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BPA Consultant gets More than $350,000, But for What? by Charles Pope, Washington Correspondent Seattle Post-Intelligencer, June 20, 2005

WASHINGTON -- The Bonneville Power Administration, which forced managers last year to make deep budget cuts and is under pressure to raise rates, has spent more than $350,000 since 2001 on a well-connected Capitol Hill consultant whose mission and results have been largely undocumented.

While senior BPA officials vigorously defend the no-bid contract with Washington2 Advocates, it has drawn attention from the Energy Department's inspector general.

"I have no objections to Bonneville hiring a consultant to give them advice," said attorney Dan Seligman, whose clients include public utilities that buy power from BPA and who asked for the IG investigation. "But I've yet to see a single scrap of paper showing what advice they've gotten."

As a public agency supported by tax dollars, BPA is prohibited from lobbying. And because tax dollars are used to pay Washington2 Advocates, BPA has a legal responsibility to document the contract so the public can decide if the money is well-spent.

BPA officials are adamant that Washington2 Advocates does not lobby; the firm only provides strategic advice, which is allowed. BPA officials also stress that the contract is tightly monitored, even if the official record does not reflect that.

Seligman concedes that the contract is a minor expenditure for an operation that generates $3 billion in revenue each year. But its significance is greater than the dollars involved, he says, because BPA plays such a prominent role in the lives of people in Seattle and across the Northwest.

BPA is officially part of the Energy Department. But in the Northwest, it is far more than a bland government subagency. It is an iconic figure, supplying 40 percent of the power consumed in Washington, Oregon, Idaho and Montana. BPA owns roughly 75 percent of the high-voltage power lines threading across the region. Virtually all the power BPA markets comes from 31 hydroelectric dams on the Columbia River system. With 3,195 employees, BPA is as much a part of the region's identity as The Boeing Co. and Mount Rainier.

One-third of the power used by Seattle City Light and its 350,000 customers comes from BPA.

With such a presence in the region, Seligman says, the Washington2 Advocates contract "is hugely important and symbolic" because it raises larger questions about how well BPA manages its finances. How Bonneville spends its money, he says, translates directly into the power bills customers receive each month.

Invoices submitted to BPA by Washington2 Advocates show the firm has earned $7,500 a month plus expenses since June 2001. The contract expires Sept. 30, but BPA officials say it's likely to be extended. The contract is renewed every six months, BPA spokesman Ed Mosey said, and when the current contract ends this fall, BPA will have paid the firm $378,100.

But there is virtually no explanation of the services provided beyond references to "consulting services" provided by Tony Williams, Washington2 Advocates' founder. There are no memos outlining the issues Williams discussed with BPA officials or who he contacted on the agency's behalf.

BPA says it is more than satisfied with Williams' work.

"The legitimate question is, are we getting value? Is it worth it? We think it is," said Jeff Stier, who ran BPA's Washington office for several years but is moving into a new job in BPA's headquarters in Portland next month. Stier, who managed the contract and dealt most closely with Williams, said it's not unusual for the file to have few details. Williams was hired to provide advice as events arise and to help BPA understand the mood and peculiarities of Congress and the administration, he said.

For example, when U.S. District Judge James Redden ruled earlier this month that BPA had to increase the volume of water spilled through five dams on the Snake and Columbia rivers to protect salmon, Stier immediately called Williams to see if BPA could get help from Congress. BPA wants to keep the water flowing through turbines so electricity can be generated. If upheld, Redden's ruling would mean the loss of $60 million worth of power.

"I don't ask Tony to write me daily memos. We regularly talk on the phone. We regularly meet and the administrator regularly talks to him on the phone as the need arises. It's not a real structured thing," Stier said in an interview.

"I don't have any need to have things like that written down. There's no point in it. I know what kind of work Tony is doing; it doesn't require or necessitate ... passing written materials back and forth."

The Inspector General's Office declined comment, but Seligman and Stier each confirmed that the IG has contacted them about the contract. They also characterized the IG's overtures as a preliminary review that could lead to a full-blown investigation.

Stier says the allegations are baseless and are similar to ones Seligman brought to the IG in August 2004 when he first asked for an investigation. The IG declined. Seligman made a second request in April after collecting additional information. That request is under review.

"None of what he has provided is new. It's exactly the same," Stier said, adding that Seligman "is just one individual who is pursuing a conspiracy theory that doesn't exist."

Seligman insists that he has uncovered new information that raises additional troubling questions about the contract.

Among the new allegations, Seligman says, is that BPA destroyed e-mails between Stier and Williams and that BPA continues to refuse to provide more information about the contract and the work provided.

"It would take minimal effort to provide this information. Why are they being so secretive?" asks Seligman.

In his formal request for an investigation, Seligman alleges that "BPA appears to have destroyed dozens of e-mails" related to the contract that, under federal rules, should be kept on file for at least 90 days.

Seligman asked for specific e-mails based on an index of e-mail traffic in the record. BPA said those e-mails no longer exist and that they did not have to be retained under the government's policy for keeping documents. The only e-mails that must be kept, Stier said, are those dealing with contract language and other official business. The messages Seligman requested, he said, involved routine conversation, such as arranging meeting times.

Seligman also says that "with few exceptions there is no record that (Washington2 Advocates) has performed any work for BPA."

"The absence of documented work product from the company, the destruction of e-mails, the company's attempt to make BPA pay for travel expenses for political fund-raisers, and other anomalies raise serious legal and public policy questions," Seligman said in his letter to the IG.

Asked why BPA doesn't provide a list of people contacted by Williams, Stier said, "Because it's a waste of my time and I'm busy. The business relationship goes back to 2001. Nobody has asked me to operate in a manner where I'm keeping careful notes and records of everything he's doing.

"I'm not going to take the time to go back and do that to satisfy Dan Seligman."

BPA's contract with Washington2 Advocates calls for the firm to be available around the clock to trouble-shoot, provide "strategic counsel" and "acquire information for Bonneville."

BPA has always had to fend off opponents in Congress who routinely raise questions about its taxpayer support and low power rates compared with the rest of the nation.

But in 2001, when Washington2 Advocates was hired, Washington, D.C., was an especially threatening place.

A new -- and largely unknown to BPA -- cast of characters was moving to Washington, thanks to the election of George W. Bush.

The energy market in the West was melting down thanks to Enron and other manipulators. And BPA received a $600 million windfall from the federal government as reimbursement for the cost of protecting salmon.

"You have a new administration, new people coming into positions in Treasury, in the White House, OMB, Department of Energy. Whereas normally they might not ever hear very much about BPA ... all of a sudden there's this little tiny agency that's on their radar screen," Stier said.

"Tony also helped in terms of relations with congressional delegations. He has very good relations with some chiefs of staff. He helps us get in the door when I need to get in the door. ... Williams had credibility," he said.

None of that, however, is reflected in the official record.

Washington2 Advocates is a small but influential lobbying and consulting firm specializing in issues important to the Northwest.

Its founder, Williams, was chief of staff to former Washington Sen. Slade Gorton. He is well-regarded by Republicans and Democrats in Congress and in the White House.

Most important to BPA, he has a deep understanding of BPA's mission and the politics swirling around the federal agency.

"The people I work with know me; they trust me. We are a small firm and we focus on results as opposed to process and bureaucracy," Williams said.

Williams said he would provide more documentation if BPA asked, but he believes it isn't necessary. "The way we work with BPA is the way we work all our clients."

According to hundreds of documents collected by Seligman through the Freedom of Information Act, there is no detailed account of the hours Williams works, a list of the people he contacts on BPA's behalf or a summary of work performed.

Documents obtained by Seligman also show that trips Williams took to the Northwest occasionally coincided with political fund-raisers.

In one case, BPA believed it was mistakenly billed for expenses related to fund-raisers for Sens. Gorton Smith, R-Ore., and Patty Murray, D-Wash., in July 2001.

When the potential conflict was found, Washington2 Advocates reimbursed BPA $1,177 for those events as well as an additional fund-raiser in Montana.

In a letter to BPA, Washington2 Advocates insisted no rules were violated and that "when Tony visits the Northwest, he schedules multiple meetings, including political meetings."

The expenses, the letter said, are segregated so improprieties are avoided.

But, it continued, "we believe strongly that we should avoid even the appearance of impropriety. Our only mistake in this matter was not to be precise enough in our description of our own bill. For this we apologize."

The Washington2 Advocates contract is notable for its remarkable resilience even while BPA's finances were declining and its budgets were being scrubbed.

Last year, for example, when BPA managers were ordered to cut spending, Stier took a hard look at the contract, which by then had cost BPA nearly $300,000.

"It was actually on the table," he said. "This office, like every other part of Bonneville, was asked to look for savings.

"That was one of the prime items on the table."

Even though the Washington, D.C., operation was lean, Stier and BPA Administrator Steve Wright decided to keep Williams.

"We decided, and we've had this conversation more than once, that we get good value," Stier said.

Instead, they decided to eliminate one of the six positions in the Washington office and cut back on travel.

Consulting Firm

Like many former congressional staffers, Tony Williams put his specialized -- and valuable -- knowledge to good work after his boss, Sen. Slade Gorton, was defeated in 2000.

He, along with two other Gorton staffers, formed the lobbying and consulting firm Washington2 Advocates to address issues important to the Northwest. It was a decision that has worked out well. (Gorton himself went to work for lobbying powerhouse Preston Gates after retiring from the Senate.)

Washington2 Advocates has five employees and a bustling workload. Williams and an associate work from Washington, D.C., while three others are stationed in Bellevue, including co-founder J. Vander Stoep, who served as Gorton's chief of staff before Williams.

The firm bills itself as "Pacific Northwest problem solvers" and offers to do everything from direct lobbying to strategic planning and public communications.

Under law, when acting as a lobbyist, Washington2 Advocates must disclose for whom it lobbies, how much it is paid and the issues it is trying to influence. It does not have to provide that information when it is acting as a consultant, as is the case in its work for the Bonneville Power Administration.

Government agencies are not allowed to lobby Congress or the administration, though they can hire Washington2 Advocates to provide "strategic advice" and other services that fall short of directly influencing legislation.

Washington2 Advocates' client list includes some of the region's most recognizable names:

• Safeco Corp.
• Trident Seafood
• The World Shipping Council
• Northwest Indian Fisheries Commission
• Sound Transit
• The city of Auburn
• The Washington Forest Protection Association