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Posts Tagged ‘pedernales electric cooperative’

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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UPDATE: We’ve added a little here and there based on some new information we’ve gotten since first publishing this, specifically some information from NRECA (National Rural Electric Cooperative Association) and Pedernales’ counsel about the effects of converting to SMDs.

Well folks, yesterday marked the beginning of voting for the board of the Pedernales Electric Coop.  I’m a proud co-op member, something I couldn’t have said several years ago when the co-op board met behind closed doors and the board nominated its own members. But now we have returned to the principle of democratic control by the member-owners of the co-op, in no small part due to the work of Public Citizen and others.

There’s been a lot of news recently about PEC and Public Citizen’s involvement in the reform effort.  We’re not going to comment on that just yet, as we want to keep this focused on the issue at hand, which is the election.  Voters across the co-op have the opportunity to vote for two board seats and on a member referendum about future elections and how they should take place.

You can vote in three ways.  A ballot should have been mailed to you on Wednesday according to PEC staff.  In it you will see that you can vote for candidates in Districts 2 and 3 and on the question of single member districts.  You can see videos of each of the candidates at the PEC Candidate Forum online here. We’ll let the candidates speak for themselves on why they should get your vote, as we do not and will not endorse anyone in these races.

However, what’s missing in all of this is a discussion about the pros and cons of single member district voting. Below I’ve attached the presentation we made to board candidates about what we would like to see in the future for PEC. We lay out a broad vision that investing in the future and the key to lower rates is efficiency and renewables. These also just so happen to help things like clean air, create jobs, and use little water in comparison to traditional power generation.  We believe that as a co-op, based on the principles of what a cooperative is (as opposed to a private utility or municipal utility), we have a special place in the community to be responsible, ethical, and think about the greater good of our policy choices.

Beware– this presentation is loooooooong, but I wanted to bring attention specifically to the slides about the pros and cons of single member districts. (pgs 15-19)

But in the spirit of transparency we wanted to put the entirety of what we spoke to the board candidates about out there. You know, in case someone publicly accuses you of being a secretive, corrupt cabal that pulls the strings at the co-op.

So, let’s discuss single member districts, or SMDs for short. I’m putting on my political science hat (my Political Science 350:  “Theories of Democracy and Democratization” professor would be so proud of me) and let’s talk about what SMDs actually do.  I’m personally agnostic about how people should vote on this. I see good sides and down sides to it, but both sides deserve an airing.

But first, what are we voting on?  This is how it will appear on the ballot: (more…)

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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.

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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.

Update:

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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At yesterday’s board meeting, the Pedernales Electric Cooperative voted to review a recently passed bylaw that could disqualify one of its members from serving on the board.  Specifically, if the board applies this bylaw retroactively, it could disqualify Chris Perry from continuing his position on the board. 

Coop attorneys have been questioning Perry about his energy consulting business, Windhorse Energy LLC in Dripping Springs. According to documents filed with the Federal Energy Regulatory Commission in March 2009, Perry applied with the commission for his business to engage in wholesale sales of electricity and other services. Perry said in the documents that Windhorse Energy would be a “power marketer” and that it did not generate or distribute electricity.  In addition, Perry wrote to the federal commission earlier this month to cancel his registration, stating Windhorse Energy has not conducted any business and had no active contracts for sales.

The bylaw in question prevents a director from working for a wholesale power company for at least three years prior to serving on the board.  That bylaw, along with a number of other reforms in co-op governance procedures, was approved in November by Perry and the rest of the board . Perry was elected six months earlier.

The board voted 3-2 not to begin disqualification proceedings against Perry and to initiate a review of the new bylaw. Perry abstained, however he did argue that when he was elected to the board, the bylaw wasn’t on the books, and that it was unfair to apply it retroactively.

Perry, the former assistant energy secretary for the State of New Mexico, has emerged as one of the board’s leading voices for renewable energy.  And he would have been unable to sell power in Texas anyway since he did not register with the Public Utility Commission. 

The board will have to resolve this issue, but we hope they do so in a fair and equitable way.  Nevertheless, we have to say kudos to Perry and other members of the board for disclosing any potential conflicts of interest.  This is something that would have been unlikely in the closed-off “old days” of Pedernales.

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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.

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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, former Pedernales Electric Co-op GM - AAS Photo

With last week’s conviction of Tom Delay, is it too much to hope that another Texas scoundrel gets justice, too?

Less politically charged but no less important, for PEC Director Bennie Fuelberg will go on trial in Fredericksburg, where the trial was moved because the judge decided Fuelberg was unlikely to get a fair trial if tried in Pedernales territory.  He was probably right.

Patrick George of the Austin American Statesman wrote extensively about the trial and the actvities leading up to the trial  this morning.

From the Austin American Stateman article:

In what is arguably the climax to more than three years of lawsuits, grand jury indictments, legislation, allegations of corruption, congressional hearings, reforms and resignations at the Pedernales Electric Cooperative not to mention newspaper stories detailing it all the utility’s former chief executive will go on trial today in Fredericksburg.

Before his June 2009 indictment on felony theft and money laundering charges, former Pedernales General Manager Bennie Fuelberg was one of the Hill Country’s most prominent citizens. Now, his name is often tossed about by co-op leaders and employees as synonymous with scandal and cronyism.

The trial, prosecuted by the Texas attorney general’s office after a Hill Country district attorney stepped aside, could be the completion of Fuelberg’s fall from grace — or it could result in his exoneration.

Fuelberg, who ran the nation’s largest member-owned electric utility for more than 30 years, is charged with misapplication of fiduciary duty in excess of $200,000, theft of property in excess of $200,000 and money laundering between $100,000 and $200,000. The first two charges are first-degree felonies that carry a penalty of up to 99 years in prison if convicted; the last charge is a second-degree felony that carries up to 20 years.

Fuelberg and the co-op’s former outside counsel, Walter Demond, were indicted on identical charges last year after a five-month grand jury investigation. Demond will be tried after Fuelberg. Both have pleaded not guilty. The grand jury’s term has since expired, and no other indictments have been handed up.

The criminal charges stem from accusations that the men arranged for thousands of dollars of co-op money to be paid to relatives of Pedernales executives. According to the indictments, payments exceeding $200,000 went to Curtis Fuelberg, Bennie Fuelberg’s brother, and William Price, the son of former Director E.B. Price. (more…)

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Picture was obtained from the Statesman

PEC's newly elected Board Member, Ross Fischer

Picture was obtained from the Statesman

Larry Landaker, PEC's President of Board of Directors

Pedernales Electric Cooperative.  The name used to be synonymous with closed-door meetings and conjured up images of a good ol’ boys club and the smoke-filled room, where the public was shut out of the decision-making process.

Today Pedernales Electric Co-op (PEC) board members voted for a proposed strategic meeting in October to be open. They had originally proposed the meeting be closed, as electric cooperatives, like some other public utilities and agencies, have an exception under the Public Information Act exempting “personnel, real estate, legal and competitive matters.”

Enter Ross Fischer, District 5′s newly-elected representative on the PEC board, who raised concerns about holding closed meetings, saying “The outcome is going to be meaningless because the stakeholders aren’t going to be a part of it”. Having served as the head of the Texas Ethics Commission before he was elected to the Board in June, Fisher emphasizes transparency in conducting those meetings.  Fischer is right, of course– how do you make decisions about the future of a member-owned electric cooperative if the member-owners can’t attend?

On Monday, Board President Larry Landaker said the meeting, for the most part, will be public.

Four of the board members voted for the meeting to be public. In addition to the president, and Fischer, Patrick Cox and James Williams also voted against the old policy.

The Board of Directors also revised its record-access policy. Though members are not allowed to access records that pertain to protected categories (legal, personnel, and competitive matter) as it has always been, other records are more accessible and members can now write a complaint letter to the General Manager who has to take a corrective action within 20 days.

Public Citizen commends the Board of Director at PEC for taking such an action in order to increase the level of transparency under which, the Co-op functions and we urge them to keep the spirit of reform they have and use it to ameliorate the services and satisfy its members.  Pedernales needs to be a model for openness for other co-ops and utilities, but this just shows that transparency must be a constant vigil.

To get an update on the Board’s recent reform, actions, and policy revisions, please click here.

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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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Logo for PEC

Rep. Patrick Rose this morning had an opinion piece printed regarding transparency reforms at the  Pedernales Electric Cooperative (PEC) , echoing similar criticism from the Austin American Statesman last week.  I’m not saying I agree with every word Rep. Rose wrote here in this morning’s San Marcos Local News, but this shows that this will likely be an issue in the upcoming Legislative Session.  As a bit of history, Rep. Rose (D-Dripping Springs) and Senator Troy Fraser (R-Horseshoe Bay), both of whom are members of the co-op, tried to pass a bill to increase transparency at PEC last session, but that ultimately failed when, as with so many other issues, it got killed by Voter ID.

As an aside and for full transparency’s (ha!) sake, Rep. Rose is also my State Representative and I have to give him a big hat tip for the work he has done in working to reform the PEC, as that work directly affects the electric bills my family and neighbors pay every month.

Commentary
By PATRICK ROSE
District 45 State Representative

Rep. Patrick Rose by the river

Our three-county district is served entirely by electric co-ops and municipally owned systems. I believe that public power has served our area well and kept costs lower than other energy providers across the state. As we continue our efforts to protect and grow jobs in our region, energy affordability is key. This is one of the many reasons why I am committed to a strong and transparent Pedernales Electric Cooperative (PEC).

On Monday, Senator Troy Fraser (R-Marble Falls) and I spoke at the August meeting of the PEC board of directors. I appreciate every opportunity to meet with the board and co-op members about our reform efforts.

My remarks were focused on my strong disapproval of the board’s latest mistake that cost co-op members $1 million, firing its general manager days before the election of two new board members. In June, PEC seated its first ever 100 percent democratically elected board. This decision could have and should have waited until the new board members, duly elected by the members, were sworn in.

The two outgoing directors were part of the legacy board that allowed for and participated in the mismanagement and corruption at PEC that was brought to light over the last few years. They should not have been part of any decision that impacts the future of PEC. At the meeting, I repeatedly asked Larry Landaker, PEC’s board president, to explain why he and two other board members joined forces with the last two legacy members. He could not answer the question, and furthermore, he admitted that the board did not have cause for the firing, thus costing co-op members $1 million.

These actions are unacceptable and show the irresponsibility and lack of transparency that justify legislation. What co-op members can count on, regardless of the makeup of the PEC board or who is general manager, is that Sen. Fraser and I are committed to transparency and openness at our cooperative. The legislature will reconvene in January and we will proceed with our effort to statutorily protect members’ rights. (more…)

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AUSTIN – Public Citizen Texas will be honoring the recipients of this year’s Texas Outstanding Public Service (TOPS) Awards at the organization’s 25th anniversary dinner today. The awardees are local visionaries, recognized experts and celebrated advocates who have aided in the effort to help Texas realize a more environmentally conscious and sustainable energy future.

Those receiving the TOPS Awards were chosen by Tom “Smitty” Smith, director of Public Citizen Texas, and his staff based on their accomplishments and contributions to the overall health, safety and democracy of all Texans. This year’s lineup of winners includes two journalists, three legislators, two activists, a whistleblower, a legislative aid and a man whose lifetime of achievement merits the finest award of all.

Winners of this year’s awards include Roger Duncan, general manager of Austin Energy, Austin American-Statesman reporter Claudia Grisales, San Antonio Current reporter Greg Harman, state Reps. Dave Swinford and Rafael Anchia, citizen activists Gerry Sansing and Dr. Wes Stafford, state Sen. Wendy Davis, whistleblower Glenn Lewis and state legislative staffer Doug Lewin.

Duncan will receive this year’s Lifetime Achievement Award. Duncan is a true visionary who has not only blueprinted the greening of the Austin City Council but also of the city’s public utility. He successfully transformed Austin Energy and set standards for the rest of the nation. He has been a major player in the fight for green issues for more than three decades – starting with his journey as a student activist in the 1970s, serving two terms as a member of the Austin City Council in the 1980s and eventually leading the city’s environmental department for nine years as the assistant director. Duncan is considered the architect of several of Austin’s nationally acclaimed energy efficiency and renewable energy programs, including GreenChoice and the Green Building Program. Furthermore, under Duncan’s leadership, Austin Energy adopted ambitious goals to bring more solar energy to Austin, committing to the development of major solar generating capacity. Duncan was also one of a few people to realize early on that the city of Austin had the potential to reduce urban air pollution by using plug-in hybrids. He assembled a coalition of potential buyers of plug-ins in the country and implemented a program at Austin Energy that offered an incentive package for such hybrids. Although he has announced his planned retirement for next year, it will not be surprising to see him in some sort of leadership role in the city in the near future.

In a quote from Duncan published in the Austin Chronicle last month, he said, “Today, it is time for me to return to my original role as an involved citizen of Austin.” Public Citizen Texas welcomes him as such (more…)

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