For a gross example of corruption, deceit, and rigged elections by a co-op board and its manager, Oklahoma’s Choctaw Electric Cooperative was a grand-prize stinker. Though CEC is owned by the lower-income population in this farming/working class area, the co-op was assessing members the state’s highest electric bills–unless you were a board member or top manager and secretly got lower rates.
Choctaw Electric had long ago lost its populist essence, operating instead as just another monopolistic corporation run by an aloof clique of “upstanding citizens.” With no real voice, members mostly quit paying attention. As one put it, “We just paid the electric bill and fussed about how high it was, and just went on about our business.”
That is, until 2014, when member Doug Felker inquired about how much CEC’s rates could be cut if the co-op switched from coal-generated electricity to solar. He was told: Go away. He didn’t. Knowledgeable and persistent, this member-owner pressed further on basic finances, but the board refused to explain how bills were calculated or to share the co-op’s tax returns with him and other owners. This stinks, he thought. What else are they hiding?
Felker set up a Facebook group, and thousands of members quickly echoed his concerns about board shenanigans. A core group began digging … and the stench grew worse as they uncovered such “leadership expenses” as vacations and personal purchases charged to the membership. Then members were stunned to discover they’d been taken on a long joy ride by co-op CEO Terry Matlock, a respected church deacon, former state representative, and all-around good ol’ boy. Matlock’s crude indiscretions included billing members for “escort services” on out-of-town trips and for using co-op employees and heavy equipment on his personal property. The big shocker, though, was the discovery of a furtive set of books that included board authorization of a super-secret gift of $1.2 million to Matlock. As one of the group’s diggers icily put it: “They increased our meter charge to give him that.”
Still, the board backed its CEO, so the co-op owners had one recourse: Remove all nine board members. The bylaws required the signatures of 10% of members, but Matlock and the board refused to say how many that was. So the group did it the hard way, going door to door in the towns and remote farms in this six-county region, making calls, attending festivals, going wherever needed to gather signatures. “We just hammered, hammered, hammered,” says one of the rebels. At first the board laughed. Then they panicked and lashed out at their own members. Then they tried to assuage the people’s anger by firing their million-dollar CEO!
But the increasingly outraged members saw that the entire clique was corrupt and had to go. So they pressed on, finally getting twice the number of petitions needed to recall the whole bunch.
Victory? Not yet. The tyrannical slicks pulled one more trick: One by one, they resigned and appointed buddies in their places, replicating the old board but with new faces, and thereby invalidating the assiduously collected recall petitions.
Defeat? Never. The reformers shifted to the upcoming board elections, putting up five of their own team against the board incumbents and proposing new democratic bylaws. The campaign was long and hard, but the large turnout produced a landslide victory for the entire reform slate–finally restoring member authority over the Choctaw Electric Cooperative. As one of the group summed up the result: “Everybody working together is what got it done.”
And that is exactly what co-ops are all about.
*Hat tip to We Own It for this story–and for all it does to support member-owners in battles against entrenched co-op boards.