The election of four new board members to the Cobb EMC board of directors marked a major turning point in the four-year battle between EMC members and our electric cooperative. Members expressed their frustration through lawsuits, grassroots organizing and most recently elections, after the EMC took calculated steps to squash democracy at Cobb EMC and isolate the entrenched board along with now former president/CEO Dwight Brown.
Cobb EMC members however, are not alone in their fight to take back their cooperative from board members and management who have been accused fiscally mismanaged their co-op. Electric cooperatives throughout the United States who have dealt with similar issues for years. Like Cobb, several are emerging from dark chapters as stronger, truly member-based organizations (now operating under principles of open democracy and with greater accountability to members); others continue to struggle with a lack of member rights and/or corrupt board members or management.
One in particular, which bears striking resemblances to our efforts with Cobb EMC, has worked tirelessly to ensure that a runaway management and board of directors, some of whom have been charged with corruption allegations, will never again rule their cooperative with an iron fist.
The Pedernales Comparison: We’re Not Alone
Pedernales Electric Cooperative (PEC), the country’s largest co-op, based near Austin, Texas, bears striking similarity to the struggles Cobb EMC’s members faced in recent yeasr. In June 2007, several members of Pedernales filed a class action lawsuit against the cooperative’s then general manager, Bennie Fuelberg, alleging a breach of fiduciary duty by Fuelberg and several members of the board of directors and management at PEC. Like the Cobb member complaints against Dwight Brown, the PEC plaintiffs alleged that Fuelberg and others enriched themselves with excessive compensation and took steps to marginalize member control. Board members and employees of PEC claimed that Fuelberg had near total control over the cooperative, its finances and operations. The suit led to a criminal investigation, Congressional hearing and the eventual indictment of Fuelberg and PEC attorney Walter Demond.
The charges against Fuelberg and Demond alleged that they stole hundreds of thousands of PEC dollars and distributed them to Fuelberg’s brother and the son of a former PEC director. In December 2010, Fuelberg was found guilty on all charges and in February 2011, he was sentenced to 300 days in jail and ordered to pay over $100,000 in restitution. Fuelberg is appealing his sentence. Demond was found guilty in May 2011 and was sentenced to 500 days in jail, 10 years probation and must pay a $10,000 fine.
Pedernales members were fed up with the gross mismanagement and just like we’ve seen with Cobb EMC, took action. PEC4U, a grassroots organization, similar to Take Back Cobb EMC, formed to help inform PEC members of the issues affecting them and to support and elect new and accountable leadership to the PEC board of directors. In June 2008, after a year of investigations, lawsuits and active members, five new board members were elected to the board, pledging to return PEC to its members and bring accountability and transparency to the board.
PEC4U and several board candidates pushed for a series of changes at PEC that now makes a once trouble co-op a model for EMCs throughout the country. Stay turned for Part 2 next week as we focus on the changes PEC made and how we can adopt similar measures at Cobb EMC.