Dark money group pushing PRC reform tied to major oil company

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Exxon Mobil Corporation contributed to a dark-money group that supported a successful November referendum reforming the state’s Public Regulation Commission (PRC), according to a campaign finance report filed by one of its lobbyists.

One of the largest oil and gas producers in New Mexico, the multinational conglomerate gave at least $10,000 to the “Committee to Protect New Mexico Consumers,” a nonprofit that spent a quarter of a million dollars touting the merits of a constitutional amendment, which eventually passed handily. The contribution can be found in an Oct. 7 report filed by Exxon Mobil lobbyist Deanna Archuleta.

The Committee to Protect New Mexico Consumers refused to disclose its donors when the State Ethics Commission (SEC) demanded it do so despite new campaign disclosure laws requiring groups like it to say where the money they spend on political campaigns comes from. Eventually, the group agreed to disclose its spending but not who funded the campaign. 

Thanks to the October lobbyist report, it appears at least one donor helping to pay for the campaign has been made public. 

Ten thousand dollars is small potatoes for Exxon Mobil, which ranked third among oil and gas companies for political spending in 2020 after contributing $117,000 to candidates and committees, according to a recent report by New Mexico Ethics Watch. 

But the reported contribution to a dark money nonprofit organized by environmentalists heightens suspicions —expressed by several current PRC commissioners and others— that companies secretly bankrolled the effort to overhaul the very agency that regulates them. That overhaul changed not just how commissioners are selected, but also struck specific mention of other PRC oversight authorities from the constitution.

The authority of the commission over electricity rates, as well as a range of other regulatory functions held by the PRC, such as pipeline safety, likely makes Exxon’s major subsidiary in New Mexico, XTO Energy, particularly interested in the commission. 

“To me, it’s a basic ethical question,” said Kathleen Sabo, executive director of New Mexico Ethics Watch. “You know, who is it benefiting? And to what extent does it harm citizens and our community?”

“Not knowing who supports [a ballot measure], and at least being able to potentially deduce why, just clouds the issue.”

The Public Regulation Commission (PRC) is an influential agency that regulates public utilities and other industries. By the time voters went to the polls in October, they’d witnessed high-level dysfunction surrounding the commission for years: ethics violations, infighting among commissioners, and significant political spending by the state’s largest public utility, Public Service Company of New Mexico (PNM), to influence PRC elections. Most recently, the commission clashed with the governor, state lawmakers, environmentalists and PNM over applying a new clean energy law passed in 2019 to the closure of the San Juan Generating Station. 

The drama surrounding the commission continued during the 2020 election, when outside groups spent more than a million dollars to sway voters to endorse the proposed changes.

About a quarter of that spending came from the Committee to Protect New Mexico Consumers, a cut-and-dry example of so-called “dark money.” 

Anatomy of a Bill  

The spending to support changing the PRC came after a weeks-long drafting of the constitutional amendment during the 2019 legislative session that included a group of industry lobbyists. Their inclusion illustrates the enduring influence of lobbyists in a state that relies on unpaid citizen lawmakers. 

When the final ballot language emerged from that session, it had not only changed the PRC to an appointed group of commissioners, but also eliminated language in the state constitution that specifically named entities other than public utilities that the PRC oversees. Going forward, the Legislature will be empowered to decide whether or not pipeline safety, motor carrier operators, and other non-public utility functions are regulated by the PRC and to what degree.

The dark money campaign and lobbyist involvement illustrate the challenges faced by the public in knowing what special interests stand to gain from elections or their role in creating public policy or ballot measures. It’s a longstanding issue, stemming from a lack of transparency, that transcends the merits of any particular ballot measure.

When the 2019 legislative session commenced, two competing proposals for reforming the PRC focused solely on changing the composition of the commission from an elected to an appointed body. Senators Peter Wirth, D-Santa Fe and William Payne, R-Albuquerque called for a five member group, with three elected and two appointed commissioners, while Sen. Steven Neville, R-Aztec, proposed a five-member appointed body.

As often happens at the Legislature when there are two highly similar bills, lawmakers got together to see if they could merge their bills. 

That’s what happened in this case. Lawmakers allowed anyone interested to participate in the discussions, and at the Roundhouse, such interested parties usually include lobbyists. In this case, a group of industry-affiliated and environmental lobbyists were a part of an ad-hoc working group convened by senators to provide insight and guidance over the final details of the measure. 

There’s little in the public record about the ad hoc working group. Lobbyists aren’t required to file reports about legislation they actively work to shape, a gap in disclosure some lawmakers are pushing to close this year, and legislative council staff are barred from making public any notes or information provided to them by lawmakers.

Wirth read out the names of those participating in the group during a Senate Rules committee meeting, however. It included environmentalists like Noah Long, with the Natural Resources Defense Council, who went on to form the dark-money nonprofit Committee to Protect New Mexico Consumers and later, a political action committee, to pass the amendment. It also included Steve Michel of Western Resource Advocates, a former PRC commissioner, and an assortment of industry-affiliated lobbyists, including the state’s largest public utility, PNM. “It was a pretty diverse representation of utility and environmental groups,” said Wirth. “It was open to anyone that wanted to participate.”

In fact, the group was composed primarily of utility and business lobbyists. Lobbying reports from 2019 shed light on who they represented. Robert Romero was registered to represent the Emissary Group, BNSF Railroad, NGL Water Solutions Permian, and Kit Carson Energy. Kim Legant was registered as a lobbyist for a renewable energy company, NextEra Energy, as well as Hull Consulting, which represents multiple energy companies and PNM. Mark Fleisher was a registered lobbyist for Affordable Solar and Sacred Wind Communications. The Emissary Group, a public affairs lobbying company, made significant campaign contributions on behalf of Occidental Petroleum and Marathon Oil Company. Energy companies may have a variety of interests concerning the PRC, in addition to pipeline safety for those who own pipelines within the state. 

The working group met several times, producing a merged bill that proposed dropping from the constitution specific language saying the PRC regulated transportation. Currently, the PRC’s transportation division enforces railroad and pipeline safety, and regulates any company providing transportation for a fee in New Mexico.

When presenting the changes to the Senate Rules Committee, Wirth said because transportation wasn’t a monopoly, it shouldn’t fall under PRC regulation. It appeared almost an afterthought to senators, who were largely consumed by how to change the commission to an appointed body. Then Sen. Cliff Pirtle, R-Roswell, recommended removing all mention of specific industries in the constitution other than public utilities, latching on to an idea that has gained traction in the Legislature: that the constitution shouldn’t be overly detailed so lawmakers can more easily make necessary changes over time. 

Rather than agree on the spot, the bill sponsors said they wanted to take Pirtle’s suggestion to the working group for review. A week later, the sponsors suggested removing from the constitution all industries other than public utilities from regulation by the PRC, leaving it up to the Legislature in the future to determine how those industries will be regulated. 

Industry representatives were consulted every step of the way, pointing to the challenge lawmakers face when creating complex legislation that can be hard to change once passed.

Paul Biderman, Democratic staffer for the working group, said such groups help ensure legislation doesn’t include any unforeseen mistakes.

“You may have some language that has hidden problems with it, and if you don’t run it by the other side, so to speak, even to people who might not like the bill, you could fall into traps that you’re just not aware of, because they’re more experienced in that area,” said Biderman.

Biderman’s perspective was echoed in part by Sabo. “It’s always good to get all stakeholders involved,” she said. “The potential problem is how much influence they could exert.”

Asked about the participation of utilities in the process, working group member Steve Michel was candid.

“Is there a concern with having that level of utility participation in developing a regulatory body that is going to oversee them? Yeah,” said Michel. “There has to be a filter as you’re listening to utilities and what they’re saying, recognizing that they have a stake in this that’s probably bigger than anybody else.”

The reliance upon lobbyists and advocates for expertise underscores one of the challenges of New Mexico having unpaid lawmakers, many of whom have full-time day jobs. 

“Legislators, particularly on complex issues– and I’d say that utility regulation is one of those complex issues– come to rely very heavily on lobbyists to explain things to them,” said Sabo. “Not discounting what wonderful people they might be, they’re getting paid to influence.”

A dark money campaign

Long, a clean energy advocate with the Natural Resources Defense Council and a member of Wirth’s working group, went on to spearhead a million dollar advertising campaign, first creating the nonprofit group “Committee to Protect New Mexico Consumers” in April of 2020 and later the political action committee “Vote Yes to Reform the New Mexico PRC.” 

The nonprofit was established in April of 2020 by Long and two other prominent environmental advocates: Jon Goldstein from the Environmental Defense Fund, and Sanders Moore, the former director of Environment New Mexico who now serves as chief of staff to Senate President Pro-Tempore Mimi Stewart. 

Asked repeatedly whether he would disclose the donors behind the Committee to Protect New Mexico Consumers, Long has continued to refuse, maintaining that he isn’t required to do so.

He would not confirm or deny to New Mexico In Depth the $10,000 contribution from Exxon Mobil in the Oct. 7 report of lobbyist Deanna Archuleta.

“The broad coalition that supported the reform was evident in the 2019 legislative session,” he wrote in response to an email asking about the contribution.

As for Archuleta, she said in late January that she was not aware of the contribution and directed inquiries to a company spokesperson, raising questions about whether or not she files her own lobbying reports to the Secretary of State. She declined to comment further. Exxon Mobil has not returned multiple requests for comment in the past two weeks.

Information about the Exxon contribution comes as questions swirl as to whether public utilities regulated by the PRC, like PNM, helped fund the last year’s reform campaign. Several PRC commissioners New Mexico In Depth spoke to as well as others expressed that suspicion.

PNM has jumped into races before, its PAC spending six-figure sums in 2018 to try to defeat PRC candidate Steve Fischmann, who is now chairman of the agency.

“I don’t know it for a certainty, but I hear through the grapevine that it’s certain environmental groups and utilities” who spent money on the campaign, Fischmann said. 

PRC Commissioner Theresa Becenti-Aguilar also believes utilities were behind the spending.

“…the utility companies, they have a huge budget,” Becenti-Aguilar said.

Asked whether he knew if utilities had funded the dark money group, Michel, the working group member, said he didn’t know but was open to the idea.

“Certainly, utilities cared about it a lot,” said Michel. “You know, it wouldn’t surprise me if some of the money came from utilities, but I don’t know that.”

New Mexico in Depth asked all three investor-owned electric utilities in the state — PNM, El Paso Electric (EPE), and Southwestern Public Service Company (SPS) — whether they had contributed to the dark money group. Spokespeople for EPE and SPS responded within days, denying that they had made any contributions.

PNM responded but did not answer the question about whether it had contributed to the campaign despite multiple opportunities over three weeks. 

New Mexico in Depth also asked Avangrid, the Spanish-owned utility and renewable energy company that recently announced its acquisition of PNM, whether it contributed to the committee. The company did not respond despite several calls and emails.

Asked whether he thought utilities had funded the dark money campaign, Sen. Wirth said absolutely not. “That money came from environmental groups. It was not coming from the utilities, to the best of my knowledge,” the Senate majority leader said.

Long created the new PAC, Vote Yes to Reform the New Mexico PRC, on the same day that the Committee to Protect New Mexico Consumers reached a settlement with the ethics commission to disclose its spending but not its donors. The Vote Yes PAC spent over $746,000 on mailers, radio, print, and digital ads in support of the ballot measure. 

The contributions to Long’s political action committee are public and include six-figure donations from a mixture of nonprofits and other PACs.

However, Vote Yes to Reform the New Mexico PRC is a key example of “gray money:” a political action committee whose donors are primarily other PACs or nonprofits, requiring interested citizens to sift through several layers of disclosure reports across multiple jurisdictions to search out who ultimately funded an effort. And finding who funded such groups is often impossible, making it difficult for the public to understand what interests are behind a campaign to change the law.

Long said he had no regrets about the non-transparent fundraising.

“If you don’t play in the game, then you’re not going to win elections, and so you have to play by the current rules and try to win elections in order to advance these causes,” said Long.

But Kathleen Sabo of New Mexico Ethics Watch emphasized the corrosive effects that dark money has on public trust.

“I mean, this is a perfect, perfect example,” she said. “How can we be sure that they have our interests, citizens interests, at heart? We can’t at all, not one bit.”

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