Former Cobb EMC head indicted again
by Kim Isaza
kisaza@cherokeetribune.com
July 08, 2011 12:00 AM | 4109 views | 1 1 comments | 7 7 recommendations | email to a friend | print
MARIETTA - A unanimous Cobb County grand jury indicted retired Cobb EMC head Dwight T. Brown on 35 felony criminal counts Thursday. Ironically, the indictments were read in open court before Superior Court Judge Robert Flournoy III, who in March threw out a previous criminal indictment against Brown.

The 89-page indictment accuses Brown of a pattern of racketeering activity dating to 1997, when he, "together with directors of Cobb EMC ... devised and intended to devise a scheme to acquire and maintain interests in Cobb Energy, consisting of preferred and common stock, control of Cobb EMC and Cobb Energy, and personal property, including United States currency."

But Brown is also now facing charges he threatened and intimidated witnesses by participating in filing a civil suit in February, following his Jan. 6 indictment, against people "who allegedly cooperated with the prosecution with regard to the prosecution of Dwight T. Brown and the investigation of Cobb EMC directors." Brown and the other plaintiffs quickly dropped that lawsuit.

The indictment also lays out multiple charges of theft involving SCANA Energy fees, and making false statements and writings for each year between 1998 and 2007; conspiracy to defraud Cobb County government and the Cobb County School District; theft involving meter-reading fees; theft involving $3 million in loans Brown and his wife used to buy stock in Cobb Energy; and theft of dividends paid on that Cobb Energy stock.

Brown was booked in to Cobb Jail just before 6 p.m. Thursday and released on a signature bond at 6:27 p.m. Former Gov. Roy Barnes, who is representing Brown in the criminal case, declined to comment.

Most, if not all, of the charges accuse Brown of acting "in concert with directors of Cobb EMC," though none of the 10 directors have been charged.

As for whether such charges are forthcoming, District Attorney Pat Head quoted an old Doris Day song in saying "whatever will be, will be. The future's not ours to see."

The latest indictment is a mix of new charges and some contained in the January indictment, the tossing of which remains on appeal to the state Court of Appeals, Head said.

All together, the latest charges accuse Brown of diverting at least $75 million in assets away from Cobb EMC and its member-owners and into the coffers of the for-profit Cobb Energy, and some into his own pockets.

Prosecutors took special care in the indictment to fend off statute of limitations defenses, naming 34 individual Cobb EMC members who are over the age of 65 as victims in the case. Under Georgia code section 17-3-2.2, if the victim is 65 or older, the limitations clock does not begin to run until the violation is reported or discovered by law enforcement.

Among the victims named in the indictment are former Congressman Fletcher Thompson; Edgar "Bo" Pounds, one of the plaintiffs who sued the EMC in 2007; Ralph Frey; Jimmy Durham; and Marietta lawyer Hilton Dupree.

As for the charges of influencing and threatening witnesses, prosecutors allege Brown "conspired with directors of Cobb EMC and others to file a lawsuit against persons who allegedly cooperated with the prosecution" of Brown and the investigation of Cobb EMC directors. That lawsuit "sought actual damages, punitive damages and attorney fees against persons named in that action for allegedly cooperating with the State of Georgia in ... bringing criminal charges against the accused," according to the indictment, and Brown, "with intent to hinder, delay, prevent, and dissuade persons from assisting in a criminal prosecution, directly or indirectly threatened, caused, and attempted to cause economic harm to the defendants" by filing that civil lawsuit.

In explaining the nature of the case in Thursday's indictment, prosecutors note that days after Cobb Energy was formed on Sept. 3, 1997, Brown stood before the Cobb EMC members at the 1997 annual meeting and said, "We will not allow Cobb EMC to subsidize this new company," and "this other company is created to work for you and to work for Cobb Electric Membership Corporation."

But less than a year later, according to the indictment, "all of Cobb EMC's employees were working for Cobb Energy, Cobb Energy was being paid a premium to employ Cobb EMC's former workforce, Cobb EMC's meters were owned by Cobb Energy, and all of the revenues from the SCANA Contract were flowing to Cobb Energy. In short, Cobb EMC was subsidizing Cobb Energy to the tune of millions of dollars per year, a situation that continued for a decade."

Back on Jan. 6, Brown was indicted by an earlier grand jury on 31 counts of theft, racketeering, fraud and conspiracy to defraud government entities. The indictment was delivered before Superior Court Judge George Kreeger in his courtroom in the new Superior Courthouse, which was not yet fully open to the public.

That indictment alleged that Brown used Cobb Electric Membership Corporation as a piggybank to fund various operations and activities of the for-profit Cobb Energy firm he created, without approval by the cooperative's members, as required in EMC's bylaws. Without revenues from these various business dealings by Cobb Energy, funded by the co-op's members, Cobb Energy could not have paid Brown millions of dollars in salary and compensation, dividends in preferred stock, and forgiven a $3 million loan Brown used to purchase the Cobb Energy stock, according to the indictment.

In March, Superior Court Judge Robert Flournoy III threw out Brown's indictment on grounds that it was handed down in a courtroom that was not open to the public. That decision has been appealed, and is scheduled to be heard by the state Court of Appeals in October.

And though the 10 directors of Cobb EMC have not been charged with any crimes, they are still heading to court for a hearing regarding the settlement agreement in the 2007 derivative lawsuit.

Cobb Superior Court Judge Stephen Schuster ordered all 10 Cobb EMC directors to appear in his courtroom at 9 a.m. Aug. 12, after rejecting their attempts to rehire Brown as the EMC's chief executive officer.

This week, sources told the Journal the directors are now interested in naming Stan Wise, a Public Service Commissioner, to replace Brown as CEO.

After that story broke Thursday morning - with critics insisting Wise is Brown's "hand-picked successor" - Wise tried to distance himself from his longtime friend.

"The next CEO, whomever that may be, needs to start the healing process and move this EMC forward with some reforms," Wise said in a statement to the Journal. "The Co-op needs a plan for open and legitimate Board elections and better communication and interaction with member-owners. The integrity of the electoral process that is adopted cannot be questioned. The Co-op needs to move as expeditiously as possible on these matters and in harmony with the Court. These reforms will go a long way towards giving comfort and assurance to the dedicated employees who have made this Co-op great for a long time."

Brown retired from Cobb EMC on Feb. 28 as part of a Dec. 2008 settlement. He has since served as a consultant until Schuster ruled that Brown's tenure "at Cobb EMC and its subsidiaries ended February 28, 2011" and "cannot be renewed, revived or repackaged."
Comments
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anonymous
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July 08, 2011
if it walks like a duck , talks like a duck ,

and looks like a duck , it IS probably a duck !

brown & company sure lokk "quacky" to me.

'forgave' a $3 million loan ? WTH.

'haired as a 'consultant' ?

roy barne$ ?

angus

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