Ehrlich eased PSC rules

As delegate, he targeted employment barriers in '93


As a state delegate more than a decade ago, Robert L. Ehrlich Jr. pushed to lower barriers between the state Public Service Commission and the utilities it regulates, legislative records and news accounts show.

In 1993, the General Assembly adopted a law to cut in half the amount of time hearing examiners and a chief lawyer at the PSC had to wait between switching jobs and representing a utility company before the regulatory agency, allowing an easier pass through the revolving door between government and industry.

The sole sponsor of the legislation: Ehrlich, then a Republican delegate from Baltimore County.

The bill, Ehrlich acknowledged at the time, was designed to help one constituent: Daniel P. Gahagan, a PSC employee who said a two-year employment restriction was making it difficult for him to leave his $55,000-a-year state job for a more lucrative one.

"The fact is, no other employees of state government are subject to post-employment restrictions," Ehrlich was quoted as saying in The Washington Post in 1993. The legislation applied to six hearing examiners and a chief lawyer.

Gahagan is now general counsel for BGE, the company that is implementing a 72 percent increase in electric rates this summer.

He participated in negotiating sessions with lawmakers over rate relief and is part of the legal team representing BGE in Baltimore City's lawsuit to stop an increase-deferral plan negotiated by the governor and the utility company.

PSC critics say Ehrlich's belief in 1993 that the revolving door between regulators and industry should move faster is still at work today.

"What you've got in the Ehrlich administration is an extraordinarily cozy relationship between the regulators and the regulated," said state Sen. Brian E. Frosh, a Montgomery County Democrat who spoke out against the employment bill as a delegate at the time. "It's beyond being friendly to business. It's not giving consumers a fair shake, and it's not an exaggeration to say that the rate increases that we are looking at today across the state reflect in part the governor's policies toward regulation."

Ehrlich's bill was signed into law by Gov. William Donald Schaefer, a Democrat. PSC Chairman Kenneth D. Schisler, then a Republican delegate from the Eastern Shore, voted for the bill, as did Senate President Thomas V. Mike Miller and Del. Michael E. Busch, who is now speaker of the House.

Miller and Busch are Democrats who are now threatening to hold a special session to try to blunt the impact of BGE's rate increase.

Three members of Ehrlich's Cabinet who were then in the legislature - Human Resources Secretary Christopher J. McCabe (then a Republican senator from Howard County), Juvenile Services Secretary Kenneth C. Montague Jr. (a former Baltimore Democratic delegate) and Transportation Secretary Robert L. Flanagan (who was a Howard County Republican delegate) - voted against Ehrlich's bill.

Ehrlich spokesman Henry Fawell said the governor remains comfortable with the legislation.

"Clearly, everyone from Mike Busch and Mike Miller to then-Delegate Ehrlich thought it was inappropriate to single out a small handful of state employees for special treatment," Fawell said. "The bill had bipartisan support."

Robert L. Gould, a spokesman for BGE's parent company, Constellation Energy, said Gahagan lived in Ehrlich's district and approached the delegate to ask for the change so he might in the future have better opportunities to provide for his family. Ehrlich at the time was a corporate lawyer with Ober, Kaler, Grimes & Shriver.

Gahagan never benefited from the law. By the time he left the PSC in 1998, he had been promoted to a job that was never subject to the restrictions.

"The fact that this issue is being surfaced again at this particular time is nothing more than ugly election-year politics and is grossly unfair to Mr. Gahagan, who dedicated nearly 20 years to public service in a nonpolitical capacity, or, for that matter, to anyone else in state government who might have been covered by this law," Gould said in an e-mail.

Elected to Congress in 1996, Ehrlich was a member of the House Energy and Power Subcommittee and voted in 1999 in favor of a federal energy deregulation plan. He was the sixth-highest recipient of utility company campaign contributions on the 31-member subcommittee that year, according to the Center for Responsive Politics.

As governor, Ehrlich has readily acknowledged that he appointed more business-friendly regulators. E-mails show that Schisler, appointed as PSC chairman by Ehrlich in 2003, discussed political strategy, personnel moves and confidential business with a top utility company lobbyist - lawyer Carville B. Collins, who was also chief counsel to Ehrlich's transition committee.

Until April 26, Collins, an attorney with the Baltimore firm DLA Piper Rudnick Gray Cary, represented BGE alongside Gahagan in a PSC case about the proposed merger between Constellation Energy and Florida-based FPL Group Inc.

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