The results are in! Final vote counts:
District 2: Yore 9528 Boggs 9733 District 3: Scanlon 9846 Gress 3323 Weldon 2759 Thomas 2585 At large 8122 Single member districts 6400 Hybrid 4212
:: Share or discuss :: 2011-06-18 :: admin
Filed under Finances + Investigation + Lawsuit
This article first appeared in the Austin American Statesman
BOERNE — A Kendall County jury on Tuesday found former Pedernales Electric Cooperative attorney Walter Demond guilty of felony theft, money laundering and misapplication of fiduciary property for helping arrange secret payments of co-op money to relatives of Pedernales officials.
The jury sentenced Demond, 63, to 10 years of probation and a $10,000 fine. State District Judge Dan Mills also gave Demond 500 days in jail — 100 days a year for five years — and imposed $212,000 in restitution. The money will be paid to Demond’s former law firm, Clark, Thomas & Winters, which ceased operations earlier this year.
Demond’s attorney Rip Collins declined to comment, saying he planned to appeal.
His other attorney, Gerry Morris, had asked the jury to sentence his client to probation, citing his age, lack of a criminal record and the fact that he did not take the secret payments himself. He also said that Demond’s career was finished and “his reputation is gone.”
“One thing you can rest assured: Mr. Demond will never practice law again,” Morris said.
Prosecutor Harry White argued against probation, telling the jury that as a lawyer, Demond should have known better.
“If we allow Mr. Demond to just get probation, what is the message being sent?” White asked. “That you can be the lawyer to large electric companies and if you violate that duty, if you steal from a client, that’s not a big deal.”
Demond received a harsher sentence than the one given to former Pedernales General Manager Bennie Fuelberg by a Blanco County jury in February. Fuelberg got five years of probation, including 300 days in jail, and is appealing his sentence.
Demond was convicted of one first-degree felony — theft — and two second-degree felonies — money laundering and misapplication of fiduciary property. Fuelberg was convicted of lesser, third-degree versions of those charges.
“I think the evidence develops differently in different cases,” White said. “The jury decided Mr. Demond had a greater responsibility.”
Both men were prosecuted for their roles in arranging about $700,000 in secret payments of co-op money to relatives of former Pedernales executives. The payments went through Clark Thomas, which represented the co-op for decades.
Prosecutors say Demond inflated legal bills sent from the law firm to Pedernales between 1996 and 2007. That money secretly paid thousands of dollars per month to lobbyist Curtis Fuelberg, the brother of Bennie Fuelberg, and Bill Price, an attorney and the son of former co-op board member E.B. Price.
During the trial, Demond denied criminal wrongdoing and attributed many of his actions to following Bennie Fuelberg’s orders. Prosecutors never called Fuelberg to the witness stand. His attorney said that if they did, Fuelberg would use his Fifth Amendment right not to testify.
Jurors began deliberations Thursday morning but went home without a verdict and returned on Tuesday after the Memorial Day holiday. Demond and his attorneys showed little emotion when the jury issued its verdict.
Unlike Fuelberg’s trial, where defense attorneys called a long list of character witnesses, including his wife and neighbors, during the sentencing phase, Demond’s attorneys called no one. Morris told the jury that was because many witnesses had already attested to Demond as “an honorable man, a good lawyer, a leader among his peers.”
Before leaving the law firm in 2009 , Demond headed Clark Thomas’ energy section and was Pedernales’ top outside lawyer. He was described in court as a close friend of Fuelberg’s; the latter served as a best man at Demond’s wedding, and the two owned a hunting lease together.
The trial’s outcome caps a years-long saga at Pedernales, the nation’s largest electric cooperative, with more than 200,000 members.
Beginning in 2007 with a member-led lawsuit and investigative reports in the American-Statesman, the co-op was dogged by scandals related to questionable business dealings, closed-door practices and excessive spending. Its officials were called on the carpet by legislative bodies in Austin and Washington.
Today, Pedernales is run by a new CEO and directors who have enacted a number of reforms. All have said they are eager to put the Fuelberg era behind them.
Clark Thomas wasn’t so lucky. The affair cast a cloud over what was once Austin’s largest and oldest continually operating law firm, and it was one of the factors blamed for the firm’s demise in April, along with a tough economy. Most of its attorneys left to work elsewhere.
“This verdict should send a chill through the spine of all corporate lawyers,” Pedernales board President Larry Landaker said Tuesday. “General counsel has a higher duty to the law and the corporation’s shareholders. It is not an acceptable defense to say that ‘I was following orders of management or the board.
pgeorge@statesman.com; 512-392-8750
:: Share or discuss :: 2011-06-01 :: admin
Hi folks,
It’s election time! As we have for the past several years, PEC4U’s steering committee discussed the pros and cons of the candidates and the voting issue. And as in past years, there are some tough choices to make. Here are this year’s endorsements:
District 2 – William Boggs
District 3 – Kathy Scanlon
Voting Method – At Large
But as always, we encourage you to think for yourselves, examine the details, and then get out and vote! See our Candidates Forum to discuss the pros and cons of the candidates and the voting method issue, and see the recent discussions regarding voting method in the archives of our Watchdogs email discussion list. (You can join those discussions here.)
:: Share or discuss :: 2011-05-12 :: admin
We’re in the press again….
A couple of gems from the article:
“Fraser, R-Horseshoe Bay, said it has become nearly impossible for anyone to get elected to the board without PEC4U’s funding and support. He points to former candidates like auto dealer Chuck Nash, who were well-financed and had name recognition but lost, Fraser claims, because he lacked endorsements from the group.”
First off, it is far less impossible to get on the Board than it was during the Fuelberg/Burnett regime, when it was absolutely impossible for anyone outside the cabal. These days a couple hundred signatures on a petition will get you on the ballot. Being a better choice than the other candidates will give you a good shot at getting elected.
Perhaps Sen. Fraser’s fair-haired boy Chuck Nash wasn’t elected because there were better candidates to choose from? That’s certainly why PEC4U didn’t endorse him. Maybe he didn’t do a good job of campaigning despite whatever money he threw in that direction. I certainly never heard a peep from Mr Nash’s “well-financed” campaign. How much did he spend? Was it anything near the $300,000 Fraser now claims is needed to run a campaign for PEC Board?
“Fraser, R-Horseshoe Bay, said it has become nearly impossible for anyone to get elected to the board without PEC4U’s funding and support.”
Senator Fraser, I invite you to find PEC4U’s funding. I quote from our “Who is PEC4U?” page (which has been in place for several years): ”Funding? There is none. There’s no formal organization as yet, no mailing address, no bank account.” And we have no plans for any of those. If you happen to find any PEC4U funding, please let us know – we’d love to be reimbursed for our voluntary efforts over the last several years.
As far as PEC4U’s support throwing the election one way or another, that remains to be seen. You could just as easily place the responsibility for election of the current crop of Board members on the Austin American-Statesman, who helped bring awareness of the corrupt politics of the Fuelberg/Burnett regime and likely motivated a large number of reform-minded votes.
:: Share or discuss :: 2011-04-28 :: admin
Filed under Finances + Investigation + Lawsuit
originally published By Patrick George , AMERICAN-STATESMAN STAFF April 20 in the Statesman
Two months after saying he wouldn’t appeal his conviction on felony theft and money laundering charges, former Pedernales Electric Cooperative general manager Bennie Fuelberg has changed his tune.
Fuelberg’s attorney Chris Gunter said Tuesday he has filed a motion for a new trial with State District Judge Dan Mills ‘ court. He said he expects the judge to deny that motion, in which case he will proceed with an appeal.
Fuelberg, who ran the nation’s largest member-owned electric utility for more than 30 years, was convicted in December of third degree theft, money laundering and misapplication of fiduciary property. He received a probated sentence that includes 300 days to be served in the Blanco County jail, beginning in June.
Gunter said Fuelberg is not on probation currently, and any jail time he might face will be put on hold during the appeal.
Gunter said Fuelberg also does not plan to testify at the trial of Walter Demond , the former outside attorney for Pedernales, who faces trial in May on the same charges. The state attorney general’s office, which is prosecuting the Pedernales cases, is seeking an order granting Fuelberg limited immunity in exchange for his testimony against Demond.
“We have made it known to the AG that we do not intend to testify for either side,” Gunter said. Fuelberg may invoke his Fifth Amendment right to remain silent, Gunter said.
Fuelberg went on trial for his role in secret payments made to his brother, lobbyist Curtis Fuelberg, and Bill Price, the son of a former Pedernales board member, through Clark, Thomas & Winters, the co-op’s now-defunct former law firm, where Demond was a partner.
The jury acquitted Fuelberg on the charges related to his brother, but convicted him on the payments to Price and sentenced him to probation.
Mills gave Fuelberg the option of reducing his jail time by accepting responsibility for his crime — including waiving his right to appeal — and testifying against Demond. On February 11, Gunter said his client would accept that deal.
They changed their minds, Gunter said, after reviewing Mills’ rulings during the trial.
“We decided that but for a few of the judge’s rulings, the jury would have acquitted Mr. Fuelberg,” he said.
In particular, Gunter pointed to Mills’ ruling that allowed former Clark Thomas partner David Duggins to testify about what Fuelberg knew about the payments to his brother and Price. Duggins said Demond — also a former Clark Thomas partner — told him that Fuelberg directed payments of co-op money to Price and Fuelberg’s brother.
Gunter on Tuesday said that testimony was “double hearsay” and was the only evidence in the trial that indicated Fuelberg knew about the secret payments to Price.
Pedernales officials in March sought to revoke Fuelberg’s pension from the co-op, but their lawyers advised them that such a move was unlikely to succeed. Fuelberg collects payments of more than $12,000 a month from his pension plan, co-op officials have said.
pgeorge@statesman.com; 512-392-8750
:: Share or discuss :: 2011-04-28 :: admin
We had fun at the premier showing of Green Dreams, a 50 minute documentary about the revolution at the Pedernales Electric Cooperative last night at the Uptown Marble Theater in Marble Falls.
The next (free) showing of Green Dreams will be:
Monday, April 18th, 8PM
Rocky River Ranch
Corral Theater
100 Flite Acres Road
Wimberley. TX
Hope to see you there!
:: Share or discuss :: 2011-04-14 :: admin
:: Share or discuss :: 2011-04-14 :: admin
Filed under Elections
The 2011 PEC Board election season has begun, and PEC4u has established a Twitter account to help you keep up with the details.
Tweet this page: Tweet
:: Share or discuss :: 2011-04-08 :: admin
Filed under Board + Elections + Finances + Lawsuit
On April 13th at 7:30pm, the Uptown Marble Theater in Marble Falls will present the world theatrical premiere of Green Dreams, a 50 minute documentary about the revolution at the Pedernales Electric Cooperative.
Following the screening will be a meet & greet with PEC’s newly-hired CEO, R.B. Sloan.
At the screening in Marble Falls, someone requested a copy of the documentary. The details haven’t been worked out yet, but please fill out our request form if you’d like one, and Ric will get back to you soon.
:: Share or discuss :: 2011-04-02 :: admin
Filed under Finances + Investigation + Lawsuit
This article first appeared in the Austin American Statesman
JOHNSON CITY — A state district judge Monday night sentenced former Pedernales Electric Cooperative General Manager Bennie Fuelberg to five years’ probation, 300 days in county jail, 1,000 hours of community service and $126,000 in restitution.
That restitution won’t go to the member-owned electric utility Fuelberg ran for more than three decades, whose reputation prosecutors argued was damaged by Fuelberg’s actions.
Instead, state District Judge Dan Mills ordered that the money be paid 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 co-op, which earlier in the day rejected a prosecution proposal directing Fuelberg to pay Pedernales $100,000, gets no money.
Fuelberg was convicted in December of third-degree felony theft of co-op funds, money laundering and misappropriation of fiduciary property, charges that carry maximum prison terms of 10 years.
A Fredericksburg jury sentenced him to probation and assessed a $30,000 fine. But the terms of that probation, including possible jail time, were up to Mills.
Fuelberg was originally charged with first-degree felonies for his role in arranging for hundreds of thousands of dollars in members’ money to be paid to his lobbyist brother Curtis Fuelberg and Bill Price, the son of a former co-op board member, through the law firm. Curtis Fuelberg received about $630,000, and Price received $86,000, according to testimony.
On Monday, defense attorney Chris Gunter argued that Fuelberg’s conviction on the lesser charges — covering amounts of less than $100,000 — meant that the jury only convicted Fuelberg for his role in the secret payments to Price. Gunter argued that any restitution paid to the co-op must be derived from that amount of money.
“You’ve got to look at what he was guilty of,” Gunter said. “The jury acquitted him of the actions related to Curtis Fuelberg.”
Mills agreed that the jury did not convict Fuelberg for sending money to his brother, who testified during the trial that he did lobbying work for the co-op.
“What he got convicted of was the conduct related to Mr. Price. I think that’s what the jury found, for whatever reason,” Mills said.
Gunter also argued that the $4.1 million settlement reached between the law firm and the co-op already covered the damage from the payments to Price.
Mills agreed with that argument, too, and ordered Fuelberg to pay the $126,000 to the law firm and its insurance company.
The judge’s decision was a disappointment for co-op leaders, who announced last month they would seek $8.8 million in restitution from Fuelberg.
“To the extent there exists a legal avenue for PEC to secure through civil means the $8.8 million we’ve itemized against Mr. Fuelberg, the board will have to weigh its options,” said Larry Landaker, the president of the co-op board of directors.
On Monday afternoon, prosecutors with the Texas attorney general’s office presented the co-op’s board of directors with a proposed deal that would have sentenced Fuelberg to 120 days in jail and called for a payment of $100,000 to Pedernales and 1,800 hours of community service, according to Landaker.
It also would have compelled Fuelberg to testify against former co-op outside attorney Walter Demond , Landaker said.
Meeting in emergency session, the board unanimously rejected the deal.
Demond, a former attorney with Clark, Thomas & Winters, faces trial on the same theft and money laundering charges later this year.
In a filing with the Llano County probation department, dated Jan. 6, Pedernales CEO Luis Garcia said the $8.8 million sought by the co-op included $1.4 million in incentive pay Fuelberg received in addition to his regular salary, more than $4 million in legal fees paid by the co-op in dealing with issues related to Fuelberg, and $1 million in lost interest from a bank account for a failed electric generation venture called Texland.
Assistant Attorney General Harry White argued that a 2008 audit by Navigant Inc. expanded in scope and cost due to some of Fuelberg’s actions, such as the erasure of hard drives on co-op computers he once used, and his role in Texland.
“I think it’s fair to say PEC has been harmed by Mr. Fuelberg,” White said. “There’s a lot of damage he did to the cooperative. The biggest one he did was goodwill, and there’s no way to value goodwill.”
Mills awarded $40,000 of the restitution based on the amount that was spent investigating the erased computers. The other $86,000 was based on payments to Price.
pgeorge@statesman.com; 512-392-8750
:: Share or discuss :: 2011-02-08 :: admin
