What conflict of interest?

DNR board tangled up in business ties

The Sea Island Co. is on a roll. First, the friggin' president of the United States picks the company's posh coastal Georgia resort for the next meeting of the mightiest leaders in the world — the G8 summit. Bellboys' tips alone could surpass the state budget shortfall.

Then, last week, Sea Island got a quieter kind of political boost. Department of Natural Resources Board Chairman Walter McNeely was elected to the company's board of directors.

Besides providing celebrities, presidents and CEOs with an exclusive playground, the Sea Island Co. is one of Georgia's biggest residential developers. The company owns all of Sea Island, all of Grover Island and three-quarters of the undeveloped land on St. Simons Island. It's also developing a 17,000-acre tract in Camden County, and owns 41 miles along the Georgia coast that the company plans to turn into upscale estates.

McNeely doesn't see any conflict between serving on the board of one of the state's largest developers while he chairs the board of a state agency that regulates developers.

"If there's an issue that concerns [the company], then I'd just not vote on it," he says. "In fact, in the five years I've been on the DNR board, [there's] not one issue relating to them that's come up."

McNeely's narrow definition of an issue "relating to" the company is a bit misleading. The DNR board regularly takes up issues that affect the Sea Island Co. The board oversees the state Coastal Resources Division. It regularly votes on erosion control regulations. And it's made controversial decisions regarding water pumped from fragile aquifers underlying coastal Georgia.

Georgia's conflict of interest law says members of any state board may not "accept any economic opportunity under circumstances where he knows or should know that there is a substantial possibility that the opportunity is being afforded him with the intent to influence his conduct in the performance of his official duties." It's also illegal for board members to take official action that has a direct or indirect impact on a board member's finances.

But that conflict of interest has been interpreted very narrowly in Georgia: Governors regularly appoint politically active business people to boards despite clear, if indirect, conflicts.

McNeely's Sea Island appointment doesn't appear to be an "economic opportunity." While the company's board offers prestige, influence and opportunities to network, he says he isn't paid to serve on it.

Two of Gov. Sonny Perdue's recent appointees to the DNR board face clearer conflicts of economic interest. In May, Perdue appointed to the board Phyllis Thompson, co-owner of Thompson Hardwoods Inc., a Hazelhurst-based lumber company. In June, Perdue appointed another timber company executive, Bill Carruth, owner and president of Carruth Wood Products.

In addition to setting the state's environmental regulations, the board oversees Georgia's Wildlife Resources, Coastal Resources and Environmental Protection divisions — all of which regularly take up issues related to timberland management.

The new members join an 18-member board overloaded with executives whose companies are affected by DNR. For instance, Tom Wheeler is a former developer. As president of Wheeler/Kolb Management Co., Wheeler now manages shopping centers and other properties whose vast parking lots are a major source of polluted runoff.

Bob Rutland chairs Allied Holdings, the nation's largest automobile-hauling company. Earlier this year, Rutland voted to delay a regulation that would have required gas stations to sell more expensive, cleaner fuel in the metro area.

Under the shadow of such conflicts of interest, the board is embroiled in two separate controversies over its tendency to shut the public out of the public's business.

"I just don't think it wise at this time for Mr. McNeely to have accepted that [Sea Island] position," says Altamaha RiverKeeper James Holland. "It just doesn't look good, especially when the DNR board is so heavily leaning to side with development."

This summer, Wheeler led a search for a new Environmental Protection director that cut environmentally friendly board members out of the process.

The second controversy erupted when the board appeared set this month to vote down a rule protecting medium-sized chicken farms from water-pollution rules. At the behest of environmental groups, more than 200 people sent e-mails and faxes urging board members to reconsider their positions.

Wheeler and others reacted angrily. "Do not communicate with me again" and "don't respond — not ever" were among the responses citizens received. Those reactions spun into an even bigger uproar last week among environmental groups.

"We've just been shocked at their behavior," says the League of Conservation's William Perry. "These are public officials in a public role and they're hearing from the public."

About 70 activists met Aug. 19 on the Capitol steps to protest the board's attitude and walked across the street to a DNR board meeting. McNeely announced the creation of a fax line and an e-mail address the public can now use to communicate with board members. But that wasn't enough to convince skeptics.

"It'd be much more reassuring if the governor made more of an attempt to balance appointments between business people and people with strong conservation credentials," says Bill Bozarth, executive director of the government watchdog group Common Cause Georgia.

Of course, some folks never really needed that fax line or e-mail address. Even before McNeely joined its board, Sea Island executives had plenty of access to state officials.

A prime example is its president, Bill Jones III. Jones gave $1,000 to 15 state legislators who were key supporters of the 2001 flag change. He served on the powerful Georgia Ports Authority board until 1999 and now sits on the University of Georgia Foundation board.

Ah yes, and the Sea Island Co. donated a handsome sum to Perdue's inaugural soiree — $50,000. Who'd get peeved about an unsolicited e-mail from a friend like that?