AROUND TOWN:'Throw the Rascals Out'
by Otis Brumby, Bill Kinney, Joe Kirby
Around Town Columnists
August 18, 2009 01:00 AM | 829 views | 0 0 comments | 6 6 recommendations | email to a friend | print
Otis Brumby, Bill Kinney, Joe Kirby
Otis Brumby, Bill Kinney, Joe Kirby
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BUTCH THOMPSON AND BO POUNDS and their two-year effort to oust Dwight Brown as head of Cobb EMC and Energy recently picked up a high profile radio talk show host as an ally.

WSB radio consumer advocate Clark Howard called during his July 20 show for Cobb Countians as part of "their civic duty" to "throw the rascals out at Cobb EMC."

If you are not one of Cobb EMC's 200,000 customers in the five county area, the normally mild-mannered Howard said, "just count your blessings that you don't have to deal with what's gone on there with all the money that's been siphoned off and absconded by insiders who set up a for-profit entity known as Cobb Energy and have run off with the money of the citizens of Cobb County who are members of the EMC."

Howard was apparently set off by what he said was an EMC-paid-for-poll that EMC executives used to convince Cobb EMC members to keep the current directors that have steadfastly supported Brown, who Thompson and Pounds are trying to replace. Brown has a contract as CEO through 2010, but others want him gone sooner.

Howard told his listeners that he was aware of District Attorney Pat Head's criminal investigation into Brown and several directors and admitted that they are innocent until proven guilty, but went on to say "the stink there is so severe, I cannot believe (it)."

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COURTHOUSE WATCHERS, MEANWHILE, are speculating it will be mid-September before DA Head wraps up his criminal investigation and decides whether to seek a grand jury indictment for racketeering, theft and violation of Georgia's RICO statutes.

Those charges are similar to Thompson and Pounds' allegations of breach of fiduciary duty, gross mismanagement, waste of corporate assets and unjust enrichment in relation to the management and operations of the co-op and Cobb Energy. Their October 2007-filed lawsuit was settled in December 2008.

As a result, Cobb Energy was brought under the umbrella of the co-op that it created more than 10 years ago. Brown's remaining management contract, as leader of Energy, was bought out. He remains CEO of the co-op, but must retire by February 2011. All Energy subsidiary companies not related to utility operations - which were bleeding cash - were to be sold or liquidated.

Just days after the settlement, however, the co-op made by-law amendments that plaintiffs believed were in violation of the settlement. Cobb Superior Court Judge J. Stephen Schuster ruled that those amendments were allowed and plaintiffs have appealed to the Georgia Court of Appeals. Due to the appeal, the co-op has postponed the September 2009 annual meeting of members, where the election of EMC directors was to occur. Meantime, the 2008 election of directors has still yet to occur due to the legal battle.

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HOWARD'S PARTING ADVICE to WSB listeners and EMC customers was once the court allows board elections to occur, "remove every - every - incumbent board member of Cobb EMC, and get the stench out of there."

Brown and his board contend they have been demonized by Thompson and Pounds, who they claim want control of the EMC for their own egos and for personal gain. They also contend that when the for-profit Energy was started in the 1990s there was a real threat that, due to deregulation of the electric industry, an Enron-type outfit could easily take over the co-op on the cheap.

Despite the losses racked up by Energy's spinoff endeavors into mortgage, burglar alarm and tree trimming companies, Brown supporters say EMC's electric rates have remained low compared to other utilities.

Although the legal jousting over election of EMC directors is expected to be tied up in the courts for months, EMC's blue-ribbon King & Spaulding Atlanta lawyers handling the by-law litigation, and his public relations firm, recently asked to meet with the MDJ to talk about Thompson and Pounds' appeal.

When MDJ editors agreed to meet on condition that Brown, who has been low-profile and out-of-sight since the litigation erupted in the fall of 2007, participate in the interview, his lawyers said thanks, but no thanks.

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