
Can you say "conflict of interest"?
Maine has an abundance of wood and we could and should use this resource to help power our state. I read a piece in the Portland Press about the Governor's Wood-to-energy task force and initially thought that this is a great idea. Then I read that the task force is chaired by Les Otten. For those who don't know Les, I will explain that he recently started a business called Maine Energy Systems to import and sell wood pellet burning furnaces in Maine. He also plans to sell pellets in quantity throughout his sales area. I think that Les is importing a high quality furnace and providing a needed service.
Using wood in Maine is too important to screw it up. Governor Baldacci has just made the final report of his committee totally irrelevant by stacking it with interested parties.
I think Les should be involved in this task force. He could provide information as a non-member to an independent group about the equipment that is available and it's capabilities. He can also provide info on the availability of pellets and delivery systems in Maine. There are a lot of other people who can also provide info on the forests and harvesting requirements that will be call upon.
It is a shame for this task force to be undermined by blatant conflict of interest. I could tell you the outcome without spending a dime of the taxpayers money simply by reading a list of the names and business of the task force members. The task force should be manned and chaired by people without a vested interest in the outcome. This is too important to ruin by stupid and shoddy politics.
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As a member of the Governor's Task Force and a Director of Maine Energy Systems, I felt the need to respond to the editorial.
But first, suppose that Maine was in need of help to save the paper industry. Who would Mainers want to lead the charge to help? The best experts available, of course. We would want Maine’s best paper people to help develop the plan to help that industry in conjunction with a variety of stakeholders who have interest in the forest products sector and the welfare of Maine's citizens.
Now imagine that, in the face of such a crisis, someone shouted ‘Wait a minute – you can’t put paper people in charge of this – after all, they make money selling paper!”
Anyone who said that would be deservedly scorned. At the same time, it would be important to have a balanced membership on that group so that every stakeholder is represented.
That why there are 28 members on the Governor’s Wood-to-Energy Task Force.
So it’s rather odd that a Sun Journal editorial would use the same strange logic to attack Les Otten, who chairs Maine’s Wood-to-Energy task force. But on July 16, the paper did just that, raising the specter of a conflict of interest while, oddly, confirming that the draft task force report contains good stuff. The editorial's problem with Otten is that in addition to chairing the task force he heads up a group called Maine Energy Systems which is importing European-built wood pellet fueled boilers and developing a network to provide bulk delivered pellet fuel for them.
Otten’s interest in alternative energy predates the creation of the task force by several years when he joined a group of concerned citizens who sought to help the state become energy independent. The group met for a number of workshops sponsored by Otten and looked at a variety of different alternatives – wind, solar, geothermal, tidal and a variety of biofuel processes.
It became apparent to Otten that all of these technologies have promise, but his team of economic advisors saw the coming crisis with home heating oil and predicted that people would be having to choose heat or groceries. So he and his group determined that the one solution that could produce the fastest, most environmentally sound and affordable impact in terms of helping the people of Maine was wood pellet technology applied to home furnaces. This is now one of the most popular heating methods in Europe with more than 75% of new homes in several European nations being built with pellet fueled boilers as the primary heating source.
Fully automated bulk loading wood pellet heating technology is far more advanced than that found in the U.S. So in December of 2007 Otten entered into an agreement with Bosch (a German company) to import and distribute their systems.
Maine’s government didn’t come knocking until April of this year. Having heard of the efforts Otten was making as a private businessman, Governor Baldacci reached across party lines and appointed Otten to chair the committee.
Prior to accepting the appointment, Otten cautioned Baldacci that some in the state might perceive his involvement as a conflict of interest. Baldacci was undeterred, believing that Otten’s knowledge of the technology and his ability to get things done trumped any such concerns.
Otten has also been forthright about the issue with the media, and all members of the 28-member task force he chairs – which includes scientists, environmentalists, legislators, government employees, members of the forest products industry, economists and health groups – all of whom were well aware of Otten’s interests. The conclusions of the panel weren’t unanimous by any measure, but the committee still overwhelmingly supported the wood-to-energy initiative.
Also, regarding Dutch Dresser and William Strauss, the logistics of executing a wood-to-energy strategy and the financial and economic projections that are a part of any prudent strategic plan are areas in which Dutch Dresser and William Strauss have particular expertise. They are a part of the Task Force for the same reasons that they are members of Maine Energy Systems: They have experience in wood-to-energy and are able to connect good ideas with achievable strategies and thus provide focus on what can and cannot be realistically expected to be implemented successfully. Both have gained the respect of a cross section of Task Force members for their probing of any assumptions that are not supported with facts, data, or well thought out analysis.
When state government appoints a task force of this type, members serve as volunteers. Otten has even paid the support staff for the task force out of his own pocket. Nor is his situation unique; former Governor Angus King is chairing a comparable task force to develop wind energy and he, like Otten, has potential financial interest in the outcome. But just like Otten, he was appointed to lead that task force because wind energy development makes sense for Maine.
The energy crisis facing Maine is as real as it gets. More than 80 percent of Maine’s homes are heated with fuel oil. With current prices approaching $5 a gallon, Mainers are justifiably terrified of this winter’s fuel bills.
Wood pellets, burned in stoves or boilers offer a lower-cost alternative. Wood pellets are not only cheaper – they’re also locally produced from regional sustainable/renewable resources. As a result, the Wood-to-Energy task force’s recommendation to develop the resource is a way to both create jobs and develop energy independence in the state.
Maine is a small state, and must rely on the best resources it has to solve its problems. Government can’t do it alone; it must rely on partnerships between both the public and private sectors to get things done. Sometimes, that involves working with experts who potentially have a financial interest in the outcome.
But as long as those experts are open about their interests, and as long as the process ensures that different viewpoints are heard and considered, it just plain makes sense to appoint the best people available. That’s been the case all of the members of the Wood-to-Energy task force. There is no doubt that every point of view has been on the table, tested for veracity, and entered into the narrative of the Task Force’s recommendations only if the idea betters the welfare of the citizens of Maine.
Posted by
William StraussJuly 17, 2008 04:44 PM
Excellent response. Thanks for the input, Mr. Strauss.
Posted by Sharky
July 18, 2008 12:25 PM
Hi William - that's a lengthy way to say that there is in fact a conflct of interest.
Posted by
talixxJuly 18, 2008 03:29 PM
Thanks to William Strauss for the information. When writing my post, I was unaware that the Sun Journal had also raised questions of conflict. I feel that the Task Force's report can be extremely important and I feel that Les has much to offer. I also feel that if the Sun Journal and I, as well as Otten himself, can think "conflict" then a great many others will also. It is terribly sad to have the report overshadowed by this. It would have been far better to have a group without a vested interest accept the testimony of industry advisors and draft the report from there. This way the findings could stand by themselves without a cloud of doubt hanging over them.
Posted by
W FennJuly 19, 2008 12:44 AM
Accusing someone directly of "conflict of interest" is not cool unless there has been an ethical breech.
"Potential conflict of interest" or noting the "appearance of conflict of interest" might sound like minor distinctions, but they are not.
I regret Mr. Fenn's assumptive choice of words.
Moreover, Les Otten could hardly be more known in Maine. He doesn't have to say a word for us to feel a sense of full disclosure.
I would love to hear Mr. Fenn's take on the fact that it took the PPH about a year to disclose that the CEO of Plum Creek - Rick Holley - is on the Board of the company that owns the Press Herald which was reporting regularly on the Plum Creek issue. Now THAT's an actual ethical breech.
Otten brings much, much more to the table than a potential conflict of interest: he brings star power and a well-earned reputation for integrity as well as years of environmental and entrepreneurial expertise.
Maine desperately needs entrepreneurial leadership and Baldacci was right to call on Otten.
Posted by
Daniel KanyJuly 19, 2008 02:50 AM
A closer analogy would be for Rick Holley to have been appointed to and serve as the chairman of the group making recommendations to the LURC concerning Plum Creek. If Rick served and put forth a completely honest and fair recommendation, would that make it alright and would you accept it at face value? This is the same as Les and apparently others on the Wood to Energy task force.
Les and others could have better served by providing their info to a board without members having a vested interest. This report is too important to have a cloud of doubt hanging over it.
Posted by
W fennJuly 19, 2008 08:29 AM
Actually, your position would seem to indicate, Mr. Fenn, that the Press Herald should not have reported on Plum Creek since Mr. Holley was on the Board of the company that owns the paper.
Moreover, standard journalistic ethics clearly indicate full and timely disclosure.
There's a big difference between a Governor's task force and other types of committees.
I am assuming, of course, that you think that Cheney's unnamed Energy task force committee is just over the edge since not only did it contain oil magnates, but he won't even release the names of the members.
Whenever you have experts in a field, they tend to have connections to that field that include financial connections. The key is full disclosure - not leaving off the people who might give you the best advice just because there is a potential conflict.
Otten was honest and Baldacci requested him to participate. The doors are open for you or anyone to investigate any wrong-doing.
Slinging mud without any reason doesn't make a good story. It does, however, make the reader question your motivation. Are you just trying to "sell" a story or do you suspect there is an actual problem. If so, please explain what that is. Who would you rather have had in place of Otten? Were there other representatives from other industries?
Also, you shift from using the term "task force" to "committee" - is that just a casual use of the word "committee"? Or is there a separate committee?
If you are going to accuse people of wrongdoing and "stupid and shoddy politics" then you should have some meat with which to back it up. The terms of your accusations are serious, Mr. Fenn, so you should have the goods to back them up.
Posted by
Daniel KanyJuly 19, 2008 02:04 PM
Congratulations on a good column, Bill.
You have indeed inspired reactions and that is our goal.
Posted by Peter Cutler
July 20, 2008 10:57 AM
Slinging mud and making misplaced accusations of mythical ethical breeches is what you want, Mr. Cutler?
That's not what I want. I would like good reporting and well-researched copy. I would like insightful columns instead of an amateur hour of angry would-be talking heads like you and, in this case, Mr. Fenn.
Maine deserves insightful conversations. Not Talk Radio tripe.
Just because you offend people enough to get them to respond, Mr. Culter, doesn't mean you have accomplished anything at all - other than further dividing the community.
That's nothing to be proud of.
Posted by
Daniel KanyJuly 21, 2008 10:49 AM
I wondered if anyone was going to fix that glaring typo in the first sentence. "Abundance of would" was pretty funny, though.
Posted by Sharky
July 21, 2008 12:37 PM
I didn't think that was a typo .
I wood like to point out that I like Mr. Fenn's posts in general. I enjoy his subjects, respect his point of view, and usually I agree with his conclusions.
But I really do take issue with this short-sighted and ill-advised cynicism when it precedes research. This type of issue should compel looking objectively into a subject, not destructive shots from the hip.
Posted by
Daniel KanyJuly 22, 2008 10:04 AM
I can't take Fenn at his word when he laments that a potential appearance of conflict of interest might interrupt the task force's findings. Fenn is clearly laboring to dilute the impact of any finding by posting this blog entry.
It's a shame Fenn didn't wait to see the outcome first before crying foul.
Posted by Jack Hurd
July 27, 2008 08:07 AM
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