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Legislative auditor: Commerce Department lacked jurisdiction in energy company investigation

By:   ['Ricardo Lopez', 'More From Author', '- January'], Minnesota Reformer
Date: 2022-01

A law enforcement unit of the Minnesota Commerce Department lacked statutory authority to investigate an energy company charged with swindling customers, the Legislative Auditor’s office said Wednesday.

The Commerce Fraud Bureau (CFB) may only investigate offenses related to insurance fraud, “but we found that it sometimes also investigates other types of fraud, contrary to what the law allows,” the Legislative Auditor’s report says.

Minnesota statute says, “The jurisdiction of (CFB) is limited to offenses related to insurance fraud,” with four duties outlined related to insurance fraud.

The audit was sparked by a complaint from a member of the public, the report says. It stems from an August 2021 announcement by the Hennepin County Attorney’s Office that Michael James Harvey had been charged in district court with theft by swindle. Harvey was owner and CEO of Able Energy, a solar company that had been accused of swindling dozens of Minnesota consumers.

The investigation was led by the Commerce Department after a request from the Plymouth Police Department.

It’s unclear what bearing the report may have on Harvey’s criminal case, which has not yet been resolved in Hennepin County.

In response, Commerce Commissioner Grace Arnold said the Commerce Department is sometimes “asked to be an investigatory agency of last resort” because of its expertise in financial fraud.

Arnold said the department plans to introduce legislation to clarify the CFB’s authority to investigate all financial fraud.

One issue the legislative auditor focused on to argue CFB lacked jurisdiction is its funding source. The majority of its $3.5 million budget comes from fees paid by insurers. The report says if lawmakers expand the agency’s jurisdiction, it should reconsider its funding sources as well.
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