Posts Tagged ‘money laundering’

Walter Demond

Walter Demond

A Kendall County jury found former Pedernales Electric Cooperative legal counsel Walter Demond guilty of all three felony charges outlined in his June 2009 indictment.

Demond was found guilty of theft, misapplication of fiduciary property and money laundering. The jury recommended that Demond receive 10 years probation and be required to pay a $10,000 fine for illegally diverting funds from the cooperative’s members. As a condition of probation, State District Judge Dan Mills ordered Demond to serve 500 days in jail and pay $212,000 in restitution.

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The Pedernales Electric Cooperative (PEC) has named R.B Sloan as its new CEO. Sloan begins March 6, leaving his current job as director of utilities in Danville, VA.  He also ran the city-owned electric company for Vero Beach, Fla.

PEC, the nation’s oldest and largest co-op has been plagued by scandal and management upheaval over the past few years. Sloan will come to Pedernales just three months after longtime General Manager Bennie Fuelberg was found guilty of a money-laundering scheme.

See our earlier posts on Fuelberg’s trialconviction and sentencing.


By promoting cleaner energy, cleaner government, and cleaner air for all Texans, we hope to provide for a healthy place to live and prosper. We are Public Citizen Texas.

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Bennie Fuelberg during his trial

Bennie Fuelberg

Former Pedernales Electric Cooperative General Manager Bennie Fuelberg has been sentenced to five years’ probation, 300 days in county jail, 1,000 hours of community service and $126,000 in restitution which goes to the co-op’s former law firm Clark, Thomas and Winters, and its insurance company, which paid a $4.1 million settlement to the co-op last year.  The sentence is for a conviction on third-degree felony theft of co-op funds, money laundering and misappropriation of fiduciary property.  The co-op, which had rejected a prosecution proposal directing Fuelberg to pay Pedernales $100,000, gets no money.

The charges could have carried a maximum prison term of 10 years, but Fuelberg got less than a year of actual jail time.

Demond, a former attorney with Clark, Thomas & Winters, faces trial on the same theft and money laundering charges later this year.


Turns out, the reason for only 300 days of jail time is the judge gave Fuelberg the option of reducing his jail time by accepting responsibility for his crime — including waiving his right to appeal — and testifying against attorney Walter Demond. Demond, a former partner at Clark Thomas, who faces trial later this year on the same felony theft, money laundering and misapplication of fiduciary property charges as Fuelberg.

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Judge Pat Priest has sentenced former House Majority Leader Tom DeLay to three years in prison on the conspiracy charge he was convicted of in November.  Delay was also sentenced to five years in prison on the money laundering conviction but Judge Priest allowed DeLay to accept 10 years of probation instead of more prison time.

He is expected to appeal and the judge set a $10,000 bond, which means DeLay will likely be a free man until his appeal is complete.

The convictions stem from the 2002 Texas state house elections, when DeLay’s state PAC collected $190,000 in corporate donations and sent the money to the Republican National Committee. The RNC then sent a total of $190,000 to seven Republican state house candidates hand-picked by DeLay’s PAC.

Under Texas law, it is illegal for candidates to use corporate money — raised directly or indirectly — for their campaigns.

Public Citizen wants to acknowledge the work done by Craig McDonald, the director of Texans for Public Justice and former director of the Texas office of Public Citizen.  His work on tracking the money was key to the initial investigation of Delay and his PAC.

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After only a day of deliberation, the jury has returned a guilty verdict on former Pedernales Electric Cooperative (PEC) general manager Bennie Fuelberg on all counts of money laundering, theft, and misapplication of fiduciary property.

During the two weeks of trial, the prosecution showed how Bennie Fuelberg filtered money through Clark, Thomas & White, the co-op’s law firm, to his lobbyist brother, Curtis, and Bill Price, the son of a co-op board member.  Fuelberg also misdirected staff, removing oversight of the co-ops legal bills from other managers in an attempt to hide the money being passed through to his brother.

Prosecutor Harry White detailed this in his closing arguments Thursday: “The reason Bennie Fuelberg kept a secret was because he knew it was wrong. What he did was he took money that didn’t belong to him, that belonged to normal people, and gave it to his brother.”

As an aside, Clark, Thomas & White repaid over $4 million in fees to PEC in a separate lawsuit, showing just how much money Bennie siphoned away from the co-op over the years.

Several of us here at Public Citizen are current or former PEC members.  We were part of the original investigations and lawsuits that opened up the wretched hive of scum and villany that Fuelberg had turned the co-op into, and have worked for and are proud of the reforms that have taken place in the past few years.


By promoting cleaner energy, cleaner government, and cleaner air for all Texans, we hope to provide for a healthy place to live and prosper. We are Public Citizen Texas.

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Tom Delay has been convicted of money-laundering by a Travis County jury.

After three days of deliberation in  former House Majority Leader Tom DeLay‘s corruption trial the jury returned a verdict of guilty.

Tom DeLay‘s defense team, presented five witnesses over two days, resting its case last Thursday.

This was in stark contrast to the prosecution’s case, which included more than 30 witnesses in 10 days. The former Houston-area congressman did not testify. Closing arguments in the trial were delivered on Monday, and jurors began deliberation later that day.

Shortly after convening, jurors sent two notes to the judge, asking him about the charges. “Can it constitute money laundering if the money wasn’t procured by illegal means originally?” one note read.  A second note  questioned whether money laundering can involve funds that were not initially accepted for an illegal purpose.   Judge Priest expressed concern about how to answer the jury’s questions without commenting on evidence in the case.  In the end, he declined to answer the question telling the jury to figure it out for themselves.

Earlier today (the third day of deliberation), the jury asked for multiple copies of the transcript of Tom DeLay’s interview with prosecutors in 2005.  Then later during the day, a question from the jury elicited an instruction from the judge that could have been the final blow to DeLay’s defense.  The jury basically asked whether DeLay had to know about a conspiracy to commit money laundering before it began. Visiting District Judge Pat Priest told them no.

At 5 pm today, the jury returned a verdict of guilty on both charges of money laundering and conspiracy to commit money laundering.

Currently Delay is out on a previous bond, but his conviction means he faces five years to life in prison on the money laundering charge and two to 20 years on the conspiracy charge.  He also would be eligible for probation.

The sentencing phase of the trial is tentatively scheduled to begin December 20, 2010 and DeLay has chosen to have Senior Judge Pat Priest sentence him.

DeLay’s lawyers intend to appeal the felony criminal conviction.  One thing is clear, he will not be returning to politics anytime soon.

Earlier this year, DeLay tried to get his case moved out of Travis County.  He argued he could not get a fair trial in Austin because of the role he played in the 2003 Texas redistricting efforts.  Obviously the venue change request was denied, and from the outside it seems clear that this Travis County jury took its task to heart, and deliberated fairly and judiciously before bringing back a guilty verdict.

I expect this will be one of our Thanksgiving dinner topics tomorrow.   In the meantime, whether or not you and your loved ones make this a Thanksgiving topic to go along with your holiday turkey (tofurkey for you vegetarions among us) dinner. . . Public Citizen wishes each and every one of you a safe and happy holiday.


By promoting cleaner energy, cleaner government, and cleaner air for all Texans, we hope to provide for a healthy place to live and prosper. We are Public Citizen Texas.

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As Public Citizen’s offices close for the Thanksgiving holiday, the jurors in the money-laundering and conspiracy trial of former U.S. House GOP Majority Leader Tom DeLay had still not come back with a verdict. (more…)

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As the Tom Delay trial got underway, the State’s first two witnesses were Craig McDonald, a former Public Citizen Texas director and now the executive director for Texans for Public Justice, and Austin attorney Fred Lewis, both of whom the defense characterized as being from the left end of the political spectrum which they attempted to capitalize upon.  Twice the defense moved for a mistrial, claiming there was an effort by prosecutors to push political opinions on the jury.  Both motions were ignored by Judge Priest.

Craig McDonald said he focused solely on campaign donations while with Public Citizen and that there were discrepancies between what Texas Republican Majority PAC (TRMPAC) reported to the Texas Ethics Commission in terms of its income and what Republican National State Election Committee (RNSEC) reported to the IRS.

The defense, in examining McDonald, reviewed 60 candidate names on Public Citizen’s website — only one of which was a Democrat (gubernatorial candidate, Bill White, and that was from a blog on yours truly, Texas Vox, which showed up on the site through an RSS feed).  DeLay, however, was mentioned 100 or more times on the site. But McDonald maintained political neutrality in his testimony, noting that DeLay’s appearance on the website did not mean he was the only subject of Public Citizen’s research. (more…)

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A jury for Tom DeLay‘s money laundering trial was selected quickly last week, but only after the prosecution challenged whether the defense was striking African American jurors without good cause.

The defense cut five African Americans from the jury because, in several instances, he said the would-be jurors appeared angry at him after he had criticized the lead prosecutor, who is black. (more…)

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Board Promises Transparency, Whistleblower Protections, Open Meetings

AUSTIN, Texas – The first meeting of the new board of the Pedernales Electric Cooperative (PEC) on Monday marked an unprecedented change in leadership and vision for the nation’s largest electric cooperative. Not only is the majority of the board progressive reformers, but it is led by an entirely new executive body that has promised to prioritize transparency, accountability, whistleblower protection, renewable energy and energy efficiency new priorities.

“The PEC has an opportunity to be a national leader among co-ops. Board members see that the future of electric power in America lies with energy efficiency and renewable energy,” said Tom “Smitty” Smith, director of Public Citizen’s Texas Office. “Public Citizen Texas applauds the board’s openness and commitment to member rights and looks forward to working with directors in the future as they further investigate how to make their visions reality.”

Considering that just last year the co-op was deep in the midst of a scandal involving accusations of misappropriated funds, theft, money laundering, closed meetings and tainted elections, Monday’s meeting marked an incredible turnaround.

PEC held a special meeting Monday to seat newly elected board directors Christi Clement, Patrick Cox and Larry Landacker. During this meeting, the full board held the elections for the positions of president, vice president and secretary for the coming year.

Landacker was nominated for president and elected with six votes in favor and one abstention;  Clements secured the vice presidency with four votes in favor and three abstentions, and Kathy Scanlon was unanimously elected to the position of board secretary.

During his acceptance speech, Landacker announced that the board would begin working immediately on several projects to reform the co-op and move toward becoming a more environmentally friendly, sustainable business. Landacker plans to adopt a co-op members’ Bill of Rights, guarantee open access to meetings, implement a new whistleblower protection policy and create a new and open governance system for the co-op. These laudable measures will ensure that members have the opportunity to participate fully in their co-op and in decisions, and that workers are encouraged to act in the best interests of member-owners.

Landacker also pledged to move forward aggressively with the co-op’s goal, set last November, to purchase or generate 30 percent of its electricity from renewable sources by 2020. As a part of this effort, the co-op plans to create new programs to encourage energy efficiency and renewable energy projects among individual members.

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