President Donald Trump’s decision to wedge his political might into the inner workings of the Tennessee Valley Authority Monday concerned a now-former board member and caught the attention of others who fear the actions could have unintended consequences.
By Tuesday morning, TVA’s website displaying the members of the board of directors had two fewer faces after Trump announced he had removed Chairman James “Skip” Thompson and board member Richard Howorth.
Trump signed an executive order forbidding federal agencies from outsourcing jobs overseas, a move that was a direct result of TVA’s decision to send at least 120 information technology jobs to three software development contractors headquartered outside of the United States.
In signing the order, Trump pushed for the TVA Board of Directors to remove CEO Jeff Lyash. He also called the CEO’s salary — the highest of any federal employee — a disgrace.
If you outsource jobs, ‘you’re fired’: President Trump pushes to oust TVA CEO
“If the TVA does not move swiftly to reverse their decision to rehire their workers then more board members will be removed. We have the absolute right to remove board members, and the board makes that decision,” Trump said. “I don’t make the decision.”
Politicization of the board
The TVA board of directors has always been political — each of the nine members are appointed by the president and must be Senate-approved. When Howorth, the last remaining member appointed by President Barack Obama, first began working on the board in 2011, the board was nearly split between parties. Then it became entirely Democratic members and now is all Republican, he said.
Still, he told Knox News, the substance has never been political and he’s afraid Trump’s actions could change it.
“In all that time, never has the board directors gone to a political direction at all. There’s never even been a discussion or statement that has been political. And I’ve worked with some wonderful people, all of whom … I’m getting a little emotional here … all of whom are striving to do the best thing, the right thing.”
U.S. Rep. Steve Cohen, D-Tenn., an outspoken critic of both TVA and the president, said he agreed with the president’s actions on eliminating the hiring of foreign workers — or hiring from companies owned overseas — and agreed that Lyash’s salary is too high, but he said the political interference and the “willy-nilly” firings is too far.
“He’s threatening other people on the board and that’s wrong,” Cohen said. “The way it was set up is that the president recommends, and the Senate confirms. That’s the extent of the roles they’re supposed to have … the idea that you’re going to fire them if they don’t do what you want is what an authoritarian leader does.”
University of Tennessee College of Law professor Brian Krumm, who previously was a management consultant for TVA and later an employee of TVA, said presidents have always asserted their political will on TVA by not renewing board members and appointing like-minded ones instead. Although, he said, Trump’s decision is atypical in its timing and his not-so-veiled threat of removing Lyash.
Krumm said Trump’s moves may be best viewed as outlier in nature, of a president following his own specific playbook, substituting his business judgement for the board’s.
“It’s concerning to me but not unexpected because, if you think about it, Trump has basically been the head of a closely held corporation,” Krumm said. “He didn’t have to respond to board of directors. He could make unilateral decisions … I think he comes from things from that frame of mind and he may not understand the intricacies.”
Cohen agreed and said no future president would even consider removing the whole board. Trump is a one-off in this way, he said.
Mike Arms is the executive director for the Association of Tennessee Valley Governments, a non-profit that assists local governments in the valley.
He said it sets a dangerous precedent to fire board members mid-term. What if, he said, the next president decides to wipe the entire board and replace them with people who will push solely for solar power or something else entirely?
“We think it’s not in the best interest to replace board members by firing them,” Arms said.
Trump can’t fire Lyash
Trump does not have the authority to fire TVA’s CEO; that is a board decision. But, according to a TVA spokesperson, the nine-member board only needs five members for a quorum and just a majority of votes to make a decision like removing Lyash. It would take only three, then, to vote him out.
This is concerning, Howorth said, but mainly because of what it could do to TVA.
“In the big, high-stakes CEO corporate world it’s not unusual to have CEOs come and go every five years, but to have four in 10 years is a lot of churn … Especially if they come in with a different kind of agenda and different focus,” he said.
“You know, you had one CEO come in and have the company going in this direction with influences in certain areas … and then someone comes in and wants to change that. That can difficult for an organization this large and complex as TVA is.”
It is not known what the board will do when they meet virtually on Aug. 27 and whether they will take a vote on Lyash. The process for filling the vacancies could outlast the president if he loses the election this fall.
Trump previously nominated former Tennessee Speaker of the House Beth Harwell and East Tennessee State University President Brian Noland to the board, though neither have been approved by the Senate. On Monday, he nominated Charles W. Cook Jr. to fill one of the remaining empty seats.
Howorth: Outsourcing was best decision at the time
TVA previously gave formal notice to 62 IT workers in Chattanooga and Knoxville that their jobs were ending in 90 days as it moved closer to outsourcing more data and programming work, according to the Chattanooga Times Free Press.
Since TVA announced last year it would outsource some of the computer programming work being done at its Chattanooga computer center and its headquarters in Knoxville, nearly half of the 120 jobs being cut have already been phased out as workers found other jobs at TVA or left the agency, the newspaper reported.
During Monday’s meeting, Trump said that Lyash had called and offered a “very strong willingness to reverse course.” However, when asked by Knox News if Lyash’s comments indicated TVA would take a different direction on the outsourcing, a TVA spokesperson declined to elaborate.
Still, Howorth said it was the correct decision at the time — a decision that was made before COVID-19 reared its ugly head and threatened to wreck the U.S. economy.
“We’re living in a global economy,” he said. “If doing business that way is what helps reduce rates for people in the valley or helps us reduce (operations and maintenance costs), helps us make a financially stronger organization — and if other federal departments and agencies are doing this — then that passes the smell test for me.”
Former chairman “Skip” Thompson, a Trump appointee, declined to comment for this story.
Email Tyler Whetstone at firstname.lastname@example.org and follow him on Twitter @tyler_whetstone. If you enjoy Tyler’s coverage, support strong local journalism by subscribing.