Tri-County Electric’s embattled part-time board of directors had a penchant for secretive meetings, expensive dinners and cash bonuses normally reserved for employees, according to thousands of credit card receipts, attendance records and other documents obtained by The State.
Those records also show board members claimed $450 per-diem payments for attending community events and attended political fundraisers at the co-op’s expense. At least one board member filed reports that exaggerated the hours that she worked as a Tri-County director.
Such concerns will be top of mind Saturday as the tiny Midlands cooperative’s customer-owners — up to 13,600 of them in six counties — hold an unprecedented meeting to vote on whether Tri-County’s remaining six board members should be kicked out of office. Three directors already have resigned — two of them citing frustration with board members who worked to defeat a permanent proposal to rein in their compensation.
“The community has been awakened,” said state Rep. Wendy Brawley, a Richland Democrat who has raised awareness of the scandal among her Lower Richland constituents. “Once you wake people up to these types of abuses, you don’t go backward.”
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Meanwhile, the board appears ready to fight its ouster. The board’s attorney, Lexington lawyer Jake Moore, said the directors have done nothing wrong and only acted on the advice of their chief executive, Chad Lowder, and general counsel, John Felder — two men who Moore says have stabbed the board in the back.
“Somebody has got to show me somewhere where these people have done something wrong,” Moore said Tuesday. “I’ve seen a bunch of noise. I’ve seen a bunch of people who have been screaming and don’t know what they’re talking about.”
$11,600 in committee meetings during one month
The uproar at Tri-County began in May, after The State reported the St. Matthews-based co-op’s part-time board had paid itself about $52,000 per member in 2016 — triple the national average for co-ops. That pay was higher because board members had held a higher number of meetings than other co-ops — collecting their $450-a-meeting per-diem allowance each time — and paid themselves health insurance benefits.
But new documents obtained by The State detail how the board — tasked with keeping costs low for the co-op’s customer-owners — boosted their per-diem pay and mileage.
Three months after they had been warned their pay was out of whack because of too many meetings, Tri-County’s board held four committee meetings in the days before its Jan. 18, 2018, full board meeting, attendance records show.
None of those meetings — from the Policy and Bylaws Committee on Jan. 10 to the Finance Committee on Jan. 17 — lasted more than 30 minutes, recalled Tri-County chief executive Lowder. Lowder added the board never recorded minutes of its meetings or notified customer-owners of them.
Lowder said the meetings could have been held on the same day as the full board meeting. That would have saved the co-op $11,600 for the four meetings, according to The State’s review of per-diem documents.
But Moore, the attorney for the board members, said the meetings all were substantial and held for legitimate reasons.
Documents show the board frequently met several times before its regularly scheduled monthly meeting.
And those extra meetings added up.
Records show board Chairman Heath Hill claimed 102 per-diem payments in 2017, including 31 days at conferences, 45 board committee meetings, 13 full board meetings and 13 “other” unspecified events. Those payments cost the co-op $45,900 last year, part of his $79,600 in compensation from Tri-County.
No Tri-County board member claimed fewer per-diem payments than former trustee Billy Shannon’s 55 last year. Shannon took home $24,750 in per-diem pay and $58,800 in total compensation in 2017.
Board members also claimed per-diem payments for attending community events, including the Aug. 11, 2017, Good Hope Picnic in Calhoun County, and political events, including a February 2012 fundraiser for then-U.S. Rep. Mick Mulvaney’s campaign.
Most board meetings were no more than a “really thinly disguised cover to reimburse travel and obtain a per-diem payment,” according to one of two lawsuits filed recently against Tri-County and its board.
Facing about 200 angry customers at a June 19 town-hall meeting at Eastover Park, Tri-County board member Mary Brown defended her fellow trustees, saying the board’s per-diem rate is comparable to other co-ops. Brown also shifted blame for the payments to chief executive Lowder for signing the board’s checks.
Lowder contends that, as CEO, he has no legal authority to refuse payments to the board that hires and fires him. He said the board’s $450 per-diem rate is close to South Carolina’s $457-a-meeting average, but the Tri-County board’s large number of meetings was the primary driver behind its high pay.
“Your meeting per diem was based on state average, but when you meet more than anybody else does, your gross income is higher than everybody,” Lowder said.
Moore said Tri-County’s trustees met so regularly because they are more involved in their co-op’s affairs than other boards. He said the board met frequently on the advice of the co-op’s chief executive.
“You’ve got people who are relatively uneducated. They’re country people,” Moore said. “They have put together and run a very good co-op. They have relied on professionals. They have relied on their lawyer, their counsel and their CEO, and at present, the people stabbing them in the back — apparently trying to keep their job — are the lawyer and the CEO. That doesn’t seem right to me.”
Lowder said that isn’t true, adding the board calls its meetings and is no more involved in the co-op’s operations than other utility boards.
Perks of the job
Tri-County’s board also spent big on group dinners, according to credit card receipts.
The full board met for one dinner during each of its semiannual trips to the National Rural Electric Cooperative Association’s regional and national conferences, Lowder said. It also held a group Christmas dinner at the co-op’s expense each year.
While attending a national conference in New Orleans, the board spent $744 to dine at Bourbon’s Street’s award-winning Red Fish Grill. According to documents reviewed by The State, board members also spent $939 to hold their 2013 Christmas dinner at Ruth’s Chris Steakhouse in Columbia — well out of the co-op’s six-county service area.
Tri-County board members also have awarded themselves the same Christmas bonus given to the co-op’s employees each year. That bonus paid each trustee $300 last year, in addition to their per-diem pay, health insurance benefits and $30,000 life insurance plans, records show.
Those bonuses were paid eight years after a 2010 audit of Santee Electric in Kingstree declared that S.C. laws don’t support paying such bonuses unless explicitly mentioned in a co-op’s bylaws.
In recommending Santee Electric discontinue the Christmas payout, Charlotte attorney Aaron Christensen wrote that S.C. law allows co-op directors to be paid only for their service, not for their status as board members.
Mike Couick — CEO of the Electric Cooperatives of South Carolina, the statewide association of co-ops — said he is unaware of any other S.C. co-op that pays Christmas bonuses to its directors.
Some Tri-County board members also have claimed employee-like hours in forms submitted to the Internal Revenue Service and were accused of fudging those numbers in a recent lawsuit.
Hill reported he worked 40 hours a week for the co-op in 2016, while Brown said she worked 35 hours a week, according to tax records.
In supporting documents, board member Maurice Etheredge wrote that he spent an hour of almost every day in 2017 talking with co-op customers.
Records show Brown wrote she spent at least one hour every day of 2010 talking with Tri-County customers and another hour each day studying co-op literature.
She claimed to work for Tri-County on Feb. 29 — a date that did not occur because 2010 was not a leap year — and Feb. 30 and 31, April 31, Sept. 31 and Nov. 31 – dates that do not exist. Efforts to reach Brown on Tuesday were unsuccessful.
Tri-County customers — many of them on fixed incomes — are not pleased.
After months of fiery news conferences, town hall and board meetings, they have pledged to turn out for Saturday’s meeting and vote to kick out the board.
Local pastors have vowed to bus residents to St. Matthews. Some customers already have started campaigning for board seats they expect soon to become vacant.
“They should be serving us and not themselves,” said Lower Richland activist Kay Hickman, a retired SLED forensic chemist who has declared she will run. “I want to see new faces.”