Whistleblowers allege fraud at FPL, urge executives to 'come clean'
A group of Florida Power & Light whistleblowers sent a letter of complaint to the head of utility company’s parent company this week, alleging the company hid information from regulators, fraudulently kept two sets of books, exaggerated its need for new generating plants, and “illegally and improperly used its resources at ratepayer expense.”
In a rambling, 15-page letter sent June 15 to Lew Hay, CEO of NextEra Energy -- formerly FPL Group -- the group of unnamed employees said it has presented evidence of 14 criminal allegations to law enforcement since February but has seen FPL executives take no action and refuse to cooperate with investigators.
“FPL management is taking us down. You changed our corporate name but that can’t hide what FPL is doing,’’ the letter says.
FPL spokesman Mark Bubriski said the company has conducted two previous investigations into previous claims "neither of which found any evidence of any illegalities." He said the new letter contains "more of these unsupported and unsubstantiated allegations of fraudulent or other illegal conduct."Disgruntled employees may contact a company compliance officer, a 24-hour hotline or any member of the Audit Committee of the Board of Directors, he said. "The company will evaluate every concern that is submitted, but will not treat as credible nor be willing to address claims that are unsupported."
The whistleblowers, who say they include members from several departments including union members, copied the letter to the Public Service Commission, the Securities and Exchange Commission and the attorney general.
They say that FPL has refused to cooperate with FDLE, which was asked to hold off on its investigation until the company’s hired law firm, Carlton Fields, completed it internal probe earlier this year.
The company announced in its annual report to shareholders last spring that, because no one would come forward with the claims, none of the allegations could be verified. The whistleblowers say that is because employees distrust FPL management and fear retribution.
“Your hiring of Carlton Fields gave us no reason to believe we would be protected,’’ the letter states. “We now believe it was simply meant to protect you, board members and senior management.”
The group alleges that FPL company is preparing another rate case request, to be filed in January 2011, when the PSC will have at least two new commissioners in place and possibly four.
In preparation of for the rate filing, the whistleblowers claim that the company is “trying to soften our customers.” It is testing its message, has plans to roll out “a massive, multi-million dollar image campaign with advertising everywhere,” and has “ramped up social media, blogs and vlogs, and are trying to curry favor with reporters.’’
The real goal, they allege, is not improved reliability but to “raise costs to our customers and cut our budgets” because “we are desperate to make money somewhere because we failed at our rate case.”
The group continues to lay blame on specific executives: Eric Silagy, vice president of regulatory affairs, Tim Fitzpatrick, vice president of communications, Wade Litchfield, general counsel and Armando Olivera, FPL president.
They say some vice presidents and directors “almost singlehandedly ruined our company’s reputation, cost our company jobs, created customer dissatisfaction, and brought down our stock value.”
They allege that Silagy directed some of them “to use whatever means necessary late last year and earlier this year to convince customers our rate request was justified.” They blame Fitzpatrick for “destroying the morale of his unit.” And they say Litchfield was concerned only with pleasing his boss, Olivera, “at the expense of his fellow lawyers in his unit.”
The whistleblowers also allege that the company has kept two sets of books to hide some expenses from regulators and has been “unwilling to hand over files and documents” to FDLE.
They claim that Litchfield has instructed staff to label documents as confidential to shield them from investigators and that Olivera instructed some directors and managers “not to put things in writing.”
“Why would you be directed to not put things in writing unless you don’t want to have others see what you’re doing?,” the letter asks.
The letter also claims FPL’s motives during the legislative session were suspect when it pursued increased solar generation in legislation that ultimately died.
“If solar generation costs are continuing to come down with new technology, then why build now when we don’t have the need?…We are lying to the media just about every day.”
The whistleblowers also suggest that the company may have something to hide because it: used third-party blogs to to influence public opinion on the rate case, crafted messages “to discredit commissioners and the Governor,” changed its numbers on its generation capacity for its solar units, made presentations on alternative energy and conservation issues that “made us look good but were just to maximize our profits,” exaggerated their claims on renewable energy, and disguised that they have more generating capacity than they are letting regulators know.
“If the company really wants to come clean, then we call upon FPL leadership to release all emails, all spreadsheets, all documents, all records, all budget drafts, memos and other documents that deal with our 2009 rate case and for the regulatory filings we have in planning now,'' the letter says. "…If we have nothing to hide and we already lost the rate case, what do we have to lose? Credibility? We already lost that.”
The writers accuse Olivera of being “smitten by Silagy,” who along with others are “way over their heads.” They repeated accused Fitzpatrick, Silagy and Litchfield of “masking, manipulating and concealing real information that should be disclosed to regulators and provided to outside parties.”
This is the third anonymous letter sent to state regulators and other officials from people alleging they are FPL employees. They claim their numbers are growing.
“When we first wrote to you, we said we were not angry or disgruntled,'' the letter states. "Because little or nothing has been done, and because FPL management decided to refuse to fully cooperate with the Florida Department of Law Enforcement, we are not motivated more than ever and we will continue to expose what some leaders in this company are making this company do.” Download Whistleblower letter 6.16.10