Bankruptcy doesn't preclude Mirant's lobbying legislators

Company defends need to protect its interests

February 14, 2005|By Tom Pelton | Tom Pelton,SUN STAFF

The Mirant power company is in bankruptcy, unable to pay taxes or creditors. But it didn't look broke last week hosting a private dinner party for state lawmakers at an Annapolis waterfront hotel.

As yachts bobbed on the light-dappled harbor, Mirant's president, a lobbyist and waiters offered a dozen legislators red snapper sauteed in garlic, strawberry-drenched cheesecake and Jim Beam whiskey in a banquet room at the Marriott.

This is routine - and perfectly legal - for a company whose three power plants in Maryland are regulated by the state, a Mirant spokesman pointed out. But some environmentalists questioned the company's priorities.

"They don't have the money to pay their taxes or install better pollution controls, but they can take legislators out to a fancy meal? That's striking," said Brad Heavner, director of the Maryland Public Interest Research Group. "Since when does bankruptcy mean strutting around the capital like a fat cat?"

The company says it has to protect its interests. "We're in bankruptcy, but we're not out of business," said Steve Arabia, a spokesman for the regional branch of Atlanta-based Mirant. "We have a responsibility to tell people about our business and what we're doing."

Some Maryland legislators introduced bills last week that would require power companies including Mirant - which has a history of pollution violations at its plants here and in Virginia - to install more air pollution-control equipment.

To help counteract what they see as a weakening of air pollution regulations by the Bush administration, state Del. James W. Hubbard, Sen. Paul G. Pinsky and 66 co-sponsors introduced legislation that would create stricter state air pollution controls.

Their bills would force coal-fired power plants in Maryland to cut mercury emissions by 90 percent, with lesser reductions for nitrogen, sulfur and carbon dioxide

Mirant and other power companies, including Constellation Energy Group and Allegheny Energy, have opposed state-level air pollution limits, arguing that they would put an unfair financial burden on businesses in Maryland. According to the Maryland Department of the Environment, about two-thirds of the dirty air over Maryland comes from smokestacks across state lines.

Soot drifting from Mirant's Chalk Point plant in Prince George's County, the state's largest generating station, causes an estimated 100 fatal heart attacks a year, 7,500 asthma attacks and 1,400 emergency room visits in the region, according to a study by Harvard University researchers. Pollution at the plant and another owned by Mirant in Alexandria, Va., violated legal limits in 2003 and 2004, records show.

Mirant officials have disputed the Harvard findings, calling the study unreliable. And the air pollution violations were minor, they said.

Arabia, the spokesman, said the company held Wednesday's dinner not to lobby against the proposed legislation but to explain what a good corporate citizen Mirant has been.

He said Mirant plans to emerge from Chapter 11 bankruptcy this year and eventually pay all of the delinquent taxes it owes to Prince George's, Montgomery and Charles counties, some of which it paid in the fall. The unpaid tax debts stood at about $29 million Friday, officials said.

The company also told the lawmakers that it is complying with a consent decree it signed in September by installing tens of millions of dollars worth of additional equipment to reduce nitrogen air pollution.

All 33 members of the House Environmental Matters Committee and Senate Finance Committee were invited to the dinner, but about 20 chose not to go.

State Sen. George W. Della Jr., a Baltimore Democrat, was among those who got an invitation but did not attend. He said his appetite was spoiled by allegations that Mirant cheated customers in California through market manipulations.

"That's another good reason I wouldn't want to have dinner with them - that whole fiasco in California, with those businesspeople gouging the public," said Della.

California Attorney General Bill Lockyear sued Mirant in August, accusing the company of "unjustly profiting from rampant lying and fraud during the energy crisis of 2000-2001," which led to rolling blackouts. Mirant agreed Jan. 14 to pay a settlement in the case worth more than $600 million.

The company's business and accounting practices are being investigated by the U.S. Department of Justice, the General Accounting Office and "various state attorneys general," according to the company's Nov. 8 filing with the Securities and Exchange Commission.

Arabia said the California settlement did not include any admission of wrongdoing by Mirant.

As part of a reorganization plan filed Jan. 19, Mirant said it would recover fully from bankruptcy but might reincorporate under a new off-shore parent company "to create a more efficient financial structure."

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