Environmentalists and good government groups on Wednesday called for an ethics investigation into D.C. Mayor Muriel E. Bowser’s decision to reverse course and to back a takeover of Pepco, the city’s electric utility, by Exelon, a Chicago-based nuclear energy giant.
Critics of the mayor’s about-face, which breathed new life into the $6.4-billion merger, question if Bowser has been honest with the public about everything that prompted her change of heart.
Specifically, the opponents question the timing of an agreement between Bowser’s administration and Pepco for $25 million to offset city costs to build a new stadium for the city’s Major League Soccer team, D.C. United.
Some of the money could also be used to lower city costs for Bowser’s priority to build a Washington Wizards practice arena in Southeast.
The sponsorship agreement — which includes either renaming a park near the soccer stadium “Pepco Park” or a street leading to the new stadium “Pepco Place” — was signed and the money deposited in a city account as top Bowser aides had begun negotiating terms under which the mayor could support the broader merger.
If there was any coordination on the two topics, it could force the energy companies to reopen merger talks with Delaware, Maryland and New Jersey, where regulators have already backed the takeover, but states are entitled to similar compensation.
Bowser’s office touted the sponsorship agreement and cast it as entirely separate from the merger discussions. Last month, the mayor announced a separate package of new concessions that she said had led her to change her position and to support the merger.
Bowser spokesman Michael Czin reiterated that position Wednesday in response to a news conference held by the opponents. As the biggest landowner on Buzzard Point, where the soccer stadium is to be built, Pepco, Czin said, “has been in contact with the District government regarding a soccer stadium for years. The sponsorship agreement stemmed from that relationship.”
Pepco spokeswoman Myra Oppel was more forceful, noting support for the Pepco-Exelon merger is now common among a majority of D.C. Council members, the attorney general and the once critical Office of the People’s Counsel.
“It’s clear the small, vocal minority who continue to oppose the merger are becoming increasingly desperate in their last-ditch attempts to disrupt it,” Oppel said. “They are deliberately ignoring the facts and will say just about anything to distract from the substance of the merger and to serve their special interests.”
In a letter to the director of the D.C. Board of Ethics and Government Accountability, however, two leading area environmentalists on Wednesday said the simultaneous negotiations raised questions that must be probed.
“Barely two weeks after the Pepco sponsorship agreement, the Mayor announced the merger settlement and her support for the merger . . . which was in contrast to her previous position,” they wrote.
In a news conference outside a Pepco substation that would be demolished to make room for the new soccer stadium, Mike Tidwell, one of the two authors of the letter and head of the Chesapeake Climate Action Network, went further.
He and other critics held up a banner that read “SOCCERGATE: Did Pepco buy Mayor Bowser for $25 million?” The opponents also laid out a web of financial connections between Bowser’s administration, developers and donors to a pro-Bowser political action committee that they said pointed to a conspiracy to ram through a merger not in the best interest of ratepayers or the environment.
“There’s a story here, a very big story, in my opinion,” Tidwell said. “The facts already are extremely controversial. We did not throw this word ‘soccergate’ out lightly,” he said.
Anya Schoolman, director of the Community Power Network, said an analysis by her group has found a problem with a provision in the merger deal to shield D.C. residents from rate hikes until 2019. The arrangement could result in a balloon hike for residential transmission rates of 45 percent that year — a time period, she noted, that would be “after the next mayor’s election.”
Schoolman also questioned why the utilities have declined to say if they were asked to contribute to a pro-Bowser political action committee. That PAC was shut down Tuesday night, but Pepco again on Wednesday declined to say if the company had been asked to support it during the negotiations.
Advocates also broadened their criticisms. They took aim at Sandra Mattavous-Frye, head of the Office of the People’s Counsel and once the merger’s most vocal critic. She reversed course and backed the merger, and Bowser reappointed Mattavous-Frye to a new term two weeks later.
Schoolman also questioned the role of D.C. Attorney General Karl Racine, who at first recused himself from the merger talks because his prior law firm had represented Pepco.
Racine’s office, however, became heavily involved in negotiating the final deal that Bowser supported.
Both Mattavous-Frye and Racine have said the deal would be best for city residents.
Schoolman, however, said D.C. ethics investigators only need to use common sense to see the sponsorship deal and the timing of it merits a closer look. The deal would not put the company’s name on the stadium, but on a city park, or possibly on four blocks of what is now an industrial strip that would run adjacent to the stadium.
“What kind of a corporation pays $25 million for an unnamed empty lot somewhere, and why does the mayor even have the authority to hand out the names of streets?” she asked.