Embattled CEO out for now at Cobb EMC

By Margaret Newkirk

The Atlanta Journal-Constitution

Dwight Brown, the indicted chief executive of Marietta-based Cobb EMC, retired Monday from the co-op he has led since 1993, meeting the terms of a 2008 court-ordered settlement deal between the co-op and suing customers.

But if the co-op's board has its way, he won't be gone for long. The co-op's board asked a Cobb County court to allow it to rehire Brown, 65. Meanwhile the board said Brown will remain an "independent consultant."

"Nobody knows our co-op and the electric industry better than he does, and his expertise will help us continue . . . supplying reliable and affordable power to our members," board chairman Larry Chadwick said in a statement.

He said the board interviewed eight candidates to replace Brown but none was deemed as qualified.

The co-op's chief operating officer since 2004, Chip Nelson, will be the co-op's chief executive in the interim, a spokeswoman said.

The co-op board also dropped its Feb. 17 lawsuit against customers who sued it three years ago. That suit accused the customers, in violation of the 2008 settlement, of instigating a grand jury investigation that led to criminal charges against Brown.

A Cobb County grand jury indicted Brown on 31 counts of racketeering and theft in January.

In recent weeks Cobb EMC had not given any indication whether Brown would retire by the end of February, as ordered in the settlement. The co-op's board began meeting Monday at 2 p.m. and released news of its decisions nearly five hours later.

A non-profit, customer-owned electric co-op, Cobb EMC serves about 200,000 customers in Atlanta's northwest suburbs.  It's been at war with a group of those customers since 2007.

Customers sued the co-op's board, management and a for-profit operating company called Cobb Energy in October 2007, following an Atlanta Journal-Constitution story on Cobb Energy and its relationship to the co-op.

The lawsuit alleged that Brown and other co-op leaders had unjustly enriched themselves by setting up Cobb Energy and siphoning co-op assets to it.

Beginning in 1998, Cobb Energy operated the co-op for a markup of up to 11 percent. The for-profit company was controlled and partly owned by co-op insiders, including Brown, who owned $3 million in its stock, along with his wife.

The December 2008 lawsuit settlement required the co-op to pay $47 million to buy out Cobb Energy's shareholders and get its assets back. It also released the co-op from a 40-year operating contract with Cobb Energy.

The settlement set a schedule of board elections that would have allowed the co-op's customers to replace most of its governing board in 2009. The two sides continue to fight over the terms of those elections. The co-op has asked the state Supreme Court to overturn an April appellate ruling that it violated the settlement terms related to the board votes.

Co-op members have not been able to vote on co-op board members since 2007.