Take Back Cobb EMC Endorses Candidates for Cobb EMC Board

Candidates also backed by most plaintiffs

Take Back Cobb EMC announces today its support for a slate of candidates who have agreed to a platform of transparency, accountability, and honesty at Cobb EMC. These candidates have all agreed that if elected, they will support open board meetings, a three-term limit, a members’ bill of rights, and a rigorous forensic audit.

Our endorsed candidates are:

AREA 3: Kelly Bodner

AREA 4: Jim Hudson

AREA 5: Tripper Sharp

AREA 8: Bryan Boyd

AREA 9: Eric Broadwell

Take Back Cobb EMC’s slate of candidates is identical to the slate endorsed by four of the six plaintiffs who sued to restore accountability to Cobb EMC in 2007. We are proud to support candidates who have earned the trust of nearly all those who dedicated their time, money, and reputations to bring accountability back to Cobb EMC.

All five of these candidates have demonstrated their commitment to reform through their long-time involvement with reform efforts. Mr. Sharp was one of the original plaintiffs in the lawsuit to restore accountability at Cobb EMC, and brings an incredible wealth of knowledge and proven determination to reform the board. Mr. Boyd has been an active volunteer supporting the past years’ reform efforts. Mr. Broadwell and Ms. Bodner have been campaigning on principles of transparency and reform since 2009, the year their elections were originally scheduled to occur. Mr. Broadwell brings his community-oriented business background and Ms. Bodner is a celebrated public school teacher determined to better her community. Mr. Hudson’s passion for reform was ignited at the derailed 2007 Cobb EMC Annual meeting; as a former executive with AT&T, he brings a 36-year business career to the table.

“We’re confident the slate of candidates we’re supporting will prioritize transparency, accountability, and integrity when they’re elected to the board of directors at Cobb EMC. We’re proud to support them,” said Joel Mendelson, Campaign Coordinator for Take Back Cobb EMC. “We need Cobb EMC members to come out in full force to vote for these outstanding individuals on March 31 and take back our Cobb EMC once and for all!”

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Transparency Begins at Cobb EMC; Or Does It?

In another triumph for transparency, reform, and sound fiscal judgment, the Cobb EMC board of directors cut funding to the controversial coal-fired Plant Washington and enacted a series of transparency measures at its board meeting last week. Led by the four new board members, seven of the nine voted to cut ties with the plan, bringing an end to the EMC’s relationship with the troubled project. The Board also voted to enact a series of transparency measures that include quarterly town hall meetings for members and access to board meeting minutes online.

Plant Washington’s estimated price tag is $2.1 billion and Cobb EMC has already sunk $13 million into planning and development costs. In December, power generator LS Power canceled its plans for another coal-fired plant in Early County, GA, citing economic concerns. When power generation companies like LS Power decide it’s no longer good business to invest in a coal-fired power plant in Georgia, it makes you wonder whether our investment in Plant Washington was ever worth it. Fortunately, the new board took care of business. The Plant Washington decision is a big step forward in bringing accountability and fiscal sanity back to Cobb EMC.

As part of their ongoing transparency efforts, board members also voted on other measures aimed at opening the EMC’s doors to members. One month after each board meeting, the approved minutes will be posted on Cobb EMC’s website, along with a link for members to comment and submit questions directly to the board members. Additionally, Cobb EMC will start scheduling quarterly town hall meetings for EMC members to meet with the board and senior staff – finally allowing regular contact between the Board and the EMC members who elected it.

The measures announced last week are solid steps forward for transparency at Cobb EMC, but in the long run we’re concerned that they don’t go far enough to ensure members cannot be taken advantage of again. We hope the board put in place after the March 31st election will take further steps.

For example, we don’t see why Cobb EMC couldn’t follow the models of other EMCs and hold a brief public comment period prior to the monthly board meetings. EMC members and the media should be able to observe the rest of the meeting – not wait a month to get the minutes. If proprietary matters need to be discussed in private, nothing would prevent the Board from holding a closed-door executive session. We feel truly open meetings are the best way to have regular interactions with EMC members.

Additionally, as part of the meeting minutes, the Board should report the votes each director casts, so members can see how their directors are representing them. If openness and integrity is truly the cornerstone of the new board, then directors should have no problem disclosing their votes publicly.

The new board members are laying the groundwork for transparency, but we know can, should, and will be done after March 31st. The actions at last week’s meeting further proves just how crucial it is for members to stay involved and active with their EMC. We spoke loudly last year and the Board is listening but we want more transparency. Let’s make sure our voices continue to resonate by demanding truly open meetings and continued improvements in communications between the board and EMC members.

We can celebrate another series of small victories in the Cobb EMC saga, but we still have more work to do. The final round of elections is scheduled for March 31st, so let’s use this great news to recharge our batteries and finish the job!

TBCE’s 2011 Year In Review

What a year it has been! From indictments to elections, 2011 was chock full of news and excitement for Cobb EMC members who finally began to reform and repair the long-suffering co-op. Take Back Cobb EMC was here for it all and today we’re going back to review the year that was.

January: Dwight Brown indicted, for the first time

The year started quietly enough, with little news pushing the reform movement forward. However, just days after the peach dropped, Cobb County District Attorney dropped a bombshell in the lap of Cobb EMC. Dwight Brown, the longtime president and CEO of the company, was indicted on 31 felony counts of theft, racketeering and false statement.

Dwight Brown’s attorney, former Georgia governor Roy Barnes, argued that the indictment was invalid because it was delivered in a closed courtroom: Cobb County’s new courthouse was not yet officially open for business. Judge Robert Flournoy III, a Barnes appointee, heard arguments for and against tossing the indictment and subsequently ruled in favor of Brown.

The ruling infuriated both Cobb EMC members and Cobb District Attorney Pat Head, who claimed that it could affect many more indictments that were delivered on the day Brown was formally charged. Mr. Head appealed the ruling and a decision has yet to be reached.

February/March: Dwight Brown retires, then rehired 

The 2008 lawsuit settlement agreement stipulated that Dwight Brown would resign on or before February 28, 2011. Brown took that action, officially retiring as president and CEO on the last possible day. However, the EMC quickly announced that Brown would remain at Cobb EMC as a “consultant,” but refused to disclose his pay or responsibilities in that position.

It was later revealed that Mr. Brown was making $60,000 per month and collected $1.5 million in salary and consulting fees from December 2008 through July 2011. 

March: Take Back Cobb EMC launches petition drive

In March, Take Back Cobb EMC officially launched a petition drive to force Cobb EMC to hold a special meeting for its members. The launch was met with widespread enthusiasm among Cobb EMC members, many of whom attended the petition launch event. In all, TBCE collected over 1100 petition signatures that turned up the pressure on the board to finally let members have a voice at their co-op. The petition signatories started a movement that led to the elections of reform board members and finally bringing reform to Cobb EMC.

May: EMC members request federal investigation

In May, Dan Davis and Mark Hackett, two outspoken, determined and concerned Cobb EMC members filed a petition with the Federal Energy Regulatory Commission (FERC) requesting an investigation of wrongdoing by Cobb EMC. Since the Public Service Commission does not regulate EMCs, there is very little oversight, especially when members are disenfranchised, but since Cobb EMC is such a large co-op FERC has some jurisdiction. Among other allegations, Davis and Hackett claimed that when Cobb EMC created Cobb Energy, they never disclosed any information regarding the relationship between the two companies to FERC. While the initial request was denied, Davis and Hackett appealed and are still awaiting a decision.

June: Georgia Supreme Court rules against proxies

The long court battle over EMC elections finally reached the Georgia Supreme Court in June with a victory for the plaintiffs and EMC members desperate for reform. In a decisive 6-1 ruling, the Court determined that the EMC could not use proxy ballots for EMC board elections. The decision helped clear a path for fair and open elections, although a new settlement that included provisions for elections needed to be hammered out by both parties and Superior Court Judge Stephen Schuster.

June/July: Attempt to rehire Brown rejected; Brown re-indicted

In late June and early July, Dwight Brown was dealt a series of crushing blows that put his future at Cobb EMC in serious jeopardy. First, the Cobb EMC board voted to rehire Dwight Brown as the EMC’s president and CEO, despite the settlement agreement mandated Brown’s retirement. The action forced both Cobb EMC and the plaintiffs back into court as both sides argued in front of Judge Schuster over whether Brown should or should not be allowed to lead the co-op.

Schuster reaffirmed the settlement agreement, stating that the settlement was crystal clear in its language regarding Brown’s employment at the EMC. He could no longer serve as the president and CEO.

Just two weeks later, Brown was re-indicted on the same 31 charges as the January indictment, plus four new charges of threatening and intimidating witnesses. Once again Brown’s attorney, Roy Barnes, is challenging the indictment. Mr. Barnes claims that since five members of the grand jury that indicted Mr. Brown for a second time are Cobb EMC members, the indictment is invalid.

A hearing was held in early December and Judge Flournoy is expected to rule on the matter in early January.

August: Schuster chastises board and elections are set

In early August, both parties returned to court to craft a new agreement that would include a timeline for board elections. Judge Schuster ordered all ten sitting board members to attend a hearing, at which he chastised the board for its attempts to rehire Dwight Brown and the slow moving process to liquidate several former subsidiaries of Cobb Energy.

Both sides settled on a date of September 17 for a special meeting of the members. Elections would follow in November 2011, February and May of 2012.

September: EMC members turn out en masse to vote down mail-in ballots

September 17, 2011 will be remembered as the day Cobb EMC members finally took back their co-op and spoke loudly at a boisterous meeting and subsequent election. The members, attending their first meeting in three years, vented their frustrations at the actions and inactions of the current board and voted on two key bylaw amendments. First, and most importantly, was an amendment that would allow for board elections by mail-in ballot. The measure was quite controversial, as it did not preclude the EMC from spending unlimited amounts of money in support of the incumbent board members. Concerned that the mail-in ballot provision would stack the deck in favor of the current board, members voted down the measure by a margin of 2,561 to 1,113. It was a resounding victory for the reform movement and set the stage for in-person elections in November.

The second item up for a vote—to eliminate cushy retirement benefits for future board members—passed overwhelmingly as well.

October: Cobb EMC Owners Association Vets and Endorses Candidates

As board elections approached, the Cobb EMC Owners’ Association, a campaign group formed by the plaintiffs who sued Cobb EMC in 2007, invited all reform candidates to a series of vetting meetings. At these crucial events, EMC members heard directly from the board candidates and voted on whom the Owners Association would endorse for each of the four seats up for election. The members in attendance voted to endorse Ed Crowell in Area 1, David Tennant in Area 6, Malcolm Swanson in Area 7 and Cheryl Meadows for Area 10.

As elections approached, two incumbents, Area 1’s Don Barnett and Area 6’s Al Fortney, decided not to seek reelection in the November elections.

Following the endorsements, TBCE, the Owners’ Association and dedicated volunteers took to the streets and the phones to campaign on behalf of the endorsed candidates. As the calendar turned to November, victory was near.

November: A Clean Sweep! Four new board members elected

On November 12, 2011, Cobb EMC members voted in the first board elections since 2007, finally casting their votes for Areas 1, 6, 7 and 10. In a resounding victory, members elected all four of the Owners Associations endorsed candidates. Ed Crowell, David Tennant and Cheryl Meadows all won their seats with overwhelming majorities, while Area 7 candidate Charles Malcolm Swanson was only 12 votes shy of a majority vote.

Cobb EMC bylaws require a majority vote (50 percent +1) to win a board seat. Mr. Swanson won nearly 49.5 percent of the vote, with incumbent R.J. Patel placing a distant second with less than 15 percent. After careful consideration, Mr. Patel conceded the race to Mr. Swanson.

Onward to 2012!

The hard work of the lawsuit plaintiffs, reform groups, the journalists (a special thanks to the Marietta Daily Journal for their incredible coverage) who got the facts out there, and, most importantly, YOU, the members who dedicated dollars and countless hours to reform Cobb EMC, paid off. The new board members have already dedicated themselves to reforming Cobb EMC, enacting new transparency measures and spending as much time as necessary to grasp the complicated issues surrounding Cobb EMC.

As we turn the calendar to a new year, it’s our responsibility to continue our work. The next set of elections will determine whether we have a majority of the board dedicated to reform and transparency at Cobb EMC. We also need to continue to support reform initiatives, weigh in at member meetings, and never let our co-op run away again. We’ve come a long way in the last year, and next year promises more excitement as we Take Back Cobb EMC!

 

Cobb EMC Members Are Not Alone: Part II

In Part I of our co-op comparison, we compared Cobb EMC to Pedernales Electric Cooperative (PEC) in Texas, and looked at how members there united to take back their co-op from a runaway board. This week, we look at some of the principles newly elected reform board members implemented at PEC and think about how we could adapt similar measures to fit our needs at Cobb EMC.

Best Practices: What they are and how we can use them

Dr. Patrick Cox, a University of Texas-Austin professor elected to the PEC board in 2008, is a leading voice for best practices at electric cooperatives. Cox argues that all cooperatives should establish a set of core values based in several areas to ensure long-term success. We hope the newly elected Cobb EMC board members and other members will take notice of the two key principles Dr. Cox stresses:

Democratic Member Control: Dr. Cox points out, “cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions.”1 Cobb EMC, now under new management and with four new board members, can bring democratic control back to the EMC with a few relatively minor changes. With two elections behind us, we’ve slowly but surely seen democracy return to Cobb EMC and the new board is pushing for more transparency and democracy.

The implementation of Democratic Member Control was of the highest priority for the reform board members at PEC. In 2008 they quickly adopted a series of transparency measures that included open records and open meetings, live streaming of board meetings on the Internet, and engaging membership in meetings, online forums, blogs and through social media sites. Members are now able to vote by mail, in-person, or even online. Like Cobb EMC, PEC hired a third-party firm to handle their elections which “guarantees the efficiency, accuracy, security and integrity” of the elections.

The elections process is a key component of democratic member control for Cobb EMC. PEC took on this major reform successfully and we can do it here. We need to implement a system that allows for fair and open voting for all. While EMC members roundly rejected mail-in ballots in September 2011, they should be reconsidered with the proper transparency measures in place. We need to make sure that all EMC members have an opportunity to inform themselves about the co-op’s affairs and cast their vote, and that we have in place an honest and transparent process for counting the ballots.

Members’ Economic Participation: According to Cox, in a successful co-op “members contribute equitably to, and democratically control, the capital of their cooperative.” In contrast, under the leadership of Dwight Brown, Cobb EMC regularly made major financial decisions that significantly impacted EMC members. Without the right to attend regular board meetings, EMC members were not consulted, even for large expenditures. Brown and his entrenched board spent millions of dollars on creating Cobb Energy, naming the Cobb Energy Centre, developing coal fired power plants and, of course, spending millions of EMC dollars on legal fees. In the midst of these actions, the EMC rarely issues capital credits to members and instead spent excess EMC profits on the expensive ventures that rarely, if ever, benefitted EMC membership.

In solidifying member economic participation, PEC distributed over $14 million in capital credits, hired a new auditor, and earned clean audits in 2009 and 2010. This commitment to financial stability not only improved the image of PEC but also significantly improved the viability of the company. Through the board’s changes, PEC successfully reduced its operating costs by more than ten percent in 2010.

PEC not only adopted a series of best practices, but also developed a member bill of rights (more on that here) to enshrine these values in the co-op’s operations and implemented new transparency measures that are quickly becoming a benchmark in the industry. PEC is a textbook case, paralleling where Cobb EMC was and where we can go from here. PEC members and new directors laid a path for us to follow – let’s take advantage of PEC’s experience to bring true transparency to Cobb EMC.

How We Make it Happen Here: 

It’s time that we see Cobb EMC establish “best practices” of its own, ensuring that it will never again be a runaway co-op. While the board and management are committed to transparency at Cobb EMC, it’s our job as members to see that those transparency measures are preserved for the long haul, and moreover that Cobb EMC becomes a model for electric cooperatives throughout the country.

We helped elect new leadership to the Cobb EMC board in November, but the ball is still in our court. When board meetings open up to the general membership (hopefully in January), make it a point to attend, listen to your board members and ask them to pursue best practices for Cobb EMC. Volunteer, donate, and VOTE for three new board members in February and three more in the final round of elections in May. It’s going to take all of us staying active and informed and pushing for a reformed, democratic Cobb EMC.

Cooperatives throughout the state and country are watching Cobb EMC, hopeful that members will continue to stand up for transparency, accountability and integrity. The power is in our hands, so let’s make sure the future shines bright at Cobb EMC.

 

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1 Cox, Patrick Best Practices of Cooperative Boards http://myenergycoop.org/images/articles/Patrick_Cox_-_Best_Practices_of_Co-op_Boards.pdf

Cobb EMC Members Are Not Alone: Part I

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.

Brown Trying to Weasel Away Once More

Photo courtesy of Marietta Daily Journal

Dwight Brown was back in a Cobb County courtroom on Wednesday as his attorney, former Georgia governor Roy Barnes, argued that the 35-count indictment against him should be tossed out. Judge Robert Flournoy III is a Barnes appointee and has been criticized by Cobb EMC members for failing to recuse himself in this case and for dropping a previous indictment against Brown on a controversial technical matter.

Barnes argued that including Cobb EMC members – “victims” of Brown’s alleged crimes – on the grand jury that indicted Brown was intrinsically unfair. Prosecutors countered that there was no Georgia law that prohibited the EMC members from serving on the grand jury. The jury’s indictment was unanimous and only four of its twenty members were Cobb EMC members. Judge Flournoy said he would rule sometime after December 16 but before Christmas.

If the current charges are dropped, Brown may never face trial for theft, racketeering, lying, and intimidating witnesses – a dismal failure of justice, in our opinion. An appeal of the initial January 6 indictment could still more forward, but the law prohibits a third indictment against Brown.

Let’s be ready to take action when a decision is handed down. If the charges are dropped, we must let Dwight Brown, Roy Barnes and Judge Flournoy know that we’re still going to clean up Cobb EMC. If they move forward, let’s commend DA Pat Head and his associates for a job well done. Be ready to comment on any newspaper articles online or send letters to the editor expressing  your views. We won’t stand idly by while Brown and Barnes try to work the legal system, especially while EMC members are footing his bills.

And the bottom line is, we need to replace the board of directors that kept Brown in power – so don’t forget to mark your calendar for the February 18 elections!

Stay tuned to Take Back Cobb EMC for the latest coverage on the Dwight Brown case.

Victory! Cobb EMC Customers Elect 4 New Board Members

In an overwhelming victory, Cobb EMC members spoke loud and clear for reform at Cobb EMC by electing four new members to the Board of Directors. The four winners are the candidates endorsed by the Cobb EMC Owners Association. November 12 marked the first time in four years that board elections were held.

In Area 1, Ed Crowell soundly defeated Johnny Woodward, while in area 6 David Tennant won an overwhelming majority in a field of three non-incumbent candidates. In Area 10, also known as the Pataula District, Cheryl Meadows of Cuthbert, GA defeated incumbent Henry Balkcom III. Charles Malcolm Swanson won 49.47 percent of the vote in Area 7, but fell 12 votes shy of the 50% +1 majority required to win the election outright. Incumbent RJ Patel received roughly 15 percent, good enough for second place. EMC bylaws require a run off between the top two candidates if one does not secure a majority. However, on November 14, 2011, Mr. Patel conceded the race to Mr. Swanson.

Thank you to everyone that voted, volunteered and helped ensure that Cobb EMC’s future is secure for its members. This was a community-wide effort to ensure that transparency, integrity and honesty return to Cobb EMC. We’ve won the first two rounds and now it’s time to gear up for round 3. The next set of elections, for Areas 2, 3 and 9, are scheduled for February 18, 2012 – and the final three seats will be up for election on May 12, 2012. Let’s get six more reform candidates elected to the Cobb EMC board!

For the latest on Cobb EMC elections, please visit our website, Facebook and Twitter to stay informed and ready to vote again in February!