Jury leaves MEA in dark

PALMER — After a two-week trial and an afternoon thinking it over, a jury ruled against Matanuska Electric Association in its attempt to hold its former general manager liable for settlements with two fired executives.

MEA spokeswoman Cheryl Heinze said that the co-op was disappointed with the verdict and still believes its rules required then-manager Wayne Carmony to seek approval for the employment contracts he put in place, which led to the settlements.

“We still believe that he should have gone before the board, but we respect and honor the decision of the jury,” Heinze said. “Now we just move on, go on doing the best we can building a power plant and looking to the future.”

MEA’s board of directors fired Carmony in spring 2009, not long after they directed him to fire IT director Bruce Scott and assistant general manager Tuckerman Babcock.

Scott and Babcock later filed lawsuits against MEA, claiming they were owed severance pay the co-op refused to give them. MEA, Babcock and Scott settled those lawsuits out of court. In the meantime, MEA filed a lawsuit against Carmony seeking to hold him fiscally responsible for that severance pay.

The two-week trial essentially asked the jury to decide who should have to pay the settlement to the two former executives; reported during the court proceedings as $650,000.

Attorneys for both sides gave closing arguments Friday.

Kevin Clarkson, representing MEA, said that Carmony gave his executives the contracts in order to gain political advantage at the expense of the company. He said Carmony put those severance clauses in there and structured them in such a way so that if a new board took over and fired Carmony, MEA would be on the hook for hundreds of thousands of dollars. And that new board would then look bad.

“That’s what it is — political advantage and payback at the expense of the cooperative,” Clarkson told the jury.

He also pointed to evidence that the day Babcock and Scott were fired, Carmony went to Chili’s with some of his executives. The next morning he came into the office and tried to get $1.1 million in severance paid to the fired executives. The board stepped in to stop it, but Clarkson said Carmony knew the board didn’t want him doing that in the first place and acted anyway.

“It’s outrageous,” Clarkson said. “He’ just trying to get the money out the door is what he’s doing,”

On the other side, Carmony’s attorney, James Gorski, told the jury that Scott, Babcock and the other executives who received similar contracts were hard-working people taking tough stances on behalf of the company.

“Who are they sticking their necks out for? Are they doing it for Mr. Carmony? No. They’re doing it for the co-op,” Gorski said.

So why shouldn’t they receive a measure of financial security when they were let go?

He said he felt that the order to fire Babcock and Scott was a kind of game the board was playing.

“It’s a trap. Mr. Carmony is never going to fire his senior managers, and if he doesn’t that’s cause right there to have him fired,” Gorski said.

As evidence that Carmony didn’t need to seek the board’s approval for the contracts, he pointed to evidence that his replacement, Joe Griffith, had made decisions on those very same contracts without first consulting with the board of directors.

“They can’t have it both ways,” Gorski said.

He noted that Carmony had walked away from a six-figure settlement with the cooperative because the board wanted him to say something he didn’t believe was true about the contracts with Scott and Babcock to help MEA in the lawsuit. For his part, Clarkson disputes that Carmony was asked to lie. But Gorski said that decision should tell the jury something about Carmony’s credibility.

“Mr. Carmony is an honorable man. He may be a bit of a tough taskmaster. He may be kind of autocratic, but he’s not a liar,” Gorski said.

Contact Andrew Wellner at andrew.wellner@frontiersman.com or 352-2270.