Justice may yet prevail in CMEEC debacle

Infuriating. That is the natural reaction when learning that men under federal indictment for allegedly violating the law and the trust placed in them as public servants will probably not have to pay for their own legal fees and, in one case at least, walked away with quite the golden handshake.

Unfortunately, the only recourse is to learn from mistakes. That is what the Connecticut Municipal Electric Energy Cooperative and the City of Norwich are trying to do.

First the infuriating part.

On Thursday, federal Judge Jeffrey A. Meyer ruled that CMEEC is required by its bylaws to cover the legal fees of the former chief financial officer for the energy cooperative, Edward Pryor, as he contests a federal criminal indictment.

While the indemnification ruling is specific to Pryor, it probably means the four other CMEEC officials under indictment will also qualify for having their legal fees paid. Those costs will be substantial. CMEEC has disclosed paying $370,000 in legal fees during the two-year FBI investigation that led up to the criminal charges.

The investigation resulted from the diversion of funds — collected by the cooperative as part of its mission to hold down public utility rates — to pay for extravagant annual trips to the Kentucky Derby and for other junkets. The cooperative spent about $1.1 million on the weekend-long trips to the Derby.

Pryor, CMEEC CEO Drew Rankin, former Norwich Public Utilities General Manager John Bilda and former CMEEC board members James Sullivan of Norwich and Edward DeMuzzio of Groton were charged with one count each of conspiracy and three counts each of theft from a program receiving federal funds. Rankin and Sullivan face the same charges in a second indictment over CMEEC’s reimbursement of nearly $100,000 in Sullivan’s personal expenses.

The defendants may get their legal fees paid up front, but they are hardly free and clear. A conviction could mean jail time. A conviction could also lead CMEEC to try to claw back the legal fees it paid up front, making the argument that the defendants were never entitled to indemnification.

Six municipal utilities own the cooperative: Norwich Public Utilities, Groton Utilities, Bozrah Light & Power, Jewett City Department of Public Utilities and two utilities in Norwalk.

In Norwich, much of the anger centers around the deal Bilda negotiated as he headed out the door, ending his time as general manager of Norwich Public Utilities. A separation agreement approved by the Board of Public Utilities Commissioners on Jan. 22 provided Bilda a $35,000 severance payment, kept his full pension in place and even directed payment to him for 1,160 hours of accrued sick and vacation time.

Chairwoman Grace Jones said the commissioners’ options were few given Bilda’s contract.

Most outrageous was the agreement by Jones and Commissioner Stewart Peil, when acting in their capacity as members of the CMEEC board, to vote in favor of covering Bilda’s legal expenses. While the issue may become moot given the judge’s ruling, the agreement by the two commissioners to essentially sell their votes as part of the settlement was wrong and they should not be allowed to vote if the issue is raised.

Norwich Mayor Peter Nystrom, who called the settlement with Bilda “disgusting,” has scheduled a meeting for 6 p.m. Monday at Norwich City Hall to discuss it with the utilities commissioners. His intent, he said, is to set guidelines so the utility is never in such a weak bargaining position again with an NPU general manager or other executive.

As for CMEEC, it has taken several steps to prevent such abuses going forward, while changes in state law have provided greater operational transparency.

This said chapter cannot end soon enough.

The Day editorial board meets regularly with political, business and community leaders and convenes weekly to formulate editorial viewpoints. It is composed of President and Publisher Tim Dwyer, Editorial Page Editor Paul Choiniere, Managing Editor Tim Cotter, Staff Writer Julia Bergman and retired deputy managing editor Lisa McGinley. However, only the publisher and editorial page editor are responsible for developing the editorial opinions. The board operates independently from the Day newsroom.

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