CMEEC reappoints current officers over objections

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Norwich — Despite last week's federal federal indictment of five current and former officials of the Connecticut Municipal Electric Energy Cooperative, all of the agency's current officers were reappointed Thursday at its board of directors' annual meeting.

The list of officers approved Thursday included CMEEC management staff with "Chief Executive Officer Drew Rankin/Interim CEO Mike Lane" listed. Lane also was listed as the chief financial officer.

Rankin, CMEEC Chief Financial Officer Edward Pryor, Norwich Public Utilities General Manager John Bilda and former CMEEC board members James Sullivan of Norwich and Edward DeMuzzio of Groton face federal charges in indictments in U.S. District Court in New Haven, announced Nov. 8, in connection with lavish trips to the Kentucky Derby and to The Greenbrier golf resort in West Virginia, as well as gifts and souvenirs given to dozens of participants. Rankin and Sullivan face a second indictment on similar charges related to Sullivan's personal expenses totaling nearly $100,000 charged to CMEEC.

Pryor had announced last spring plans to retire in January — six months prior to the Nov. 8 indictments — and was not listed on the 2019 management staff.

Talk of the indictments dominated parts of Thursday's meeting, including a failed attempt by one member to overhaul the board officer positions to remove those connected with the lavish trips that led to the criminal charges.

Paul Yatcko, general manager of South Norwalk Electric and Water, on Thursday objected to the proposed slate of four board officers — three of whom attended at least part of the controversial trips but were not indicted — and recommended officers be selected who did not take part in the trips. Yatcko, who never attended the trips, offered to serve as chairman.

He said CMEEC needs to show the public, ratepayers in the six municipal utilities that own the cooperative and state lawmakers that the organization is making changes to address the serious charges.

But in two 10-5 roll call votes, the board approved the slate of officers and committee appointments, with Chairman Kenneth Sullivan, director of utilities for Jewett City Department of Public Utilities; Vice Chairman Ron Gaudet, director of Groton Utilities and Bozrah Light & Power; Secretary Louis Demicco of Jewett City, and Treasurer Kevin Barber, general manager of South Norwalk Third Taxing District Electric Department.

Of those four, only Barber never attended the trips. Gaudet attended only one day of CMEEC activities at the 2016 Kentucky Derby.

After the federal indictments were handed down last Thursday, the CMEEC board held two emergency meetings that day and Friday and voted unanimously to place Rankin and Pryor on unpaid administrative leave and removed Bilda from the board of directors.

In his strongly worded statement, Yatcko said CMEEC also needs to come to the realization that “we may well have seen the last of (Rankin)” and need to prepare for that future.

In response to questions about Rankin, CMEEC General Counsel Robin Kipnis said: “As of now, Drew Rankin has not been removed from his position as CEO.”

Yatcko said reappointing the same board leaders also would send the wrong message to ratepayers and lawmakers, who could consider proposed legislation to eliminate CMEEC in the spring legislative session. CMEEC was created in a 1976 act of the General Assembly.

“Damage has been done to the CMEEC brand and reputation in the state and our communities,” Yatcko said, “damage to our image in the legislature, the resulting intrusion into our governance and increased cost to the legislative response to the situation, astronomical legal and consulting and lobbying costs that have been incurred to defend what very well could be an indefensible position, and most recently an evolving threat to CMEEC’s very existence.”

State Sen. Heather Somers, R-Groton, proposed legislation earlier this week to consider tighter controls on CMEEC or even to abolish the organization.

"That the majority of the CMEEC Board of Directors chose to disregard the seriousness of this situation and turn a blind eye to the federal charges brought by the FBI rather than acknowledge the need for a complete overhaul is unconscionable," Somers, who did not attend the CMEEC meeting, said in a statement Thursday evening. "This organization continues to affirm that it is unable or unwilling to understand its own culpability or empathize with the ratepayers it serves. They continue to make it more likely that a legislative remedy is the only recourse."

To exemplify that point, Norwalk CMEEC board member David Westmoreland told the board that Norwalk utilities officials have asked to meet with Norwalk area state legislators and have been refused.

“They do not want to meet with anyone connected with the scandal,” Westmoreland said. “It’s problematic.”

During the public comment period, Michael Boucher of Groton applauded Yatcko’s effort to change board leadership and called for further overhaul to replace some members of the board. State legislation enacted in 2017 gave governing boards in each municipality within the cooperative direct appointments of ratepayer representatives to the CMEEC board. Boucher said the municipalities need to consider new appointments — “real ratepayer representatives,” he said — for those positions.

On Thursday, Norwich ratepayer representative Rashid Haynes did not attend the annual meeting. Groton ratepayer representative Mark Oefinger voted to approve the current slate of officers, as did Norwich regular CMEEC board members Grace Jones and Stewart Peil. Groton members split their votes, with Gaudet voting in favor of the current slate and Groton City Mayor Keith Hedrick and David Collard, general manager of utility finance for Groton and Bozrah utilities, voted against adopting the current slate of officers. Norwalk ratepayer representative Pete Johnson also voted in favor of the current slate of officers.

Board Chairman Kenneth Sullivan, who has no relation to James Sullivan, started Thursday’s annual meeting by reading a statement saying the board takes the indictments seriously. In the resolution adopted last week, the board directed CMEEC General Counsel Kipnis to conduct an internal investigation. On Thursday, Kenneth Sullivan said the board has hired an independent counsel, Eileen Duggan of the firm Suisman Shapiro, to conduct the 30-day internal investigation.

Duggan is listed as head of the law firm’s labor, employment and municipal law departments.

During a board recess prior to going into executive session, Kenneth Sullivan, in response to Yatcko’s statement, said all board members are working hard on behalf of CMEEC, especially in the past week in response to the federal indictments.

“My personal opinion is, if it’s me or somebody else, we all have a lot of work to do,” Kenneth Sullivan said. “It’s about the work.”

Statement by CMEEC board member Paul Yatcko

Most of statement read by CMEEC board member Paul Yatcko, general manager of South Norwalk Electric and Water, at Thursday’s CMEEC annual Board of Directors meeting:

As a board, we need to begin to face the reality that life very well may need to go on without Drew Rankin, and we may well have seen the last of him. Even if his acts are not judged to be criminal by the federal court, this board must consider his business judgment and his integrity as demonstrated by his conduct, as well as what remains of his credibility.

Beyond that, we must elect board officers that are capable of providing the considerable support that will be required by Mike Lane as he attempts to wrap his arms around his interim responsibilities — officers who have some knowledge of the energy commodity industry, the associated markets and who have served in executive roles in complex organizations.

Reappointing the current incumbents, in my opinion, is simply not supportable. CMEEC and its members, that’s all of us, and its customers have been victimized by the conduct detailed in the indictments and the resulting crisis. Specifically, damage has been done to the CMEEC brand and reputation in the state and our communities, damage to our image in the legislature, the resulting intrusion into our governance and increased cost to the legislative response to the situation, astronomical legal and consulting and lobbying costs that have been incurred to defend what very well could be an indefensible position and most recently, an evolving threat to CMEEC’s very existence.

In the two years of this crisis, the board has shown deference to the response provided by the CEO, which has been largely directed at defending and excusing the expenditures in question and, in fact, this board’s leadership has shown a clear reluctance to drive the board to take any action beyond monitoring what the CEO was doing, particularly when it came to taking any sanctions against Drew Rankin for the conduct. In light of this, I don’t believe the incumbents should be returned to office. I further believe that anyone who has profited from a business relationship with CMEEC should be precluded from a leadership role and obviously, I believe that anyone who attended the derby trips, or the Greenbrier retreat should also be excluded from an officer role.

I believe that the time has come for this board to send a clear message to our various publics that this will never be tolerated again, and the time has come for this board to start driving the go-forward agenda by installing board officers that are not tainted by the conduct that resulted in the indictments, by aggressively supporting Mike Lane in his interim role, by ensuring itself that the appropriate financial controls are in place and that certain costs in the cost structure have visibility in the board level, by proactively addressing our relationship with our various constituencies and yes, beginning the process of seeking a replacement for Drew Rankin.

CMEEC needs change. Frankly it has needed a change since this sordid mess became public two years ago. And it needs change now. I think we have an opportunity here, and I think the change that’s required is not returning the board’s officers to their posts.


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