Faked Emails Favoring Dominion's Scana Bid Spark State Probe
Faked Emails Favoring Dominion's Scana Bid Spark State Probe
(Bloomberg) -- Authorities are investigating a flurry of allegedly phony emails sent to South Carolina lawmakers in support of Dominion Energy Inc.’s $7.9 billion takeover bid for troubled Scana Corp.
The form emails were made to look as though they were sent by South Carolina citizens and came via a website operated by Consumer Energy Alliance, a Houston-based trade group representing Dominion and other energy companies.
The alliance says it didn’t send the emails and that the names of some of the supposed senders were used without their permission. That could constitute fraud, according to Robert Kittle, a spokesman for South Carolina Attorney General Alan Wilson.
"It’s a criminal investigation," Kittle said. "We are trying to find out where the emails came from."
The stakes are high. Dominion, which has said the transaction would immediately add to their earnings per share, would be scooping up Scana for about $50 a share based on the current value of the all-stock deal, a 30 percent discount to the year-ago stock price.
The Dominion deal has received pushback from South Carolina Governor Henry McMaster. Earlier this year, Dominion Chief Executive Officer Tom Farrell asked Scana workers to lobby South Carolina lawmakers to support the deal.
Related: South Carolina Threatens to Derail Dominion’s Scana Takeover
Some of the legislators reported the allegedly fake emails to the attorney general’s office, which turned the investigation over to the state’s Law Enforcement Division.
Dominion and Scana did not return emails seeking comment.
"The more we hear about this issue, the more we learn, the more it feels like there was a deliberate attempt to mislead the public by someone other than us or CEA," Dominion spokesman Chet Wade told the The Post and Courier of Charleston, South Carolina, which previously reported on the investigation. "We are puzzled by it. We are disturbed by it."
David Holt, the Consumer Energy Alliance’s president, said in a statement that its website had been accessed fraudulently. A spokeswoman for the group said they didn’t know how many of the more than 2,500 emails sent to state lawmakers were fake.
CEA welcomes the investigation into the letters and were the first ones to ask the state attorney general to investigate, the spokeswoman, Emily Haggstrom said.
The alliance has been linked to similar letter-writing incidents.
In 2016, hundreds of seemingly grassroots letters in support of Spectra Energy Partners LP’s Nexus gas pipeline running through Ohio were sent to the Federal Energy Regulatory Commission, according to a complaint filed with FERC by opponents of the project. The complaint included sworn affidavits from people whose names were on letters they didn’t send. One letter carried the name of a dead person. Spectra was a member of the alliance and has since been bought by Enbridge Inc.
A petition to Wisconsin regulators defending rate increases proposed by two utilities in 2014 was denied by the state’s Public Service Commission after several people said their names were wrongly listed on the document, according to an order by the commission. The petition had been filed by the alliance.
Haggstrom, the alliance’s spokeswoman, said the earlier incidents were caused by emails that were generated by an "imperfect" automated calling system and the group was cleared of wrongdoing.
--With assistance from Jim Polson
To contact the reporter on this story: Ari Natter in Washington at anatter5@bloomberg.net.
To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Lynn Doan at ldoan6@bloomberg.net, Elizabeth Wasserman
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