Earlier this month, Shift reported on an independent investigation into Snohomish County Public Utility District (PUD) and $16 million worth of no-bid contracts it granted, since 2011, to a Seattle-based company called 1Energy. The investigation was launched after a whistleblower informed King 5 News of four years worth of documents that reveal a conflict of interest involving Snohomish County PUD and the no-bid contract it awarded to 1Energy.
The documents prove outgoing PUD CEO and General Manager Steve Klein “laid the foundation for the no-bid contracts, intellectual property arrangements and other important information connected to the project with one important utility employee, David Kaplan.” Kaplan later founded 1Energy.
A mere two months after Kaplan left his job at Snohomish PUD, his company (which he launched while still a PUD employee), won the no-bid contract. Email evidence indicates that Kaplan and his supervisors at PUD negotiated most of the contract that would go to his future company while he was still working for the district.
But, that’s not all. According to a recent King 5 report, the investigation into the scandal has determined that, while still employed at PUD, Kaplan was “given permission by former utility CEO Steve Klein to ‘continue consulting for outside clients’ and it was known he ‘intended to identify an entrepreneurial opportunity in the course of his work.’” King 5,
“By the summer of 2011, the investigation states, Kaplan was ‘directly involved’ in discussions with Klein and other PUD leaders about ‘a possible project following his departure.’ 1Energy, it states, ‘was activated’ by the initial contract with Snohomish County PUD.”
Additionally, top officials from the state Department of Commerce also went to work for 1Energy shortly before Commerce awarded Snohomish PUD a whopping $7.3 million to help pay for the work done by… 1Energy. Kaplan was a consultant for Commerce.
Kaplan and Snohomish County PUD are both working hard to dispel the controversy that has engulfed them. Kaplan chose to do so by reiterating comments by the investigator that he “took specific steps to dispel any inference of favoritism” in a statement to King 5. Of course, Kaplan failed to mention the other part of the investigator’s statement that his efforts “fell short.”
As for Snohomish County PUD, the Interim CEO and former general counsel Anne Spengler decided the best response to the controversy would be to highlight the investigation’s determination the contracting process was legal. Spengler commented that the scandal has “just the appearance of a conflict of interest.” She also said that she would not characterize it as “big.” Rather, “it’s a lesson learned for the PUD” but that “in the grand scheme of things, it is what it is.”
Well, state lawmakers—specifically state Senate Republicans—do classify the sketchy allocation of $16 million worth in hard earned taxpayer dollars as “big.” Senate Republicans are now investigating the potential conflicts of interest between public and private entities involved in the scandal, i.e. the state Department of Commerce, Snohomish County PUD and 1Energy.
State Sen. Doug Ericksen (R-Ferndale), chair of the Energy, Environment and Telecommunications committee, told King 5, “You have these employees who are going from the Department of Commerce to Snohomish County PUD to be CEO of a company with money following them every step of the way.” He intends to address the clear conflict of interest this special session.