The Board of Directors for the Connecticut Municipal Electric Engergy Cooperative agreed Friday to place several administrators on administrative leave and remove one board member following five federal indictments alleging misuse of federal funds.
The indictments, unsealed Thursday in U.S. District Court in New Haven, are the culmination of a two-year FBI investigation of CMEEC's finances, prompted in 2016 by media reports that CMEEC executives used money from the cooperative's budget to fund lavish trips to the Kentucky Derby.
CMEEC, an electric energy co-op owned by several municipal utilities in Connecticut, had purchased power for Wallingford from 1994 until 2014, after which the town entered a five-year contract with Energy New England.
Wallingford entered a legal dispute with CMEEC in 2013, claiming the cooperative overcharged the town through agreements the two sides have for shared projects. Those agreements run through at least 2021. Arbitration is pending.
A spokeswoman for Wallingford Town Attorney Gerald Farrell Sr. said Tuesday the town’s legal office had no comment on the indictments and would take no further action in response.
State Rep. Craig Fishbein, R-Wallingford, said the alleged criminal actions are separate from Wallingford’s arbitration. He also said the allegations had no impact on legislation he co-sponsored last year, since signed into law, with a Groton lawmaker seeking more transparency from CMEEC.
”I didn’t know about the criminal aspects until after” the law was drafted, he said. Fishbein, who is a lawyer, also said some of the charged parties could be held financially liable for their expenses if they are found guilty.
“Then civil proceedings could start,” Fishbein said. “The court has the ability to award restitution.”
Any restitution would likely go to the cooperative and less likely to the municipalities or ratepayers. “But one is always hopeful,” Fishbein said. “It’s up to the municipalities to agree there is an overage.”
Paul Yatcko, general manager of South Norwalk Electric and Water (SNEW), said Tuesday that it’s premature to determine whether his utility district will try to recoup costs through the courts.
“The board of directors is conducting its own investigation,” Yatcko said. “Until it’s complete, it’s too early to say.”
He also said he supports the board’s decision to place CMEEC CEO Drew Rankin and Chief Financial Officer Edward Pryor on unpaid administrative leave, and to remove John Bilda of Norwich Public Utilities from the Board of Directors.
SNEW continues to assist with the federal and board investigations, Yatcko added.
Indicted last week were: Rankin, 57, of Columbia; Pryor, 62, of Groton; Bilda, 54, of Norwich; former Chairman and Norwich's board representative James Sullivan, 52, of Norwich; and board Secretary and Groton representative Edward DeMuzzio, 77, of Groton.
SNEW is one of six districts that made up CMEEC membership. The others are Bozrah, Groton, Jewett City, Norwalk TTD, and Norwich.