MEA can learn a valuable lesson

Maybe it could be an illuminating experience for Matanuska Electric Association leadership. Friday’s jury verdict against the Valley-based electricity cooperative may be a hard legal pill to swallow, but one that could ultimately help lead to a more healthy organization.

MEA lost its bid to recoup $650,000 it had to pay out in a settlement with a pair of former executives, IT director Bruce Scott and assistant general manager Tuckerman Babcock. Their 2009 firing opened up a litigious and financial can of worms that’s been dangling at the end of a legal line for nearly two years. Their contracts, given to the executives by former general manager Wayne Carmony, called for huge sweetheart severances if anyone but Carmony fired them.

It was an end-run around the MEA Board of Directors that led to MEA suing Carmony for the severance. The settlement with Scott and Babcock was significantly less than the $1 million-plus MEA officials say each potentially stood to gain had their claims gone to court. Of that $650,000, all but a $25,000 deductable was paid by MEA’s insurance company.

While we understand Carmony’s tenure came under the watch of a different board of directors, this current board would benefit by learning from this costly experience. In addition to Scott and Babcock, the jury verdict on Friday also validates the $1.7 million Carmony himself got as severance.

The former manager argued in his testimony that he didn’t personally benefit from the contracts he gave the former executives. Well, of course their contracts would not include financial compensation for other employees, but Carmony is laughing all the way to the bank.

In the end, the MEA board fired Carmony and made him a millionaire in the process. The lawsuit against Carmony has roughly cost the cooperative about $130,000 in added legal expenses as well. More accurate billing won’t be known for a couple months.

Far be it for us to second-guess a jury of good, honest Valley residents charged with deciding who legally had a dog in this fight. We appreciate the difficult job these people had and respect their verdict. What we can do is hope MEA’s current board is paying attention, and from our seat in the peanut gallery, that seems to be the case. Ultimately, no matter how much anybody makes Carmony out to be bad guy, he did what he did under the watch of the MEA board. He was the board’s hire, the person the board put its trust in, and it is the board’s responsibility to hold the general manager accountable.

Today, MEA bears little resemblance to the tightly guarded good old boys club we witnessed under Carmony’s tenure. His replacement, Joe Griffith, is now the only executive with a contract. And that contract is open and available to anyone who wants to see it. In fact, it’s available online at mea.coop without any redactions.

In contrast, Carmony’s contract was so super-secret that even MEA board members — the body that employed him — could not get a copy of it.

There is likely more to be done to put the co-op’s affairs in order, but this costly housecleaning seems like a good start. It seems the former manager made golden parachutes for his chosen few and left members to pay the tab.

We hope that light bulb we see going on at MEA headquarters is a good sign that management and the board aren’t content with keeping their member-owners in the dark anymore.