Around Town: Hindsight shows Cobb EMC acted without good faith
by Otis Brumby, Joe Kirby and Bill Kinney
Around Town Columnists
June 18, 2011 12:00 AM | 4223 views | 11 11 comments | 17 17 recommendations | email to a friend | print
THIS WEEK'S DECISIVE RULING by the Georgia Supreme Court against Cobb EMC proves that "judges read newspapers, too," quipped a local politico after reading of the decision on Monday. That is, no judge, after having read the law in question, would willingly put himself in the position of pulling controversial EMC head Dwight Brown's chestnuts out of the fire unless the law was clearly on his side. And in this case, it clearly was not on the side of Brown or the board.

The court ruled 6-1 - coming down with no heartburn, in other words - against Brown and his 10-person rubber-stamp board, saying they had violated an earlier settlement agreement when they amended the utility's bylaws to allow proxy voting. That December 2009 agreement in the 2007 suit brought against the board by plaintiffs Bo Pounds and Butch Thompson had specified that the two sides would jointly determine procedures for electing future board members. Instead, Brown's board unilaterally decided to go behind the plaintiffs' backs and allow proxy voting - a procedure that typically allows management to remain entrenched. Board elections have been postponed for three years as a result.

"We had an agreement and before the ink dried, they were changing the rules," complained Pounds in the wake of Monday's ruling.

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POUNDS AND THOMPSON'S SUIT alleged that Brown had used the EMC as a piggybank: i.e., that he had diverted assets from the publicly owned EMC without the public's knowledge to prop up corporate spinoff Cobb Energy, a private corporation of which he was a major stockholder. The settlement agreement specified that Energy was to be shut down and that it was to pay back to the EMC some $112 million that had been used to finance the ventures by Cobb Energy - most of which had lost money. That part of the agreement was fulfilled.

But on two other points the utility board appeared not to have acted in good faith when it entered the settlement. The first was in regards to the elections, as mentioned above. The other was the board's obvious reluctance to part ways with Brown. The settlement had specified that Brown would retire by the end of February and not seek further employment with the EMC. The EMC then kept the public in the dark about Brown's plans until the very last minute, cynically waiting until the early evening of the last day in February to put out a news release laying out their plans to rehire Brown.

The EMC is awaiting a ruling from Cobb Superior Court Judge Stephen Schuster on whether it can rehire Brown, arguing that he had not sought further employment there, but rather that they were seeking to continue his employment. Or in other words, he had not applied for the job, but they were going to hire him anyway, if the court approved.

Schuster had been expected to rule this week, but did not - and many court observers wonder why, considering how clear-cut the evidence was of the board's bad faith, he didn't rule from the bench in favor of the plaintiffs at the hearing's conclusion rather than letting the matter drag out even further and letting legal bills continue to mount. It was abundantly obvious to the Supreme Court that the utility was not acting in good faith; so why was it not also obvious to Schuster?

EMC lawyers offered the court the bizarre argument that it had conducted a national search for a successor, but had been unable to find a candidate as good as Brown. Really? As good as him at what? Running the EMC to the brink of bankruptcy and ruining the reputation of a utility that had been viewed for decades as a community treasure?

Indeed, Pounds and Thompson have said that a big reason they agreed to settle their suit when they did was because the EMC was in dire financial straights, and that they had no desire to hurt it, just to end its mismanagement and Brown's alleged siphoning of funds.

Brown was indicted back in January by a Cobb grand jury on multiple counts of theft, racketeering and making false statements in connection with the alleged scheme to use the EMC as a piggybank. Brown's indictment was later tossed by Judge Robert Flournoy on the grounds that it was not delivered in open court, in violation of Brown's constitutional rights. Cobb District Attorney Pat Head is now trying to have an appeal heard in the case.

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MEANWHILE, THE SUPPOSEDLY TRANSPARENT EMC also has refused to disclose how much it has paid Brown to serve as a "consultant" since February. Perhaps that's what happens when one hires, like the EMC did, an Atlanta public relations firm best known for stonewalling media members seeking information to which the public is legally entitled.

But it's no secret that the money-is-no-object EMC board has squandered millions of ratepayer dollars on legal fees and spin doctors trying to fend off the plaintiffs, who just want to make the EMC more accountable to its 190,000 ratepayers.

If Cobb EMC were a publicly traded firm, its investors would have pulled the plug on it long ago and its stock would be selling for pennies on the dollar. Few corporate boards would have put up with Brown's years-long shenanigans, or have been so eager to pay the sky-high bills for his legal team and spin doctors.

BALLOTING for the Cobb Commission chairmanship is still a year away, but you wouldn't know it from this week's dueling press releases.

Former Chairman Bill Byrne, who hopes to unseat incumbent Tim Lee in next summer's Republican Primary after a decade on the political sidelines, fired off the following: "In Cobb County, we must all work to: replace UNCERTAINTY with CONFIDENCE replace DISAPPOINTMENT with HOPE and replace DIVISIVENESS with LEADERSHIP."

He also attacked the coming T-SPLOST referendum planned next summer: "Raising taxes on Cobb's residents, FOR 10 YEARS, in the middle of a serious recession, is totally unacceptable.

"Cobb's voters can endorse a Commission Chairman that supports this tax increase proposal or a Commission Chairman candidate that opposes this proposal. My campaign for Commission Chairman will work hard to defeat this T-SPLOST proposal and focus on reducing spending to balance the budget."

Lee fired back on Friday with a strong salvo of his own, accusing the former chair of being a demagogue.

"As we meet the challenges of today and focus on tomorrow, we cannot pretend we're living in the past. The same old politicians, the same old political ego games, and the same old angry rants won't solve these problems. We can not allow Demagoguery to become a substitute for real leadership in these critical times. This election is a clear choice between a results based vision for our future and the tired politics of the past."

As you can see, neither man is mentioning the other by name. But it's a good bet that will change long before next summer.

Lee's campaign kickoff will be June 27 at the Marietta home of Dan and Mary Lou Stephens. Lee's incumbency gives him a decided advantage when it comes to fundraising. The invite list for his kickoff lists 74 names on the host committee, each of whom is expected to give or raise $1,000. The names include former U.S. Rep. Buddy and Lilian Darden (D-Marietta), Cobb EMC's Sam Kelly, Atlanta Regional Commission head Tad Leithead, zoning attorneys John Moore and Garvis Sams, former Commission Chairman Earl Smith, and former state DOT board member Johnny Gresham.

A MEMORIAL SERVICE for Bishop/Confederate Gen. Leonidas Polk will be held at 10 this morning off Beaumont Drive atop Pine Mountain in west Cobb, where he was killed by a Union artillery shell in June 1864. Period dress is encouraged. The event is being sponsored the Leonidas Polk Camp of the Sons of Confederate Veterans, according to member Martin O'Toole. ... Faith and Freedom Coalition Chairman Ralph Reed will be guest speaker at today's Madison Forum 8:30 a.m. breakfast at the Rib Ranch on Canton Road in east Cobb.

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MDJ COLUMNIST Dick Yarbrough will be the featured artist at the July 1 Marietta Art Walk, with his paintings on display at the Earl Smith Strand Theatre on the Square. He has been a student for the past four years of Kristopher Meadows of Marietta.

WHILE WAITING for Republican presidential frontrunner Mitt Romney to arrive at Kenny's Great Pies in Smyrna on Thursday, MDJ reporter Jon Gillooly cornered Mayor Max Bacon, asking if he intended to endorse Romney for president. After thinking about it for a moment, Bacon revealed that he would indeed endorse Romney. Romney then arrived and toured the pie factory with Bacon, Attorney General Sam Olens, Smyrna Mayor Pro Tem Wade Lnenicka, Chamber CEO David Connell and others, before appearing before a press gaggle.

Pointing across the room to the press gaggle, Bacon said to Romney: "That's Jon Gillooly. He's the one that got me to endorse you."

In response, Romney asked Gillooly: "Can you get a contribution out of him as well?" to general laughter from all.
Comments
(11)
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Bob Bummer
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June 20, 2011
This article starts talking about Cobb EMC and ends with Cobb County politics? The topics are very separate issues and besides David Hankerson runs Cobb County.
anonymous
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June 20, 2011
"I will be voting for Mr Lee as he has done a good job for the county."

That is pretty funny right there. Thanks for the input Mrs. Lee.
anonymous
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June 20, 2011
The 5000 employees along with family and friends are going to have strong say in this vote. Lee should be very worried and the cobb residents should be too. Faced withn that choice Byrne will be back on charge very soon. The employees cannot afford to keep Lee around any longer, but no real leaders are stepping up.
anonymous
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June 20, 2011
Lee or Byrne? Out of 700k residents, is this really the best Cobb County has to offer its voters? No wonder people are walking away from their mortgages and getting out of this county.
anonymous
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June 19, 2011
I will be voting for Mr Lee as he has done a good job for the county. We do not need Mr Byrne and his homophobic rants. Remember how we lost out on the Olympics under his watch.
Boot Tim
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June 19, 2011
Tim Lee's already kicked our seniors to the curb. Now he wants to tax us all out the wazoo next year with the T-SPLOST.

Adios Tim Lee (you've already turned Pat Mell Road into Tijuana.)

Piney Woods Pete II
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June 18, 2011
The continuing actions by the EMC board are so egregious that I can only come up with one explanation for their actions. They must be protecting themselves. There must be improprieties that have not come to light. As bad as this whole episode has been to date, I don't think we know the whole story even now.
Southern Flower
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June 18, 2011
Everything was better in Cobb County when Bill Bryne was in charge.
yeah right
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June 18, 2011
EMC lawyers were being truthful and I do not like the backwards slap at their honesty. EMC has been looking for a replacement for Brown and probably have not been able to find someone as good as him...at granting favors, setting up lackeys as fellow board members to go with whatever he says, to get zero interest loans paid back by someone else, to rob peter to pay paul, and by paul, i mean him and his fellow board members...etc. So, yeah, they probably didnt find someone as good as Brown. most people have integrity. its the ability to find a leader without any inkling of it that is not in jail that is difficult.

this is merely my opinion. others may feel different.
Dustoff
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June 18, 2011
Having been a county employee under the rule of Byrne aka Hitler's evil twin and seeing the way Tim Lee keeps spending money he does not have and the way he has treated the employees I will not vote for either one of them.
Ratepayer West Cobb
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June 18, 2011
Dwight Brown appearance is that of a Chicago mobster of the 1920's.

His demeanor and action provide the same.

Thank you Bo Pounds and Butch Thompson for caring the fight for the ratepayers of Cobb EMC.

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