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Warrants: Execs transferred $23 million from electric co-op
Cobb County authorities allege that executives of a non-profit electric cooperative illegally transferred at least $23 million from the co-op to a business in which they had a financial interest.
Cobb sheriff’s deputies and the GBI served search warrants Wednesday at the EMC offices and the homes of three co-op executives – CEO Dwight Brown and three members of the co-op’s board. The warrants seek a variety of paper and electronic documents.
No criminal charges have been filed. But in an affidavit seeking the warrants, a deputy cited several examples in which the EMC’s assets were illegally transferred, including:
— the sale of all the co-op’s electric meters to Cobb Energy, a for-profit business owned in part by co-op executives, at $5.8 million below the book value
— $2.9 million in excess fees charged by Cobb Energy for reading the meters
— a 50 percent markup on the expense of running a customer call center, costing the co-op $14.3 million
— $3.4 million to end a natural gas contract with SCANA
The transactions are part of a complex series of deals stemming from the co-op’s 1997 creation of Cobb Energy. Some EMC customers filed suit in 2007, eventually forcing the EMC to disentangle itself from Cobb Energy and take back the transferred assets.
The co-op serves most electric customers in Cobb and several adjacent counties.
The warrant requests are posted on ajc.com, from which I borrowed them. Thank you very much, AJC. You can read their story here.