Coal-powered corruption in Georgia?

State and local law enforcement officers raided the homes of top officials at a metro Atlanta electric utility recently as part of an ongoing investigation into charges of theft from the customer-owned company through a private spin-off they created.

Now a clean-energy advocacy group is raising questions about one of the accused men's key role in constructing -- and profiting from -- a controversial new coal-fired power plant in Georgia.

On April 22, officers with the Cobb County Sheriff's Department searched the homes of Cobb Electric Membership Corp. CEO Dwight Brown (at right in photo), EMC board chair Larry Chadwick, and board members David McGinnis and Frank Boone, the Atlanta Journal-Constitution reports. A sheriff's deputy was also spotted inside EMC's headquarters along with a Georgia Bureau of Investigation agent.

According to warrants examined by the paper, the officers were looking for evidence of racketeering and theft from the customer-owned electric cooperative, which serves 190,000 people in four suburban Atlanta counties. The warrants charge that the assets were transferred illegally from the co-op to Cobb Energy -- a for-profit spin-off of the EMC run by Brown -- and put "to personal use."

The criminal investigation comes on the heels of a recently-settled civil lawsuit brought by the EMC's customers that made similar allegations, the paper says:

The lawsuit targeted the co-op's relationship with for-profit Cobb Energy, which the co-op formed in 1997. Cobb Energy operated the nonprofit cooperative for a markup that eventually reached 11 percent.

The suit said the arrangement siphoned co-op assets and enriched insiders. Brown was CEO of both companies.

The co-op settled its suit with customers in December, under a deal that folded Cobb Energy into the co-op.

The warrants cited a number of illegal acts, according to the paper:

They include the co-op's $431,500 payment for 49.5 percent of Cobb Energy stock. The deal "was not possible without substantial detriment to Cobb EMC," the warrants said, "since Cobb EMC already owned 100 percent of the stock" and "no stock was issued to Cobb EMC in exchange."

The Marietta Daily Journal reports that the Cobb County district attorney is seeking grand jury indictments on multiple counts of theft by taking and racketeering against Brown and Chadwick. Those indictments are expected some time next month, according to the paper.

Cobb EMC posted a statement to its website denying any wrongdoing and criticizing both the raids and their media coverage:

While seemingly dramatic in its purpose and execution, most of the documents requested are already in the court's possession. Given that these issues raised by 8 plaintiffs in a recently settled lawsuit which were thoroughly investigated by an independent Special Litigation Committee and which found no wrong-doing, it remains to be seen what additional issues the DA believes exist. Interestingly, while the company had no knowledge of the pending search, the news media posted information just about as early as the agents walked through the door.

All involved have been very cooperative. The company looks forward, as do the individuals involved, to being vindicated and hope that the news media will cover THAT story with equal time and interest.

Now the Southern Alliance for Clean Energy is sounding the alarm over Brown's role in a controversial new 850-megawatt coal-fired power plant planned for Georgia's Washington County.

Plant Washington is one of two new coal-burning power plants planned for the state, along with the 1,200-megawatt Longleaf Energy Station proposed by Dynegy/LS Power for Early County. Plant Washington is opposed by clean-energy advocacy groups including SACE, which issued a report last year critical of the project titled "The Risks of Building and Operating Plant Washington."

The entity building Plant Washington is Power4Georgians, a consortium of 10 electric cooperatives.

Who's the founder and manager of Power4Georgians? Cobb EMC/Cobb Energy CEO Dwight Brown.

That's not the only eyebrow-raising connection between Brown and Plant Washington. As detailed yesterday on SACE's CleanEnergy Footprints blog, Power4Georgians hired to construct the coal plant a company called Allied Energy Services -- which just so happens to be a fully-owned subsidiary of Brown's Cobb Energy. SACE raises critical questions about the deal:

* There is no evidence that Allied Energy Services has any experience with the construction of a coal-fired power plant.
* No evidence has been presented of a competitive bidding process to give the contract to Allied Energy Services.

SACE goes on to note that the Power4Georgians spokesperson, Dean Alford, is a senior vice president with Cobb Energy who owns 30,000 preferred shares of the company. He also owns a real estate firm with Brown.

SACE says Brown's close involvement with the Plant Washington project deserves scrutiny:

Power4Georgians claims that Plant Washington will cost $2.1 billion dollars while verifiable trends indicate that a plant of this size will in fact cost much more.  Nevertheless, such an enormous investment in the hands of men being accused of theft and a breach of their fiduciary duty should be a concerning thought for members of the 10 EMC's involved in Power4Georgians.

The consortium is still in the process of obtaining the necessary state permits to proceed with the plant's construction.

(In the Georgia Department of Defense photo above, Cobb EMC CEO Dwight Brown, at right, hands Georgia's Adjutant General titles for trucks the company donated to the Georgia National Guard's Youth Challenge Program.)