MEA lawsuit targets Carmony

PALMER — The protracted legal struggle that flared up in the wake of the Matanuska Electric Association’s firing of numerous top executives is reaching its climax.

For the past week, attorneys, MEA officials and the cooperative’s deposed former general manager Wayne Carmony have met in a courtroom to hash out a two-year-old lawsuit.

The suit began with a claim filed against the co-op by its fired IT director, Bruce Scott, and its fired head of human resources, Tuckerman Babcock. Those two former executives have since settled their claims. But in the interim MEA filed suit against Carmony. And that’s the trial that’s currently under way before Superior Court Judge Eric Smith.

On Friday — in a courtroom filled mostly with MEA board of directors, members, staffers and frequent attendees of MEA board meetings — jurors heard from former executives who had received contracts from Carmony.

Those contracts have been something of a bone of contention in this saga. On Feb. 6, the Frontiersman ran an opinion piece from current MEA general manager Joe Griffith in which the contracts were described as “self-serving” and “illegal.”

The contracts essentially said that Carmony could fire the executives for any reason he liked, but that the board of directors would have to pay severance — Griffith would say excessive severance — if the executives were fired without a good reason.

“If MEA wins then it will probably be for the amount of the settlement with Babcock and Scott and then whatever the law allows for attorney fees,” Griffith said in an interview Saturday.

Bob Drake, the co-op’s former operations manager, testified in a videotaped deposition played in court that he was very happy to receive the contract.

“It provided me a sense of security and a lot less stress,” he said.

Michael Pauley, formerly in charge of government and corporate communications for MEA, was also glad to receive the contract.

He said that in his view the contract gave him a measure of financial security working for an organization that had a lot of uncertainty. Each year, he noted, the co-op’s membership would decide on a new raft of members for its board of directors.

“I don’t think I fully appreciated the political tensions on the board until I was on staff,” he said.

The union representing MEA’s linemen, Pauley said, was trying to gain control of the board. A new board would probably choose to fire Carmony and then to clean house and remove all of the executives loyal to him.

Pauley said that it was part of his job to be loyal to Carmony and it wouldn’t be fair if that were to be the only reason he was fired.

“We certainly felt a measure of anxiety every year regarding whether we would still have a job a month after the (co-op’s annual) meeting,” he said.

But he bristled when attorneys described the contracts as offering a measure of job security.

“The issue isn’t lifetime job security, it’s severance,” Pauley testified.

One of the main reasons Griffith called the contracts illegal in his column was that Carmony didn’t get the board’s consent to offer them.

Pauley said that he didn’t recall the board ever voting on them, but when they were offered, board president Bill Folsom was in the room.

“I recall Mr. Carmony making comments to the effect that the presence of the board officers was a mechanism for informing the board that these contracts existed,” Pauley said.

Griffith wouldn’t actually disagree. His opinion piece says that three hand-picked board members — Carmony’s friends, as Griffith called them — signed off on them. Not the full board. Griffith said the contracts were a means for Carmony to subvert the will of the board.

Pauley testified that without that financial security, executives might start looking for other work at places where their positions wouldn’t be as tenuous.

On the other side, Griffith argued in his Spectrum that some of the executives offered the contracts had been there for years, working in that supposedly tenuous situation and none of them had plans to leave.

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