A crack in MEA's stone wall

A Spectrum, by Jim Sykes

MEA's stonewall door was recently cracked open by the Alaska Supreme Court. Taken together with another pending case against MEA, the smell of corruption and mismanagement are wafting out. The cases tell different stories about MEA manipulating member election, which is prohibited.

The Alaska Supreme Court, in December, found MEA in contempt of violations of court orders "forbidding attempts to influence the recall election results." MEA had to pay more than $100,000 in attorney's fees and fines. Find fascinating reading in the Waterman v. MEA case (No. 3PA-01-548 Civil), which presents evidence that MEA spent money to influence the 2001 board election. If Folsom had a hint of integrity, he would bring his own violations up for examination and consider resigning like Mrs. DePriest.

The suit alleges, "Folsom, the Board president, testified that all of these MEA-paid advertising and 'informational' materials were definitely intended to persuade voters to vote against Janecek, Klunder, and Goodrich and in favor of Shattuck, DePriest, and Tischer." Chairman Folsom admitted to publicly supporting candidates for the MEA board and to donating money to REACH, an organization that funneled campaign support to candidates DePriest, Tischer and Shattuck. REACH, run by Bill Miller, uses an MEA loophole that doesn't require it to disclose any contributions. Chairman Folsom apparently failed to disclose campaign materials and support in 1997 and 2000 -- similar to charges currently pending against Linda Shattuck. If Folsom had a hint of integrity, he would bring his own violations up for examination and consider resigning like Mrs. DePriest.

One employee from the time of the 2001 election testified, "It appeared to me that they [Strategic and Government Affairs Assistant Tuckerman Babcock and General Manager Wayne Carmony] were trying to figure out how they might be able to support certain candidates and disqualify others." Later, "It was my impression that they were trying to find a way to keep from seating Mr. Janecek."

The GOBS (good old boys) have a good deal at MEA. They can hand-pick board vacancies instead of putting seats up for election. Like Enron, MEA looks like a political junta mostly run by active republicans. Political influence and public utilities are always a bad mix. Any member of citizen's group that seeks honest open answers from an MEA-type stonewall is at a great disadvantage because MEA can freely use the members' money to keep the lid on.

MEA has repeatedly refused requests for expenses related to the failed takeover of Chugach Electric, legal expenses prior to 2001, and the status of the shell co-op within MEA called Northland Electric. Manager Carmony hyped the marvel of Enron so enthusiastically last year one has to wonder if the same moral standards are at work here.

Chairman Folsom propagandized about 11 rate reductions since 1996 -- with a couple exceptions most were 1/4-1/2 of 1 percent. That's 25-50 cents on a $100. MEA says it costs $25,000 for each filing. By its own estimate, fewer but larger rate reductions could have saved MEA $100,000 to $200,000. Consumers could have had even lower rates, as suggested by the Regulatory commission of Alaska (RCA).

The special capital-credit payout being touted looks like a scam. MEA collected so much money from consumers that it approached the legal maximum. Board member Wes Pollock stated they needed to make an immediate payout to stay under the limit, otherwise it "…could cause the RCA to tell us how to govern our finances." The timing looks dubious at best. Checks will be mailed about the same time as ballots for the board, providing potential benefit to directors who may seek reelection. Lower electric rates and/or higher regular capital credit payouts would eliminate the need for a "special" payout at election time. There is a serious question whether the current management and board can hold a fair election.

Judge Cutler recently took the first step towards cleaning up the mess at MEA, ordering the Mike Janecek be seated. Read more about MEA in Waterman v. MEA at the Palmer courthouse. Surf Utility Watch's Web site (www.utilitywatch.org) for counter spins to dubious MEA claims. Utility Watch is non-political and its only agenda advocates for openness and fairness, and lower rates for utility consumers. If people keep asking important questions, information that should be public will eventually come out.

Jim Sykes helped start Utility Watch and is a long-time consumer advocate.