We thank you in advance for your consideration of the above. We will continue in earnest our effort to regain the trust and confidence of the citizens of New Orleans and this Council.
Roderick K. West
Executive Vice President and
cc: Council Utilities Regulatory Office: Attention Ms. Erin Spears
City Attorney: Sunni LeBeouf, Esq.
Clint A. Vince, Esq.
Marcus V. Brown, Esq.
Karen H. Freese, Esq.
Cory Cahn, Esq.
Brian L. Guillot, Esq.