Tone Deaf PEC Board May Sacrifice Hewa to Protect Oakley

By Larry Landaker

“My continued service as CEO has become impossible because of this situation. I am in the process of providing the board details.”

“Personally witnessed retaliation”

“Conditions for some of our key employees in the organization have become untenable because of the conduct of the board. Those of us who spoke up to support minority employees and to object to racially insensitive comments were assured that retaliation would not occur. This has not been the case,”

“Board response to concerns of employees has been ‘inappropriate.”

___John Hewa

hewa

CEO John Hewa

Whether John Hewa has actually tendered his resignation at PEC is unknown. The cooperative is officially silent other than to confirm that Mr. Hewa has not resigned. External communication on the matter has apparently been placed on lockdown.

Whether Mr. Hewa resigns or is fired, he is clearly on his way out the door. At the board meeting on Monday, May 15, Mr. Hewa spoke briefly before he was cut off by Board President Emily Pataki,  who claimed Hewa’s comments were “not accurate” and that Hewa “should not be speaking on these matters.”

Hewa accused board members of retaliating against employees for speaking out against Board Member James Oakley’s, “time for a tree and a rope” comment widely reported around the world last November.

Video and a published story in the Austin American Statesman, Thursday, May 18, 2017 is found here:

http://www.mystatesman.com/business/pedernales-ceo-says-plans-resign-cites-board-retaliation/ZkVwNuvTW69Sx9Mu9gHpvM/

Hewa’s departure would be considered an enormous loss by most employees and PEC members. Widely respected in the utility industry and hired by a unanimous majority in 2013, Mr. Hewa has enjoyed a generally smooth tenure. Under his direction since 2013, rates have been lowered by 17%, debt has been reduced, service has significantly improved, new technology empowering members to save electricity is in place, and metrics that compare PEC performance to other similar providers have soared.

Hewa’s likely departure was fully avoidable. In failing to deal forthrightly with Mr. Oakley’s incendiary racist comments, which most observers took to mean a lynching, the story gained legs and ultimately divided the cooperative internally. Many called for Mr. Oakley to resign, citing the practices of large corporations, municipalities, school boards and other elective bodies to quickly sever themselves from similar comments.  It is inescapable that PEC has chosen to sacrifice its exceptional CEO rather than remove the offending party, Mr. Oakley. To be clear, they have chosen Oakley over Hewa.

Mr. Hewa’s loss will likely register as one of the most profound blunders by any board in PEC’s 79-year history.  It has taken PEC well over 10 years to retain a measure of industry reputation and public confidence following the demise and ultimate conviction on fraud charges of  a former General Manager, Bennie Fuelberg. The damage to the cooperative’s reputation resulting from Mr. Oakley’s comments will run just as deep, take years to repair and will likely result in a flood of talent loss and a negative financial impact. The PEC Board of Directors, in protecting one of it’s own, James Oakley, appears willing to endorse a standard of values quite apart from the cooperative’s  own stated values.

 

CEO Hewa Silenced. Board Strong-arms Director Clement.

PEC CEO John Hewa

By Larry Landaker

It was a stunning scene. CEO John Hewa had something he wanted to say at yesterday’s meeting of the PEC board of directors. In the first ten minutes of the meeting he was given the floor to present his routine monthly report. He mentioned something about speaking on a “somber” note. Then, his mere utterance of one word, “retaliation”, stirred General Counsel Don Ballard to tap the shoulder of Board President Emily Pataki, who stopped Mr. Hewa cold in his tracks. The duly empowered chief executive of the nation’s largest electric cooperative was silenced and not given the floor again for the entirety of the day.

After Mr. Hewa’s interruption, Board Member Cristi Clement, requested a short recess in order to determine the legal reasoning behind this act of prior restraint. Yet, when the Board reconvened, nothing was mentioned. No reasons were given.

It remains unknown what Mr. Hewa intended to say. However, it seems the word “retaliation” is a sensitive subject around PEC. It is sensitive because of the accusations surrounding board member James Oakley’s incendiary, “time for a tree and a rope” comment, now widely known.  Both the PEC board and the Texas State Commission on Judicial conduct have reprimanded Mr. Oakley for his comments and have provided further disciplinary measures and guidance for Mr. Oakley to follow.

Members would be within their rights to know exactly why Mr. Hewa was silenced in such a heavy-handed way. Mr. Hewa has always spoken in a controlled and professional manner. He has always been exceptionally well-briefed. He has always demonstrated a sensitivity to legal constraints. PEC needs to explain why Mr. Hewa was muzzled.

As was reported yesterday on PECTruthwatch, sources within PEC are alleging that Mr. Oakley has disregarded the warning he was given in the disciplinary resolution passed by the PEC board in January, 2017. That warning explicitly said, “No member or employee should be subject to any actual or perceived, act of retaliation for their individual input into the Cooperative’s review of this matter. Retaliation is strictly prohibited under PEC policy; and the board authorizes and encourages PEC management to act swiftly under the current PEC policy and procedures with the reporting and immediate addressing of any act of retaliation.”

It now appears that the fate of one of the nation’s most respected electric CEO’s is in the balance. Rumors abound. Is he about to be fired? Will he quit? Is he seeking a settlement? Does he have grounds to sue the cooperative? There are no answers at this hour. Thus far,  Mr. Hewa remains employed at PEC.

emily pataki

Board President Emily Pataki

It appears, to PEC observers, including PECTruthwatch, that Board President Emily Pataki and her board majority are eager to accept Mr. Oakley’s behavior and move ahead at all costs. They seem eager, that is, to sweep the entire Oakley matter under the rug.

During yesterday’s meeting, Director Cristi Clement attempted to place a resolution she and Director Kathy Scanlon wished to offer for consideration. She was blocked from doing so in a parliamentary move.  Her resolution, buttressed by the findings of the State Commission on Judicial Conduct,  intended to ask the Board to remove Mr. Oakley “for cause” that includes violations of Director’s fiduciary duty or Code of Conduct/Ethics policies or the “bringing of such disrepute or disparagement to the Cooperative by unacceptable personal conduct” per the Bylaws. Clement was told that her resolution was filed too late. In fact, her resolution was filed 30 minutes before the deadline but was apparently ignored by the General Counsel, Don Ballard, until after the witching hour. Failing to respect her peer’s timely filing, Pataki ruled the Clements-Scanlon resolution out of order.

On matters such as this the Board President may assume some latitude to allow the resolution. Even the general counsel admitted that it was filed before the deadline, just not posted by him. It is a splitting of fine hairs that the resolution was not allowed. President Pataki chose to strong-arm two of her fellow directors.

Below is the resolution Ms. Clement intended to introduce but which must now wait until the June annual meeting:

cristi oakley rev 3 cjc (1)

James Oakley: PEC Wrecking Ball

A.B. Walters

By Larry Landaker

James Oakley likes to surround himself with wannabee power players. He has a friend named A.B. Walters who moved to Burnet County in 2010. Local media stories at the time compared him to “Stovepipe Johnson”, a confederate brigadier general, Indian fighter and the founder of Marble Falls. Flattered though he may be about the comparisons, Mr. Walter’s lips drip with venom. At the December 2016 PEC meeting, Mr. Walters rose to the podium in defense of Director Oakley’s now-infamous “time for a tree and a rope” comment. Walters made sure the audience knew how wealthy and successful he was and how powerful he’d like to be before hurling his threat directed at senior PEC management. “Better dust off your resumes”, he intoned.

Unclear at the time was just how quickly those words would prove to be a harbinger of things to come.

Because of Mr. Oakley’s continued presence on the PEC board, the cooperative sits precariously near the edge of chaos, turmoil and dysfunction. The workforce is distressed–many are deeply troubled. It is hard to know who is more to blame: the Board of Directors or the board member they have enabled, James Oakley. At stake is the future leadership of PEC at its highest levels. It is clear that no CEO of integrity can function under a board that seems willing to operate in toleration of flagrantly racist comments publicly made by one of its own and without respect for the delegation of authority given the CEO. In fact, the current CEO (and other employees) may have been retaliated against by Mr. Oakley precisely for speaking or acting in opposition to Mr. Oakley’s “time for a tree and a rope” remarks, or for for protecting employees from them. One notable example of Mr. Oakley’s interference was when the communications department wrote a press release intended to separate the cooperative’s values from those of Mr. Oakley’s comments. Mr. Oakley ordered the press release taken down.

Mr. Oakley has become a one-man wrecking ball. Sources within PEC have informed PECTruthwatch that Mr. Oakley was not happy with the PEC Board Complaint Committee’s punishment (warning and removal of his title as board vice president) imposed in January, 2017 and proceeded to disregard the warning he was given in a resolution passed by the Board. That warning explicitly said, “No member or employee should be subject to any actual, or perceived, act of retaliation for their individual input into the Cooperative’s review of this matter. Retaliation is strictly prohibited under PEC policy; and the Board authorizes and encourages PEC Management to act swiftly under current PEC policy and procedures with the reporting and immediate addressing of any action of retaliation.”  Sources within PEC have advised PECTruthwatch that Mr. Oakley may have engaged in such retaliation against specific employees.

James Oakley

Following PEC’s action taken against Mr. Oakley, the Texas State Commission on Judicial Conduct concluded its own review and consideration of the matter and made its recommendations. Mr. Oakley is the sitting Burnet county judge. Included in their recommendations was a strong reprimand and the order of additional training hours and sensitivity counseling for Mr. Oakley.

The Commission took pains to note that Mr. Oakley’s conduct “cast reasonable doubt on his capacity to act impartially in the performance of his duties as a judge. They said he cast discredit on the judiciary and thus violated the Texas Constitution.

It is not known whether the PEC Board, the Complaint Committee or general counsel ever examined the Texas Constitution or, for that matter, Title 7 of the Civil Rights Act of 1964, for similar language about retaliation.

CEO John Hewa

At risk is the utterly needless loss of an industry-respected CEO and his senior team. At further risk is the stability of a dedicated workplace, still un-recovered from the turmoil fomented by the incendiary, “time for a tree and a rope” comment which was given national and international attention. At risk is the safety of employees who now operate in fear from opposing Mr. Oakley. At risk is the relative peace and harmony of an effective, highly trained workforce, some of whom are now working in contentious environments. At risk is a huge financial loss to PEC members, possibly in the millions of dollars, resulting from replacing personnel, not to mention the potential for lawsuits and further loss of cooperative reputation.

This entire debacle has resulted from the Board’s failure to act when it should have—within days of Mr. Oakley’s comments. Instead, under weak board leadership, it dithered and allowed itself to be intimidated by Mr. Oakley.

Mr. Oakley’s comments have now become branded onto the public image of PEC. A simple Google search of the name, “Pedernales Electric Cooperative” produces a screen full of shots of Mr. Oakley and his “tree and a rope” comments. Those comments remain there forever. There is good reason why corporations, municipalities, school boards, etc. move quickly to fire or remove people within their organizations publicly identified with racist comments. It is not for political correctness. Such comments do untold damage to corporate image and ultimately the bottom line. Lost in that conversation is the hurt such comments inflict on others. PEC’s board, under the leadership of Emily Pataki, failed miserably to protect its members and employees from the damage Mr. Oakley’s racist comments have caused. They should have removed him from the Board when he failed to resign.

The board has one last swing at the plate to fix this rapidly deteriorating crisis. It must pull itself together and act in the best interests of the Cooperative, its members and employees. It must side with the State Commission on Judicial Conduct. It must side with the Texas Constitution. It must side with the policies IT created when they adopted the Complaint Committee. Above all it must side with their fiduciary duty of protecting the cooperative.

It must side with good judgement and remove Mr. Oakley from the PEC board immediately.

State Publicly Reprimands Oakley and Orders Him Back to School

By Larry Landaker

oakleymugPEC Board member and Burnet County Judge James Oakley has been publicly reprimanded and ordered to take additional education by the State of Texas Commission on Judicial Conduct, according to copies of state documents recently obtained by PECTruthwatch.

These actions are in response to Mr. Oakley’s, “Time for a tree and a rope” comments posting to the San Antonio Police Department Facebook page in November, 2016 following the arrest of Otis Tyrone McKane, an African-American man arrested and charged with the capital murder killing of a San Antonio police officer. Those comments were also posted to Mr. Oakley’s personal Facebook page. These posts became the subject of negative local, national and international media attention.

The PEC Board of Directors considered this same matter for several weeks in late 2016. They received comments from members and employees and took little action other than to issue a warning and remove Mr. Oakley’s VP title.  See Editor’s note.

The State Commission on Judicial Conduct received numerous written complaints including concerns about the call for vigilante justice, the apparent disregard for due process of law, the influence the comment could have on a potential jury pool and racial insensitivity.

Asked by the Commission to explain the intent and context of the Facebook post, Mr. Oakley responded, “My comment was intended to reflect my personal feelings that this senseless murder of a police officer should qualify for the death penalty. In my mind the race/gender of the admitted cop killer was not relevant.” Mr. Oakley further added, that a “tree and a rope” was a reference to the humorous advertising campaign for Pace Picante Sauce Salsa from the 1980’s.

At his appearance before the Commission on April 5, 2017, Mr. Oakley testified that while he handled uncontested probate and guardianship matters as a judicial officer, he has never attended any of the judicial training offered by the Texas Association of Counties.

During his appearance Mr. Oakley made certain statements, according to the Report, that indicated to the Commission that he could benefit from racial sensitivity training with a mentoring judge.

According to the Report, the commission considered two relevant standards in making its decision to reprimand Mr. Oakley and order additional education:

  1. Canon 4A(1) of the Texas Code of Judicial Conduct provides in relevant part that a judge “shall conduct all of the judge’s extracurricular activities so that they do not cast reasonable doubt on the judge’s capacity to act impartially as a judge.”
  2. Article V. 1-a(6)A of the Texas Constitution provides, in relevant part, that a judge shall not engage in “willful or persistent conduct” that casts public discredit upon the judiciary or administration of justice.”

The Commission concluded that Mr. Oakley did, in fact, cast reasonable doubt on his capacity to act impartially in the performance of his duties and was condemned and publicly reprimanded for doing so.

The following was ordered:

In addition to completing his annual required judicial education, Mr. Oakley must attend and complete the next available 30-hour educational training program for new judges and he must participate in 4-hours of instruction in the area of racial insensitivity with a mentor to be chosen by the Commission.

It was further ordered that these actions be made the subject of a Public Reprimand and Order of Additional Education.

 A full copy of the public sanction is found here: scan0065

Editor’s Note: The PEC Board of Directors considered this same matter for several weeks in late 2016. They received comments from members and employees but ultimately took little action other than to issue a warning and remove Mr. Oakley’s VP title. They did however note that “no member or employee should be subject to any actual perceived act of retaliation for their individual input into the Cooperative’s review of this matter…that retaliation is strictly prohibited and that the board authorizes and encourages PEC management to act swiftly under current PEC policy and procedures with the reporting and immediate addressing of any action of retaliation.”

PEC Member and Reformer Dave Collins, Dies

By Larry Landaker

Dave COllins

Dave Collins

It saddens me to report that PEC member and reform activist, Dave Collins of Johnson City, died today at Scott and White Hospital in Lakeway. He had fallen ill several days ago and was rushed to the hospital. No arrangements have been announced by the family at this hour.

Dave Collins was one of several PEC members who revolted against the authoritarian reign of Bennie Fuelberg and his complicit board of directors over 10 years ago. Following a member lawsuit against the cooperative, he demanded reforms that resulted in the election of board members. He further advocated a member Bill of Rights, guaranteeing open records, open meetings and the democratic governance which prevails today.

On a personal note, Mr. Collins advised me on numerous occasions through my six years on the PEC board, two of them as Board president. He was an experienced business consultant. I considered him one of my wisest and most trusted confidants. We didn’t agree on everything but he was a straight shooter which I respected. He was also a great friend and we shared many cups of coffee discussing LBJ, Blanco County, Vietnam, PEC and a host of other topics too long to list. Dave served his nation honorably in Vietnam. He was exceptionally well-read and I reveled in his intellect.

I last saw Dave in Blanco about 6 weeks ago where we met for breakfast. He appeared happy and healthy and we enjoyed one last cup of coffee at an outside table that balmy winter morning, an experience which I will always remember. I will miss him terribly. Rest in peace, good friend.

Member Says PEC Being Hijacked

pec-guestopinion

The Hijacking of Pedernales Electric Cooperative

by Richard Golladay, PEC member

A Dec 29, 2016, lawsuit filed against Pedernales Electric Cooperative (PEC) and five Directors (Pataki, Graf, Akers, Powers and Oakley) is a “last ditch effort” on the part of two brave PEC Directors (Scanlon and Clement) to halt a process that has been evolving for some years.

See PEC Truthwatch post, January 9, “Two PEC Directors File Suit Against Cooperative

Also:

http://www.mystatesman.com/business/directors-file-suit-over-pedernales-electric-election-change/MqIAUMpJBeiEMHzj4bdmBL/

 

Richard Golladay

Member Richard Golladay

Unknown to the vast majority of its members, PEC is being systematically hijacked.  Most PEC member-owners are unaware because most who vote in Director elections  (about 10%) “trust” the Directors they’ve elected.  All but a few PEC members have discretionary time to attend monthly PEC Board meetings in Johnson City to observe what is going on.

Having attended most Board meetings for over 5 years now, I’ve observed that every new Director elected to the Board, starting four years ago, have from their very first appearance, been preoccupied with trying to change the Co-op’s bylaws and voting rules.

oakley-called-meeting-1The last five Directors who’ve appeared on the Board (and replaced that excellent Board who ended the corrupt Bernie Fuelberg era nine years ago) have a common agenda, which they are advancing slowly and methodically.  That agenda (and its full repercussions) went unreported in the press, with one sensational exception:

The straw that broke the camel’s back came on August 19. 2016.  Having achieved a “super majority” (five out of seven Director positions) the Board voted unilaterally, without member consent, to overturn a 70+ year voting system known as “At Large” voting, which allows all PEC members to vote in all Director elections.  The “Single Member District” (SMD) system they replaced it with only allows members within each district to vote for his or her Board representative.  The obvious advantage to SMDs is that richly funded candidates will be able to outspend opposition with campaign road-side signs and mass mail-outs and win by name recognition virtually every time.

Four of the five most recent Directors were sponsored by a secretive organization called “American Reform Coalition”, which also uses the name “Texans for Affordable Electric Rates”.  This organization is anti Co-op, from what little can be discovered about it, and most likely represents an effort by large fossil fuel energy interests to deregulate Co-ops – or force them to embrace customer choice.  The Co-op’s customers would be baited by slick advertising, as in other deregulated areas of Texas, and lured to buy power from internet store front facade privately owned retail electric providers – supplied by the major energy companies, of course, who own most of Texas’s fossil-fired coal and natural gas plants, and transmission lines.   No doubt, another component exists within this subterfuge of special interests, which would be an attempt to stop the further adoption of renewables (wind and solar).

The most appalling fact about the hijacking process is that it is preeminently political.  In early 2015 an exercise in tyranny was orchestrated by Tony Dale, Paul Workman, and other House Republicans in the form of House Bills 3451 and 3391.  These outrageous bills, had they been passed, would have (1) nullified the existing Board of PEC by resetting all Director elections, (2) nullified our bylaws by forcing Single Member District representation, and (3) changed PEC’s plurality voting to majority voting with requirements for runoff elections.  These bills represented the tip of a political machine’s spear, but the agenda in these failed House bills is nevertheless alive and well on the current and dutifully complicit Board.

Can PEC survive as a democratic member-owned Co-operative?  Probably not, if the lawsuit fails.  It may become nothing more than a local crony energy arm of the Republican Party.  And being a Republican, I am both appalled and ashamed.

Publisher’s note: Lawyers will meet in court in Hays County next week.