Utility cooperative attorneys recall their knowledge of Kentucky Derby trips at trial
New Haven — Golf outings in Connecticut and public power conferences in Washington, D.C. and New Hampshire attended by utility officials were highlighted Monday, as the federal criminal trial of five former utility officials charged with planning trips to the Kentucky Derby resumed.
U.S. attorneys prosecuting the case and attorneys for the five defendants used evidence from the Connecticut outings and out-of-state conferences to elicit different conclusions during their questioning of witnesses.
Former Connecticut Municipal Electric Energy Cooperative CEO Drew Rankin, former CFO Edward Pryor, former Norwich Public Utilities General Manager John Bilda and former CMEEC board members James Sullivan of Norwich and Edward DeMuzzio of Groton face felony charges of conspiracy and theft from a program that receives federal funds in association with the Kentucky Derby trips. Two other trips were made to The Greenbrier luxury golf resort in West Virginia.
The charges stem from annual trips CMEEC arranged for dozens of top staff, board members, some family members, local political leaders, vendors and others from 2013 to 2016. Four of the defendants face four theft charges, while Sullivan faces three charges, as he resigned from his CMEEC and Norwich utility commission positions prior to the 2016 Kentucky Derby trip.
CMEEC is owned by its member municipal utilities: Norwich Public Utilities, Groton Utilities, Bozrah Light & Power, Jewett City Department of Public Utilities, South Norwalk Electric and Water and Norwalk Third Taxing District. In the case, the defendants allegedly used money to fund the trips that was derived from CMEEC revenues that had been intended to be returned to the member municipalities as rate stabilization funds.
The defendants argue that the money used for the trips was CMEEC money, not belonging to the members, and the state statute that created CMEEC allowed it to function as a corporation, including allowing board retreats, such as those to the Kentucky Derby and golf resort.
CMEEC General Counsel Robin Kipnis and her predecessor, attorney Philip Sussler were called to testify by U.S. attorneys Monday on their knowledge of the Kentucky Derby and West Virginia golf resort and other local outings in eastern Connecticut.
Kipnis was asked to describe an August 2015 “CMEEC Board Meeting, Customer and Partner Social Event” that featured a golf outing at the Pautipaug Country Club in Baltic, dinner and an awards celebration. Kipnis said she attended the event, and rode in the golf cart with Thomas Ritter, a CMEEC lobbyist and her brother-in-law. She testified other social outings by CMEEC staff were held at the Norwich Inn & Spa.
Kipnis, who started as CMEEC general counsel in 2016 and was a contracted assistant general counsel prior, said she never attended the Kentucky Derby trips or trips to The Greenbrier in West Virginia. She testified she was not aware of the trips at the time.
Kipnis said she attended a Washington, D.C. American Public Power Association conference with Rankin and in 2019 — after all five defendants were no longer with CMEEC — she attended a New England Public Power Association conference at a hotel on Mount Washington in New Hampshire.
In questioning by Assistant U.S. Attorney Michael S. McGarry, Kipnis said the New Hampshire and Washington conferences addressed public power issues.
She described the Pautipaug Country Club event as a social outing, allowing participants to get to know one another.
“Did it work?” McGarry asked of the golf outings. “Did it have that effect?” Kipnis responded, “Yes.”
Kipnis told the assistant U.S. attorney she either drove or took shuttle buses to the local outings, and flew by commercial airline to Washington, and she received no participation gifts, in contrast to the stretch limousines, private jets and gifts received by Kentucky Derby trip participants.
Later, McGarry asked: “Did members of CMEEC have to go to Kentucky to have a team bonding experience?”
Kipnis responded, “No.”
He then asked “Did members of CMEEC have to go to West Virginia to have a team bonding experience?”
Kipnis again responded, “No.”
Kipnis also said she asked one Kentucky Derby participant, a CMEEC vendor she had worked with, to repay the $8,000 cost of his trip to avoid “any appearance of any kind of conflict.”
Craig A. Raabe, who represents Rankin, questioned Kipnis during cross examination and centered his questions on whether there was utility business conducted, whether there were presentations, votes and minutes kept at the local social outings. She said there were not and repeated that they were social gatherings, giving participants, including herself, a chance to connect with one another.
“Was it worthwhile?” Raabe asked.
“Yes,” Kipnis replied.
Raabe then presented the 2016 invitation to the Kentucky Derby Rankin sent to invitees that began: “Are you ready for some genuine Kentucky experiences and some Derby fun?”
“That’s essentially the same purpose as the golf outings, correct?” Raabe asked.
“Yes,” Kipnis responded.
Sussler, the former CMEEC general counsel, testified Monday afternoon. In response to questions by Assistant U.S. Attorney Sarah P. Karwan, Sussler said he was initially not aware of the Kentucky Derby trips and was not invited. He said one year, he arrived at work to find many staff gone and was told they were in Kentucky. He said he knew Rankin had a house in Kentucky and guessed the retreat was at Rankin’s house.
In early 2016, Sussler said he was in a lunch line with Bilda and Rankin following a board meeting. One of them asked for his opinion on whether the Kentucky Derby retreat was OK, Sussler said. He recalled responding that he needed more information, what was being done during the retreat and who would attend. He said he advised them also to seek opinions from municipal attorneys for the member towns.
Sussler said he never received more information and did not research the matter further, he said.
U.S. attorneys pointed out in a written motion submitted prior to Monday’s trial session that Sussler’s testimony contrasted with assertions made during opening statements by attorneys for the defendants that Sussler had known about the Kentucky Derby trips and had told Bilda and others that they were not illegal.
The cross examination by defense attorneys is scheduled to continue Tuesday.