REMAC meets in response to ballot

Published 12:00 am Saturday, March 13, 2004

Leaders of the Rural Electric Member Action Committee (REMAC) called an emergency meeting Monday after Pioneer Electric Cooperative sent out ballots last week for members to vote on proposed changes to the coop’s current bylaws. In essence, the legal team representing REMAC members said this is simply the Co-op’s attempt at staving off legal action relating to a lawsuit filed against Pioneer on Feb. 13.

According to J. Doyle Fuller, an attorney from Montgomery who is representing the plaintiffs against Pioneer, the suit stems from the alleged disappearance of more than $18 million of cooperative members’ funds over the course of a year. The suit seeks to discover how the funds disappeared and if the defendants were negligent, wanton or reckless in their management of the cooperative.

Fuller said Pioneer has yet to contact them about the lawsuit.

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However, he said cooperative members got an answer in their mailbox last week.

&uot;We haven’t gotten a response to the lawsuit we filed yet,&uot; he said.

&uot;They have 30 days to respond. We do think we got an answer, or should I say the members got it in the mail on Friday.&uot;

Fuller was referring to ballots mailed out by Pioneer proposing to change its bylaws.

He called it a smoke-screen to hide the alleged problems facing the co-op.

Last Friday, approximately 10,000 members received the ballots and REMAC believes, if the bylaw changes are approved, members would lose any hopes of having a say in how their coop is operated.

Fuller said the proposed bylaw changes give full authority to the board of directors, who are also named in the lawsuit.

Fuller said he filed a motion on Monday for an injunction with Circuit Judge Edward McFerrin that asks him to appoint an independent custodian to run the co-op until a proper hearing can be held. The motion is currently on the court’s docket for April 8 at 9 a.m. At that time, they may argue why a hearing should be set.

Fuller said he will be there ready to present his case.

&uot;This would prevent any potential pilfering of the co-op,&uot; Fuller said.

Phil Butler, an attorney in the Montgomery offices of Bradley, Arant, Rose and White L.L.P, the firm representing Pioneer in the suit, said this request for an injunction makes no sense.

He said these proposed bylaws fall completely in line with what REMAC petitioned of Pioneer several months ago.

&uot;Quite frankly, the board was surprised by these actions because the membership requested these same changes,&uot; Butler said. &uot;They are now complaining about the very changes they asked for in their petition.&uot;

He said Pioneer believes REMAC is wrong to ask members to vote no.

He also said the timing of the ballots being mailed out had no relation to the suit being filed.

&uot;The proposed changes had nothing to do with the pending litigation with the REMAC members,&uot; he said.

Also Monday night, Fuller told approximately 250 people gathered at the Butler County Fairgrounds that when he was first approached and he began looking into Pioneer’s finances, it became clear to him that much more than $18 million was unaccounted for in Pioneer’s financial statements.

&uot;Good news is that we have someone looking into it,&uot; he said.

&uot;The bad news is that it is not $18 million unaccounted for, but rather $75 million.&uot;

This announcement was met with stunned gasps from the crowd.

Fuller said he didn’t have all the answers, but from what his investigators found thus far, a large chunk of the money went into the purchase of various propane companies.

&uot;Using the co-op money, they made agreements to buy the propane gas companies,&uot; he said.

&uot;We don’t know what they paid for them. I do know that instead of being called Pioneer Electric, they should change the name to Dandelion Electric, because a lot of your money is drifting away in the breeze.&uot;

Fuller said it appears that from 1998 until June 30, 2003, some $75 million was funneled into Pioneer Services. He said from his looking at records, these funds came either from the co-op’s available cash or the co-op went out and borrowed money and loaned it to Pioneer Services Corporation.

&uot;We know that some of the money is from the sale of the satellite business to Pegasus,&uot; he said.

&uot;Of that money, I know what happened to $4 million of it, but I don’t know where the rest went.

It’s unaccounted for.&uot;

As for those ballots, Fuller said he would encourage members to vote no and to attend the meeting at 10 a.m. on Saturday, April 3 at Greenville High School.

&uot;I’m going to be there on April 3 and I’m going to have lots of questions,&uot; he said. &uot;You members are faced with two decisions on this ballot. If you want to insure the integrity of the co-op that benefits you, and to keep it from financial collapse, then show up at the meeting on April 3. For those who can’t show up and want a chance at a wide screen TV, mark your ballot no and mail it in.&uot;

He said the bylaws are too involved and complicated and he spent the better part of the weekend studying it.

&uot;I think I finally got it this afternoon (Monday), he said.

&uot;These bylaws would basically mean that you are empowering the co-op if they lose this suit, to open the co-op’s checkbook and pay for it.&uot;

He said another section in the proposed bylaws is the clause that dictates members give Pioneer land if it deems it necessary.

Another section he said bothers him is the bylaw that states potential board members must be running or an incumbent in a public office.

He told those in attendance that it disturbs him that Pioneer is trying to change its bylaws after 35 years.

&uot;Our question is why if after 35 years, they wanted to change the bylaws, then why did they wait until three weeks after being sued?&uot; he said to enthusiastic applause.

&uot;They sent out 45 pages of little print.

There is only one page with larger print and that’s the page that tells you if you return your ballot by March 20, your name goes into a drawing for a big screen television.&uot;

Willie Bradley, of Greenville, who was present on his mother’s behalf said the photo used on the ballot of two elderly people outraged him, and that the elderly should be the first concern.

&uot;They are the ones who paved the way and they are having to choose between paying high utility bills or buy medicine,&uot; he said.

&uot;That is what concerns me.&uot;

Margaret Pierce, the president of REMAC thanked those who attended on short notice.

&uot;We have had phone banks going since Saturday,&uot; she said.

&uot;Throats are sore and their mouths dry, but I see it all their hard work paid off.&uot;

Pioneer Electric has more than 10,000 members in Butler, Dallas, Lowndes and Wilcox counties. About 500 of those members make up REMAC.

Three members of the group, Wendell Phelps of Butler County, Hoffman Rhyne of Lowndes County and Kenneth Stallworth of Wilcox County are the plaintiffs in the case.