Tennessee Valley Authority directors recently clamped down on wining and dining, telling managers to be "prudent and responsible" in entertaining clients -- or risk being fired.
The country's largest public utility acknowledged two weeks ago that it spent thousands of dollars entertaining power distributors, clients and employees at Bristol Motor Speedway and fancy restaurants in Washington and Nashville.
"It is clear that some excessive expenditures occurred in the past for hospitality," TVA Chairman Glenn L. McCullough Jr. and directors Skila Harris and Bill Baxter wrote.
"This use of resources is not consistent with TVA's commitment to cost effectiveness, and it reflects badly on TVA as a whole."
In a six-page memo, the board told top managers that while some entertainment expenses may be appropriate, "we expect each of you to model prudent and responsible behavior."
"I think we can conduct our business in a more moderate setting and really not lose very much effectiveness, and have it appear a lot more reasonable to the man on the street," said Kenneth R. Breeden, the TVA's new executive vice president of customer service and marketing.
The customer service and marketing group is responsible for most of the TVA's entertaining. Dick Tallent, a Breeden predecessor, received three retirement parties costing $35,000 before leaving the TVA in January 2003.
Stephen A. Smith, director of the TVA watchdog group Southern Alliance for Clean Energy, said the entertainment spending was "clearly very abusive at a time . . . when TVA is laying employees off and claiming to exercise a conservative nature on spending."
"We welcome anything that would make TVA consistent with what they are saying," he said, challenging the TVA's 158 power distributors, which are "actively participating in taking this money at ratepayers' expense," to follow suit.
Jack Simmons, president of the Tennessee Valley Public Power Association, which represents the distributors, called the policy "an appropriate response" and praised the new standards of accountability.
"I don't think the price of a dinner determines how much is accomplished," he said, "but I think that using some prudence on the expenditure is the right way to go."
The TVA will pay for meals, refreshments, food services, lodging, non-cash gifts and decorations in some situations, such as TVA-sponsored events, employee recruitment and funerals, the directors said.
But "personal recognition events" such as birthdays and showers are out. TVA directors suggested a common-sense standard.
The TVA will not pay for "any activity which due to its nature, location, timing, participants, expense or other factors would likely be perceived by a reasonable member of the public as improper."
Presumably this would rule out the $199 bottles of wine and $45 cigars that TVA officials charged on more than $22,000 in Washington restaurant bills over two days last year, or $75 veal chops ordered in two dinners costing $10,000 at Nashville restaurants in 2001 and 2003, or 50 pairs of Bauer binoculars given away as part of $360,000 spent over three years entertaining at a Bristol Speedway skybox.
"Hospitality shall not be lavish, inappropriate to the circumstances or occasion or likely to reasonably be perceived as an improper or inefficient use of TVA resources or for the private benefit of any employees or other parties," the directive said.
TVA spokesman John Moulton said the TVA board wanted to emphasize adherence to a hospitality policy already in place.
Still, new policy manuals were being prepared and "training in the materials will be mandatory for managers and employees responsible for hospitality costs," the directors said.
Employees who violate the requirements will be subject to discipline "up to and including termination," the directors said.
Any entertainment costing more than $5,000 will require prior approval of a top TVA officer, and anything more than $500 will require a vice president's okay.
The directive also says the highest-ranking TVA official in attendance should always pick up the tab on his or her TVA credit card.
The TVA, a self-supporting government corporation, provides electricity to about 8.5 million people in seven states.