The High Cost of a Tree and a Rope

editorial and opinionBy Larry Landaker, Publisher of PEC Truthwatch

Information about former CEO John Hewa’s recent departure from PEC has been made public by the Austin American Statesman. According to an article published today,  Mr. Hewa was apparently paid handsomely to “leave quietly”.

“The former chief executive of Pedernales Electric Cooperative was recently awarded an estimated $1.1 million to leave quietly in May, the American-Statesman has learned, on the heels of a dramatic board meeting in which he announced his intent to resign and accused board members of retaliating against employees who spoke out against perceived racism at the electric utility.”

Link to the entire article is found below:

http://www.mystatesman.com/business/sources-former-pec-leader-got-million-when-left/1X04HxlKhsPCsvBCHsYVBI/?ref=cbTopWidget

pec john hewa 3

Former CEO John Hewa

It is clear from this story that Mr. Hewa’s departure remains a sensitive matter for the Board of Directors who authorized the settlement. Neither the Board President, Emily Pataki, nor the Acting CEO, Tracy Golden, would comment for the Statesman story. Furthermore, the Board appeared to have no intention of providing its member-owners with details concerning the settlement sum until next year when the cooperative would be forced to disclose it as part of its IRS 990 filing. So much for transparency.

There is good reason why this subject remains a sensitive matter. It is a near-certainty that the Board would not wish to link the cost of Mr. Hewa’s “go quietly” money to its own board member, James Oakley. It was Mr. Oakley who started a chain of events, ultimately leading to Mr. Hewa’s departure. It was Mr. Oakley who uttered the viral-bound words, “time for a tree and a rope” on his personal Facebook page in reference to an accused African-American suspect in the killing of a San Antonio police officer.

Nor would the board wish to acknowledge the highly avoidable cost of their own fiduciary failure in protecting the cooperative’s best interests. Instead, they dithered and  chose to protect one of their own, Mr. Oakley.  When they finally got around to giving Mr. Oakley a slap on the wrist by removing his title as board vice president, Oakley allegedly set about on a vendetta against Mr. Hewa and against the employees who protested against Mr. Oakley’s comments.

$1.1 million to go quietly. Perhaps the board was lucky. Mr. Hewa, no doubt, chose to protect his family and good reputation and move on with what will undoubtedly be a bright future. His settlement was probably a pittance when measured against the ultimate legal and financial exposure PEC faced at the hands of James Oakley. Employers cannot punish employees for making discrimination or harassment complaints or participating in workplace investigations. To do so, if proven, violates PEC’s own workplace policies, not to mention state and federal law.

And where is PEC today? It’s reputation once again is in tatters, not because of its dedicated rank and file employees, but because of the actions of those at the top.

Was it worth it?

 

Single Member Districts Revisited

pec-guestopinion

Single Member Districts Revisited

by Richard Golladay, PEC Member

It has been almost eleven months since the now-corrupt PEC board voted (without member consent) to adopt Single Member Districts for the Co-op.  The Board members who forced this upon the Co-op were Emily Pataki, Paul Graf, Amy Akers, Jim Powers, and James Oakley.  The pre-designed goal which this achieved is to create a voting system that ensures the most well-financed and wealthy candidates win all future Board elections (financed, of course, by energy special interests).

Richard Golladay

Richard Golladay

Four of these Board members, when they were running for office, employed mass mailings of campaign flyers.  It is instructive to note that in none of Power’s, Graf’s, Aker’s, or Oakley’s mailed out election campaign flyers was the platform of “Single  Member Districts” ever mentioned.  Not  once that I can find.

Yet, during the August 19, 2016 meeting in which this issue was forced upon us, in what was most certainly a pre-orchestrated justification (Graf and  Powers sounded like dual recordings of a pre-rehearsed song) you would conclude this issue was a major one from the day they began to solicit signatures to  get on the ballot.

But just why did such an impassioned and noble “ideal” require a  later “coming  out” to  be  revealed? Why hide from the members what you really think, until after you’re elected?  And then force it on them (without their consent)?

It appears they’ve always owned this agenda – a hidden agenda that  wouldn’t sell with most PEC members.  (Indeed, it was voted down twice back when all members were allowed to vote.)  Was it an agenda they were solicited and coached to perform – under the radar, until a  super-majority could be achieved?  An agenda defined by some of their financiers: the “Texans  for  Affordable  Electric Rates” and “American Reform Coalition” energy/political cartel?  An agenda defined by an anti-PEC political machine, most visibly represented by  Republican politicians Tony Dale and Paul Workman?

You decide, PEC member.  But remember: Never evaluate a politician by what he says before an election, but by what he does afterward.  Mark it down: With politicians there’s almost always an overlying spoken facade which baits people, but the real agenda is only revealed later.

We don’t want or need politicians for District Directors at PEC, but men and women bent on serving ALL our members, in ALL our Districts, and upholding the seven Cooperative principles.

Are these Board members really servants to all of PEC’s members, or are they only hireling politicians serving an outside agenda destructive to PEC?  You decide.

Emergency Meeting Called for 1pm Today. CEO John Hewa Fate To Be Decided

developing_storyby Larry Landaker

An emergency meeting of the PEC Board of Directors has been called for 1pm today. The meeting is expected to open in public with member comments. The board will then likely go into executive session to consider two actions:

  1. Consideration and action on CEO agreement
  2. Resolution and possible action to fulfill CEO duties

There are many questions in these two items. It is known that attorneys working for PEC were authorized to deal with the personnel matter concerning John Hewa. Presumably today’s meeting will culminate in a settlement of some kind whereby Mr. Hewa steps down as CEO and the board appoints a temporary or permanent successor.

There is no secret that Mr. Hewa is leaving because of Mr. Oakley.What is not known is what the cost of such an agreement will be to the members. At some point it becomes known to members through disclosure on the IRS form 990. Why should members have to wait?

It is also unknown whether the board intends to appoint an “acting” CEO or whether a permanent appointment is imminent. If the board appoints a permanent replacement without seeking public input from member stakeholders, that action would be unprecedented.

Speculation over Mr. Hewa’s presumed departure have been documented on PECTruthwatch. If Mr. Hewa leaves it is no secret that he is doing so because of Director James Oakley and the failure of the Board to place boundaries on his insatiable hunger for power and control. In essence, Mr. Hewa believed he was no longer able to function in an environment where stated Board policy against the retaliation of employees had occurred. Board Member James Oakley’s, “time for a tree and a rope” Facebook post has caused enormous controversy, hurt and anger over the last few months, both publicly and within PEC.  Oakley was publicly reprimanded by the Texas Commission on Judicial Review and ordered to take additional continuing education and sensitivity training.

For months, Mr. Hewa has been left to manage this firestorm.

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.”