Weekly Obsession: In NES audit results, Christmas comes early for Phil Williams

Tuesday, December 18, 2012 at 10:05pm

Christmas came early for Phil Williams.

The once-mustachioed chief investigative reporter for WTVF-Channel 5 must have ended up on News Santa’s Nice List this year, as the state comptroller released its audit of the Nashville Electric Service right into Williams’ wheelhouse Thursday.

Pivoting from a November 2011 sweeps series by Nashville’s favorite gadfly TV reporter, the audit revealed a cavalcade of criticism of the city’s electric utility.

The utility eschewed its own purchasing practices in at least $17 million no-bid contracts for equipment.

In addition, an NES vice-president used a company credit card to make purchases on Amazon and Ebay, “commingling funds” in the parlance of the auditor.

Those top-line findings are probably the most damning from a fiscal point-of-view for the power company, but certainly some relatively small-potatoes findings are just as interesting.

In an arrangement that may illustrate the Oxford English Dictionary’s entry for “sweetheart deal,” NES executives were able to attend and play golf free of charge at Gaylord-owned properties in exchange for leasing NES transformers. More than meets the eye, indeed.

In another case, NES’ chief financial officer purchased a $104 gift card to Babies-R-Us for a board member with a utility credit card. In the highly formal language of the auditor: “The propriety for the purchase of gifts as a business expense is not addressed in the procurement credit card policy.”

In other words, “No one ever thought to make such an asinine practice technically against the rules, but apparently NES executives need some hand-holding here.”

NES exists in the weird purgatory between public good and private enterprise — in this, it’s not unique among massive metropolitan utilities. It is funded entirely by ratepayers — rather than taxpayers, although the Venn diagram of those two groups would show significant overlap. Metro government has little oversight over the utility — the mayor appoints its board and the council ratifies those appointments — but it doesn’t set salary or have much in the way of policing power.

The utility has an internal auditor, but no third-party examines it unless a problem — or a legion of problems — is brought to light, as Williams did last year.

NES disputes a handful of the comptroller’s findings, but responded to most of them simply: “Agreed” or “We agree with this recommendation.” Even in the prosaic black-and-white of an audit, the hangdog faces of NES taking their licks are clear.

And they clearly needed to be taken down a peg.

NES operates a legal — albeit necessary — monopoly. There is no competition for their service. If their rates are inflated by workday dalliances with cyber-commerce or by low-ball leases being traded for tickets to “A Country Christmas,” the consumer can’t just take his business across the street.

Such market control often leads to abuses, and those abuses all too often go unchecked.

Enter Williams. For the criticisms that can and have been laid on him — that he’s a showman, that his stories are sensational, that he should have never shaved his crumb-catcher — his virtue comes in finding often-untold and hidden injustices and blaring them from the mountaintops.

And when does it, people take notice. And in this case, the powers-that-be take action.

3 Comments on this post:

By: justacitizen on 12/19/12 at 8:14

Kudos to Phil Williams for bringing this matter to light and Kudos to the Comptroller's Office for verifying all the dirty details.

But is it all done for naught? It appears that everyone will retain their jobs and life will continue as usual at NES. In a few years they will all be back to doing the same nefarious activities again and again.

Wouldn't it be nice if the Mayor and NES board actually had the guts to take appropriate actions and remove these scoundrels from the agency? Now that would be justice done and a great Christmas present for the NES ratepayers and the citizens of Nashville. They need to do what is right! But don't bet on it.

By: Moonglow1 on 12/20/12 at 10:12

Moonglow1: Agree-those crooks should be fired and jailed. I am so tired of white collar criminals not being punished for their crimes. Instead of jailing poor people for an ounce of marijuana, we should be jailing white collar criminals and throwing away the key. They are the worst... So despicable yet hailed as pillars of society and their churches. What hypocrites. Thieves!! Crooks!! Sick people. With luck they will be struck down with a chronic illness for their misdeeds. Hopefully God is watching and will give them what they deserve.

By: Magnum on 12/20/12 at 4:43

Moon, this isn't white vs. blue collar crime related. Assuming guilt, in most private enterprises several of these folks would have likely been fired, charged with a crime and required to pay back with interest.