It’s nice to see a guy get a raise, but the compensation package offered to Maine’s former Public Utilities Commission chairman by a wind developer raises a number of red flags.
According to a story Thursday by Naomi Schalit, of the Maine Center for Public Interest Reporting, former PUC Chairman Kurt Adams negotiated a pretty sweet deal for himself about a month before leaving the state’s employ.
Adams accepted a vice-president’s position at the Boston-based First Wind, a company seeking to develop a wind energy project in Maine.
A Securities and Exchange Commission filing says his first-year compensation at the firm totaled $1.3 million, which included $315,000 in salary, $658,000 in stock, $29,000 in “other” compensation and $315,000 in “non-equity compensation.”
That’s certainly a step up from his former position, which pays the current PUC chair, Sharon Reishus, a measly $164,278 per year. In fact, it’s an eight-fold increase if the value of his stock is included.
And this is at a firm that has yet to turn a profit, according to a March 30 Boston Globe story.
The company had revenues of $47.1 million in 2009, but still had an operating loss of $57.1 million.
What’s more, first wind is not a big company. According to the Globe, it has a total of 70 employees. And, according to the company’s website, 10 of them are either chairmen, CEO, CFO or a vice president of one thing or another.
Compare that to some of Maine’s top hospital CEOs, who also make about $1 million per year, but who supervise thousands of employees and produce hundreds of millions in revenue.
So, what does a company get when it pays $1.3 million for a former regulator from Maine?
Contacts. Knowledge of the regulatory process. Friends in high places. A big Rolodex — make that a deep Blackberry “contacts” list.
This is, of course, the kind of strategic hire that happens 100 times a day in Washington, but which we seldom see in Maine.
It’s not illegal, but it’s the familiar “revolving door” of politicians, soldiers and regulators moving seamlessly between government and industry that we’ve come to mistrust and despise about Washington.
But here’s what should really concern us — the example Adams’ hiring sets for other highly placed state employees.
Across Augusta, people buried in regulatory agencies must be asking themselves, “If he can do it, why can’t I?”
Which raises an even more disturbing prospect called “regulatory capture.”
It’s a theory developed by Chicago School of Economics Professor George Joseph Stigler that regulators eventually identify with and aspire to join the well-heeled people they regulate.
And a regulator thinking about soon joining private industry probably isn’t interested in offending prospective employers.
Of course, people do leave government. Adams’ reason, a conflict of interest posed by Central Maine Power’s efforts to expand transmission lines near his home, is a good one.
Still, we hope his example remains the exception rather than the rule for Maine.