The politics are as dirty as the water
Next week, shareholders and activists will take on Duke Energy at the company’s annual shareholder meeting. Duke, a company now infamous for polluting a 70-mile stretch of the Dan River in North Carolina with mercury, arsenic and lead, is facing a shareholder resolution calling for the company to provide more information about its political spending, along with thousands of activists livid over Duke’s catastrophic environmental record.
For starters, the company’s recent environmental mishaps – eight violations in just the past month or so – are rapidly making Duke the kind of cartoonish environmental foe that would send Captain Planet into cardiac arrest.
On February 2, 2014, a storm water drain beneath one of Duke’s coal ash ponds broke, kicking off a deluge of more than 39,000 tons of toxic sludge and 27,000 gallons of contaminated water into the Dan River. On the heels of the spill, Duke was caught intentionally dumping more than 61 million gallons of contaminated water into the Cape Fear River.
Environmental groups have long been pushing the North Carolina Department of Environment and Natural Resources (DENR) to get tough with Duke over its violations of the Clean Water Act. Prior to the Feb. 2 spill, environmental groups blasted the agency for proposing a paltry $99,112 settlement for Duke’s illegal dumping of coal ash from plants near Asheville and Charlotte. In the settlement Duke received amnesty for past pollution, and can continue polluting until research demonstrates that the contaminants must be addressed, despite land near the plants containing levels of boron, magnesium and thallium beyond the regulatory limits. The leniency of the settlement raised alarms at the U.S. Environmental Protection Agency (EPA) over DENR’s handling of the settlement.
Based on the sheer number of violations the company faces, it looks like Duke is using North Carolina as its personal toxic dumpsite. And a closer look at Duke’s political activities potentially sheds light on how the company has managed to escape thorough scrutiny.
Information from Democracy North Carolina shows the amount of money Duke’s political action committee and executives have given to support lawmakers in North Carolina, including Gov. Pat McCrory, a former 28-year employee of Duke. From 2008 to 2012, Duke gave $1.1 million in direct and indirect spending to support McCrory. In the year leading up to the Feb. 2 spill, as environmental groups ratcheted up pressure on DENR to investigate Duke’s numerous violations of the Clean Water Act, the company gave more than $650,000 to support North Carolina politicians.
Democracy North Carolina also points out that it’s impossible to know how much Duke potentially donated to Renew North Carolina, a dark money nonprofit group run by former-McCrory campaign staff that doesn’t disclose its donors.
Were Duke’s executives emboldened to be more reckless because they knew North Carolina’s regulators and governor would look the other way? Do Duke’s campaign contributions, disclosed or undisclosed, make it easier for the company to disregard environmental regulations?
The Nathan Cummings Foundation has filed a shareholder resolution calling on Duke to disclose direct and indirect political spending to help investors get some insight into these questions. The foundation also is spearheading the call for Duke executives to launch an independent investigation into the company’s recent, numerous environmental violations.
Duke shareholders need to know what role political spending has played in Duke’s calculus and whether that political spending has enabled reckless decision-making.
For one thing, being caught purposefully dumping toxic chemicals in a river while your accidental toxic chemical spill is being investigated does some serious reputational damage to a company. Duke’s share prices dipped and then recovered since the spill, but the company is now facing a multimillion-dollar cleanup and will likely have to relocate several coal ash ponds, which could potentially cost the company billions.
And it’s not just the bottom line that should concern shareholders — the environmental impact of the Feb. 2 spill alone is tremendous. The Dan River provides drinking water to several cities, but residents have since been advised to avoid the water. Residents have also been told to avoid eating fish from the river. The U.S. Fish and Wildlife Service has raised concerns about the “longer-term toxicological impacts on aquatic animals and birds from metals in elevated concentrations.”
If all of that weren’t enough to alarm shareholders, Duke is also involved in a grand jury investigation of its relationships with state regulators. Federal prosecutors have issued at least 23 subpoenas aimed at determining whether the company received preferential treatment from DENR.
Given Duke’s environmental record combined with the investigation into a potential political scandal, it’s hard to argue that Duke’s investors would not be better served if they had more information about the company’s wheeling and dealing. Shareholder and board oversight of Duke’s activities could have sounded the alarm long before toxic sludge began flowing into North Carolina’s waterways.
Because of Duke, the politics in North Carolina are as murky as the Dan River, and shareholders are right to demand accountability from a company that is not acting responsibly.
Take action: If you would like to attend the protests outside of Duke’s shareholder meeting on May 1 get the details here.
Kelly Ngo is the online advocacy organizer with Public Citizen’s Congress Watch division.