Former CMEEC CEO: Luxury 'retreats' improve work relations, company success
New Haven — Former utility cooperative CEO Drew Rankin testified Monday that early in his career, private and public utilities where he had worked held mostly social retreats at luxury resorts and in stadium skyboxes, and once even took a three-week train tour of the Midwest on an antique train.
Rankin was the first witness called by defense attorneys in the federal criminal trial that charges Rankin and four other Connecticut Municipal Electric Energy Cooperative former officials with conspiracy and theft for their roles in planning $1.2 million in lavish trips to the Kentucky Derby and The Greenbrier golf resort in West Virginia.
Rankin testified for nearly three hours Monday responding to questions from his attorney, Craig A. Raabe.
He called the retreats he attended for utility companies in Ohio and Colorado “very powerful” in bringing together employees, colleagues and representatives from different companies — including from two companies he had worked to merge into Cinergy Corp. — to improve relations and productivity.
Rankin was hired by CMEEC in January 2011, he said, to turn the cooperative around. During his testimony, he defended his use of trips to the Kentucky Derby, the Greenbrier and other social outings as part of an overall effort to improve the cooperative’s employee and board of directors’ relationships, trust and ultimately productivity.
He said as he rose in his utility management career, he gained a reputation for turning around under-performing companies — and a supervisor once gave him such an assignment and told him “do what you do.”
In the criminal case, 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 four Derby trips. Two other trips were made to The Greenbrier.
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 CMEEC revenues intended to be returned to the member municipalities as rate stabilization funds to pay for the trips.
Rankin said when he arrived at CMEEC, board members saw themselves mostly as wholesale utility customers rather than as owners of a utility cooperative that could become entrepreneurial and grow its own revenues. He said he wanted them to view their roles as “we,” rather than “me.”
Rankin said he organized the Kentucky Derby retreats — which grew larger and more extravagant each year from 2013 to 2016, when dozens of invited guests took charter flights and attended private cocktail parties and the horse races.
He said The Greenbrier retreat in October 2015 included important presentations on a CMEEC project Rankin testified was a “bold” move that needed board of directors’ support.
He said the retreats worked. He said at one point, then-Groton Utilities finance manager and board member David Collard told Rankin the trips allowed him finally to get to know then-NPU General Manager Bilda, along with his wife, after the two had “sat across the table” from each other at meetings for years.
U.S. attorneys characterize the trips as lavish outings funded with money that was supposed to be returned to member municipal utilities and instead benefited the participants and rewarded friends, business vendors and political supporters.
Asked by attorney Raabe if he made any mistakes regarding the retreats, Rankin said he didn't perceive that CMEEC would be seen as a government bureaucratic agency rather than a corporate entity, and that public reaction would be so strong against the actions. He also said he should have sought more board involvement in the decisions. He called those mistakes “business judgment mistakes,” not criminal mistakes.
Rankin is scheduled to return to the stand Tuesday, with Raabe continuing his questioning, followed by attorneys for the other four defendants and then cross examination by U.S. attorneys.
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