October 7, 2005

Some Interesting Facts

As the issue of legislative ethics continues to be front and center in Tennessee, here is some information you may find interesting. It involves state Rep. Joe Armstrong, D-Knoxville, who was hired by Tengasco, a Knoxville-based independent oil and natural gas producer, in 1997, and was made chairman of the company's board of directors in 2003. I will present the facts and draw no conclusion, but rather invite you to draw your own conclusions.

Tengasco wants to bypass local utilities and sell directly to industrial customers - Nashville Business Journal, Jan. 27, 1999.
The Tennessee Oil and Gas Association is supporting Tengasco Inc.'s (OTC: TNGO) efforts to bypass local utility districts and transport natural gas directly to industrial customers in Hancock, Claiborne and Hawkins Counties in Tennessee. The Tennessee Regulatory Authority had previously approved selling locally produced gas directly to end-users but is re-examining the issue. Tengasco claims the Natural Gas Utility of Hawkins County stopped buying natural gas from Tengasco because of a politically motivated dispute with its pipeline subsidiary.

Natural Gas Compromise OK'd by House Panel - Knoxville News Sentinel, April 21, 1999, page B-1 (found via Lexis-Nexis)
Rep. Joe Armstrong, D-Knoxville, also supported the bill. Armstrong serves on the board of Directors of Tengasco Inc., a natural gas company, which seeks to distribute natural gas in East Tennessee.

Here is a webpage with links to the Tennessee Regulatory Authority's Tengasco proceedings from Feb. 11, 1999, through April 21, 2004. Armstrong is not mentioned in the TRA documents, but it is clear that Tengasco is seeking to delay TRA action until after the General Assembly acts on legislation that would help Tengasco on this matter.

And the legislature indeed does act, passing this law in the spring of 2000.

Division Teamwork Assists Legislators in Study of Gas Deregulation - The Authority, (the quarterly newsletter of the Tennessee Regulatory Authority), Winter 2000 edition.
The Tennessee Regulatory Authority's (TRA) Gas Pipeline Safety, Economic Analysis, and Energy & Water Divisions teamed up recently to present information to state legislators seeking to learn more about Gas Deregulation. Select members of the House and Senate of the Tennessee Legislature have formed a study committee to look at the subject of gas deregulation for Tennessee. The informational presentation came about after Representative Joe Armstrong (D-Knoxville), inquired about the scope of the TRA's authority over Tennessee's natural gas companies.

May 2001: A Tengasco filing with the Securities and Exchange Commission shows that Armstrong owned 50,000 share of Tengasco stock.

Armstrong sold 4500 shares of Tengasco stock on May 13, 2002

Armstrong's conflict-of-interest disclosures for the years 2000 through 2004 are online here, thanks to the Center for Public Integrity. Only his 2004 disclosure mentions Tengasco as a source of income that might present a conflict of interest, although he was chairman of the company's board of directors for 2003, and was employed by Tengasco throughout the entire period covered by the events described above.