For O’Malley and friend, interests align in offshore wind bill
By Aaron C. Davis,
Maryland Gov. Martin O’Malley’s childhood friend and right-hand man for a decade stands to gain from the governor’s ambitious plan to subsidize development of an estimated $1.5 billion offshore wind farm.
Michael R. Enright is managing director of an energy firm behind a joint venture competing for federal leasing rights to develop the project.
The company would have to win both federal and state approvals. But if it does, a commission appointed by O’Malley (D) would work out a complex deal sending billions in revenue to the company over 25 years by raising almost every state resident’s electric bill.
As the governor’s chief of staff, Enright was deeply involved with energy issues but later said he never significantly contributed to the administration’s wind energy policy. Before he left the governor’s office in January 2010, he requested an ethics review clearing him and his new employer to work on the wind energy initiative. Weeks later, Beowulf Energy and Enright filed paperwork with the state identifying the company as an interested developer of offshore wind.
Two other members of O’Malley’s trusted inner circle who are now in the private sector also have business interests aligned, indirectly, with the governor’s offshore wind bill through their work for Pepco.
There has been no suggestion that the potential benefit for Enright, who became fast friends with O’Malley at age 14, was a football buddy in high school and became O’Malley’s first deputy mayor in Baltimore and ultimately his chief of staff in Annapolis, would violate Maryland law.
But never before has such a high-ranking aide who helped intimately in the governor’s ascent — and whom O’Malley still counts among his closest friends — stood to possibly gain from one of his signature bills.
Enright’s move is emblematic of a revolving door between government and the private sector that has become common in Washington and in every state capital.
With more O’Malley staffers likely to migrate to the private sector before his second term ends, the governor’s ties to Enright and growing ranks of former staffers and friends in the private sector are certain to be scrutinized as talk increases of a possible O’Malley run for the presidency.
“The governor will be able to say that he would have supported these issues regardless — he’s talked about a green economy for years — but they are the kinds of connections that nonetheless raise eyebrows,” said Todd Eberly, a political science professor at St. Mary’s College.
“In Maryland, they probably do not hurt him because with a very, very united [and Democratic] state government, there’s no real chance of an investigation . . . but if he seeks higher office, does someone bring this up and say, ‘You were trying to give sweetheart deals?’ Potentially, that’s the case, the risk for O’Malley.”
A federal decision
In an interview, O’Malley stressed that it is not his administration but the U.S. Interior Department that will initially decide which company will win the right to develop Maryland’s offshore wind area, because it is in federal waters. “As I understand it, Michael’s new employer is one of many people seeking to win approval from the federal government in one of the areas that they have designated for offshore wind, so I think it’s a pretty attenuated chain of events” to tie it to the state, O’Malley said.
In an e-mail, Enright also stressed the federal competition. His firm, Beowulf, is a partner in Maryland Offshore LLC, one of eight companies seeking leasing rights to develop Maryland’s offshore wind area, according to state and federal records.
“Offshore wind is a promising clean energy industry for the state and the nation’s economy. Maryland Offshore Wind is competing against seven other companies in a federal process that is in its infancy,” he said.
After the federal government awards leasing rights, Maryland’s Public Service Commission, controlled by O’Malley appointees, would assess the feasibility of each developer’s business model, and if more than one developer wins federal leasing rights, it would determine which company or combination of companies would be included in the state’s long-term power purchasing agreement. That agreement would set the cost to ratepayers and essentially determine the developer’s profit margin.
Proponents believe that with similar investments in other states, competition will increase and make the price of wind power competitive with that from fossil fuels.
The cost of the subsidy in Maryland, however, would be spread among nearly every ratepayer for the next quarter-century. The monthly cost for most has been estimated at $1.44 to $3.61.
Friends and former colleagues of Enright’s bristle at any suggestion that the former chief of staff or others from the administration have sought to parlay their relationships with the governor into high-paying private-sector jobs.
“There’s no K Street for O’Malley’s guys in Annapolis,” said Sean Malone, who was employed by the governor until 2008 to lobby the General Assembly on behalf of his agenda.
“The governor’s office gives good access to all lobbyists; they’ll hear everybody out. But sometimes you’re on the right side, and sometimes you’re on the wrong side,” said Malone, who is now a lobbyist on the wrong side of O’Malley’s offshore wind effort. His firm represents energy companies seeking to kill or significantly alter the bill.
“Anybody who’s wondering: The governor’s office doesn’t do anything because one of us is on an issue,” Malone said.
Encounters vs. lobbying
Enright has not registered as a lobbyist in Annapolis, and neither has Beowulf.
But Enright’s every move in the state capital, where he still works on many days, is watched carefully, given his close ties to O’Malley. Even casual encounters around the capital can open him up to criticism.
A case in point: After an offshore wind briefing this year before the House Economic Matters Committee, which would have to approve the governor’s plan, lobbyists for a rival energy interest who happened to be in a popular restaurant and bar across the street from the State House noticed when Enright began chatting with Del. Dereck E. Davis (D-Prince George’s), the committee’s chairman.
“I saw him, and he spoke to me. It was sort of a casual mention” of offshore wind, Davis said when asked about the encounter.
Enright told Davis to let him know if he could “be of assistance,” Davis recalled. “He didn’t really come at me like, ‘Do this, do this.’”
Enright’s discussion with Davis probably would not be enough to require the governor’s former aide to register as a lobbyist, the director of Maryland’s ethics commission said.
Ethics panel review
Documents show that before he left the state’s payroll, Enright sought clarification on ethics rules to avoid any question of a conflict of interest.
At the time, he was easing out of his role as chief of staff, serving as O’Malley’s special adviser and working on, among other topics, state energy policy.
The documents show that as the governor’s office announced Enright’s departure to Beowulf in January 2010, Enright spoke with state lawyers at least three times about post-employment ethics issues, including asking whether an administration report drafted while he worked for O’Malley and published that month would create a conflict.
The report concluded that offshore wind and other clean energy projects “must be developed” in Maryland for the state to meet its renewable energy goals.
“I was not involved in the drafting of the report and I did not sign off on it,” Enright wrote on Jan. 20, 2010. State ethics opinions are confidential, but Enright provided the opinion and e-mail correspondence with state lawyers to The Washington Post at the paper’s request.
Enright also asked the commission to review whether there would be “any ethics issues” if Beowulf responded to a request for information from O’Malley’s energy administration, which was in the process of drafting its offshore wind strategy.
On Feb. 4, four days after Enright started at Beowulf, the commission voted to approve a staff lawyer’s recommendation that Enright had not met a threshold of having “significantly participated” in the state’s offshore wind policy development “and therefore he would not be precluded from working on these matters” on behalf of Beowulf.
At the beginning of March, Beowulf responded to the state with its proposal.