Report shows lavish spending by fired CMEEC CEO
Norwich — An investigative report documented escalating spending from 2013 through 2016 by former CEO Drew Rankin for outings labeled as strategic retreats, team-building or even social events and personal expenses using revenues at the nonprofit Connecticut Municipal Electric Energy Cooperative.
The 68-page report by labor specialist attorney Eileen Duggan was just part of the foot-thick record of documents and back-up materials presented to the CMEEC board’s special committee that recommended terminating Rankin, who faces two federal indictments on public corruption charges.
The board voted unanimously Thursday to terminate Rankin’s employment following a three-hour closed-door hearing with Rankin and his attorney, Gregg Adler. Rankin was placed on unpaid leave Nov. 9, a day after the indictments were released, but was awarded back pay through Thursday based on his $325,000 annual salary.
Rankin and Adler could not be reached for comment Friday, and did not return calls Thursday.
The report chronicled expenses for the well-publicized four years of trips to the Kentucky Derby and two trips in 2015 to The Greenbrier luxury golf resort in West Virginia that were the focus of the federal indictments of Rankin and four other CMEEC officials on public corruption charges.
Duggan’s report went beyond the Derby trips, which she calculated at a total cost of $1,268,500 — higher than the total listed in the indictments — including $200,960 in unrefunded deposits for a 2017 Kentucky Derby trip aborted after public outcry erupted in fall of 2016 and led to the FBI investigation, local ethics complaints and changes in the state law that created CMEEC.
Duggan found no board votes for the trips. The 2013 and 2014 Derby trips were funded through the Administrative and General expense accounts. In 2015, CMEEC set up the “contra-Margin account” to fund the trips using a profit fund intended for rate stabilization for member utilities. Duggan said members of the board’s budget committee questioned the line item of “Member Delegation Expenses and Retreats” and were told the funds were for the Derby trip.
Duggan wrote that while Rankin repeatedly categorized the Derby trips as “strategic retreats” for board member and staff bonding, the trips included no business activities, and less than half — sometimes less than a third — of the participants each year were board or staff members. It was also unclear whether all the CMEEC board members were invited to the trips.
Rankin also organized local golf outings, either at the Mohegan Sun at Pautipaug Country Club in Sprague or at the TPC River Highlands in Cromwell, that also escalated “exponentially” in cost from 2013 through 2016, Duggan reported. Again, less than half the participants were board members or staff, the majority being spouses, vendors, lobbyists, politicians and other guests.
An August 2013 golf outing cost $3,500; a July 2014 outing, $9,500; and three golf outings in 2015 totaled $49,000. The 2016 single golf outing included 88 golfers and cost $36,500, including lodging for some, gifts, meals and alcohol.
Rankin used his CMEEC purchasing card for many outings and personal expenses, the report said. He repeatedly received temporary increases from the $10,000 per month limit, authorized by then-CMEEC Chief Financial Officer Edward Pryor, who also is indicted on the same corruption charges.
In August 2015, Pryor authorized a permanent jump in Rankin’s purchasing card to $25,000 per month. Two weeks later, Rankin asked for a temporary increase to $35,000 “due to combined event costs within the same calendar period.”
Because Pryor, who also was placed on unpaid leave Nov. 9, retired as of Dec. 31, CMEEC did not pursue disciplinary action against the former CFO.
The report said Rankin used his purchasing card “on a regular basis for meals for himself and/or others, and he appeared to spare no expense in this regard.” The investigation found that Rankin failed to submit receipts for many expenses, as required in CMEEC purchasing card policy and consistently used the card for alcohol purchases prohibited by the policy.
In 2015, not including spending for the Kentucky Derby, Greenbrier or the local golf outings, Rankin spent at least $17,000 for six noncatered dinners and apparently alcohol for 10 or fewer participants, the report said.
Duggan’s report also touched on the second federal indictment, in which Rankin and former CMEEC board Chairman James Sullivan of Norwich were charged with one count each of conspiracy and three counts of theft from a program receiving federal funds. The indictment said CMEEC paid for nearly $100,000 for Sullivan’s travel and personal expenses, including to Washington, D.C., where he works as a federal lobbyist. Sullivan was not a registered lobbyist for CMEEC.
“Further, rather than pursue reimbursement for all travel expenses, Mr. Sullivan utilized the Office and Facilities Manager to book travel which did not have any express, documented business purpose,” Duggan wrote. “It is unclear why Mr. Sullivan may have been given such treatment by CMEEC.”
Combined, Duggan wrote, Rankin’s “acts or omissions” amounted to numerous violations of CMEEC policies and his contractual duties as CEO, including alleged violation of laws, “willful misconduct” that hurt CMEEC financially and in its business reputation, and gave the board cause to terminate his employment.