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LOUIS HAULaw firm Ausley & McMullen's longtime chairman, DuBose Ausley, now retired, has been on TECO's board since 1992.
TALLAHASSEE - Even if Tampa Electric Co. loses its battle over its contract with TECO Transport, at least one entity with close ties to TECO Energy Inc. will have profited from the case: the Tallahassee law firm of Ausley & McMullen.
Ausley & McMullen's chairman emeritus, DuBose Ausley, has been a member of TECO's board of directors since 1992.
During each of the last five years, Ausley & McMullen, which was founded by Ausley's late father, Charles S. Ausley, has billed TECO more than $1-million in legal fees.
Ausley also sits on the board of telephone company Sprint Corp. and is a board member and longtime chairman of Capital City Bank Group Inc. of Tallahassee. Both companies are Ausley & McMullen clients. In 2003, the firm billed Sprint and Capital City $426,386 and $765,000, respectively, for legal fees.
All of Ausley & McMullen's business dealings with TECO, Sprint and Capital City are fully disclosed every year in the companies' annual proxy statements.
Although there is nothing illegal about such relationships, transactions between publicly traded companies and businesses with ties to company executives and directors have come under increased scrutiny in recent years because of the conflicts of interest they can introduce, according to Paul Hodgson, a senior research associate for The Corporate Library, a corporate-governance research firm in Portland, Maine.
"It raises questions about the affiliation of the director," Hodgson said. "Directors are supposed to be stockholder representatives of the board. If there is an additional (business) relationship between the director and the management of the firm, there's a question about where their loyalties lie."
The genial Ausley, 67, is a fixture in Tallahassee legal circles. During an interview in his wood-paneled office on S Calhoun Street, Ausley said he has never let the firm's business interests interfere with his duties as a director.
"Theoretically, people might say I'm a captive of management because they pay us legal fees," he said.
But, he added with a laugh, TECO chairman and chief executive Robert Fagan "probably doesn't feel he has much control over me."
Ausley, who retired as chairman in 2002 and no longer owns shares in the law firm, noted that he has never sat on the audit or compensation committees of TECO, Sprint or Capital City. He also said he has not been involved in negotiating the firm's fees. In addition, he said, TECO, Sprint and Capital City had already been clients of Ausley & McMullen for decades before he joined their boards.
"I understand how people perceive these things," Ausley said. "But I think the important thing is looking at the complete corporate culture of a company and making sure people conduct themselves in an independent fashion."
- Louis Hau can be reached at 813 226-3404 or hau@sptimes.com