[Watchdogs] Special grand jury takes up utility inquiry [Austin American-Statesman]

[Milton Hawkins]

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PEDERNALES ELECTRIC CO-OP


Special grand jury takes up utility inquiry


Jurors quizzed about witness ties as testimony begins before specially
picked panel.


By Claudia Grisales
<http://www.statesman.com/news/content/news/stories/local/02/06/mailto:cgris
ales at statesman.com> 
AMERICAN-STATESMAN STAFF
Friday, February 06, 2009 

JOHNSON CITY - A half-dozen lawyers cooled their heels outside a courtroom
at the Blanco County Courthouse on Thursday as a new grand jury
investigating the Pedernales Electric Cooperative heard testimony all day
long.

The lawyers had come with their clients, who were the first witnesses to
appear before the grand jury that was impaneled Wednesday to examine
potential criminal violations by former officials at the Johnson City-based
co-op, the largest member-owned electric utility in the country.

Those testifying included Will Dahmann, former deputy general manager of the
co-op; Mike Vollmer, its chief financial officer; and Rory Boatright, who is
listed as a director at Cattleman's Bank and has an office at the Moursund
law firm in Round Mountain - both entities that have had close ties to
Pedernales. They testified alone, but Boatright left the grand jury room
several times to consult with his lawyers.

A fourth witness declined to identify himself to a reporter, as did his
attorney, Evan Stubbs of Lampasas. Later, Stubbs acknowledged that he
represents William Price, son of former Pedernales director E. B. Price.
According to a review of Pedernales' books by Navigant Consulting Inc., the
younger Price received payments "on the co-op's behalf" through its law
firm, Clark, Thomas & Winters. Martha Dickey, an attorney hired to represent
the law firm, was also at the courthouse.

In an unusual move requested by Hill Country District Attorney Sam Oatman,
state District Judge Dan Mills picked two grand juries - one for routine
criminal matters and the other for the Pedernales inquiry, which Oatman
began a year ago. It was taken over by the Texas attorney general's office
in August.

None of the seated jurors appears to have direct ties to the co-op, an issue
that apparently led to the early dismissal of the last Blanco County grand
jury, which took no action on the case.

In an effort to ferret out potential conflicts, Mills read from a list of
more than three dozen names and asked if jurors had any connection to the
individuals. When a juror asked who the individuals were, Mills said they
were either subjects or witnesses in the Pedernales case.

They included former co-op General Manager Bennie Fuelberg. Attorneys Chris
Gunter and Terry Kirk, who identified themselves as lawyers for Fuelberg,
observed the jury selection Wednesday. Both are listed as Austin criminal
attorneys.

When Oatman began the Pedernales investigation, he cited a state law that
says executives of corporations have a fiduciary duty to their owners.
(Pedernales is a nonprofit corporation.)

According to Texas Penal Code Section 32.45, "A person commits an offense if
he intentionally, knowingly, or recklessly misapplies property he holds as a
fiduciary or property of a financial institution in a manner that involves
substantial risk of loss to the owner of the property or to a person for
whose benefit the property is held."

The provision can be difficult to prove, because it can be tricky to
establish what "misapplies" means, legal experts say.

An in-depth examination of the co-op's books by Navigant Consulting produced
a report in December that documented a series of questionable actions at
Pedernales, including the destruction of documents and payments to relatives
of top co-op officials.

Oatman said he's optimistic about the outcome of the Pedernales
investigation. "I'm very pleased with what the attorney general's office is
doing," he said.

cgrisales at statesman.com; 912-5933

 


 


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Milton Hawkins    830-868-9075

 

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