San Marcos Mercury | Local News from San Marcos and Hays County, Texas

June 24th, 2009
‘Outrage’ over PEC settlement with its former law firm


We are outraged that the Pedernales Electric Cooperative (PEC) Board of Directors would agree to indemnify its former law firm by agreeing to a settlement the same week that the Blanco County Grand Jury indicted a principal partner with that firm.

This action by the legacy directors is consistent with the tactics used by Bennie Fuelberg, the former general manager, to hide information from the members and employees. It is unbelievable that five days before a new board is elected by the members, the old guard is still making major decisions. These decisions should wait until the new board of directors duly elected by the members are sworn in.

We believe that further misdeeds of the PEC board of directors and former general manager will be uncovered – including the possibility that there were other misapplications of funds to the law firm. As long as a criminal case is ongoing against Walter Demond, the former outside counsel, we would ask the cooperative board to not settle this matter. It is in the best interest of the members that PEC wait until it has all information necessary in order to make the best deal possible.

Members and employees want the whole truth, not the truth outlined in a settlement agreement. With the indictments issued this week, and as the criminal trials progress, we believe that the members and employees will get the answers they deserve. By accepting this settlement agreement, the board appears to have reverted to its former practices of putting up roadblocks to prevent members from fully participating in the cooperative that they own.

Just like the settlement in the civil lawsuit, the only true winners in this settlement are the attorneys – the law firm being indemnified — and PEC’s trial attorney who now gets $1.3 million for agreeing to the settlement.

These actions by the PEC board further confirm that its members and hard working employees need protections in the law. We remain committed to passing legislation that guarantees democratic elections and open governance.

SEN. TROY FRASER represents Senate District 24, District 24, Bell, Blanco, Brown, Burnet, Callahan, Coleman, Comanche, Eastland, Erath, Gillespie, Hamilton, Kerr, Kimble, Lampasas, Llano, Mason, McCulloch, Menard, Mills, San Saba and Taylor Counties.  He is Chairman of the Senate Committee on Business & Commerce.

REP. PATRICK M. ROSE represents House District 45, Blanco, Caldwell and Hays Counties. He is Chairman of the House Committee on Human Services.

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