CMEEC board fires indicted CEO Drew Rankin
The indicted CEO of an energy cooperative at the center of a controversy over lavish trips to the Kentucky Derby was terminated Thursday following a three-hour, closed-door hearing at a hotel conference room in Orange.
Drew Rankin, CEO of the Connecticut Municipal Electric Energy Cooperative since 2011, had been placed on unpaid leave Nov. 9, one day after he was indicted along with four other CMEEC officials on several federal corruption charges connected with their leadership roles in organizing trips to the Kentucky Derby for four years and a 2015 trip to The Greenbrier luxury golf resort in West Virginia.
Following Thursday's hearing, the CMEEC board voted unanimously without discussion to terminate Rankin’s employment "for cause" and to award him back pay dated to Nov. 9 based on his annual salary of $325,000.
Labor specialist attorney Kenneth Weinstock, hired by CMEEC to assist with the termination proceeding, said after the vote that the award of back pay was required under the due process clause in the U.S. Constitution. The exact amount of his back pay has not yet been calculated, acting board Chairman Ken Barber said.
Rankin and his attorney, Gregg Adler, left the meeting prior to the end of the executive session, and could not be reached afterward for comment.
Rankin had the option of having the hearing in closed or open session and chose a closed executive session hearing. Weinstock and CMEEC General Counsel Robin Kipnis said Rankin submitted no written arguments, and the entire hearing was conducted with oral arguments.
Rankin faces eight federal corruption charges in two indictments following a two-year FBI investigation. In one indictment, Rankin and four other CMEEC officials face one count each of conspiracy and three counts each of theft from a program receiving federal funds for their leadership roles in CMEEC’s hosting of lavish trips to the Kentucky Derby for top CMEEC staff, board members, family members, public officials and invited guests. The trips collectively cost about $1.1 million, according to the indictments.
Rankin faces the same four charges in a second indictment that alleges CMEEC reimbursed former board Chairman James Sullivan of Norwich, also charged in both indictments, for nearly $100,000 in personal expenses and travel costs.
The four current CMEEC board members who attended Kentucky Derby trips, Chairman Kenneth Sullivan, Vice Chairman Ron Gaudet, Secretary Louis DeMicco and board member Richard Throwe recused themselves from the proceedings and did not attend Thursday’s meeting. James Sullivan is not related to Kenneth Sullivan.
A special committee of CMEEC board members, led by Norwalk board member Debora Goldstein, conducted an investigation into Rankin’s actions as reported in the federal indictments with outside attorney Eileen Duggan, a labor law specialist. The full board — minus the four derby participants — accepted Duggan's 68-page report and the committee’s recommendation in March that a pre-termination hearing be scheduled.
After Thursday's meeting, the CMEEC board released a written statement calling the action "in the best interests" of CMEEC members and electric ratepayers.
"As a public entity, we fully recognize the important role we play in our communities where we operate," the statement said, "and the responsibility we all have to ensure CMEEC is operating at the highest standards of organizational integrity. We will continue working diligently to regain the trust of our members and ratepayers as we deliver on our commitment to provide lower-cost energy solutions for years to come."
Along with Rankin and James Sullivan, former CMEEC Chief Financial Officer Edward Pryor, former Norwich Public Utilities General Manager and CMEEC board member John Bilda and former board member Edward DeMuzzio of Groton were indicted.
Pryor also was placed on unpaid leave Nov. 9 but, because he retired from CMEEC at the end of December, CMEEC took no disciplinary action on his status.
The trial is scheduled to begin in February 2020, but documents already on file in U.S. District Court in New Haven reveal hints about the scope of the two-year federal investigation and Rankin’s defense arguments.
The investigation generated about 375,000 pages of documents, including reports of witness interviews and handwritten notes by investigators, U.S. Attorney John H. Durham wrote. Durham wrote that the documents were turned over to the defendants’ attorneys, but with a restriction that they remain in the attorneys’ offices for viewing there only.
Attorneys for Rankin and Bilda filed motions seeking unfettered access to the documents for all five defendants to assist in preparing their defenses. Durham filed an eight-page response objecting to their request.
According to Rankin’s attorney Craig A. Raabe’s motion, the witnesses included attendees of the retreats, including unindicted CMEEC board members and strategic partners, CMEEC employees, CMEEC outside auditors, “disgruntled former CMEEC employees whose credibility will need to be challenged” and politicians “who claim amnesia or new-found disapproval about the trips in the wake of media criticism of the trips.”
Raabe argued that limiting Rankin’s review of the materials “unquestionably” hampers his ability to review the materials and assist counsel in his defense. Raabe called the allegations in the indictments “white-collar prosecution of select individuals” who served as CMEEC executives or board members.
CMEEC has generated more than $170 million in savings for its members since Rankin took over as chief executive officer in 2011, Raabe wrote. CMEEC’s enabling statute encourages CMEEC to act “in an entrepreneurial manner and grants CMEEC ‘any and all powers that might be exercised by a natural person or private corporation in connection with similar property and affairs,’” Raabe quoted from the statute.
The government used the indictments “to second guess CMEEC’s business judgment and to meddle in the affairs of this highly successful, quasi-public entity,” Raabe argued.
Raabe wrote that one indictment alleges that Rankin stole from CMEEC by “openly planning and conducting strategic retreats at the Kentucky Derby and The Greenbrier resort, retreats that CMEEC’s unindicted board members were invited to and knowingly and voluntarily attended and enjoyed (including several of its current Board members).”
Regarding the second indictment, Raabe wrote that long before Rankin became CEO in 2011, Sullivan had traveled on CMEEC business and “consistently received reimbursement” for those expenses.
“CMEEC continued that reimbursement during Mr. Rankin’s tenure and the federal government determined in its misplaced, non-entrepreneurial judgment that the level of reimbursement was inappropriate and it indicted Mr. Rankin.”
Raabe argued that it is essential that Rankin and four co-defendants be given copies of the FBI and IRS materials to review “in their own time and as often as they would like.” Rankin can best assess whether witness statements are true, Raabe wrote.
Durham countered that there are “significant concerns” about allowing the defendants unfettered access to the huge volume of documents, including the risk that information could be lost, stolen or accessed by unauthorized third parties.
“Such dissemination risks tainting the jury pool, permitting witnesses to tailor their testimony and quoting or misquoting out of context reports that do not purport to be the director words of witnesses,” Durham wrote.
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