Embattled Brown indicted again
by Kim Isaza
newseditor@mdjonline.com
July 07, 2011 08:27 PM | 7819 views | 20 20 comments | 35 35 recommendations | email to a friend | print
MARIETTA — A unanimous Cobb County grand jury indicted retired and embattled Cobb EMC head Dwight T. Brown on 35 felony criminal counts Thursday. Ironically, the indictments were read in open court before Superior Court Judge Robert Flournoy III, who in March threw out a previous criminal indictment against Brown.

The 89-page indictment accuses Brown of a pattern of racketeering activity dating to 1997, when he, “together with directors of Cobb EMC … devised and intended to devise a scheme to acquire and maintain interests in Cobb Energy, consisting of preferred and common stock, control of Cobb EMC and Cobb Energy, and personal property, including United States currency.”

But Brown is also now facing charges he threatened and intimidated witnesses by participating in filing a civil suit in February, following his Jan. 6 indictment, against people “who allegedly cooperated with the prosecution with regard to the prosecution of Dwight T. Brown and the investigation of Cobb EMC directors.” Brown and the other plaintiffs quickly dropped that lawsuit.

The indictment also lays out multiple charges of theft involving SCANA Energy fees, and making false statements and writings for each year between 1998 and 2007; conspiracy to defraud Cobb County government and the Cobb County School District; theft involving meter-reading fees; theft involving $3 million in loans Brown and his wife used to buy stock in Cobb Energy; and theft of dividends paid on that Cobb Energy stock.

Brown was booked in to Cobb Jail just before 6 p.m. Thursday and released on a signature bond at 6:27 p.m. Former Gov. Roy Barnes, who is representing Brown in the criminal case, declined to comment.

Most, if not all, of the charges accuse Brown of acting “in concert with directors of Cobb EMC,” though none of the 10 directors have been charged.

As for whether such charges are forthcoming, District Attorney Pat Head quoted an old Doris Day song in saying “whatever will be, will be. The future’s not ours to see.”

The latest indictment is a mix of new charges and some contained in the January indictment, the tossing of which remains on appeal to the state Court of Appeals, Head said.

All together, the latest charges accuse Brown of diverting at least $75 million in assets away from Cobb EMC and its member-owners and into the coffers of the for-profit Cobb Energy, and some into his own pockets.

Prosecutors took special care in the indictment to fend off statute of limitations defenses, naming 34 individual Cobb EMC members who are over the age of 65 as victims in the case. Under Georgia code section 17-3-2.2, if the victim is 65 or older, the limitations clock does not begin to run until the violation is reported or discovered by law enforcement.

Among the victims named in the indictment are former Congressman Fletcher Thompson; Edgar “Bo” Pounds, one of the plaintiffs who sued the EMC in 2007; Ralph Frey; Jimmy Durham; and Marietta lawyer Hilton Dupree.

As for the charges of influencing and threatening witnesses, prosecutors allege Brown “conspired with directors of Cobb EMC and others to file a lawsuit against persons who allegedly cooperated with the prosecution” of Brown and the investigation of Cobb EMC directors. That lawsuit “sought actual damages, punitive damages and attorney fees against persons named in that action for allegedly cooperating with the State of Georgia in … bringing criminal charges against the accused,” according to the indictment, and Brown, “with intent to hinder, delay, prevent, and dissuade persons from assisting in a criminal prosecution, directly or indirectly threatened, caused, and attempted to cause economic harm to the defendants” by filing that civil lawsuit.

In explaining the nature of the case in Thursday’s indictment, prosecutors note that days after Cobb Energy was formed on Sept. 3, 1997, Brown stood before the Cobb EMC members at the 1997 annual meeting and said, “We will not allow Cobb EMC to subsidize this new company,” and “this other company is created to work for you and to work for Cobb Electric Membership Corporation.”

But less than a year later, according to the indictment, “all of Cobb EMC’s employees were working for Cobb Energy, Cobb Energy was being paid a premium to employ Cobb EMC’s former workforce, Cobb EMC’s meters were owned by Cobb Energy, and all of the revenues from the SCANA Contract were flowing to Cobb Energy. In short, Cobb EMC was subsidizing Cobb Energy to the tune of millions of dollars per year, a situation that continued for a decade.”

Back on Jan. 6, Brown was indicted by an earlier grand jury on 31 counts of theft, racketeering, fraud and conspiracy to defraud government entities. The indictment was delivered before Superior Court Judge George Kreeger in his courtroom in the new Superior Courthouse, which was not yet fully open to the public.

That indictment alleged that Brown used Cobb Electric Membership Corporation as a piggybank to fund various operations and activities of the for-profit Cobb Energy firm he created, without approval by the cooperative’s members, as required in EMC’s bylaws. Without revenues from these various business dealings by Cobb Energy, funded by the co-op’s members, Cobb Energy could not have paid Brown millions of dollars in salary and compensation, dividends in preferred stock, and forgiven a $3 million loan Brown used to purchase the Cobb Energy stock, according to the indictment.

In March, Superior Court Judge Robert Flournoy III threw out Brown’s indictment on grounds that it was handed down in a courtroom that was not open to the public. That decision has been appealed, and is scheduled to be heard by the state Court of Appeals in October.

And though the 10 directors of Cobb EMC have not been charged with any crimes, they are still heading to court for a hearing regarding the settlement agreement in the 2007 derivative lawsuit.

Cobb Superior Court Judge Stephen Schuster ordered all 10 Cobb EMC directors to appear in his courtroom at 9 a.m. Aug. 12, after rejecting their attempts to rehire Brown as the EMC’s chief executive officer.

This week, sources told the Journal the directors are now interested in naming Stan Wise, a Public Service Commissioner, to replace Brown as CEO.

After that story broke Thursday morning — with critics insisting Wise is Brown’s “hand-picked successor” — Wise tried to distance himself from his longtime friend.

“The next CEO, whomever that may be, needs to start the healing process and move this EMC forward with some reforms,” Wise said in a statement to the Journal. “The Co-op needs a plan for open and legitimate Board elections and better communication and interaction with member-owners. The integrity of the electoral process that is adopted cannot be questioned. The Co-op needs to move as expeditiously as possible on these matters and in harmony with the Court. These reforms will go a long way towards giving comfort and assurance to the dedicated employees who have made this Co-op great for a long time.”

Brown retired from Cobb EMC on Feb. 28 as part of a Dec. 2008 settlement. He has since served as a consultant until Schuster ruled that Brown’s tenure “at Cobb EMC and its subsidiaries ended February 28, 2011” and “cannot be renewed, revived or repackaged.”
Comments
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Ernest Norsworthy
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July 22, 2011
Is this the same EMC that built the defective trunk line around the county? As I recall, there was a known payoff in the huge water pipe deal. Two people, now dead, told me they knew but would not tell who got the money for fear of bodily harm.

Is the Brown case a carryover from that era?
Concerned EMC Member
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July 09, 2011
The Saturday paper "Around Town" reported that EMC PR Veep Sam Kelly said Friday that Brown is still working for the utility as a consultant. He added that there will be a board of directors meeting next week, but that the date has not been set.

This is really unbelievable. Mr. Brown should leave Cobb EMC immediately and pay back ALL payments paid to him as a consultant. How do we stop this man and board??
AcworthSage
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July 09, 2011
As for the Director's, all hand picked by Brown,

they are accomplices and they were all receiving the sweetheart compensation and outlandish lucrative retirement monies, to go along with his vile schemes. The new filing hangs them all. As for anyone hand picked by Brown to follow in his steps I say "an unlikely chance, Mr. Brown." Oh, and finally, to those few who have brought this scandal to light and who so diligently have fought

this injustice I say, well done faithful servants

for your honorable and selfish actions you all are noble people. Bless you, each and every one.
Want to know
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July 09, 2011
How does one get booked into the Cobb County jail at 6:00 and released 27 minutes later? Is this the way it works for everyone that is booked into the Jail? It doesn't. Everything must have been staged before the booking to make it move this fast. It is obvious to anyone looking at this situation to know that games are being played and no one is stopping it. We need to bring in the group that did the report that finally exposed the Atlanta Public Schools cheating cover up to get to the bottom on what is going on here.
EMC Hostage
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July 08, 2011
This is great news. Now we need to seen Brown in the clink. Hopefully we will soon see indictments for the Board. I think Dwight Brown, Larry Chadwick, David McGinnis, David Herndon, Don Barnett, Sarah Brown, Al Fortney, Kay Anderson, Johnny Gresham, R.J. Patel and Henry Balkcom would all look great in orange jumpsuits. It's a shame that we no longer have chain gangs in Georgia. Git em Pat Head!
Bob Johnson
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July 08, 2011
Look at the character of Stan Wise. Even though this is a hostile article that attempts to tar him with the past executives, he remains willing to step up to the plate and be a reform minded CEO. This is exactly what Cobb EMC needs amid the midst of this ongoing scandal - a man of integreity who is part of the solution, not part of the problem. Hire Wise, call an election, replace the Board, and move on.
scottacworth
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July 08, 2011
anybody notice that the chairman of the board is also chairman of a coal company, and cobb emc is partners in a group building a new controversial coal plant instead of using natural gas. dwight brown's son works for procore which surprisingly has a huge contract with cobb emc.

vote out the entire board, fire whatever CEO they hire unless it is chip nelson, I'm actually surprised chip has lasted this long, an honest man surronded by crooks on every side
ProCore Routine
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July 08, 2011
To flopac-ProCore was the Staffing arm of Cobb Energy. Procore not only provided practically all the customer service representatives for Cobb EMC, ProCore was a staffing agency for other companies, just like any other national staffing agency. ProCore employees at the ProCore office at the corner of Bells Ferry Rd. & Cobb Parkway is a call center. They answered customer service calls for Cobb EMC along with at least 15 other energy companies and city power departments in various states. You could have a ProCore employee taking incoming calls for Cobb EMC and another utility in Florida. For example, the ProCore cust service reps took calls for Greystone Power. A ProCore employee had to look at their computer screen to know how to answer the phone, so they would not answer with the wrong company name.

So when someone called Cobb EMC to connect power or disconnect power, or to talk about trouble with their bill, most likely they were speaking with a ProCore employee, NOT a Cobb EMC employee.
anonymous
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July 08, 2011
ROY,ROBERT,BROWN & HEAD. I SMELL A RAT
Fact Time
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July 08, 2011
Thank you grand jury for indicting this "good ole boy salesman" again. Now Pat Head needs to do his job or step aside & let Pearlburg or someone else finish the job. At least some of the members of the Board, especially long term member, should be prosecuted also. All Board members are guilty of stupidity at the very least. They should resign immediately & wait their next punishment.

The indictment in this article talks about EMC employees being converted to Cobb Energy employees. After Cobb Energy was formed, the vast majority of people being hired were under the ProCore division of Cobb Energy. These were not Cobb EMC employees. These were employees of ProCore who worked down the road at the ProCore headquarters at the corner of Bells Ferry Rd. & Cobb Pkwy. And the boss was Greg Steele.

All of the customers, who thought you were speaking with a Cobb EMC employee to start service, stop sevice, report an outage or talk about your statement, were fooled for many years. They were ProCore employees of Brown and his Cobb Energy umbrella. ProCore employees had different health insurance, different vacation benefits, different sick days and most definitely a much stricter work environment than a Cobb EMC employee had. How about scheduled bathroom breaks & don't even think about going outside the schedule?

It is way, way past time for Brown to face the music along with the Board.

flopac
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July 08, 2011
If Energy is for profit, why did this all start with ProCpore? Is ProCore a sub of EMC or Energy? If ProCore and Energy are one in the same then why does Energy get all the pay and benefits while ProCore gets all the volenteer work and public service?

There is a coal plant underway, so who on the board will benefit along with Brown and I bet Wise when the plant goes online?

Seems as though some Energy, since they treat themselves as the Elite must have known or in on some of Browns rackets, besites Energy is nothing but managers so wouldnt they see things too?
Pat H
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July 08, 2011
Brown was aided and abetted by each member of the Board of Directors. All should be indicted, their pay suspended including any retirement subsidies, no money from electric rate payers for their lawyers. Even money from the late Boone should be sought from his estate.
dmkochatl@yahoo.com
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July 08, 2011
Again--Pat Head inappropriate comments "How long is a String" & "What will be will Be" shows his lack of

seriousness for trying this case for Cobb Cty citizens. Time for Pat to retire early & let Asst DA handle the case...
Cobb Citizen
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July 08, 2011
I find it extremely disgusting that our judicial system plays this game w/ this man. If you look at the Cobb Co. Jail website, you will see yet again, this man was released on his own recognizance within 1hr. of him being arrested. When he was orignally indicted he was released in the same manner. His hands are clearly in our counties political scene. Any other "lay man" would not receive such preferential treatment.
Julie Smart
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July 08, 2011
AMEN!!!!!
Call Roy
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July 08, 2011
Roy Barnes is a master---he'll pull out some more tricks and find some more loopholes to let Brown beat the rap---book it!
DavidPark
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July 08, 2011
This is good news. Attorney, Pitts Carr has performed with extraordinary skill in getting the case to this point. The members of Cobb EMC owe him a large debt of gratitude. He has been working against some pretty high-powered litigators on the other side. Thank you Mr. Carr!

Now comes the task of replacing the Board with some members we can trust to direct management in the interest of the membership and the employees. This task will be persued aggressively, especially if the Board selects Brown's pal, Stan Wise, as the new CEO.

The Cobb EMC Owners Assn., LLC has recently been formed to recruit and support the campaigns of candidates to serve on the Board. Thus far, nine potential candidates have been identified for the ten slots that will become open for re-election.

BeamMeUpScottie
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July 08, 2011
“together with directors of Cobb EMC … "

Why weren't they charged also? Can the Judge put them in jail on August 12th? I think I'll show up for that one!
anonymous
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July 07, 2011
Hopefully Roy Barnes can man up this time, put away his bag of cheap tricks, and actually try to present a defense in response to the charges.
Sandor
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July 07, 2011
Public to private sounds like a very incestuous relationship between two groups. This is the problem with the quasi private-public relationship and the hap-hazard ways the citizens of this county are governed. Please pick your poison in regards to the sector you wish to serve; for profit or public servant.

Regardless, Wise will take the reins and the same pattern will repeat itself.
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