Guinn denies he intervened in Southwest Gas merger

Thursday, July 29, 1999 | 11:26 a.m.

CARSON CITY -- Gov. Kenny Guinn on Wednesday denied he ever signed or sent a letter involving the merger of Southwest Gas Corp., where he was once the board chairman and a shareholder.

"I wouldn't do that," Guinn said, referring to an allegation in a lawsuit that charges the governor sent a letter to Southwest CEO Michael Maffie expressing concerns about a merger offer from Southern Union Co.

There was no reason, the governor said, for him to write a letter. And he said he never has and never will call a regulator about a case.

Guinn said he sold his shares in Southwest more than two years ago when he started his campaign for governor.

Southwest Gas has accepted a $1.8 billion merger offer from ONEOK Inc., which offered $30 a share. Southern Union bid $33.50 per share, but Southwest said regulatory concerns about Southern Union make the ONEOK bid superior.

Southwest shareholders are to meet Aug. 10 to decide whether to accept the ONEOK offer.

In an effort to block the ONEOK-Southwest merger, Southern Union filed a suit alleging, among other things, that Guinn met with Arizona Corporation Commissioner Jim Irvin, who lobbied him to turn Nevada's Public Utilities Commission against Southern Union.

Guinn confirmed there was a meeting with Irvin, whom he had met once before. But he said Irvin offered his congratulations to Guinn on being elected. Guinn said Irvin told him he was in Carson City because of the proposed merger. But there was no lobbying or the asking of any favors, Guinn said.

Guinn denied Irvin asked him to do anything or sent any letters. "Irvin may have sent a letter but my signature was not on it," he said.

He said he never knew how the Nevada Public Utilities Commission voted on the merger. "I don't even know how our vote went. It was none of my business. I have never written any letter. Why would I?"

The Southern Union suit said Irvin wrote a letter March 8 to be sent by the heads of the public utilities commissions of Arizona, Nevada and California to the board of directors of Southwest Gas. It implied all three state commissions had serious concerns about the Southern Union offer, the suit said.

But Judy Sheldrew, chairwoman of the Nevada utilities commission at the time, never signed it. The suit said on or about March 30 this year, Guinn sent a copy of the Irvin letter to Maffie, an allegation the governor denies.

"If someone is going to pay cash or end up with a deal, let them (the parties) argue over it," the governor said.

The Nevada utilities commission approved the merger.

Three law enforcement agencies in Arizona are investigating allegations that Irvin may have illegally influenced Southwest Gas to sell to ONEOK, rather than Southern Union. Irvin has denied the allegation.

California is still conducting hearings on the merger case and Arizona has continued its hearing until Sept. 1 to allow officials time to investigate the charges that Irvin illegally used his office to push for the merger.