New Haven — During closing arguments Tuesday, a federal prosecutor told a jury in U.S. District Court in New Haven that five former public utility cooperative officials knew lavish trips to the Kentucky Derby and a West Virginia golf resort were wrong.

One defense attorney countered during his closing argument that the trips had clear corporate value as team-building and bonding retreats. He said the government failed to prove there was theft of public funds for personal benefit or that the organizers of the trips had acted in bad faith.

Assistant U.S. Attorney Michael S. McGarry reviewed testimony by numerous government witnesses during his nearly two-hour closing argument Tuesday. He refreshed the jury’s memory of exhibits presented on the trips hosted by the Connecticut Municipal Electric Energy Cooperative from 2013 to 2016. He said the cooperative used money that was intended to be returned to member public utilities to stabilize electric rates.

McGarry said the five defendants, charged with conspiracy and theft from a program that receives federal funding, planned the trips, concealed them from public records and public CMEEC board discussions and failed to provide the cooperative attorneys and auditors with details on the nature and itineraries of the trips.

He listed itineraries that included private chartered jets, multiple golf outings, Derby tickets costing hundreds of dollars each, a $10,000 dinner with a dozen $200 bottles of wine, gifts, tours, horseback riding, spa treatments and dozens of invited guests, including family members, spouses, girlfriends and the bartender of one of the defendants.

And when the trips were publicized in the news media in fall of 2016 and public outcry ensued, the group abruptly canceled the planned 2017 Kentucky Derby trip, McGarry noted.

“The trips were canceled when they got caught,”  he said. “That’s how you know they were personal.”

Attorney Craig A. Raabe, representing former CMEEC Chief Executive Officer Drew Rankin, asserted that the government failed to prove the trips were personal or represented any theft. He said the government had presented arguments that were “nonsense” and “illogical.” He said the cooperative was created by a state statute to act as a private corporation.

“Budgeting expenses is not stealing,” he said.

Raabe said Rankin acted in full good faith that the retreats had strong value to improve working relations among board members. He cited statements by trip participants urging the cooperative to continue doing the retreats.

Raabe stressed that a mistaken good faith act is not criminal theft. He called the federal government charges against the five defendants, “government meddling.”

Former CMEEC CEO Rankin, former Chief Financial Officer Edward Pryor, former Norwich Public Utilities General Manager John Bilda and former CMEEC board member Edward DeMuzzio of Groton each face a felony charge of conspiracy for their roles in planning the trips and two counts each of theft from a program that receives federal funds in connection with the 2014 and 2015 trips.

CMEEC is owned by its member municipal utilities: Norwich Public Utilities, Groton Utilities, Bozrah Light & Power, Jewett City Department of Public Utilities, South Norwalk Electric and Water and Norwalk Third Taxing District. The defendants allegedly used money derived from CMEEC revenues that had been intended to be returned to the member municipalities.

McGarry stressed that the over $1 million used for the Kentucky Derby and Greenbrier trips was money held by CMEEC for its member utilities. Initially, the cost of the trips was drawn from operating funds derived from the sale of electricity to member utilities and other customers. In 2015, CMEEC shifted the costs to what is called the Margin Fund, which contained revenues intended to be returned to the member utilities to stabilize rates.

McGarry said the Margin Fund was a revenue account, and the only expense drawn from it was for the trips CMEEC labeled generally as board expenses or retreats. He said Rankin at one point instructed his executive secretary to remove specific reference to the Kentucky Derby and label it instead as a board strategic retreat.

Raabe, however, insisted the trips were “team-building social functions” that Rankin sincerely believed created value for the cooperative’s board of directors that helped the board work together to dramatically improve CMEEC’s financial performance. Raabe said the 2015 Greenbrier trip was held to discuss a major new 10-year strategic plan, what Raabe termed a “bold, audacious” move.

Raabe said the government was trying to “redirect” evidence, including jokes exchanged by some defendants. He said the government intentionally left out key parts of some email exchanges.

Raabe said Rankin worked for the CMEEC board, and the board decides how to spend its money. “And they did,” Raabe said. He said the board knew about the retreats, could have stopped them and did not stop them. In contrast, the board in 2014 gave Rankin a 10-year contract and a raise in 2016. Raabe said those actions reaffirmed Rankin’s belief he was acting in good faith in planning the strategic retreats.

“At most, what we have here is a dispute over whether this was a prudent way to spend CMEEC’s money,” Raabe said.

Raabe displayed an animated scale on a video screen to "weigh" the actions taken by his client. Favorable factors, included, he said, that board members voted on the CMEEC budget; team-building exercises produced tremendous results and trip expenses were “budgeted, not stolen." He slowly lowered the weighted scale to the show that his client was not guilty.

"Reasonable doubt," he added to the jury. "If you are on the fence, not guilty."

Closing arguments will continue Wednesday. The jury is expected to begin deliberating later this week.

c.bessette@theday.com