For want of the public trust, what was lost?
The Duke Energy coal ash saga reminds us of the old poem, “For Want of a Nail.”
No doubt you remember that because of a missing horseshoe nail a horse, a rider, a message, a battle, a war and a kingdom were lost. In our modern-day proverb we would suggest beginning by saying that for want of doing the right thing the public trust was lost.
Winston Churchill once said Americans could always be counted on to do the right thing … after they had tried everything else. Doing the right thing today means people and organizations will do what they consider to be in their own enlightened self interests.
Over the past half century our evaluation of business has changed. Once we understood that businesses had four almost equally important stakeholders: their shareholders and investors, their employees, their customers and their communities. As small businesses died out or grew, they often merged into larger corporations and some morphed into conglomerates, forcing them to change their emphasis.
As mutual funds gained in popularity in the 1950s and 1960s they began buying large shares in public companies. Their fund managers, operating in their own enlightened self interests, sought more profits for investors so as to get larger fees. They increasingly pressured public companies to focus only on quarterly profits and share prices. Gone were concerns about what was right for employees, communities and, to a lesser extent, customers.
Duke Energy, operating in this “profitability and share price” culture, also had to consider its best interests. Environmental protection and remediation is extremely expensive; costs that would either reduce profits, which wouldn’t be well received by investors, or would require higher electric bills to customers. Ratepayers, operating in their self-interests, might say protecting the environment is of paramount importance but they will not tolerate excessive electric rates or a lesser quality in service. Duke postponed or avoided residue cleanup and decided to take their chances with the regulators
We created the Public Utilities Commission and Department of Environment and Natural Resources to regulate and ensure that Duke and other companies did the right thing. Regardless of their fervor in protecting the environment, employees of these agencies want to preserve their jobs. Their positions were created and supervised by elected and appointed government officials, people who won these elections and appointments because individuals donated to and hired them. Once in power most want to stay in power and it is decidedly in their best interests to listen to these donors and influential people when they speak, prompting these officials to request regulators to go easy on the regulated. It is painfully obvious the regulators listened and complied.
We now face the environmental result from a system of compounded interests, created and exacerbated because the company, the regulators, the politicians and investors did not do the right things. The end result is that public trust in all of them has been shattered.
In our poem the lack of a nail resulted in the loss of a kingdom. I leave it to you to decide the ending to today’s story of the loss of the public trust, but it is worth remembering that this nation and our state was founded on the principle of government by the consent of the governed.
Tom Campbell is former assistant state treasurer and is creator/host of NC SPIN, airing Sundays at 6:30 a.m. on WRAL-TV and at 8:30 a.m. on WRAZ-TV FOX50. Contact him at www.ncspin.com.