Legislature finds no conflict with GaffneyCline on gasline
Baker Hughes, the owner of GaffneyCline, should have done this in the first place—explain to legislators and the public that is has rules in place to manage the conflict of interest that stems from Baker Hughes investing in the gas pipeline and Gaffney Cline giving consulting advice to the Legislature on the gas pipeline.
Representatives of GaffneyCline failed to make any mention of this obvious conflict of interest when they appeared before the Legislative Budget & Audit Committee on November 19.
They failed to mention that nine days earlier, Baker Hughes, the owner of GaffneyCline, announced a “strategic alliance” with Glenfarne to work on the Alaska LNG venture.
GaffneyCline employee Nicholas Fulford, senior director of LNG and energy transition, should have addressed this issue instead of remaining silent.
He told legislators January 23 that no one at GaffneyCline who prepared the November report for lawmakers was “involved in or indeed aware of the discussions between Baker Hughes and Glenfarne. And no additional communications have occurred since that announcement.”
“We believe it’s essential to be fully transparent about these circumstances,” he said in January. Fulford said that added safeguards to make sure that the relationship of Baker Hughes and Glenfarne does not interfere with the work of GaffneyCline.
It is a conflict of interest, there is no question about that. How that conflict is dealt with, however, is what is really important.
Baker Hughes says it has firewalls in place that require GaffneyCline to give independent advice to the Legislature, even if that advice runs counter to the interest of Baker Hughes. In other words, it has a plan to manage the conflict of interest.
“GaffneyCline is committed to our integrity and to supporting the Legislature’s evaluation of complex energy matters through clear documentation, disclosure of limitations, and readiness to participate in public or committee forums as requested by the Legislature. We hope this letter clarifies how GaffneyCline’s professional obligations, legal duties, and internal structures ensure that the Legislature receives independent, fact-based advice that is not influenced—directly or indirectly—by its corporate ownership by Baker Hughes,” wrote Vinod Kumar of GaffneyCline and Matt Armstrong of Baker Hughes.
The committee met February 5 and decided that the proper safeguards are in place and that the consulting contract will continue.
Listening to that discussion, I agree. While I wrote here November 29 that the conflict of interest should doom the legislative consulting contract, I have changed my mind on that matter.
I have not changed my mind, however, that Glenfarne and GaffneyCline made a serious error by failing to disclose the conflict of interest.
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