CMEEC to ask convicted former officials to 'promptly repay' legal costs
Jun. 8—The utility cooperative that has footed the legal bills throughout the federal criminal proceedings against five former officials will seek reimbursement from three former officials convicted for their roles in planning and participating in lavish trips to the Kentucky Derby and a West Virginia golf resort.
The Connecticut Municipal Electric Energy Cooperative held a special meeting Wednesday and voted to seek reimbursement for legal costs from former CEO Drew Rankin, former Norwich Public Utilities General Manager John Bilda, who was CMEEC board vice chairman, and former CMEEC board and Norwich utilities commission Chairman James Sullivan.
The board authorized CMEEC staff to send formal written requests to the three convicted defendants and their attorneys "seeking prompt repayment of all amounts of Legal Expenses and other costs that CMEEC has or will ultimately have advanced, reimbursed or otherwise paid on their behalf."
Two other former CMEEC officials, former Groton Utilities commissioner Edward DeMuzzio and former CMEEC CFO Edward Pryor, were acquitted on all charges.
CMEEC CEO David Meisinger said Thursday the current approximate total for the three defendants is $5.38 million.
Through April 30, CMEEC had advanced approximately $9.2 million in defense costs on behalf of all five defendants. Meisinger said the insurance company at that time had reimbursed CMEEC for approximately $5.2 million of the total.
All three were convicted by a jury in December 2021 on one count each of theft from a program receiving federal funds. The three were sentenced in May, Rankin to serve 12 months in prison and three years of supervised release, and Bilda and Sullivan getting six-month sentences each and three years of supervised release. All three have filed notice they intend to appeal the convictions to the U.S. Second Circuit Court of Appeals in New York City.
The New Haven District federal court also will rule on any orders of restitution payments following a July 12 hearing.
Immediately following the convictions on May 18, the CMEEC board voted unanimously to no longer cover legal costs of the criminal case through the appeals.
On Wednesday, the CMEEC board approved a three-page resolution to seek reimbursement from the three convicted former officials, based on signed statements each had submitted at the start of the criminal proceedings promising reimbursement if they were convicted.
The resolution also cites language in CMEEC's bylaws in place at the time of the 2018 criminal indictments that exempts legal coverage in "matters as to which they are finally adjudged to be liable for willful or wanton negligence or misconduct in the performance of duty."
The jury found Rankin, Bilda and Sullivan guilty of one count each of theft in connection with lavish trips CMEEC hosted in 2015 to the Kentucky Derby and to The Greenbrier golf resort in West Virginia. The initial indictment of the five defendants included charges of conspiracy and theft related to Kentucky Derby trips from 2014 through 2016.
Federal prosecutors withdrew charges connected to the 2016 trips during the trial, and the jury acquitted all five men of the conspiracy and theft charges for the 2014 trips.
CMEEC used revenues intended to be distributed to the member municipal utilities for electric rate stabilization to pay for what were termed board retreats to the Kentucky Derby and golf resort.
CMEEC paid for legal costs for all five defendants and is engaged in a separate federal civil lawsuit challenging insurance provider National Union Fire Insurance Co. of Pittsburgh's denial of coverage for the legal costs. A federal judge has ordered the company to cover the legal costs, but the insurance company has provided CMEEC with reimbursement for only a portion of the costs, and the parties continue to argue over what costs should be deemed "reasonable."
At the start of the criminal trial, Pryor had filed a federal civil suit seeking to force CMEEC to advance the legal fees to the defendants while the insurance dispute remained pending. CMEEC agreed to advance the legal costs contingent upon each defendant signing "an Affirmation and Undertaking" pledging to reimburse CMEEC if they were found to have committed crimes.
The CMEEC resolution approved Wednesday quoted the statement as saying the defendants believed they had acted in good faith and "had reasonable belief that my conduct was lawful."
The statement continued that if it was determined ultimately they were not entitled to legal indemnification, "I will promptly repay CMEEC on request for the amounts of legal fees, expenses and other costs that CMEEC has advanced or reimbursed on my behalf."
Attorneys for Bilda, Rankin and Sullivan could not be reached to comment Thursday.
Sullivan and Rankin face a separate criminal trial alleging the two men conspired to use CMEEC funds to reimburse Sullivan for nearly $100,000 in personal expenses and travel costs.
The CMEEC resolution did not address whether CMEEC would pay Rankin and Sullivan for legal fees in that pending case, which had been put on hold pending completion of the first case and now is set to restart with motions beginning in October.
Meisinger said he had no comment on whether CMEEC would cover Rankin's and Sullivan's legal costs in that case.
