Delegate Pat McDonough has introduced legislation establishing the Constellation Energy Group (CEG) Review Commission. The purpose of the proposal is to provide a group of experts and consumer advocates with the authority to investigate the reasons for the demise of this company. Delegate McDonough believes that current law and the authority of the Public Service Commission will not provide the opportunity to review why CEG stock tumbled from about $100 per share in January of 2008 all the way down to $24 per share.
Mr. McDonough maintains that shareholders and the public deserve to know what caused the financial troubles at CEG. It is important to know the role that management played and what steps the company’s executive leadership utilized to try and prevent the company’s problems.
The details surrounding the decision made by Constellation CEO Mayo Shattuck to sell the company, at what Delegate McDonough termed “a fire sale,” for a rock bottom price needs to be revealed. Other questions include: why a more lucrative bid from a French company was rejected and why CEG executives sold large blocks of their personal stock at increased prices.
“The CEG catastrophe was a major economic event similar to the savings and loan scandal. It impacted hundreds of thousands of innocent rate payers, shareholders, and other Marylanders. It is not acceptable to allow this event to occur without seeking the truth and ascertaining the real reasons for the burden that was placed upon so many people. My legislative proposal would mandate that the truth be told,” said Delegate McDonough.
Delegate McDonough expressed concern about the so-called penalty clause contained in the agreement of sale signed with Warren Buffett. “More than a billion dollars in Constellation assets were handed to Mr. Buffett for simply failing to complete the purchase of the company. Either way, Constellation, the share holders, rate payers, and the state are placed in danger and at risk. It would be reckless to allow the Constellation executive management to continue in a position of influence and authority. They are a combination of the Jesse James Gang and the Gang Who Can’t Shoot Straight,” says McDonough.
“It is time for Mr. Shattuck to step down and bring new leadership to this troubled but important company. The Shattuck team should no longer be allowed to execute critical decisions or exercise influence with the Governor and the Maryland General Assembly. An honest and productive partnership type of relationship between policy makers and Constellation leaders would be in the best interests of the consumers,” Delegate McDonough maintained.