[Watchdogs] Former PEC manager concealed payments to brother [SA Express News]

[Milton Hawkins]

Former PEC manager concealed payments to
brother<http://www.mysanantonio.com/news/local_news/former_pec_manager_concealed_payments_to_brother_111076989.html>
*By Zeke MacCormack
*<http://www.mysanantonio.com/email_us?contentID=111076989>-
Express-News
Web Posted: 12/01/2010 12:00 AM CST

FREDERICKSBURG — Bennie Fuelberg's lawyer told jurors Tuesday that his
client erred by hiding his nepotism as general manager of the Pedernales
Electric Co-op, but committed no crimes.

Fuelberg, who retired in 2008, was accused the next year of conspiring with
former PEC General Counsel Walter Demond to secretly funnel PEC funds to his
brother Curtis Fuelberg and another man.

As his trial opened Tuesday, Fuelberg, 66, pleaded not guilty to the
first-degree felony charges of theft and misapplication of fiduciary
property, and to a second-degree charge of money laundering.

The trial was moved here due to extensive publicity about the case in
Johnson City, where the PEC has its headquarters.

The trial of Demond, who faces identical charges, is set for March in
Boerne.

In his opening statement, prosecutor HarryWhite said Fuelberg, knowing the
PEC board wouldn't approve hiring his brother as a lobbyist, convinced
Demond's law firm to hire Curtis Fuelberg in 1996 and to bill the PEC for
his $5,000 monthly salary.

He said the defendant struck a similar deal in 2003 for the firm Clark
Thomas & Winters to pay $2,000 a month to William Price, a Lampasas lawyer
whose father, E.B. Price, was member of the PEC board of directors for 30
years until 2008.

The deals constituted theft, the assistant state attorney general told the
jury, because PEC directors were unaware utility funds were flowing to the
men and therefore could not have effectively consented.

He said Fuelberg, the PEC's general manager for 32 years, breached his
fiduciary duty by misusing PEC funds, and laundered the money through the
law firm to conceal his misdeeds.

Defense lawyer Charles Grigson said Fuelberg erred by concealing from the
PEC board the payments to his brother made from 1996 to 2007.

But he claimed Fuelberg acted within his authority, violated no policy or
agreement, and said Curtis Fuelberg's work had benefitted the PEC.

He told jurors Fuelberg used deception only because openly hiring his
brother would appear unseemly — even though legal — and also might have hurt
relations with then-PEC Board President Bud Burnett.

Burnett, a former Hays County judge who headed the PEC board from 1976 until
retiring in 2008, had received a stipend since 1987 to serve as the PEC's
lobbyist but was ineffective in the role, according to Grigson.

Bennie Fuelberg needed someone he could trust “to keep their ear to the
ground” in the Legislature, said Grigson, who indicated the defendant
intends to testify.

“He'll tell you from the witness stand that it was a bad decision” to
conceal the payments to his brother, he said.

Grigson also claimed Fuelberg didn't know the PEC was paying Price's salary
through inflated monthly invoices from the Austin law firm from Sept. 2003
until March of 2007.

Price, the first witness to testify, said Demond asked him about being on
retainer for his firm, but gave him few tasks.

Price, who was retained by Demond's firm until early 2008, said he was
unaware at the time that the PEC was billed for about $58,000 of his fees.

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-- 
Milton Hawkins  milton.hawkins at gmail.com
P.O. Box 1502
Johnson City, Texas 78636-1502
830-868-9075
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