by MOSES LEOS III
A new bill introduced by State Senator Troy Fraser aims to change the way PEC conducts director elections. The goal of the bill, which is, “targeted exclusively for PEC,” was introduced in order, “to make it easier to have elections,” Fraser said, who explained that in PEC’s current at-large election structure, all 236,000 members in the cooperative have the ability to vote for any director running for office, regardless of the member’s district.
This poses an issue, as those trying to run for office must spend money to appeal to every member of the cooperative, which ranges over an area of 81,000 square miles, encompassing 24 counties in Central and West Texas.
In proposed State Bill 961, Fraser aims to force large electric cooperatives such as PEC, which is the largest in the United States, to hold single-member district elections, where directors can obtain votes only in their respective districts. Additionally, these cooperatives, which are limited to companies that have over 180,000 members and in counties with populations between one million and 1.5 million people, would be forced to assign districts to directors with an equal number of constituents.
A portion of this stems from the controversy surrounding Pedernales Electric in 2007, where a member-led lawsuit, along with a report by Navigant Consulting which uncovered years of corruptive practices from former PEC General Manager Bennie Fuelberg and former Board President W.W. “Bud” Burnett. During their time in office, it was found that PEC management and board members spent thousands of dollars on luxuries. Additionally, Fuelberg and PEC’s lawyer group Clark, Thomas and Winters gave hundreds of thousands of dollars to Fuelberg’s brother, lobbyist Curtis Fuelberg. It was also discovered that $500,000 of PEC funds were placed in a secret, non-interest bearing bank for close to twenty years, as well as millions of dollars spent on failed ventures in software and Internet service companies.
The story, which was first broken by former Hays Free Press writer Jen Biundo, helped Fraser and former State Representative Patrick Rose build a case against Fuelberg, Burnett and PEC.
Along with shedding light on the financial mismanagement, Fraser and Rose also uncovered corruption within the company’s board of directors. In 2008, they found that PEC conducted elections that were unfairly held, as well as a lack of transparency that plagued the voting and management process.
PEC Board Vice President Dr. Patrick Cox also noted the problems within the election system of PEC, characterizing the system as a “closed process.” As a member of the reform committee, which was charged with regrouping PEC, Cox went on to describe that prior to 2008, directors were rarely challenged for their positions. Opposition had to appeal to the over 200,000 members of the cooperative to earn nomination for election. This made it incredibly difficult for anyone to unseat directors, with Cox saying, “it was a self perpetuating process.”
Following the scandal, PEC was tasked with dealing with the corruptive atmosphere, but in Fraser’s eyes, did not adequately accomplish this. He said that “people were still running at-large (elections)” within the cooperative.
Fraser began legislation in 2009, attempting to rid the at-large voting process within PEC. This culminated in a PEC referendum in 2011, where members had the choice of maintaining at-large elections or changing to the single member format.
According to Fraser, PEC “rigged that vote,” as PEC placed a third choice for their members, which was a combination of at-large and single member district voting. In Fraser’s eyes, two-thirds of members voted for the combination, wanting single member districts, only to have PEC continue at-large.
Cox rebuked that statement, saying, “What we did in the referendum reflected public input from our members. It was based on the number of hearings, open sessions and open testimony on the election of directors. The three main options, which we placed on the ballot, were ideas presented by the members.”
Additionally, Cox vehemently stated that “We expressed no direction or intervention to members on how to vote. We want open and honest elections.”
However, Cox agreed that this bill was targeted specifically towards PEC, saying, “this type of legislation has been filed in previous sessions.”
Should the bill pass vote, it would go into effect on September 1. “If the legislation passes, PEC will look at the provisions of the bill, as well as the timeline to implement changes,” Cox said.
For Fraser, the goal of this bill is to promote fairness, with him saying, “You should not have to spend money to solicit votes.”