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Judge orders CMEEC to pay legal bills for one indicted defendant

The Connecticut Municipal Electric Energy Cooperative must pay in advance “reasonable legal fees and expenses” to one of five cooperative officials indicted in November on federal corruption charges, a federal judge ruled in a civil case filed by former CMEEC CFO Edward Pryor.

Judge Jeffrey A. Meyer’s order, issued Thursday, stated that CMEEC did not contest the order but reserved the right to contest whether Pryor is entitled to the payments at a later date “based on concerns for its ratepayers, among other reasons.”

The order specifically applies to Pryor’s civil lawsuit seeking legal fees, and it was unclear Thursday whether CMEEC now would provide payments legal fees in advance for all five defendants indicted in the criminal cases.

CMEEC officials did not respond to requests for comment.

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. The charges stem from their roles in CMEEC’s hosting of controversial lavish trips to the Kentucky Derby for top staff, board members, family members and invited guests. 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 question of whether CMEEC would be obligated to pay for the legal defense of the five defendants has lingered since they were indicted on Nov. 8. According to Pryor’s civil lawsuit, CMEEC last June recommended he hire an attorney in connection with the ongoing FBI investigation into alleged misuse of ratepayer funds. Pryor wrote that CMEEC advanced his legal fees for approximately six months, but abruptly stopped paying once he was indicted.

CMEEC has acknowledged it paid about $370,000 in legal fees during the two-year FBI investigation.

Pryor and Rankin both were placed on unpaid leave by the CMEEC board of directors Nov. 9. Pryor retired Dec. 31, and a CMEEC special committee is investigating Rankin’s actions and the status of his future employment.

Judge Meyer, who is handling both the criminal indictments and Pryor’s civil suit, ruled Thursday “that Mr. Pryor is entitled to advancement by CMEEC of reasonable legal fees and expenses incurred in connection with the Investigation" and the criminal case.

Meyer cited CMEEC’s bylaws that call for the cooperative to provide indemnification of board members and officers and an “Affirmation and Undertaking” statement that Pryor and the other four defendants signed months before the criminal charges were filed. In the statement, each official had affirmed: “I acted in good faith and in a manner that I reasonably believed to be in, or not opposed to, the best interests of CMEEC, and I had a reasonable belief that my conduct was lawful.”

The statement also calls for the signer to “promptly repay CMEEC on request for the amounts of legal fees, expenses, and other costs that CMEEC has advanced or reimbursed on my behalf for legal fees and expenses,” if it is found through CMEEC bylaws, resolutions or state law that they were not entitled to indemnification.

Pryor’s attorney, Michael Q. English of Stamford, declined to comment on the ruling Thursday.

Meyer’s ruling calls for CMEEC to pay Pryor’s reasonable legal fees and expenses for the criminal case within 30 days of his request for advancement.

If CMEEC decides to challenge the ruling, the cooperative would have to provide Pryor with 90 days’ notice and continue to pay the legal fees during the 90-day period.

c.bessette@theday.com

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