Rumana’s headache

Assemblyman Scott Rumana (R-Wayne) has a headache and it’s not the kind that a couple of Advil or hair of the dog will cure.  

For nearly 10 years – since he was the mayor of Wayne – Rumana has been embroiled in a plan to bring a renewable energy and cogeneration plant to the township to power public buildings in what the assemblyman says is an effort to save the taxpayers some $20 million over the next 20 years.

But the ambitious plan, which was a campaign promise made during his run for mayor, has run into several roadblocks over the years, including a lack of financing, a denial by the state Board of Public Utilities – which accused the assemblyman of a conflict of interest regarding his role as mayor and the chairman of Wayne Energy Corp., a 501 (C) (4) formed to negotiate the terms of the plant – and an ethics complaint from a Wayne resident accusing him of official misconduct.

The complaint, filed by a former Democratic council candidate in Wayne, accuses Rumana of violating a long standing rule prohibiting a sitting legislator from appearing before a state agency on behalf of a private entity, as Rumana did when he represented WEC before the BPU.

But the complaint, Rumana said, is unfounded and will be dismissed next month when it’s heard by the Joint Legislative Committee on Ethical Standards.

“We are very confident that when a full understanding of what the Wayne Energy Corp. represents,  which is a non-profit, no compensation, all volunteer committee whose sole purpose is to protect the taxpayers of the community that I represent, the committee will find there  is no conflict at all.”

Not so fast, says Rumana’s accuser, Bill Brennan, who filed the complaint in March. 

Though Rumana receives no compensation for his role as chairman of the WEC, Brennan contends that the position gives him the power to funnel millions of taxpayer dollars to contractors without the benefit of public oversight. 

“Moreover, the President of Wayne Energy Corp. will direct the expenditure of millions upon millions of public dollars as they funnel through the various entities over the years,” Brennan said in his complaint.  “Since the WEC is not a public corporation none of those millions are subject to public contracting laws or oversight.”

Brennan is joined in his agitation by Wayne resident Rob Burke, who has a longstanding feud with Rumana, ironically over alternative energy, that has caused much bad blood between them.  Burke said neither the complaint nor his role in it have anything to do with the feud and have everything to do with good government.

“Those tens of millions of dollars in contracts, jobs and other expenditures equate to political power for the Party Chairman,” Burke said in an email. “To say he doesn’t benefit from his violations of the public bidding laws and conflicts of interest laws is naive at best.”

For his part Rumana argues there is no conflict and that WEC was set up solely to shield taxpayers from any liability in the formation of the cogeneration project.  A private entity would own the plant and bill WEC for its services. WEC would simply pass that bill to the township for payment and pass the payment back to the energy company running the plant.  Construction and operation of the plant would be planned, contracted and paid for by the outside entity and the WEC would have no authority over hiring.

None of the three members of the WEC receive any compensation according to the non-profits bylaws.  There is no conflict, he says, because he gains nothing through his association.  Instead, he said, the plant would save taxpayers an average of $1 million per year over the next 20 years as the energy generated would be cheaper than the township currently spends.

“There is a disconnect in terms of what we did and what they think it is,” Rumana said referring to the complainant and the BPU. “That’s the problem with the picture because the complainant has filed certain documents that have a lot of inaccuracies they have led the committee and in my estimation even the BPU to a belief that this company is something that it is not.”

Attorney Paul Josephson, who represents Rumana, said past rulings by the committee have hinged on compensation, so he is confident no conflict will be found.

In a hearing last month, the joint legislative committee discussed an advisory opinion that would allow Rumana to appear before the BPU in the same capacity as he would in representing a constituent, provided he is not paid for his work and that he does not use his position as a legislator to influence the board he is appearing before.

But not all of the committee’s members were fully on board. During the discussion, one member questioned whether it is appropriate for a sitting legislator to appear before a committee that he holds sway over as a lawmaker.

“Here is a person who is in a capacity appearing before a state agency over which he is one of the members who eventually votes on the state agency and their funding…who is coming before that agency in a private capacity, uncompensated although hopefully to obtain funds for the good purposes of his entity and is seeking their help,” said the member, who is unnamed on the tape of the proceedings.

Another member, former Republican State Sen. Peter Inverso, also took issue with Rumana’s presence on the non-profit and his appearance before the BPU.

“I think the issue is the appearance here,” he said.  “I’m sure the motivation is fundamental and sound and probably from a governmental standpoint something that should be done.  But I think the appearance is what’s troublesome here.

“There is a question and I think a legitimate question one should ask is, is the office status of the assemblyman a key factor in a decision by the BPU to provide funding for this project knowing that the legislature plays a key role in budgetary processes…that could impact the BPU.”

The board is expected to rule on the advisory opinion next month.

Rumana’s headache does not stop with the complaint.  In an 18-page ruling issued by the BPU in April, the agency contended that Rumana’s cogeneration project had violated public bidding laws and terms of the contract were not in the best interest of the residents of Wayne.

The board cited the 17-year length of the contract as too long and said other provisions, including one that will allow the company ultimately running the energy facility to repossess any materials installed, saying that could potentially damage public buildings and cost taxpayers money.

What’s more, the board, ruled, the contract negotiated between the WEC, which Rumana chaired, and the township, of which Rumana was mayor at the time, represented a conflict of interest.

 “Having reviewed the (Energy Services Agreement) and considered the record in this matter, the Board HEREBY CONCLUDES that approval of the ESA is not in the public interest.  The ESA does not promote the goals of the (Local Public Contracts Law.) In addition, the Board cannot undermine the public confidence by approving a contract overshadowed by the appearance of a conflict of interest.”

But in response, Rumana says the terms of the contract were not “negotiated,”  but are what they are in order to make the project economically feasible.  There is no risk to the taxpayers, he said, because if the energy from the plant is not cheaper than what the township pays, the contract would allow Wayne to go back to its original supplier.

And there is another piece to the complicated puzzle.  As a result of the order denied by the BPU, the township lost a $2.2 million clean energy grant that had been reserved in anticipation of the construction of a solar energy facility.  When the cogeneration application was nixed, the grant went with it.

To see his grand plan come to fruition, Rumana will have to convince regulators that the plan he has come up with is beneficial to taxpayers and that in negotiating it, he gains nothing. 

A 45-day window to file an appeal of the BPU ruling has already passed and Rumana says he won’t go forward with anything until the ethics issues are resolved.  Once he does, however, he says he is sure the BPU will come around.

 

Rumana’s headache