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.

Demoted

It took the Board of Directors of PEC eight long tumultuous weeks to take action on Board Vice President James Oakley’s “time for a tree and a rope” comments he made on his personal Facebook page last November. At yesterday’s PEC board meeting the board voted 6-0 in favor of a resolution removing Mr. Oakley as a board officer. He will remain on the board and will continue to receive full compensation as a director.

oakleymug

PEC Director James Oakley

A fair summary of yesterday’s meeting was reported in the Austin American-Statesman:

http://www.mystatesman.com/business/pec-board-rebukes-but-doesn-remove-director-for-controversial-post/DBbZ7ZynyabZ5uiYbviyAJ/

In taking this action the board acknowledged recommendations made by a special complaint committee comprised of board president Emily Pataki and directors Paul Graf and Kathy Scanlon. Their report acknowledged Mr. Oakley’s First Amendment constitutional right to free speech. It also suggested that Mr. Oakley “must have a heightened sense of awareness regarding his personal and public activities…and has cast certain unfavorable light to PEC’s goodwill and brand and has apparently caused a negative impact to PEC’s otherwise high employee morale.”

Among other things the committee recommended that Mr. Oakley be issued a warning to “thoughtfully guard his public and personal actions” and that “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. Finally, “In the best interests of the Cooperative…the Board of Directors should replace Director Oakley as Vice President of the Board, effectively removing him from his leadership position on the Board.

Slap on the Wrist

by Larry Landaker

pec-slap-on-the-wristIt has been 7 weeks since PEC Board Vice President and Burnet County Judge James Oakley posted on his Facebook account a photo and accompanying statement from the San Antonio Police Department of an African-American  murder suspect, with the comment, “Time for a tree and a rope.” A complaint committee of the Board of Directors was formed on November 30, 2016, to review the merits of a formal complaint filed by Director Cristi Clement regarding Director Oakley’s comment.

james oakley 2

James Oakley

Seven weeks of secret meetings of the complaint committee ensued.The meetings were preceded by comments from numerous members and some PEC employees. At times these comments were emotional. No action or recommendations were made until today. Today the committee released a Report and Recommendation that will be considered by the full Board on January 17, 2017. The findings of the committee are reported here:

http://www.mystatesman.com/business/panel-recommends-reprimand-for-pedernales-director-over-facebook-post/y1sGEBCsLHEgbTziQWjrpJ/

Two PEC Directors File Suit Against Cooperative

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From left to right, PEC Directors Cristi Clement and Kathy Scanlon

By Larry Landaker, Publisher, PECTruthwatch

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

Legal action was taken on behalf of concerned member-owners whose voting rights may have been critically diminished by a majority vote of the PEC Board during an August 2016 meeting. The two Directors filing suit, Cristi Clement and Kathy Scanlon voted against the August resolution. The are joined in the lawsuit by PEC member Thomas Mitchell and are represented by attorney, Randall Buck Wood.

The voting rights of PEC members are protected under Texas Law, in the Utilities Code, Chapter 161. The law says, “Each member present at a meeting of the members is entitled to one vote on each matter submitted to a vote at that meeting.”

Today the majority of PEC members are ineligible to vote in the upcoming 2017 election. Only members from District 2 and 3 will be allowed to vote.  Thus, the remainder of the membership is disenfranchised from a vote to which they are entitled under the law.

It would appear that the Board exceeded its authority when they UNILATERALLY changed the PEC election rules.

Under current Texas law, members should be entitled to enjoy full voting rights. PEC members have voted on this matter twice, in 2011 and 2014 and both times REJECTED a change in the at-large voting system. In supporting the at-large system, members voted, in essence, to hold all seven (7) directors accountable for cooperative business.

Under the plan approved by the Board last August, members can vote for only one (1) director every three (3) years, thus leaving members with significantly diminished control of the Board.

It is unclear whether PEC lawyers (both the outside general counsel, Don Richards and the General Counsel, Don Ballard advised the Board of the law before the board took action, or whether the board simply chose to ignore it. In any event, it is incumbent upon counsel and the Board to protect and maintain strong democratic member control of their own cooperative. The resolution passed last August negatively impacts democratic member control.

The lawsuit now places in doubt the question of if or when the cooperative will change its voting system to single-member districts, a matter that will apparently be decided in court. The next election of board members is scheduled for June 2017.

Former PEC Director Chris Perry Weighs in on Oakley Controversy

pec-guestopinion Publisher’s Note: Guest Opinions are welcomed from any PEC member, subject to the editorial standards of PECTruthwatch. The opinions expressed may or may not reflect the opinion of the publisher and all viewpoints are considered.  Members are invited to comment as part of this post.

by Chris Perry,  former PEC board member

The current controversy and calls for the removal of James Oakley from the PEC Board because of something he said on Facebook raise crucial and fundamental issues concerning effective democratic control of the cooperative. The fact that PEC leaders find themselves in a yet another governance crisis highlights the dismal quality of legal advice the Board receives and the failure of the Board to enforce its own long-standing code of conduct.  To be clear, the conduct to which I refer is not Director Oakley’s.

chris-perry-preferred-photoIn 2007 a member revolt began that took back control of PEC from an entrenched and corrupt group of management and board insiders ending decades of financial and governance abuses, including the practice of the Board of Directors deciding who could and could not serve on the board. I became involved in the grassroots effort to reform PEC when a friend was denied the right to appear on the ballot as a Director candidate in 2007. Later, I was encouraged to run for the Board and was elected, under new election procedures, eventually serving two terms as a PEC Director. The current controversy around removal or “discipline” of an elected Director is cause for concern. Now, even some of those PEC members who fought to overturn the decades of abuse are calling for Oakley’s removal because of remarks considered offensive, that he posted on Facebook—remarks that are undoubtedly constitutionally protected speech.

This controversy hits a nerve with me because I too worked to overturn the corrupt and self-perpetuating insider group that ruled PEC for decades; because I have defended the right of PEC Directors to exercise their constitutional right of free speech; and because I too was the target of and successfully fought off an attempt to remove me from my elected Director position at PEC.

What may not be clear to many PEC watchers is that the path that led to the current controversy—aside from what Mr. Oakley himself probably would agree was a poorly thought out Facebook post—began in November with little fanfare and even less deliberation, when the PEC Board adopted a new Bylaw giving itself the unprecedented authority to overturn a Director election. Without any explanation of the need for or meaning of the change, PEC’s then General Counsel Don Richards urged the Board to adopt the Bylaw revision, implying only that the change reflected best practices among his other cooperative clients in the telephone business.  (Note: In response to an Open Records request by the author, PEC lawyers have refused to provide documents reflecting the detailed history of the development of the November Bylaw change, or the perceived need for it.)

While in the past, a PEC Director could only be removed by the members for malfeasance, i.e. an illegal act, or by the Board because the Director no longer met the qualifications to be a PEC Director, the newly adopted Bylaw confers upon the Board the power to remove a Director for “bringing of such disrepute or disparagement to the Cooperative”.  Inexplicably, Mr. Richards offered no public explanation of what would constitute “disrepute or disparagement”, and the Board requested no public explanation prior to its adoption. I believe that such a subjective standard of cause for removal of an elected Director has no place in PEC Bylaws and threatens the hard fought for reforms of ten years ago.

Importantly, the newly adopted Bylaw requires that a complaint made by a Director against another Director be made in “good faith”, a term defined in PEC’s Directors Code of Conduct.  In this case, Director Clement brought the complaint against Director Oakley. Having been privy to the inner workings and dynamics of the PEC Board for six years, I believe there are grounds for the Board to re-examine the behavior of Director Clement toward Mr. Oakley, and that a careful review of Director Clement’s conduct since Oakley’s first election will raise serious doubts about the complaint meeting the standard of “good faith” required by the revised Bylaw.

Removing or interfering with an elected Director’s legal rights and duties, exercised on behalf of the members that vested those rights and duties in him, threatens the foundation of democratic control of the cooperative. In fact, I argue that Mr. Oakley owes a duty to all PEC members to defend any attempt to remove him or to interfere with the exercise of his fiduciary responsibility to the cooperative and its member-owners. Finally, I urge the PEC Board to more carefully examine if the complaint against Oakley was made in good faith and suggest that the PEC Board consider rescinding the ill-conceived Bylaw change.

James Oakley Comments Pique Interest of Southern Poverty Law Center

southern-poverty-law-center

The well-respected Southern Poverty Law Center (SPLC),  is an American non-profit legal advocacy organization specializing in civil rights and public interest litigation. They are dedicated to fighting hate and bigotry and to seeking justice for the most vulnerable members of our society.

https://www.splcenter.org/

The Facebook comments of Director James Oakley caught their attention last week when on Friday, December 14, SPLC posted on their own Facebook page the reprint of a story which ran in the Huffington Post on November 23, 2016.

https://www.facebook.com/SPLCenter/?fref=ts

http://www.huffingtonpost.com/entry/judge-lynching-facebook-post_us_5835b951e4b000af95ed6964

To date, the SPLC Facebook post has received 7,300 responses, 2,142 shares and over 620 comments.

 

Hays/Burnet County PEC Member Weighs in on Oakley Matter

Publisher’s Note: The regularly scheduled PEC board meeting will be held on Monday, December 19, 2016 at 9am at PEC headquarters in Johnson City.

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“Time for a Tree and a Rope, ” says Judge James Oakley, PEC Board Member

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Hays/Burnet County PEC member Thomas Mitchell

Yes, we are all outraged at the recent police detective shooting in San Antonio, a horrendous crime. Yet, well before the alleged shooter had his day in court, Judge James Oakley, PEC Board member and the highest elected official in Burnet County, Texas, took it a step further. With no regard for the rule of law, due process, or “innocent until proven guilty”, Oakley proclaims on social media…”time for a tree and a rope”. Vigilante justice apparently is alive and well in Central Texas when a public servant, an elected official, calls for a lynching. “Time for a tree and a rope”???

This is not a political matter. It is not Republican vs. Democrat. Not right vs. left. Not liberal vs conservative. It’s a matter of civility, of human rights, of understanding…or rather lack of it in the case of James Oakley. This isn’t passed off as an innocent off the cuff comment as some attempted to explain at a recent PEC Board meeting. This isn’t excusable because Texas is in the wild, wild West where hanging horse thieves was once the norm as some people tried to reason at the meeting. Outrageous is what it is. Reprehensible! Coincidently, The NY Times published an article last week, The Horror of Public Lynchings, in which the author states the time when African Americans were publicly hanged is nearer in history than most people realize. Yes, I would say so and apparently that sentiment remains in Central Texas where an elected public servant proclaims “time for a tree and a rope”. What an embarrassment to those of us in the area and to PEC membership.

What it IS time for…it’s time for Judge Oakley to go. His immediate resignation from the PEC Board would allow for a time of healing, a chance to move beyond this. A chance to return to some sense of

normalcy. Short of resignation, the PEC Board must do its duty as a governing body to remove Oakley from the Board as provided in Section 5, Paragraph C of the Bylaws for “bringing disrepute or disparagement to the Cooperative by unacceptable personal conduct”.

Unless Oakley resigns, unless the PEC Board dismisses him, divisiveness and social schism prevails. Central Texas is better than that. PEC deserves more than that. The U S of A requires more. James Oakley must exit PEC Board and exit now. If not, the only assumption made is that his incendiary beliefs are common on the PEC Board…and that legacy will surely follow those Directors well into the future. Neither the members, the area populace, nor the nation will tolerate this. “Time for a tree and a rope”? No, it’s time for James Oakley to go.

Thomas H. Mitchell

PEC Member

Hays County/Burnet County