Regulator Reassigned in Hiring Uproar

Seeking to defuse anger on Capitol Hill, the Federal Energy Regulatory Commission has reassigned the official who hired a onetime Enron Corp. lawyer to work for the agency.

William J. Froehlich, director of FERC’s office of administrative litigation, will be moved to new duties, agency Chairman Joseph T. Kelliher said Friday.

The move comes in response to Froehlich’s hiring of Mary C. Hain, a lawyer who worked with Enron’s West Coast traders during the energy crisis. Although some of those traders have since pleaded guilty to fraud, Hain was not accused of misconduct and has said she had no involvement in devising illicit trading schemes.

But the decision to hire Hain struck some as politically insensitive to Western ratepayers who suffered during the period of spiraling electricity prices in 2000 and 2001, and it renewed questions about FERC’s vigilance as a watchdog for the public. Critics of the move included Sens. Dianne Feinstein (D-Calif.) and Maria Cantwell (D-Wash.).

In a May 10 note to Kelliher, Feinstein said she was “appalled when I learned of the commission’s choice to employ a high-ranking former Enron employee.”

She added, “I trust that you will take the issue under careful advisement and look forward to your response.”

The scolding apparently hit home. On Friday, Kelliher announced that he was moving Froehlich out of his job and replacing him with FERC veteran Richard L. Miles. Froehlich is expected to shift to the agency’s office of enforcement.

“Mr. Froehlich has served the agency well for many years,” Kelliher said in a statement. “But I believe the commission must act decisively to maintain the public’s confidence in our commitment to guard against market manipulation and abuse.”

Feinstein’s office chose not to comment on the personnel move. Froehlich was unavailable to comment late Friday.

In a previous interview, Froehlich said he had carefully reviewed Hain’s actions at Enron and chose to hire her only after he was satisfied that she had behaved ethically.

He had been Hain’s supervisor when she worked at FERC before her time at Enron.

“I have every faith and confidence in her integrity,” Froehlich said. “This was not hiring an unknown quantity.”

In April, Hain began her new job as a FERC trial lawyer, focusing on technical matters of energy rates.