Louisiana Record

Sunday, August 25, 2019

Entergy is suing a contractor for costs associated with scandal regarding power plant hearings


By Carrie Bradon | Dec 11, 2018

NEW ORLEANS – Entergy New Orleans recently filed a federal lawsuit alleging that a former contractor paid actors to endorse a proposed power plant at public hearings on the project. 

In its lawsuit filed Dec. 5 in the U.S. District Court for the Eastern District of Louisiana, Entergy is demanding the contractor, Hawthorn Group of Virginia, pay for costs related to an investigation by the New Orleans City Council into the matter. 

The scheme resulted in the utility company's chief executive resigning, while the New Orleans City Council has proposed a $5 million fee in the matter. 

According to an article published in The Advocate, the lawsuit said "Hawthorn acted intentionally, grossly deviated from the applicable standard of care of similar professionals, and acted in bad faith."

The lawsuit compels Hawthorn to be obligated, both legally and contractually for the costs related to the investigation by the city council. Entergy is willing to pay the fine, calling it a donation to New Orleans.

The council believes, however, that Entergy may be directly to blame for the incident, which would cause them to treat the $5 million sum as a penalty. This change of classification for the $5 million sum would make it a portion of the associated investigation costs.

The lawsuit says Entergy was promoting a $232 million power plant in New Orleans, for which it subcontracted Hawthorn to assist with the promotional processes that would help gain community support for the plant.

According to the suit, Hawthorn, without approval from Entergy, subcontracted out a portion of their responsibilities to Crowds on Demand, a firm located in California. 

Thomas Flanagan, the attorney representing Entergy in the case, alleges that this action on the part of Hawthorn was a violation of Hawthorn's contract with Entergy. 

Even though the New Orleans City Council agreed to allow Entergy to proceed with the plant's construction, supporters of the project who attended later council meetings allegedly had been been paid to attend. 

Following the allegations that the presence of the supporters was a publicity ploy, Entergy blamed Hawthorn, as well as Crowds on Demand, for the wrongdoing; however, it has since been uncovered that Entergy had asked Hawthorn for a number of supporters, which may injure their defense.

Entergy is seeking damages for all of the costs associated to the matter. The energy company will also demand that Hawthorn pay the $5 million penalty, in the event that the council does not allow Entergy to pay it as a donation. The decision regarding the $5 million fee has yet to be decided, as this case is ongoing.

Entergy stands by its statement in which they claim they "did not authorize or direct Hawthorn or any other person or entity to pay individuals to attend or speak at city council meetings," the Advocate article said.

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