Danly’s unusual path to the FERC nomination

Source: By Rod Kuckro, E&E News reporter • Posted: Sunday, November 3, 2019

James Danly’s resume is unlike those of predecessors who have been nominated to serve on the Federal Energy Regulatory Commission.

In the 20 years since he graduated from Yale University with a degree in English, five have been spent as an attorney in the energy industry.

That lean amount of energy experience may come up during his confirmation hearing before the Senate Energy and Natural Resources Committee next Tuesday.

Thirteen of the past 23 people to serve on FERC since 1990 have had experience with a state utility commission, while most others came from Capitol Hill or the companies in the energy industries that FERC regulates. All had more involvement with energy issues than Danly, who has enjoyed a smooth and quick rise to his nomination.

A native of Nashville, Tenn., Danly, 43, declined a number of requests to speak about his path to FERC. He has kept a low profile as the agency’s general counsel — a job often referred to as the “sixth commissioner.”

Danly’s resume submitted to FERC for his current job, obtained through a Freedom of Information Act request, sheds some light on his background while leaving a more than six-year gap immediately after his graduation from Yale. Multiple sources have said Danly’s background remains unusually murky for someone tapped to be a commissioner, though he will likely have chances to clarify his work history when he appears before the Senate Energy Committee next week.

Danly began his legal career as an associate in the energy regulation and litigation practice at Skadden, Arps, Slate, Meagher & Flom LLP in September 2014 and was admitted to the District of Columbia bar in 2015.

In that job, he worked on enforcement cases and other issues before FERC and represented clients such as Exelon Corp., FirstEnergy Corp., NextEra Energy Inc., PacifiCorp and Hydro-Québec, as well as two financial players with interest in energy, Barclays PLC and BlackRock Inc.

Two years later, in September of 2017, he was named general counsel at FERC as a political appointee selected for the post by the White House. In that role, he oversees the work of roughly 200 attorneys.

More than once, Danly has spoken at legal gatherings about his theory of the “humble regulator” (Energywire, June 10).

It is not an established legal term of art, but those who have heard him use it say it relies on a very strict reading of the Federal Power Act and the Natural Gas Act, with a hesitancy to use the agency’s discretion to interpret those and the other statutes under which it operates.

Danly’s confirmation by the Senate would give FERC a comfortable 3-1 Republican majority as he would join Chairman Neil Chatterjee and Commissioner Bernard McNamee.

Richard Glick is the sole Democrat on the commission.

By Senate tradition, a nomination to the remaining fifth seat at the agency — a Democrat — would be running in parallel as a “pair” with Danly’s, but President Trump has chosen not to submit the name of energy attorney Allison Clements, the Democrats’ choice whose vetting was completed in the spring.

Earlier this year, Danly spent 30 minutes with Trump, who was said by two sources to be impressed with Danly’s military service.

Several sources said Danly is acquainted with former White House counsel Don McGahn, with whom he shares membership in the Federalist Society, a conservative and libertarian legal organization. While at the White House, McGahn led the selection of judicial nominees, often choosing Federalist Society members.

Defending the ‘surge’

Before his three years in law school at Vanderbilt University, Danly spent five years exploring a national security career, three of which were in the Army.

Danly joined the Army in September 2005 and left in September 2008, according to the Defense Department.

He was a field artillery officer, “deploying to Iraq from October 2006 to June 2008,” a Pentagon official said.

Danly first served in an infantry company in the Dora district of Baghdad during the “surge” — an escalation of U.S. personnel — until a point in 2007, when he moved to the staff of Multi-National Force-Iraq, the command unit for coalition forces in Baghdad during the Iraq War.

There, he “conducted research and undertook projects related to the rule of law” under Gen. David Petraeus, according to a biography of Danly from the Council on Foreign Relations.

Danly’s project was titled “On Close Encounters: Examining Operational and Tactical Counterinsurgency Doctrine.” It looked at the fundamentals of counterinsurgency operations in Iraq at the level of battalion — several hundred soldiers — and below.

When he left the military in September 2008, Danly had attained the rank of captain and received a number of decorations, including the Bronze Star and Purple Heart.

Danly has demurred when asked what prompted him to join the military more than six years after graduating from Yale, where both his father and grandfather went to college.

But it was in Iraq that Danly became acquainted with John Lee Shepherd Jr., an Army reservist serving as an adviser at the operations command at Multi-National Force-Iraq. Shepherd was also a counsel in Skadden’s Washington office and is a Yale alumnus.

Since April 2018, when he left Skadden, Shepherd has been the senior legal policy adviser to Danly in FERC’s office of general counsel.

After leaving the Army, Danly worked one year for the Institute for the Study of War, a military think tank based in Washington.

The institute was founded in 2007 by Kimberly Kagan, a military historian and Yale alumna who, along with her husband, Frederick Kagan, was an early supporter of the troop surge in Iraq.

Kagan authored a book on the surge and produced a documentary, “The Surge: The Whole Story,” in which Danly has a part speaking about his experiences in Iraq and the importance of the military action.

Handling ‘tough stuff’

After his year at the institute, Danly was from 2009 to 2010 an international affairs fellow at the Council on Foreign Relations in Washington. There, he spent time at the Department of Defense and the Treasury Department.

At the Pentagon, he worked on matters relating to policies on Iraq and the Middle East. At the Treasury, he focused on a variety of issues related to national security threats, said a spokesman for the council.

Immediately after leaving the council, Danly enrolled in Vanderbilt University Law School, graduating in May of 2013.

He then went to work for a year as a law clerk with Judge Danny Boggs at the 6th U.S. Circuit Court of Appeals.

Boggs was a Reagan appointee to the bench in 1986. Previously, he had served as deputy secretary of the Department of Energy from 1983 to 1986. After Ronald Reagan’s election in 1980, Boggs served on the transition team for FERC.

“He was very, very good; very good judgment, very good writer. He handled some tough stuff for me,” Boggs said of Danly. “He always seemed to have the personality to show good leadership. I think very highly of him.”

Boggs has visited Danly at FERC and speaks with him from time to time, he said.

Little is known about Danly in the years from his Yale graduation in May 1999 until he joined the Army in September 2005.

During those years, Danly had apartments in Nashville and New York City, public records show.

He has not responded to several inquiries about what he did for work, though, or otherwise how he spent his time in those six years.