Sleeping with the Enemy

The Friday Photo
June 26, 2015

Not a photo this week, but a fond remembrance, in two parts, of a campaign where a picture and few words told the story (It won a national marketing award for “Best Villian.” I wish I could claim the idea as my own.)

Sleeping with the Enemy frontSleeping with the Enemy back

The Fat Lady is looking through her sheet music

After 8.5 years, a lot of questions about Plant Washington, Cobb EMC, and Cobb Energy, a for-profit company created by Dwight Brown while he ran the state’s largest electric co-op, have been answered after a forensic audit conducted for Cobb EMC was released by Channel 2 News in Atlanta last week. (A forensic audit is a type of financial audit that is conducted concerning possible fraud or misconduct.)

The document, which includes a 150+ page Executive Summary, also shines a bright light on Plant Washington, which Washington EMC leaders spent $1Million pursuing. Allied Energy Services, run by Brown’s crony Dean Alford, holds a no-bid contract to develop Plant Washington.

The audit includes some big numbers. Dwight Brown and his wife Mary Ellen, received over $20Million in payments, loans, benefits, and preferred stock from Cobb EMC and Cobb Energy, a for-profit company, established in 1998 under Brown’s directive.

Brown’s private business partner and Vice-President at Cobb Energy, Dean Alford, hauled in about $18Million in payments and benefits, according to the audit.

Alford was selected by Brown to serve on the Cobb Energy Board. From there Alford landed CEO appointments to Allied Utility Network and Allied Energy Services, both owned by Cobb Energy. The auditors wrote that they, “found no evidence that Cobb Energy reviewed or approved any business plan for any of the businesses it acquired or created.” The audit states that, with the exception of perhaps two entities, neither of them being Allied Energy Services of Allied Utility Network, “all of the Cobb Energy spinoffs lost money, some on a grand scale.”

Cobb Energy gave Allied Utility Network $5.9M by moving money from the nonprofit Cobb co-op to Cobb Energy, the for-profit company that, according to the audit, was anything but a profit generator. The audit reports that Cobb Energy general ledger entries totaling $4M appear to have funded Allied Energy, but the bookkeeping isn’t precise (lack of clear bookkeeping records is just one of the many criticisms raised in the audit).

So what about Allied Energy Services, Plant Washington, and the group of co-ops, including Washington EMC, that organized Power4Georgians (P4G) to support Plant Washington (and another coal-fired plant to be located in Ben Hill County) that Brown and Alford were touting years ago?

Allied Energy Services, led by Alford, secured the no-bid contract to develop coal-fired Plant Washington, even though, as the audit states, “neither Alford nor Allied had any experience building or developing a coal-fired power plant, and witnesses indicated he was hired on the basis of a recommendation by Dwight Brown.”  Alford also heads P4G, which continues to promote Plant Washington even though all of the original EMCs that made up the consortium have ceased funding the project. P4G has already dropped plans for the second facility, which would have been called Plant Ben Hill.

Large tracts of land for both coal plant sites have been bought or tied up in contracts by several companies in amounts that totaled in the millions.

Where all that money came from is among the audit’s more interesting findings.

Monies paid to Cobb EMC by its members went to more than the for-profit companies owned by Cobb Energy. Both Alumni Properties LLC, which was involved in land acquisitions for the Ben Hill coal plant, and Buster and Brown, LLC, another private real estate venture, are linked to Dean Alford and his boss at Cobb Energy, Dwight Brown.

But there were even more land companies, including Ben Hill Timberland, LLC and Washington Timberland, LLC. Washington Timberland, LLC, as readers of Rural and Progressive may remember, has a history of late property tax payments in Washington County.

Dean Alford and P4G cancelled Plant Ben Hill over three years ago, but the audit raises questions about whether it was ever a real project.  The audit says that “Senior Cobb EMC officers…advised that Plant Ben Hill was a ‘decoy” designed as a subterfuge to keep land prices lower in Washington County.”

Which raises troubling questions about Plant Washington and whether it was ever a viable proposal, or merely a scheme designed to enrich P4G.  In January of 2012, Cobb EMC Board members ceased funding Plant Washington following a presentation by Alford, during which he said, “P4G never intended to build Plant Washington” and that, “P4G’s goal has always been to obtain the permits needed and then sell them to any interested party that could build the plant.”  Unfortunately, it took many more months before Washington EMC followed Cobb EMC’s lead.

I happened to attend the invitation-only announcement for Plant Washington at the end of January 2008. The event was attended by former Washington CEO Frank Askew, then CFO and now Washington EMC CEO Wendy Sellers, Washington County Industrial Development Authority Chair, and Sandersville Railroad stockholder Hugh Tarbutton, and other Tarbutton family members.  At that time, Alford was clear in stating that Plant Washington would be built, owned, and operated by P4G members to provide affordable power to co-op members.

“Senior Cobb EMC officers interviewed advised that Plant Washington is now dormant,” according to the audit.

There’s a lot of information to digest in the 150+ page audit, which was requested by the Cobb EMC Board members elected after Brown and his cronies were ousted from the electric co-op almost four years ago. Last week Cobb County Prosecutor Don Geary told Channel 2 News in Atlanta that additional criminal charges could result from the findings.

The audit concludes with this statement, “This report has clearly demonstrated that how the former CEO made business and accounting decisions from which he and his friends profited. There was no effective compliance and ethics program and no oversight on the part of the Board of either entity, Cobb Energy or Cobb EMC to stop the activities perpetuated by the former CEO.”

It is time for Washington EMC leaders to come clean with its members and the larger community about the waste of member resources that Plant Washington has been from the beginning. Members expect and deserve the truth. We must hold them, and all our county leaders, accountable for the boondoggle they signed us up for over 8.5 years ago.

We own the screen rights to the movie

The story behind the long lingering proposed coal project Plant Washington reads much like a Southern Gothic novel. We’ve often been told that the work a handful of local citizens took up almost six years ago would make a great movie in the style of Erin Brockovich.

In an article published today by The New Republic, the plot line is laid out with layers of intrigue including family ties, political appointments, criminal charges, thousands of acres of land, money lost, and money to be made. I don’t think it spoils the end of this movie to say Plant Washington has been all about power, just not the kind that turns the lights on.

The best part of a film adaptation of our coal fighting adventures is that it allows for a generous cast of “seasoned” actors. I’m thinking Meryl Streep, Hal Holbrook, Sally Fields, Morgan Freeman, Ben Kingsley, Daniel Day-Lewis, Judi Dench, and Samuel L. Jackson would do us justice in a Robert Altman ensemble style film directed by Steven Spielberg. Pass the popcorn.

You’re only as good as the company you keep

“You’re only as good as the company you keep” is something all of us probably heard growing up. It holds true for adults just as much as impressionable teenagers.

If the company you keep says a lot about you, then Dean Alford’s choice of business partners raises serious questions. Yesterday Alford announced that Taylor Energy Fund LLC is joining Power4Georgians (P4G). Tim Taylor’s company is based in Colorado but the Secretary of State’s website there shows no record of the company. Taylor joins forces with Alford, a private business partner with Dwight Brown, who awaits trial on 35 indictments pertaining to his time at Cobb EMC and Cobb Energy.

What plant opponents have learned about Mr. Taylor’s business history is less than encouraging.

In 2007 five men working at the Cabin Creek power plant in Colorado were killed in a tragic fire. Tim Taylor was President of Colorado Service Company (part of Xcel Energy), the company which owns the facility where the men died. The Denver Post coverage includes this quote from Greg Baxter, a regional administrator of the federal Occupational Health and Safety Administration, “This catastrophe could have been avoided if the companies had followed their critical safety procedures. There should never be such a disregard for the safety of employees.”

Mr. Taylor’s approach to company finances should also make Washington EMC  (WEMC) and other P4G co-op owner members take notice. In 2009, Xcel, under Taylor’s leadership,  made multiple requests to the Colorado Public Utilities Commission (PUC) for rate increases to pay for construction costs in advance (much like GA Power is doing for Plant Vogtle). One request to the PUC was for $180.2M and it came on the heels of recent rate increases customers were already paying according to the Denver Post.

EMC members should note that Taylor had to take his rate request to a government utility  commission for approval. EMC rates do not go before the Georgia Public Service Commission. The Board of Directors at OUR co-op, the one we own and belong to, but must request permission to attend monthly meetings or get information about operations, sets our rates.There is no one to appeal to but them.

WEMC owner-members need to ask our Board of Directors who they are choosing to “keep company with” before the first shovel of dirt is moved, or we are told to expect bigger power bills.

Cobb EMC abandons coal and chooses solar power generated in Washington County!

What a week for clean air and water in Georgia! We started the week with the cancellation of the proposed coal plant Ben Hill near Fitzgerald, and Plant Washington will have to comply with stricter standards for mercury and other toxic air emissions IF it is ever constructed.

Now the Environmental Protection Agency (EPA) has released the Greenhouse Gas rule (carbon pollution rule, or GHG), making Plant Washington’s fate even less certain. Because Power4Georgians does not yet have a final permit for construction, hasn’t made final design or engineering determinations, and has yet to secure financing for the multi-billion dollar facility, it appears Plant Washington is subject to the GHG rule. That means Plant Washington will be even more expensive and much less practical to finance, construct, operate, or return any investment to the four remaining co-op owner-members.

What options does our community have for affordable electricity? Cobb EMC, which dropped Plant Washington in January, has just inked an agreement to buy 10MW of power generated from the clean and abundant sunshine we have right here in Washington County!

Cobb EMC leaders did the math on Plant Washington and accepted the fact that it just wasn’t a cost effective investment for their co-op owner-members. After putting out requests for new power contracts, they decided in favor of clean, abundant, and job creating renewable power.

Renewable energy puts people to work. Washington County residents are already working at MAGE solar panels in Laurens County, where 350 people will be employed. Another Lauren County facility using wood waste will employ 55 people. Elbert County citizens are already working at some of the 200 jobs announced for a wind turbine company in their county.

Washington EMC Directors, elected officials, and business leaders, your former partner in Power4Georgians has done its homework and found that solar is affordable and reliable after all. It is time you did your homework too.

WEMC has a 10MW contract expiring in 2014. Give us a sound business plan that supports dirty outdated coal as the best option for our community, when solar is available just down the road.

Dwight Brown wants to run the Cobb EMC faucet dry

Don McKee, who has closely followed the years long battle between Cobb EMC owner-members and management, notes in his column that for once the co-op is in agreement with the owner-members. Dwight Brown, the former CEO at Cobb EMC, has a complicated history with the co-op and the for-profit company, Cobb Energy, he helped create. Last week his attorneys were in court over contract payments Brown believes the co-op owes him (at the tune of  $13,800 per week). That Brown thinks the money faucet at Cobb EMC should continue to run for him is unbelievable.

That’s a hefty weekly check, but perhaps what makes it even worse is that former Cobb EMC Board Chair Larry Chadwick signed the contract without the board’s approval. There is a long and ugly history about closed-door operations at the co-op, much of which may be detailed when Brown is in court to defend himself on the 35 indictments against him (He hasn’t been in court for other proceedings, so noted Judge Schuster in his ruling concerning Brown’s pay last week).

Long story short, if co-op board meetings are open to the members, along with financial and meeting materials posted online and easily available to members, one would hope that such shenanigans would be much less likely to occur.

Some of my fellow EMC members in Middle Georgia have begun to pay attention to the closed-door, back room dealings that seem to control Washington EMC. Proponents of coal fired Plant Washington say they want to provide cheap electricity to members so we can keep the lights on. Instead it seems that Plant Washington has shined a bright light on the fact that the Board of Directors and Senior Staff prefer to keep the co-op owner members in the dark.

The fog is lifting on a “smoke and mirrors guy”

The Marietta Daily Journal’s “Around Town” column confirms what many of us have suspected for almost four years: Dean Alford never intended to build Plant Washington.

Cobb EMC is now posting board meeting minutes on its web site for access by co-op owner-members (pass word protected with no ability to electronically copy or print). The minutes from the January 24 meeting where Dapper Dean made a final pitch to convince the co-op to continue bankrolling his project have now been posted.

The MDJ reports from the minutes, “Mr. Alford … commented that coal is still the backbone of the country and that it is important to have a diversified portfolio of energy. Power4Georgians owns the permits but he stated that P4G never intended to build Plant Washington. He stated P4G’s goal has always been to obtain the permits needed and then sell them to any interested party that could build the plant.” (emphasis added).

The MDJ goes on to say about the project. which Cobb EMC spent at least $13.5M on,  “The power plant was the ‘baby’ of now-indicted ex-Cobb EMC head Dwight Brown and his sidekick Alford, who also served as vice chairman of corporate spinoff Cobb Energy. ”

The Marietta newspaper quotes a power industry expert in “Around Town” about the possibility of selling the permits if they could be secured, “As for the argument that the permits could be sold? “Good luck,” our first industry source said. “Who would buy those, if Cobb and others are saying they don’t need all that power?”

The MDJ quotes a second industry expert saying, “I questioned myself if they ever intended to build it, and I’m convinced that if they had pursued that course, it would have driven Cobb EMC into bankruptcy. But I think Dean’s a smoke-and-mirrors guy who’ll say anything to keep his business going.”

I saw the smiling faces at the Washington EMC when Plant Washington was announced in January 2008 because I was invited to the very hush-hush event. The Washington EMC Board of Directors, CEO Frank Askew, Dean Alford, Chamber President Theo McDonald, and Hugh Tarbutton Sr. were all grins despite Dean’s statement that they were counting on “some environmentalists” trying to stop the plant.

My eyes, like those of others in the room, were opened wide that day. We heard the promises ourselves: Plant Washington would be built, owned, and operated by the co-ops.

I didn’t know much about energy production that afternoon, and no one would have accused me of being an environmentalist. And I sure didn’t know anything about being a good co-op owner-member.

I still have a lot to learn about energy production. But now I am a flag waving, treehugging, dirt worshipping environmentalist. And the good co-op owner-member? I’m working tooth and nail on that too.

Good governance isn’t just for co-op owner-members

The cows are still coming home to Cobb EMC. The Marietta Daily Journal is reporting that Dwight Brown is taking legal action against Cobb EMC because he thinks he is due the full $2.1M from a consulting contract.

If I were Dwight Brown I would do the same: who wouldn’t want to collect $13,800 per week plus expenses for three years (plus attorney’s fees of $5,000 for the contract he had drawn up).

This is a perfect example of how open meetings and transparency help Board members too. Larry Chadwick, the Board Chair of Cobb EMC, signed the contract without the approval or authorization of the co-op’s Board of Directors. That wouldn’t happen if business and voting take place in an open meeting, along with access to documents and records (and there are co-ops that discuss personnel and  contractual matters in executive session but vote in an open meeting. It can and is done successfully) .

Maybe the previous rubber stamp board would have agreed to the contract too, but we will never know. Now the co-op has to spend yet more of the owner-member dollars in an effort to break the contract and recover some of what has been paid.

All of the “doing and deals” cooked up by Brown and the Board of Directors in control prior to November 2011 defy good business practices. A court agreement between owner-members and the Board required that Brown leave the co-op at the end of February 2011. After insisting that Brown was the only person on the planet who could effectively run the co-op, the Board hired him as a consultant on March 1, 2011 to work as a consultant where, according to the MDJ, he essentially continued to work as the CEO.

It is stunning to watch the machinations of people who have long lost sight of what is best for the community they live in, the co-op they work for, and the owner-members who elected them to conduct business on their behalf.

It bears repeating: open meetings and transparency held Board members too.

What say you now Washington EMC leaders? Still think keeping the door slammed shut to members is in the co-op’s best interest? What about your best interest?

Power4Georgians law firm reports “fat” profits

The going rate for attorneys like the ones at King and Spalding, who represent Washington EMC and the remaining three co-ops in Power4Georgians, is about $650 per hour, per attorney. They usually have no fewer than three attorneys at their table. Billing just under $2000 per hour isn’t chump change.

So how did last year go for King and Spalding? According to the American Law site, the firm’s revenue increased 9 percent, jumping from $718M to $781.5M. The cut per equity partner (lawyers in the firm eligible for distribution of profits) went up 12 percent from the previous year, falling just short of $2M at $1.975M.  The article reports that K&S’s revenue has increased 20 percent since 2008, and the profit per equity partners (lawyers in the firm eligible for distribution of profits) soared by 56 percent.

When was Plant Washington announced? January 2008. 

Every Washington EMC owner member contributed directly to those profits when they paid their bill or bought an appliance. It just doesn’t seem right that “our” attorneys are making out like bandits with our money.

Do the phones at K&S sound like a cash register when Dean Alford calls? Just wonderin’

 

Flannery O’Connor could have written this

Today the team I play on stepped our game up to a higher level. We started together to stop Plant Washington, a coal plant supported locally by the Tarbuttons (Southerners know to how things happen in a “one family county.”). The more my friends and neighbors, along with our partners, learned about our respective electric co-op’s  governance and business relationships, the more tangled the story line became.

This story is set in a rural community blanketed with tall trees, a black water river, and, because it is the rural South, a swamp. Another chapter was published today, and this one has a picture that outlines the characters and the plot.

The plot picked up again this morning. Some of the characters left early on in the story. Others held on into the fourth year since the story outline was announced in Sandersville. One of the lead characters, Dwight Brown, awaits trial on 35 indictments which include racketeering, theft, making false statements, and witness intimidation. At least one forensic audit is in the near future which may reveal yet more intrigue.

The story isn’t over, but this much is certain: it hasn’t played out like the writers announced in late January 2008. Flannery O’Connor loved a good plot twist too.