(FORTUNE Magazine) – Since it hired retired admiral Steven White at a salary of $355,200 a year, the Tennessee Valley Authority has generated controversy and scandal, but no nuclear power (FORTUNE, October 27). In a recent report, an independent counsel appointed by the TVA board concluded that the troubled agency's handling of White's conflict of interest was ''deficient.'' White has close ties to Stone & Webster Engineering Corp., which has received some $10 million in TVA contracts during his tenure. Although the report went on to clear White of violating any laws, it recommended that he sever his relationship with Stone & Webster. The TVA board promptly termed the report a ''useful tool'' and said it hopes to keep White. David Martin, director of the Office of Government Ethics, says, ''It will require a major restructuring for TVA to operate free of conflict of interest.''