Derby junkets led to resignations, indictments, law changes

The Connecticut Municipal Electric Energy Cooperative was an obscure entity in 2016, receiving little public attention except when a member municipal utility reached a deal with the cooperative to host a solar voltaic field.

That all changed in the fall of 2016 with media revelations that the cooperative, owned by six municipally owned public utilities, had hosted lavish trips dubbed strategic retreats to the Kentucky Derby for dozens of top staff, board members, their families and invited guests.

The Day obtained guest lists, cost totals and trip itineraries through Freedom of Information requests to CMEEC CEO Drew Rankin. After subsequent Freedom of Information complaints and battles, The Day was able to show how some money in a CMEEC Margin Fund meant to be distributed to member utilities for electric rate stabilization was used to pay for the trips. And some member utility ratepayer money went directly into that fund. The trips never were approved directly by the CMEEC Board of Directors and only showed up as “board expenses” on the Margin Fund account sheet.

Community impact of the coverage of this issue was immediate and continued into 2019. Ethics complaints were filed in Norwich and Groton City, and board members in Norwich and Groton resigned.

The Day continued to pursue the story by obtaining 135 pages of legal bills connected with an FBI investigation through Freedom of Information requests. The documents revealed at least two subpoenas and grand jury investigations, with legal bills footed by CMEEC totaling more than $362,000 for just the first six months through April 2017.

Federal indictments handed down Nov. 8, 2018 against five CMEEC officials also revealed that CMEEC underestimated the costs of the trips in responding to The Day’s FOI requests. The total actually was $1.2 million for four years of Kentucky Derby trips, trips to a luxury golf resort in West Virginia and unrefunded deposits for a 2017 trip abruptly canceled.

The Day continued to pursue FOI requests and learned the legal bills have soared past $1.2 million through November 2019, as CMEEC continues to cover the legal costs of multiple attorneys representing the five former officials. CMEEC has filed a civil suit against its insurance carrier for refusing to cover the costs.

The revamped CMEEC board will operate under a new state law that mandates future retreats be held within the state and include business agendas.

The criminal case is scheduled to go to trial in February 2020, but court documents show that plea deals have been offered by the federal government to all five defendants, and the court is awaiting responses from the defendants.

c.bessette@theday.com

The Impact

Ethics complaints were filed in Norwich and Groton City against Kentucky Derby trip participants, including then-Norwich Mayor Deberey Hinchey, then-Norwich Public Utilities General Manager John Bilda and utilities commission members in both cities. Board members in Norwich and Groton resigned.

Federal indictments were handed down Nov. 8, 2018 against five CMEEC officials: former CEO Drew Rankin, CMEEC Chief Financial Officer Edward Pryor and former board members Bilda and James Sullivan of Norwich and Edward DeMuzzio of Groton. All face charges of conspiracy and theft from a program that receives federal funding. Rankin and Sullivan face similar charges in a second indictment concerning allegations that CMEEC paid for nearly $100,000 in personal expenses for Sullivan.

State law changes mandated future retreats be held within the state and include business agendas, expanded the CMEEC board with municipal ratepayer representatives and created a state ratepayer consumer advocate. Norwich and Groton City replaced board members who had participated in the trips.

The revamped CMEEC board fired Rankin, while Pryor retired in good standing. In January 2019, the Norwich Board of Public Utilities Commissioners reached a separation agreement with Bilda, who was allowed to retire with a full pension despite public outrage.

The criminal case is scheduled to go to trial in February 2020.

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