A group formed last year is advocating for member input on the elections for Cobb Electric Membership Corporation (EMC) board members, while the Georgia Supreme Court weighs arguments it heard last week about a lawsuit originally filed in 2007.
Cobb EMC provides electric service to about 37,000 homes and businesses in Cherokee County, according to a spokesman for the energy co-op.
The president and directors of Cobb EMC seek the high court to overturn the appellate court’s ruling that the amendment to the EMC’s bylaws, allowing
co-op members to vote by proxy, violated a settlement agreement to the 2007 lawsuit.
The lawsuit alleged that some of the EMC’s board members, including CEO Dwight Brown, violated fiduciary duties by creating the for-profit business, Cobb Energy Management Corporation, according to an oral arguments summary provided by the Supreme Court’s public information office.
It was alleged that some Cobb EMC leaders transferred millions of dollars from the co-op to Cobb Energy, documents show.
The settlement agreement, entered into in late 2008, transferred $112 million back to the co-op from Cobb Energy, and set an election schedule for 2009, allowing Cobb EMC members to vote in a new board, should they want to.
The 2008 settlement had a provision that said the plaintiffs, Edgar Pounds and other members of the co-op, would seek a by-laws amendment “at the next meeting” of members. The by-law amendment would allow for mail-in voting, and the co-op’s board reportedly, just two weeks after the settlement was agreed to, amended the bylaws to allow for proxy voting, which by Georgia law, must be done prior to a meeting.
Supreme Court justices heard arguments from both sides Feb. 7, and have until July to render their decision – but could do so prior to this summer.
Cobb EMC’s public relations office said the organization had no comment on the ongoing legal battles.
Amidst the civil legal battles, Brown was indicted last month by a Cobb County Grand Jury on racketeering, theft and false statements charges.
In 2009, the Georgia Bureau of Investigation and the Cobb Sheriff’s Office raided the homes of Cobb EMC board members, as well as Cobb EMC offices.
While the energy co-op’s legal battles continue, a community group, Take Back Cobb EMC, is trying to keep co-op members informed of the ongoing battles the organization faces.
Joel Mendelson, a founder of Take Back Cobb EMC, said the group was formed last year after members were tired of what was going on inside the co-op. He said his group isn’t concerned with South Georgia plants, like other groups are.
He said Take Back Cobb EMC only wants to make sure the members of the co-op get involved and have the chance to take part in the process of voting for board members.
“Take Back Cobb EMC is a community group made up of Cobb EMC members and other Cobb residents who are upset with the lack of transparency and open government at Cobb EMC,” he said. “None of us really have an opinion on the plants, we just want our money to be invested properly and actually have members have a say in how Cobb EMC is governed.”
He said the group simply is there to “provide awareness” and “spread the word to other Cobb EMC members and give them a resource to find out what is going on with Cobb EMC.”
Mendelson said the group is promoting potential board candidates, but elections are “in limbo” due to the lawsuit.
“There will be no elections until the case is settled … since the elections are directly affected in the lawsuit,” he said, adding that while the organization may be promoting certain candidates, it is more interested in getting people involved.
“If they like the current board members, they can vote for them,” he said. “But we would prefer to see an entirely new slate of members to come in and look and see what’s going on. We’re just fed up with the situation we’ve seen after these lawsuits … as well as, now, the indictment of Dwight Brown. This is something we have the power to change, and this isn’t something we need to be dealing with, these lawsuits and our CEO being indicted. We’re better than that.”
A spokesman for Cobb EMC said no board member is currently serving an expired term, despite what another Web site says, because the EMC bylaws say board members serve until they are replaced.
The spokesman said the current board members will “serve until elections can be scheduled and conducted.”
Take Back Cobb EMC currently has about 100 members through its e-mail newsletter.
For more information, go to www.takebackcobbemc.com.
