The Natural Gas Supply Association (NGSA), which represents thenation’s major gas producers, earlier this week placed itspresident, Nicholas J. Bush, on administrative leave without pay inthe wake of an investigation and a subsequent civil lawsuitaccusing him of misappropriating more than $2 million from thegroup since the late 1980s. The D.C. Superior Court, where the suitwas filed, has issued a temporary restraining order against Bushand has continued the case until Feb. 26 [Docket No. 001028-99].

A copy of the lawsuit could not be obtained from the court orthe association yesterday, but NGSA spokeswoman Linda Schoumacherconfirmed that it involved long-term “financial misdealing” of thegroup’s funds by Bush. She declined to say how the alleged activitywas detected, but she noted it was uncovered in the last fewmonths. Neither the association nor its attorney would elaborate onthe specifics of the lawsuit.

“The investigation goes back several weeks,” said Eugene Propperthe lead attorney in the case for the D.C. firm of Holland andKnight. “The lawsuit pretty much says all there is to say. We havea fair amount of detail in there. We have filed not only acomplaint but injunctive papers. What happened is a veryunfortunate thing, but we plan to deal with it in the courts.”

Schoumacher said the alleged misappropriation of funds has takenits toll on NGSA. “We have a small budget so any misuse of thebudget will obviously be felt.” Nevertheless, she noted the group’smembers still are “very strongly” behind NGSA.

One source indicated that NGSA’s board members were not asproactive as they should have been in keeping a close watch onfunding channels. The source said there was a potential forcorruption upstream of the organization. Those in charge could havehad the opportunity to direct funds into their own accounts beforethose funds ever reached NGSA, the source said. NGSA has always hadan outside accountant.

Bush has been president of NGSA for 17 years. Prior to joiningNGSA he was vice president of the Midcontinent Oil & GasAssociation. He was with Exxon Corp. for seven years, Exxon Co. USAin Houston for three years and spent four years for Exxon Co. USAin Washington, D.C. Bush also spent seven years with Ford Motor Cleveland and Detroit. He holds an undergraduate degree ineconomics and has done graduate work in economics at Case-WesternReserve University in Cleveland. Bush’s salary prior to NGSA’srestructuring was more than $400,000, the sources said.

“It really is regrettable. For many years [NGSA was an]organization that was preeminent among the Washington D.C. trades,and it got to that point because of the intellectual vigor of its[employees] and their intellectual modesty. I mean it supportedderegulation when it was good for NGSA and when it was not good forNGSA. It’s terribly disappointing.”

Schoumacher said NGSA’s executive committee, which is made up ofDick Sharples of Anadarko Petroleum, J. Larry Nichols of DevonEnergy Corp., and Terry Hudgens of Texaco Natural Gas NorthAmerica, will be handling the day-to-day affairs of theassociation. They also will decide whether to appoint a temporaryreplacement for Bush. NGSA’s policy committee has named a committeeto review the organization’s leadership.

“NGSA will remain active representing natural gas producers,especially in responding to the significant industry restructuringproposals now before the FERC,” the association said in astatement.

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