Grand jury indicts two PEC employees

BLANCO COUNTY, Texas (KXAN) - On Wednesday, a Blanco County grand jury indicted two defendants on felony charges resulting from an investigation into unlawful conduct at the Pedernales Electric Cooperative.

"The grand jury charged both defendants with the following three felony charges: misapplication of fiduciary property in excess of $200,000, theft of property in excess of $200,000, and money laundering between $100,000 and $200,000," said the spokesman for the Texas Attorney General Jerry Strickland. "Misapplication of fiduciary property in excess of $200,000 and theft of property in excess of $200,000 are both first-degree felonies, which carry punishment of up to 99 years or life in prison and penalties of up to $10,000. Laundering between $100,000 and $200,000 is a second-degree felony, which carries a penalty of up to 20 years in prison and a fine of up to $10,000."

The investigation, which the attorney general started in February 2008, is still ongoing. In a statement, PEC spokesman Michael Racis said, "Eighteen months ago, PEC charted a new course under new management separate and distinct from the individuals named in these indictments and PEC currently has no corporate ties to these individuals. PEC as a corporate entity has not been involved in these hearings other than to provide any information requested by the Attorney General's office."

The co-op has 220,000 customers, who are also member-owners. It has about $500 million in annual revenue, according to 2008 numbers. Lawsuits in 2008 disclosed that Pedernales executives and board members charged $700,000 within four years on co-op credit cards for extravagant hotel stays, concert tickets and flights.

"The Attorney General has acted swiftly and effectively," said Rep. Patrick M. Rose (D-Dripping Springs ). "I appreciate his leadership on behalf of PEC's members. The Grand Jury's actions today will allow all of PEC's employees, who honorably serve their customers, the ability to move forward and continue to provide reliable and affordable energy. These indictments only heighten the need for legislation that guarantees democratic elections and open governance for all Texans served by co-ops."