Register now, it's free! |
COBB EMC
Utility's secret wasn't keptThe Atlanta Journal-Constitution
Published on: 04/25/08
Lawyers for Cobb Electric Membership Cooperative and its management company have argued for months that the public had no business knowing the total compensation of their chief executive, Dwight Brown.
This week, as lawyers continued to push to seal the information, a Cobb County judge learned that the management company, Cobb Energy, had already turned those details over to the publisher of the Marietta Daily Journal.
|
Today, Superior Court Judge Michael Stoddard will convene an emergency hearing to decide whether the disclosure nullifies Cobb Energy's argument to keep it secret.
Lawyers suing the member-owned co-op say the information shows Brown makes $1.5 million a year as president of both companies. In 2005, public records show, the co-op paid him a $335,800 salary.
The skirmish is the latest to emerge from a contentious lawsuit brought last fall by some co-op members, who are also its customers. The suit alleges that Cobb Energy, a for-profit company created 10 years ago to run the nonprofit co-op and branch into other businesses, has drained the co-op's assets.
Brown, who urged the co-op's board of directors to create Cobb Energy in 1997, has been a central player in the business decisions and financial transactions of the two companies.
On Wednesday, an attorney for Cobb Energy argued that the extent of Brown's stock ownership in Cobb Energy, along with his employment contract, should be kept confidential. Attorney Michael Weinstock also argued that the judge should bar public access to portions of Brown's deposition, in which he testified about his stock ownership and terms of employment.
"We're a private concern," Weinstock said. "We don't have the same disclosure obligations."
On Thursday, however, the publisher of Cobb County's biggest newspaper said Cobb Energy gave him Brown's deposition three weeks ago. Otis Brumby said the document includes a lengthy description of Cobb Energy's stock issues, as well as details of Brown's compensation.
In an interview, Brumby said Cobb Energy Vice President Sam Kelly sent him Brown's deposition by e-mail on April 1. The deposition, contained in two volumes, was not missing pages and had not been deleted, he said.
"I didn't see any gaps in it," Brumby said.
Brumby, who described himself as a friend to all parties in the lawsuit, said he assumed Kelly sent him the deposition at Brown's request.
Several days earlier, Brumby said, he had told his son-in-law Scott Gregory Jr., who is also a Cobb Energy attorney, that the plaintiffs' attorney had briefed him on the lawsuit but had not let him see Brown's deposition.
Gregory told Brumby that Brown probably would be happy to send him a copy of the deposition himself, Brumby said.
"The next thing I know it shows up on my machine, so I had my secretary download it," Brumby said. "It's almost 2 inches thick."
A spokeswoman for the two companies, Carol Cookerly, had no comment on the Brumby disclosure. "We're waiting for the judge to rule on the issue of confidentiality," she said.
Compensation has become a key issue in the members' lawsuit against Cobb EMC and Cobb Energy, which alleges that some co-op managers were unjustly enriched by the ties between the two companies.
Cobb EMC gave Cobb Energy a 40-year contract to operate the co-op's business while it branched into other businesses.
In court Wednesday, customers' attorney Pitts Carr said Brown's compensation from the two companies had climbed from $250,000 to $1.5 million over the past decade.
He said Brown's compensation included millions in loans from the companies that "self-liquidated" as long as Brown stayed at the helm of the companies. The only condition, Carr said, was "that he had to warm his seat for a period of time."
Carr's description prompted an angry rebuttal from attorneys for Brown and Cobb Energy.
"You can rest assured that Mr. Brown did not say he was paid to warm his seat," Weinstock said.
Brown's compensation is among several pieces of information that Cobb Energy has asked to be kept confidential.
The company also wants to seal the list of stockholders of Cobb Energy, which was once entirely owned by the co-op. The 1,000 or so shareholders had a right to expect information provided to Cobb Energy would be kept confidential, Weinstock said.
The judge had announced he would rule on the confidentiality issues today. It was not clear whether the emergency hearing would delay that decision.
In court Wednesday, attorney Carr characterized a number of ties between the two companies as "very troubling."
He said the co-op had turned its employees and its meters over to Cobb Energy with little or no compensation. He said Cobb Energy now earns an 11 percent markup on its costs for operating the nonprofit.
And he said Brown and others are reaping dividends from Cobb Energy while the customer-owned co-op is not.
Attorneys for Cobb EMC and Cobb Energy accused Carr of trying the case in the media.
Vote for this story!
More on ajc.com
- COBB EMC: Utility's secret wasn't kept
- Cobb EMC chief blasts lawsuit claiming impropriety
- Cobb EMC chief blasts customers who sued
- Cobb EMC urges judge to toss lawsuit: Utility's lawyers say it came after legal clock ran out to challenge Cobb Energy ties.
- Cobb EMC urges judge to toss lawsuit
- Filing: Cobb Energy saps co-op
- Nokia, Qualcomm settle long-running dispute
- Firm sues Courtney Love over Nirvana catalog sale
- FEMA seeks trailer suit immunity
- DeKalb judge: Defense for poor will suffer
MOST POPULAR STORIES



DEL.ICIO.US