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TABLE OF CONTENTS
In Her Own Words: Senior Citizen Complaint about Cobb EMC
Cobb EMC Members Ill-served by Creation of Emeritus Directors
Step by Step: How To Insulate a Membership Corporation from the Members
Cobb EMC Will Seek GA Supreme Court Review of Court of Appeals Ruling
Court Ruling Slams Cobb EMC, Strikes Blow for Reform – But Members Must Attend Special Meeting To Keep Reform Drive Going
How to Restore More Democracy to Cobb EMC Despite the Legal Hang-ups
ARTICLES
A senior citizen who has been a member of Cobb EMC for 19 years has written the Cobb Alliance for Smart Energy about what she describes as “a most frightening experience” at the hands of the co-op. Below is her story in her own words. For obvious reasons, we have omitted her name.
The implications of what her experience tells us about Cobb EMC’s attitude toward its own members is so clear, no comments from us are required. We would note the overarching theme here: the stonewalling at different levels of Cobb EMC. We’ll leave for later any comments on the implications of this incident for the future, especially in regard to the long-delayed elections for a new Board of Directors.
We welcome comments, especially on the question of what steps the customer could take to receive satisfaction for her complaint. Send comments to cobbsmartenergy@aol.com.
In Her Own Words: Senior Citizen Complaint about Cobb EMC
On Tuesday, August 10, 2010, I called Cobb EMC to request where my bill for August was, as I had not received it.
I gave Customer Service my name, address and account number. Customer service refused to assist me unless I verified the last four digits of my social security number.
For the record, I opened my account with Cobb EMC in November 1991 and was required to give them a deposit. In 1991, there was no requirement to give one's social security number. I informed the agent of this fact and she informed me that was not possible as everyone has to provide their social security number. and we have your social security number on file. I advised her that if Cobb EMC has my social security number it was without my knowledge and without my permission.
This indicates to me my social security number was acquired fraudulently. This Customer service agent (that did not work for Cobb EMC in 1991) informed me that I had given it to them when I opened my account over the phone. I have never given my social security number to any stranger over the telephone as I protect this information due to possible Identity Theft.
I then asked to speak with a supervisor named Chip who almost word for word repeated the exact same information. It was if they had a canned program speech to dictate to customers. I requested that I be shown a copy of my application. It was at this time that Chip started to stutter briefly as he did not know what to say when I asked for proof. He stated it would be researched and that I could call Angela Kelly the next day as she would be the person doing the research. When I called the next day, Ms. Kelley avoided my calls until I insisted that I would come over there and see Dwight Brown the CEO. Eventually, Ms, Kelly finally informed me that they could not find any information on me other then when I opened my account.
I called the Governor's Office of Consumer Affairs, the Public Service Commission and the Cobb County Board of Directors and no one could assist me as all stated they had no jurisdiction over Cobb EMC as it was a private company. When I made an attempt to call the Cobb EMC Board of Directors, I was rudely stopped by one of their gatekeepers who stated the Board of Directors does not take calls from the public, however, they have no problem taking my money.
My point here is, how is this company allowed to violate my civil rights? Cobb EMC had to obtain my social security number illegally as the only permissible way is if I were to give my permission (which I did not) or the company would have had a judgment against me which they did not.
As I am a Senior Citizen, it is not possible for me to hire an attorney I live on a fixed income. Legal Aid is not an option as I do not qualify. So if you have any suggestions as to how Cobb County tax paying residents can receive some help against these thieves at Cobb EMC, I would appreciate knowing. For the record, at the bottom of my social security card, it states, "Not For Identification Purposes.”
In a follow-up message to the CASE chairman, the senior citizen stated:
The more people educated by this episode the better. I also contacted Ed Seltzer's office (State Representative. Georgia House District 35) last week but to date (August 16, 2010) there has been no response. Should you have any other suggestions as to whom I would be able to voice a complaint to, please advise as I will to happy to comply.
If I was not living on a fixed monthly income, I would enjoy litigating this but unfortunately my pockets are not deep enough. Hopefully, this will loudly be brought to the public's attention. Unless we live in a Socialistic Society in Cobb County, obtaining someone's social security number without their permission is against the law (or at least I think so).
Cobb EMC Members Ill-served by Creation of Emeritus Directors
(This commentary was written by CASE leader Crystal Miron and appeared as a letter to the editor in the August 25 edition of the Marietta Daily Journal)
In yet another example of their self-serving entrenchment, the board of Cobb EMC recently passed a bylaw amendment creating the appointment of “Emeritus Directors”.
These Emeritus Directors will be allowed to attend board meetings and provide counsel to the Board of Directors. They will be compensated for their attendance and expenses “as determined by the Board of Directors”.
In our opinion, these appointments are flagrantly designed to provide a coterie of supporters for the incumbent directors who are already under attack in the courts and in the court of public opinion for failing to uphold their pledge to do what is best for the membership. Even worse: These appointed Emeritus Directors would stay on, even if the Directors who appointed them were voted out of office. Some of those sitting Directors are being investigated by the Cobb County District Attorney for allegedly fleecing the co-op’s assets for their own self enrichment. In 2008, the Board faced a lawsuit by disgruntled members alleging other acts of malfeasance and mis-administration. The lawsuit was settled largely in the plaintiffs’ favor. This is not the kind of “experience and judgment” we should want to reinforce in the co-op’s leadership.
The new amendment also states:
“In addition, the Cooperative shall, to the maximum extent permitted by law, advance expenses to, and indemnify, each person who is, or was, an Emeritus director, against all expenses, including attorney’s fees, judgments, fines and amounts paid in settlement, actually and reasonably incurred by such person in connection with any threatened, pending or completed action or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that such person is, or was, an Emeritus director.”
In short, any Emeritus Director will essentially be absolved of any financial penalties stemming from their acts and decisions. Cobb EMC—meaning, the members—apparently will pay whatever legal fees an Emeritus Director may incur. This strikes us as the most all-encompassing, get-out-of-jail pass ever issued. How can this amendment possibly be construed as being in the best interests of the membership?
We believe that it is a grave insult to the Cobb EMC membership to suggest, let alone require, that members be on the hook for the more legal fees resulting from any malfeasance by the board. Let’s not forget the unknown legal fees that may yet arise in connection with the ongoing criminal investigations.
Click here to view the full amendment.
Step by Step: How To Insulate a Membership Corporation from the Members
The creation of “Emeritus Directors” positions reminded us of the actions taken by the Cobb EMC Board of Directors just this year to consolidate its hold on power at the expense of the members. Here is a summary of some of those actions.
April. Cobb EMC “insulted” the Marietta-Cobb League of Women Voters, to use the term of one of the League’s members. The League had proposed holding a forum for candidates running for co-op directors’ seats. Co-op spokespersons notified the League that the incumbent directors declined the invitation, stating that Cobb EMC had learned that at least one League leader allegedly had ties to a “small group of dissidents” opposed to some co-op policies. Cobb EMC offered no evidence that the League’s decision on the forum was anything other than the League’s performing its function of fostering free and open debate on matters of public concern.
March. The Board postponed the 2009 annual membership meeting to December 2010. Under normal conditions, the meeting would have been held in September 2009. The Board, however, had already postponed the meeting once, rescheduling it for April 2010. The Board attributed both postponements to an ongoing lawsuit brought by disgruntled co-op members, challenging proposals made by the Board to change the rules that govern Board elections. The plaintiffs allege that Cobb EMC’s initiative in proposing the changes violated the terms of settlement of a previous lawsuit. The plaintiffs also claim that the Board’s proposals did not sufficiently protect members’ interests in the conduct of elections.
February. The Board of Directors took steps to solidify their hold on office and to insulate themselves from accountability by adopting changes to the bylaws that made it more difficult for members to introduce resolutions and proposals at the annual membership meetings. The Board, without consulting members, adopted amendments requiring members to submit, in writing, any issue or proposal to be considered at an annual meeting 70 to 100 days in advance of that meeting. This new restriction departed from practices in place since the co-op’s founding in 1938. Members have historically been able to bring up new matters or business for discussion at the annual meetings and bring them to a vote.
• Proxy vote amendment. The Board also adopted a second bylaw amendment allowing members to vote by proxy at annual meetings on matters other than voting on directors. This amendment also serves the self-interests of the incumbents, in CASE’s view. CASE agrees with Georgia State law professor Jack Williams, an expert quoted last year in an Atlanta Journal-Constitution assessment of proxy voting in Cobb EMC, who said: “Proxies are excellent management entrenchment tools.” The experts believe that proxy voting empowers management because management has the resources — mailing lists, customer-funded mailings — to control the result.
Continuing. Cobb EMC’s Board of Directors continues to refuse to open up its regular meetings to member participation. The same Board that, over the past two years, has passed amendment after amendment to increase its own power and to deal with the ongoing lawsuits, could just as easily have amended the bylaws to allow member attendance at the monthly Board meetings. Or, provided for special meetings for the members. Or, held town hall-like meetings, at headquarters or in each of the areas represented by the 10 directors.
Don’t hold your breath. Which reminds us of the admonition of Georgia’s chief consumer advocate, Clark Howard:
"Remove every - every - incumbent board member of Cobb EMC, and get the stench out of there."
Cobb EMC Will Seek GA Supreme Court Review of Court of Appeals Ruling
Cobb EMC’s lawyer stated on Friday, April 23, that the co-op will petition the Georgia Supreme Court to review the recent decision by the Court of Appeals that ruled against Cobb EMC in a lawsuit involving the rules by which elections for the governing Board of Directors are to be held. The appeal means that the postponed 2008 and 2009 annual elections for Board seats will remain suspended for an indefinite period, pending the final settlement of the litigation.
Cobb EMC counsel Dwight Davis made the announcement in one sentence of a long letter to the editor of the Marietta Daily Journal, in which he criticized both the Court of Appeal’s decision and a MDJ article commenting on it. The Appeals Court earlier this month overruled a 2009 decision by Judge Stephen Schuster. Schuster had approved the Board’s amendments to the bylaws and its other proposed changes in the rules for electing Board members. Some co-op members challenged Schuster’s decision, arguing that the changes, in effect, rigged the elections in favor of the incumbents and would impede the holding of fair and honest elections.
The Court of Appeals said that the plaintiffs were correct, stating emphatically that Schuster “erred in allowing Cobb EMC to submit its own resolution regarding director elections.” The Appeals Court also found that a Bylaw amendment adopted by Cobb EMC dealing with proxy voting was contrary to the terms of a 2008 agreement settling an earlier lawsuit brought by the plaintiffs. Cobb EMC, the Court said, could not be allowed to modify the voting procedures in a manner contrary to the “plain and unambiguous terms agreed upon by the parties.” According to the Court, Cobb EMC’s adoption of the amendment without providing notice to the plaintiffs violated the Settlement Agreement’s stipulation that Cobb EMC “cooperate fully” with the plaintiffs regarding implementation of the Agreement. (See next article for details).
In his letter criticizing the Appeal Court’s decision, lawyer Davis showed that Cobb EMC is unwavering in its assertion that its decisions on the electoral rules were just and proper. Davis asserted that Judge Schuster had been correct in ruling that the coop’s Board had acted in a “reasonable and pro-democratic manner” and claimed that the Court of Appeals “made several mistakes.”
Davis also stated that the MDJ’s Saturday Around Town column, headlined "Rain on Brown's Parade: Appeals ruling major setback for EMC board" was “rife with errors.” (see also MDJ columnist Don McKee).
Impact on Elections. The twice-postponed annual elections for seats on the Board will remain in limbo until the legal wrangling is settled. The first inkling of the outcome will come soon, when the Supreme Court decides whether or not to hear the appeal. A “no” decision would advance the date for holding elections, although many legal details would still have to be settled. A “yes” decision would tie the matter up for many months to come, even for a year or more. Stay tuned.
Court Ruling Slams Cobb EMC, Strikes Blow for Reform – But Members Must Attend Special Meeting To Keep Reform Drive Going
The Georgia Court of Appeals on April 13 ruled resoundingly against Cobb EMC and in favor of the plaintiffs in a lawsuit involving the rules by which elections for the governing Board of Directors are to be held. The Court’s decision found that a lower court had erred in finding in favor of Cobb EMC on the same points. Cobb EMC has touted the lower court’s verdict as proof that the co-op was introducing greater democracy and transparency into its affairs. The Court of Appeals said: No way.
In the settlement in 2008 of a separate lawsuit brought by the plaintiffs, a judge had ruled that Cobb EMC needed to change its electoral rules to better protect the interests of members. The ruling provided that the plaintiffs—and not the co-op—were to initiate the proposals for change. Cobb EMC, however, jumped the gun and offered its own proposals. The plaintiffs returned to court and challenged this apparent violation of the procedural rules. The plaintiffs also charged that the substantive proposals would impede the holding of fair and honest elections and perpetuate the incumbents’ ability to manipulate elections to their advantage. A lower court eventually ruled in Cobb EMC’s favor. It was that verdict that the plaintiffs challenged and that Court of Appeals has now ruled on.
The Court of Appeals said that the plaintiffs were correct, stating emphatically “the trial court erred in allowing Cobb EMC to submit its own resolution regarding director elections.” The Appeals Court also found that a Bylaw amendment adopted by Cobb EMC dealing with proxy voting was contrary to the terms of the 2008 settlement agreement. Cobb EMC, the Court said, could not be allowed to modify the voting procedures in a manner contrary to the “plain and unambiguous terms agreed upon by the parties.” According to the Court, Cobb EMC’s adoption of the amendment without providing notice to the plaintiffs violated the Settlement Agreement’s stipulation that Cobb EMC “cooperate fully” with the plaintiffs regarding implementation of the Agreement.
CASE Comment: A Stride towards Restoration of Democracy. The verdict is a major victory for the groups trying to break the grip of an entrenched and out-of-touch Cobb EMC leadership and to restore member control of what is supposed to be a member-controlled co-op. The ability of the incumbents to use the co-op’s resources to control and manipulate the coming elections for the Board of Directors has suffered a setback. The prospect for truly democratic elections has been advanced.
Impact on Election Timetable. Backed-up elections for Directors have been on hold pending the Court’s decision. The chief question now is: will Cobb EMC appeal the verdict. The co-op has 20 days to decide. If an appeal is launched, the date for elections will once more be in the hands of the courts.
Post-lawsuit: Special Membership Meeting Becomes Critical. The Court of Appeals decision reaffirms that once all appeals are exhausted and a final legal verdict is rendered, the first step in the electoral process will be for Cobb EMC to hold a special membership meeting to set the rules for the elections of the Board of Directors. The key decision will be for members to decide whether to allow mail-in voting for Directors and the rules and regulations that will govern mail-in voting if allowed.
The Court’s ruling seems to establish that only members physically present at the special meeting will be allowed to vote on these critical decisions. Cobb EMC for the past year had assumed that members would be able to cast their vote by proxy, but the bylaw amendment allowing that procedure is the one the Court declared invalid. Members will have to cast their vote in person on whether to allow future elections of Directors to include mail-in voting. Plaintiffs’ Attorney Pitts Carr said: “It will not be an option for proxy voting (at the special meeting), as proxy voting is just a way for management to stay entrenched.”
In short: Cobb EMC Members who want to reform the co-op and restore membership control need to make certain that they and their neighbors are present at the special meeting. We can be sure that the entrenched incumbents will go all-out to pack the meeting with their supporters, including Cobb EMC employees—as they have in the past.
Elections Follow Special Meeting. Beyond the special meeting, plans at present provide for the holding of a series of elections, separated by about 60 days—one for the postponed 2008 elections and then for the 2009 seats. By then, the 2010 elections are like to be due. The details of those elections, of course, will be determined by the court verdicts delivered in the meantime and by the decisions reached at the special membership meeting.
What Members Should Do for Now. CASE’s year-old suggestions for members remain valid:
• BE ALERT to a letter from Cobb EMC
notifying you about the special membership meeting
and the vote on mail-in voting.
• LEARN the details on MAIL-IN voting before
making a decision.
• STAY IN TOUCH with the Cobb Alliance for
Smart Energy. www.cobbemcwatch.org
• GET INFORMED about the reform candidates
who are challenging the discredited incumbents.
How to Restore More Democracy to Cobb EMC Despite the Legal Hang-ups
There is a simple way that Cobb EMC could restore transparency and accountability to the troubled co-op, while waiting for the courts to let elections resume:
Amend the bylaws to allow members to routinely attend monthly Board meetings!
Co-op members are not allowed to attend the regular meetings of their own Board. They have to ask special permission. Three CASE members who are also co-op members proposed the adoption of an amendment allowing routine attendance, in a letter Chairman Chadwick in September. They pointed out that such a move would help compensate for the court-imposed suspension of elections. Mr. Chadwick replied that no such change was in the works. In short, the same co-op whose Board of Directors has passed three amendments in seven months whose effect was to extend the incumbents’ terms of office beyond their previously allotted time, refuses to pass an amendment that help restore democracy and accountability to the co-op.
CASE’s suggestion: Ignore the Cobb EMC’s Board constant harping that some court must act before democracy can come to the co-op. Get in touch with the Cobb EMC Directors and deliver the following message:
“We urge you to pass a bylaw amendment allowing members to routinely attend Board meetings. We understand that Board meetings must at times involve confidential and privileged information. However, the situation facing Cobb EMC’s Board is no different from one facing other public (or quasi-public) bodies. City councils, county commissions, and school boards, for example, also must deal with confidential, sensitive, and privileged information not suited for hearing in a general session. The solution is to hold an executive session, according to established criteria allowing for such action. It is basic democratic operating procedure for elected bodies in America to allow their constituents to attend regular meetings.”
• “Why is the Board unable to follow the practices of other elected bodies and hold open meetings as standard operating procedure, while holding restricted or executive when warranted, according to pre-established rules and regulations that would allow the holding of such sessions?”
• “Has the Board considered other options for giving the members a regular forum in which to express their opinions and to subject Board members to questioning, while the elections remain on hold?”
Contact:
Mr. Larry Chadwick
Chairman, Board of Directors
Cobb EMC
P.O. Box 369
Marietta, GA 30060
Cobb EMC Main Number...770-429-2100
E-mail (via CEMC web page)
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