The Deal in Socorro but not in Taos!

By: Bill Whaley
22 May, 2011

By T.S. Last / El Defensor Chieftain on Sat, May 21, 2011—from the Albuquerque Journal, Sat. May 21.

“That’s The Deal”—Judge Albert J. Mitchell Jr.

SOCORRO — What members say, goes.

That’s what a New Mexico Supreme Court-appointed judge ruled this week in a landmark case in which Socorro Electric Cooperative sued all of its approximately 10,000 member-owners in an effort to block three bylaws — each aimed at increasing transparency — passed by members at last year’s annual meeting.

The ruling by Judge Albert J. Mitchell Jr. of the 10th Judicial Court District means that the Democratically controlled rural electric utility must abide by the New Mexico Open Meetings Act and Inspection of Public Reports Act.

The merits hearing drew an audience of about 100 people Wednesday, who packed a Socorro courtroom.

The co-op’s attorney, Dennis Francish, argued that the bylaws were unmanageable, created confusion and put hardship on the co-op. He said the OMA and IPRA were laws that applied to government entities and not private nonprofit corporations such as the co-op. Because of that, he said members overreached their authority when they passed the bylaws.

In Taos, however, Judge Peggy Nelson ruled on Thursday in favor of the KCEC Trustees injunction to stay the members’ request directed to the board. The request, signed by 3% of the members, asked that a petition be put on the agenda at the annual meeting, to discuss and vote on removing the nine trustees for “charges” pending the presentation of evidence. Because the bylaws were vague, the petitioners used similar language to charge the trustees with ambiguous legal terms—malfeasance, misfeasance, and breach of fiduciary duty. Trustees, according to the bylaws had the option of voting to put the “request” on the agenda or denying it.

Nelson saved the Trustees from having to make a decision and cited the lack of “specificity” in the members’ charges. The bylaws lacked clarity as to whether charges could be made against Trustees for “cause” or “at will.” As has been written here ad nauseam, the trustees, according to the Coop’s own audits, reports, income tax returns, and news stories have, by any reasonable standard, mismanaged millions of dollars at the Coop. During the last decade, conservative estimates suggest the CEO and Traveling Trustees have spent over $2 million on per diem and travel.

Of course the legal standard is different from commonly accepted ethical guidelines or generally acceptable fiscal practices. The judge appeared to use a definition of “cause” adapted from case law applied to a school board case or maybe it was from “Black’s Law Dictionary,” which was cited by the Coop attorney.

Readers know that Judge Nelson was a practicing judge, who frequently arraigned those charged in grand jury proceedings, where, according to a common refrain, lawyers say you could as easily “indict a ham sandwich” as a serial murder suspect. In the judge’s defense I once published a letter in which she severely chastises the state police and the deputy DA for lying to a grand jury. Do cops, coops, or lawyers lie? Or Trustees and CEOs?

Nobody lied or told the truth on Thursday—they just argued the law and the judge interpreted it to the disadvantage of the KCEC membership. If the Trustees knew they hadn’t engaged in excesses, let’s face it; they wouldn’t have gone to court. Further the CEO wouldn’t have refused requests from protestors for information—regarding “specificity” at the Coop. Even if the Judge didn’t buy the members’ argument, the PRC did. The Commission delayed hearings for 45 days on rate increases because the Coop refused to provide the members with financial statements etc. about Coop business.

Last Dec. CEO Reyes also misrepresented the number of valid protests to the PRC—the number went from about 300 to 6, according to Reyes’ accounting methods. So many protestors showed up at the initial PRC hearing, folks from Taos filled up the hallways and outer rooms. More than 800 members signed the request for a petition to be heard regarding removal of trustees at the annual membership meeting.

Judge Nelson tried to dance around the issue of “specificity” by softening the order and calling it something like a “limited preliminary injunction.” She also said folks love to hate the Coop—as if it were a disease or virus, not based on “grounds.” She didn’t explain how she was able to interpret “charges for cause” instead of “charges at will” and change the meaning of the bylaws. She referred ambiguously to a future “trial on the merits.”

This is how you transform a ham sandwich into bread and water for activists and a tasty Submarine for the Trustees.

Now, any attempt at reforming the board of trustees, who have violated their own oath of office in terms of equal representation of the membership, will be seen by them as another opportunity to ask for protection from the court. If members seek to reduce the number of trustees or restrict the amount of dough spent on travel or diverse but losing enterprises, the Trustees will probably go to court to stop reforms.

The trustees don’t pay for the privilege but we pay. Still, members of Coops in Mora-San Miguel and Socorro have succeeded in instituting reforms. The KCEC members on Thursday may have lost the battle but they are winning the war of public relations.

And to be frank about it, the scandals about New Mexico Judiciary are making more headlines than the fabled Coops. Nelson may have sent a chilling message to activists on Thursday but Taosenos will not forget the indignity. Pray for us and keep your CFLs loaded.

Editor’s Note: Since the members can’t get a fair hearing in court or at the annual membership meeting, we’ll just keep trying the Trustees aqui en Taos at Taos Friction.

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