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.
