[Watchdogs] Accountability at Pedernales Electric Cooperative [Editorial, Austin American-Statesman]

[Milton Hawkins]

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[From the Editorial: "And, of course, a criminal investigation by the
attorney general is underway."  How long does it take to sort out this mess!
Put some folks under oath, and give them a choice: the whole truth, or jail.
- Milton]


 

EDITORIAL


Accountability at Pedernales Electric Cooperative


Decision to reduce pension benefits for former board president was right
move by PEC, and more accountability for past performance is coming for
others involved in this mess.


Friday, February 27, 2009 

A cut of $60,000 a year in retirement pay for one former official won't make
up for the lavish pay, travel benefits and other goodies that the board and
general manager of Pedernales Electric Cooperative Inc. assigned themselves
over the last decade or so. But it's another good step toward cleaning up
the mess at the co-op, based in Johnson City.

On Monday, all but one of the voting members of the board - three "old
guard" members and the three reformers - voted 6-0 to take back a 2001
resolution that had almost doubled the pension of W.W. "Bud" Burnett, the
board's president, who continued serving until he retired last year after
nearly 40 years on the board. (The board's old guard current president, R.B.
Felps, abstained.)

Burnett was president of the board, but he was also a paid employee of the
co-op whose title was "coordinator." Officially, he was in charge of the
co-op's relations with government agencies. But as has since been
determined, he had no office, no computer, phone, files or assigned duties.
In short, it's not clear he did any actual work to earn either his pay -
$181,000 in 2007 - or his pension.

The board this week also shut down a money-losing subsidiary from the old
regime, Envision Utility Software Corp., and ordered its Albuquerque, N.M.,
office closed. The company, a brainchild of former General Manager Bennie
Fuelberg, has piled up losses of about $70 million since 1990.

Still, there's more to clean up.

One is the official audit for the co-op's 2007 budget year by KPMG, which
has been the outside auditor for the past 11 years. An in-depth, outside
review of the co-op's last 10 years of business by Navigant Consulting Inc.
of Chicago questioned whether the co-op and KPMG had been correct in
assigning to co-op members' equity a value for the underground power systems
built by residential developers.

Absent such "creative accounting methods," Barry Smitherman, chairman of the
Public Utility Commission, has told the American-Statesman's Claudia
Grisales, the co-op's financial picture would look "pretty unhealthy."

With the Navigant study in hand, KPMG is still working on the 2007 audit. We
look forward to the accounting firm's explanations.

Also still to be resolved are the "billing irregularities" of at least
$510,000 with the co-op's former outside law firm - Clark, Thomas & Winters
of Austin. The money went to relatives of two co-op officials. The co-op has
hired a Houston law firm to examine those billings, identified by Navigant.
And, of course, a criminal investigation by the attorney general is
underway.

It's been a long time coming, but accountability is taking hold at the
Pedernales co-op, even for those who already have left.

 


 


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Find this article at: 
http://www.statesman.com/opinion/content/editorial/stories/02/27/0227pederna
les_edit.html?cxtype=rss
<http://www.statesman.com/opinion/content/editorial/stories/02/27/0227pedern
ales_edit.html?cxtype=rss&cxsvc=7&cxcat=45> &cxsvc=7&cxcat=45

 

 

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