Coal Developer Indicted, Questionable Practices Loom in Georgia

Posted on January 9, 2011 by


Plans to construct two coal-fired power plants in middle Georgia were dealt a blow on Thursday as Dwight Brown, CEO of Cobb EMC- one of the nations largest Electrical Members Corporations (EMC)- was indicted on 31 accounts of corporate theft by taking, racketeering, and making false statements to government entities.  The charges come after 2 years of citizen activism and litigation, and help highlight corrupt business practices that allegedly continue within the organization today- as the EMC proceeds with it’s $4.2 billion coal plans.

Cobb EMC is the lead financial and logistical supporter of a coalition of electrical corporations called Power4Georgians LLC, attempting to build two 850MW coal plants in middle Georgia, despite the fact that no new coal plants have been started in the United States in the last two years.  In state filings Brown is identified as the lead “organizer” of the consortium, and is the lead signature in the plants’ permit applications.

The detailed indictment of CEO Dwight Brown lays out criminal business practices in which Brown and 5 other board members of the not-for-profit EMC created a for-profit business called Cobb Energy, and used EMC membership funds to piggy-bank multi-million dollar salary and compensation packages for Brown and Board.  Mr. Brown, after transferring all not-for-profit assets to the for-profit Cobb Energy, charged the 200,000 person EMC membership an 11% mark-up on services that the EMC previously rendered, used EMC membership data to sell SCANA natural gas services at huge profits for Cobb Energy, and granted Brown a $3 million personal loan- which was soon after forgiven- used to purchased preferred stocks in Cobb Energy.  All of this while Brown lied to and deceived the EMC membership, who in organizational Bylaws are charged with democratically operating and affectively owning the not-for-profit entity.

Yea…Shady (at best) right?

But it only gets better.

Power4Georgians LLC, the coalition attempting to build coal plants in Washington and Ben Hill Counties, is managed and operated by Allied Energy Services- a wholly owned subsidiary of Cobb Energy, funded by Cobb EMC membership.  Allied Energy Services CEO Dean Alford– also now the spokesperson for Power4Georgians- is also Cobb Energy Vice President, holder of 30,000 shares (worth $750,000) of preferred stock in Cobb Energy, and Dwight Brown real-estate partner and good friend.

Allied Energy Services won the no-bid-contract to develop the coal-plant projects because the consortium was looking for “the most qualified people, not necessarily to go get the lowest bid.”  Yet, neither Allied Energy nor Cobb EMC has ever constructed or developed a coal plant.  To date $27 million has been given to Allied Energy for development of the Power4Georgians coalition and projects, $11.5 million coming from Cobb EMC rate-payers and the rest from smaller EMC’s around the state.

It is easy to see that plans to construct two new toxic coal fired power plants, built at-least partially from EMC membership monies and amidst growing community opposition, are born from questionable corporate inbreeding which has itself focused on the projects profitability to a very small network of company executives.

Alford’s suspicious character isn’t a new development.  He caused a bit of a stir back in 1991, when, as a Georgia state representative, he voted for a bill mandating the Public Service Commission approve a $1.045 million contract that he had been hired to manage as a private businessman. In the past several years he has also been the target of several community-led protests drawing attention to his involvement in insider dealing and the lack of transparency in his organizations.

To top it all off, Dwight Brown is currently forcing EMC membership to cover his legal fees (ringing in to the tune of +$700 an hour for one attorney- former Ga. Gov. Roy Barnes).

All this corporate intersecting might otherwise seem “conventional”, but like all EMC’s, Cobb EMC is set up as a cooperative, where customers are given shareholder rights: democratic voting powers at annual meetings and annual dividends on company profits. However, Brown and cronies have  failed to communicate the EMC’s relationships, not allowed a democratic membership meeting since 2007, and annual dividends have been withheld for nearly 30 years.

Citizens in Cobb County, where Cobb EMC operates, and citizens in Washington and Ben Hill counties where coal plants are proposed, are currently working together to publicize critical questions and concerns regarding the health, safety, and trustworthiness of the planned development.

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