Entergy Paid Actor Scandal Widens, Nonprofits Used to Support Gas Plant

Entergy came under fire this week when a New Orleans news site revealed that many of the people who testified on behalf of the company’s proposed gas-fired power plant were paid actors.

The company has since acknowledged that one of its paid contractors, the Hawthorn Group, was behind that scam, and attempted to distance itself from the group’s activities.

But the paid actors weren’t the only people testifying on behalf of Entergy or the gas plant. A host of others, including directors of dozens of locally respected non-profits, also testified on behalf of the company and its gas plant.

It turns out that many of those testifiers, whose advocacy has not come into question, were paid by Entergy too, though those payments had nothing to do with the Hawthorn Group. They are a part of the charitable giving operation that Entergy, like virtually all regulated utilities, uses to buy support for its proposals from civic groups and charitable operations.

Recipients of Entergy’s charitable giving led testimony in support of Entergy

At least nine of the organizations which testified at the New Orleans City Council’s hearing on the gas plant on Entergy’s behalf on October 16 of last year have received charitable donations by the Entergy Charitable Foundation, according to the foundation’s tax returns and acknowledgements by the organizations themselves.

Some of those organizations disclosed the donations by Entergy at the gas plant hearings, but others did not.

Howard Rodgers of the New Orleans Council on Aging said that “gas is an energy that we use that does not have any kind of additional effects.” Burning natural gas, a fossil fuel, contributes to climate change, leading to more extreme weather and storm surges that have inundated New Orleans. Last year, Rodgers received a $300,000 novelty check from Rice, the Entergy CEO, to administer the utility’s “Power to Care” program.

Richard Arnold, the director of communications and development at Covenant House New Orleans, said that he was speaking on the youth center’s behalf and also as a city resident.

“I’d like to echo the prior comments about Entergy’s commitment to our community but also just add personally that I am very much in favor of investing in renewables, but I don’t think it’s an either-or. I think it’s a both-and. I think natural gas is an ideal bridge fuel that will help us get to our long-term renewable goals because it’s clean, and it’s cheap, and its regionally abundant, so I support the plant, thank you.”   

Arnold did not disclose that Covenant House was a 2016 grantee of Entergy for an unknown sum of money. The charity also received $10,000 from Entergy in at least 2011.

The CEO of the YMCA of Greater New Orleans, Gordon Wadge, said that “Entergy is a faithful corporate partner and puts great thought into all of the efforts that they get behind in our community, and so I think that same great thought translates into the work that they will put into this new power plant, and I’m grateful to have Entergy in this community.”

The Entergy Charitable Foundation gave the YMCA of Greater New Orleans $25,000 for adult education services in 2016, according to its tax filings.

Other organizations simply lavished praise on the utility itself, without mentioning the gas plant. Michael Williamson, the President and CEO of the United Way of Southeastern Louisiana, talked about Entergy’s donations to its efforts:

“Thank you Council Members and thank you to Charles Rice for inviting me to speak on behalf of Entergy’s long-standing commitment to our community.” Rice is the current CEO of Entergy.

“On last Thursday, Entergy dedicated another $1 million to the new Prosperity Center and its mission to lift individuals and families out of poverty and into financial stability,” Williamson continued, referring to the J. Wayne Leonard Prosperity Center, which is named after Entergy’s previous CEO.  “The bottom line is Entergy is committed to creating a stronger, more prosperous and more equitable New Orleans. United Way is grateful to Entergy — to call Entergy a partner in our fight to build better and brighter futures for all.”

Entergy now says all funds paid to Hawthorn will be refunded and it will “donate those refunded fees to charitable organizations”, prompting at least one local advocate to note the irony.

“Entergy has said the dollars that were spent on their Hawthorn contract will now go to charities in town”, said Logan Burke, Executive Director of the Alliance for Affordable Energy. “Will those charities also be required to support Entergy’s next gas plant? An independent investigation into Entergy’s practices should look into all of the ways the utility uses money to influence decisions. Profitable utilities providing support to non-profit organizations is commendable, but requiring quid pro quo support on regulatory matters is just wrong.”

All of the testimony from the October 16 hearing is available here.

Entergy paid contractor to provide “75 supporters, 10 of whom would speak”

Of the people who supported the gas plant, most either represented organizations which had received charitable donations from Entergy or were individuals whose testimony closely mirrored the talking points provided by Crowds On Demand, the subcontractor that Hawthorn employed, to directly pay actors to testify.

While Entergy denied any culpability or knowledge of the paid actor scandal, its’ investigation report does acknowledge that the company paid the Hawthorn Group to “turn out 75 supporters, 10 of whom would speak at the meeting”.

The utility said that it contracted with Hawthorn to, “assist in developing grassroots support for the proposed plant, including mobilizing supporters to attend and to speak at the October 16th (2017), meeting”.

After Entergy hired Hawthorn to manufacture support for its gas plant, the October 16, 2017 meeting was, “filled to capacity, and some people were unable to be seated due to space limitations,” according to Entergy’s investigation. At the meeting, some Entergy employees spoke in favor of the gas plant wearing the same orange shirts worn by the paid actors.

Entergy must have been pleased by the results, and it didn’t seem to ask any questions about Hawthorn’s methods, as it “again contracted with Hawthorn to recruit 30 supporters, including 10 speakers” for its February 21, 2018 meeting.

Entergy claims that the practice of paying actors runs “directly counter to Entergy’s corporate values”. However, its contract with Hawthorn to manufacture support demonstrates Entergy’s belief that support for its plant could simply be bought, even if it did not explicitly know that the actors would be paid. Entergy’s report never addresses the inherent inconsistency of paying for “grassroots” support for the gas plant.

Entergy investigation still leaves big gaps of information

Entergy claims it was first alerted to the potential that actors were paid when a “blog writer” contacted the company on March 7, 2018. Entergy took Hawthorn at its word, in spite of its national reputation for astroturfing. Not until intervenors filed a lawsuit on April 19,2018 did Entergy start “an investigation into the validity of the allegations”.

Entergy’s report stops short of providing the public with all the relevant details in its investigation. The monopoly utility claims that “Hawthorn has also provided a letter outlining its role in the events”, however Entergy failed to release this letter to the public. Additionally, Entergy has yet to release a copy of its contract with Hawthorn, a piece of information sure to be of interest to New Orleans City Council members.