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MAYO'S
ELECTRIC SHOCK
First, the fairy tale. Constellation Energy is the victim
of difficult economic times, which resulted in the demise of the
company. Fortunately, through the leadership of Mayo Shattuck, the
company was saved from total destruction by a white knight named Warren
Buffett. That's the fairy tale.
Now, let us examine the truth. One of only two Fortune 500
companies in the state of Maryland was brought to its knees by executive
mismanagement and financial poor judgment or worse. Warren Buffett
confiscated a $25 billion company at a fire sale that should have never
occurred for $5 billion. As a result, tens of thousands of
shareholders have lost a huge amount of their investments and retirement
funds. More than a million Maryland ratepayers are placed in jeopardy
by the company that was built on their backs.
Constellation is the largest property owner in Maryland, has three
nuclear power plants, numerous power generator facilities, and other
valuable assets. Moreover, the company possesses unlimited potential,
particularly in the area of nuclear power. Constellation was selling
for more than $100 a share in January 2008, and accumulating record
profits. This unprecedented gift has fallen into the clever hands of
Uncle Warren for a paltry $26 a share.
Constellation Energy Group is not only a big company; it is a necessity for
Maryland's survival. It is not just another auto dealership or other
replaceable free enterprise venture. The company provides a
life-sustaining product in a monopolistic form. It could be said,
"God gives us oxygen and Mayo Shattuck gives us electricity."
We need both in order to survive.
The magnitude of this tragedy demands the total truth and all of
the questions must be answered. Here are a few examples:
1. What
was the real cause of the failure
2. At
what point did management realize the company was in serious trouble
3. What
steps were initiated to correct the problem
4. Why
were the public and shareholders kept in the dark
5. Why
did Mr. Shattuck and other executives sell so much stock at $95 a share in
January and February
6. Is
it fair for Mr. Shattuck and other executives to receive expensive golden
parachutes while shareholders are suffering grave losses
7. Whatever
happened to the serious questions raised about Constellation's accounting
practices, which dramatically drove down the value of the stock
8. What
about the news report that Constellation had charged ratepayers an
additional $1 billion dollars with a special fee based on the premise that
the company would construct needed power generator facilities, which never
occurred
I
have asked the Governor to appoint a Commission consisting of energy
experts, financial investment professionals, consumer advocates, and public
officials to investigate the demise of this company and answer these
questions. I have requested Maryland's Attorney General to provide me
with advice regarding these matters and for him to take an independent look
at the situation. Finally, I will be examining the needs for new
legislation and will reintroduce my proposal from last year entitled,
"Maryland First - The Energy Consumer Protection Act." It
is the duty of all elected and public officials to guarantee that full
disclosure occurs and the end result is total truth, not a fairy
tale.
For
additional information, contact Maryland Delegate McDonough at 410-238-0025
or send e-mail to Patmcdee@comcast.net.
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