CMEEC top leaders removed in wake of federal indictments

The chief executive officer and chief financial officer of the Connecticut Municipal Electric Energy Cooperative were placed on unpaid administrative leave and Norwich Public Utilities General Manager John Bilda was removed from the cooperative board of directors Friday in the wake of federal indictments on several public corruption charges.

The CMEEC board of directors held an emergency meeting Thursday morning upon receiving notice of the pending indictments and held a conference call meeting Friday afternoon and announced the decisions following that meeting.

“CMEEC’s leadership and Board take this matter very seriously,” the CMEEC news release stated. “Effective immediately, CMEEC CEO Drew Rankin and CFO Edward Pryor have been placed on unpaid administrative leave to allow CMEEC to conduct an internal investigation. Michael Lane, CMEEC Director of Finance and Accounting, has been appointed Interim CEO.”

The CMEEC board of directors will hold its annual meeting at 10 a.m. next Thursday at the Spa at Norwich Inn to approve a 2019 budget and conduct other business.

Friday's moves by the board came after several Norwich city officials and state Sen. Heather Somers, R-Groton, publicly called for Rankin, Pryor and Bilda to be removed from leadership positions in the wake of the indictments.

Bilda, Rankin, Pryor and former cooperative board of directors members James Sullivan of Norwich and Edward DeMuzzio of Groton face multiple federal charges in indictments handed down Thursday. The charges stem from lavish trips the cooperative hosted to the Kentucky Derby and to The Greenbrier golf resort in West Virginia.

The trips, private charter planes, luxury souvenir gifts and meals cost well over $1 million over the four-year period from 2013 through 2016, the indictments said. The allegations stated that CMEEC used funds intended for electric rate stabilization for the member utilities for the trips and conspired to keep the expenses hidden in annual budgets and without board review or approval.

Separately, Sullivan and Rankin were charged in a second indictment alleging that Sullivan received nearly $100,000 from CMEEC for travel and other personal expenses from January 2012 through August 2015 while he chaired the board of directors. The expenses were labeled as lobbying expenses, although Sullivan was not registered as a lobbyist for CMEEC.

“Our intent throughout this process is to serve and represent our members in the best way possible,” the CMEEC release stated. “All staff remains in place and the company is fully operational. CMEEC’s core mission, to energize customers and community prosperity by delivering sustained lower-cost energy solutions, remains unchanged.”

Norwich Mayor Peter Nystrom, Council President Pro Tempore William Nash and the council’s three Democratic aldermen, Samuel Browning, Joseph DeLucia and Stephanie Burnham, all called on Bilda either to retire immediately or be removed from his leadership position at NPU.

“I’m like everyone else, extremely angry,” Norwich Mayor Peter Nystrom said Friday. “I really think at this point in time at a minimum, (Bilda) should be relieved of all responsibilities. He has to mount a defense for himself, and that’s what a person should be concentrating on at this time.”

Bilda, who took a vacation day Friday and could not be reached for comment, announced on Oct. 16 plans to retire in 2019 following selection of his successor at NPU. Nystrom said he would ask the Board of Public Utilities Commissioners to expedite the search for a new general manager as the top priority.

Grace Jones, chairwoman of the Norwich utilities commission, said Friday she has scheduled a special meeting of the commission for 6 p.m. Thursday at NPU headquarters, 16 S. Golden St., for a closed-door meeting to discuss the indictments. She declined to comment on Bilda’s status until the board discusses the situation.

Jones, also a member of the CMEEC board, participated in Friday’s conference call but declined to comment on the CMEEC board’s actions, deferring to the CMEEC news release. Board Chairman Kenneth Sullivan, general manager of Jewett City Department of Public Utilities, could not be reached for comment Friday.

State Sen. Heather Somers, R-Groton, who spearheaded legislation for stricter oversight of CMEEC in 2017 in response to public outcry over the Kentucky Derby trips, said she plans to seek stronger legislation in the coming session.

Somers said Friday she will ask the General Assembly's Energy and Technology Committee to review the 1976 statute that created CMEEC and examine whether CMEEC "should still exist" and whether the cooperative, and by extension the municipal utilities that own it, should be placed under the state Public Utilities Regulatory Authority.

CMEEC is owned by six municipally owned utilities in Connecticut: NPU, Groton Utilities, Bozrah Light & Power, Jewett City Department of Public Utilities and two utilities in Norwalk.

"Our job as legislators is to make sure that these entities, created to provide the lowest cost utilities for ratepayers, are doing their jobs," Somers said. "Maybe for ratepayer confidence, (PURA oversight) is something that needs to be explored."

Legislation championed by Somers in 2017 called for a five-year forensic audit of the cooperative's finances. The audit report is expected to be completed this month. The law also created a municipal ratepayer advocate to monitor CMEEC activities with cost savings and ratepayers' interest as his priority.

During his first year in the position, Municipal Ratepayer Advocate Bill Kowalski worked with cooperative officials to strengthen the group's ethics policy and rewrite bylaws pertaining to indemnification of board members and staff in allegations of wrongdoing. The revised language, approved in October, removed broad language that called for CMEEC to cover legal defense of officers and board members.

"The allegations in the indictment are troubling — particularly the allegation of efforts to hide the expenses from the Board and circumvent standard internal practices, if true,” Kowalski said in an email statement.

The Day received no response Friday from CMEEC to questions of whether attorneys who represented the five defendants in federal court Thursday were being paid by the cooperative.

NPU spokesman Chris Riley confirmed that NPU is not paying for attorneys for Bilda or Sullivan, who resigned from the NPU commission and the CMEEC board in October 2015.

"Now that there are criminal federal charges, I feel there could be nothing worse than taking ratepayer dollars to defend themselves for stealing ratepayer dollars to go on lavish trips. That’s unconscionable," Somers said.

CMEEC has paid well over $360,000 in legal bills in response to the FBI subpoenas, which started in late October 2016.

c.bessette@theday.com

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