[Watchdogs] Former PEC chief Bennie Fuelberg sentenced to 300 days in jail and to pay $126, 000 in restitution, but not to the co-op [Patrick George, AAS]

[Milton Hawkins]

Former PEC chief Bennie Fuelberg sentenced to 300 days in jail
Judge also orders ex-general manager to pay $126,000 in restitution,
but not to the co-op.
By Patrick George

AMERICAN-STATESMAN STAFF

Published: 9:30 p.m. Monday, Feb. 7, 2011

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 at statesman.com; 512-392-8750
Find this article at:

http://www.statesman.com/news/local/former-pec-chief-bennie-fuelberg-sentenced-to-300-1239365.html

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