PD-1537-14
COURT OF CRIMINAL APPEALS
AUSTIN, TEXAS
February 10, 2015
Transmitted 2/9/2015 8:27:29 PM
Accepted 2/10/2015 8:51:21 AM
ABEL ACOSTA
Nos. PD-1537-14 & PD-1636-14 CLERK
In the Texas Court of Criminal Appeals
BENNIE FUELBERG,
Petitioner,
WALTER DEMOND,
Petitioner,
v.
THE STATE OF TEXAS
Respondent.
ON PETITIONS AND CROSS-PETITION FOR
DISCRETIONARY REVIEW FROM THE
THIRD COURT OF APPEALS AT AUSTIN, TEXAS
BRIEF BY AMICUS CURIAE
ELECTRIC CO-OP MEMBERS IN OPPOSITION
TO PETITIONS FOR DISCRETIONARY REVIEW
AND IN SUPPORT OF STATE’S CROSS-PETITION
ERNEST J. ALTGELT
State Bar No. 0112000
ealtgelt@austin.rr.com
615 Flamingo Blvd.
Lakeway, Texas 78734
(512) 261-3681 - Telephone
Attorney and Amicus Curiae
AMICUS CURIAE IS NOT ENTITLED TO ORAL ARGUMENT
IDENTITY OF PARTIES AND COUNSEL
Neither Petitioners nor the Attorney General, fully identify a large number of
parties, legal counsel, and law firms, which are possibly interested in the above-
styled criminal cases. In ANNEX A, infra, we identify approximately 60 legal
counsel, law firms, and parties − who are possibly interested in the above-styled
cases for purposes of potential grounds for recusal. Pages A-1 to A-9 of ANNEX A,
accordingly, are incorporated by reference.
i
TABLE OF CONTENTS
Identity of Parties and Counsel ...................................................................................i
Index of Authorities ..................................................................................................iv
Tex. R. App. P. Rule 11 Requirements .....................................................................vi
Interest of Amicus Curiae .........................................................................................vi
Statement Regarding Oral Argument .......................................................................vi
Statement of the Case................................................................................................ix
Statement of Procedural History ................................................................................ x
Questions Presented for Review ............................................................................ xiii
Summary of Argument .............................................................................................. 1
Argument.................................................................................................................... 1
I. Petitioners fail to address activities by co-conspirators Curtis
and Demond. ......................................................................................... 2
II. Petitioners are criminally accountable for the long-running,
bill padding, payments scheme and conspiratorial activities ................ 2
III. The factual findings and conclusions at issue are reached in
companion jury trials held in separate cities ......................................... 3
IV. Whether the Court of Appeals erred when it concluded that
Petitioner Demond’s theft-by-deception conviction rested on
legally insufficient evidence, misstated the State’s burden,
and ignored the law of parties? ............................................................. 3
Prayer for Relief ......................................................................................................... 4
ii
Certificate of Compliance .......................................................................................... 5
Certificate of Service ................................................................................................. 6
ANNEX A − Identity of Parties and Counsel ......................................................... A-1
ANNEX B − Relevant Legal Proceedings and Court Records ................................ B-1
iii
INDEX OF AUTHORITIES
Cases Page(s)
Demond v. State,
---S.W.3d---, 2014 WL 6612510 (Tex. App.—Austin, Nov. 21,
2014) ................................................................................................................x
Fuelberg v. State,
447 S.W.3d 304 (Tex. App.—Austin, 2014)...................................................x
Hall v. Pedernales Elec. Coop. Inc.,
278 S.W.3d 536 (Tex. App.—Austin 2009, no pet.) ..................................... vi
Jackson v. Virginia,
443U.S.307 (1979)........................................................................................ vii
Matchett v. State,
941 S.W.2d 922 (1996)................................................................................ viii
Olde v. Wal-Mart Stores,
747 F.3d 315 (5th Cir. 2014) ........................................................................ vii
Statutes Page(s)
TEX. CODE CRIM. PROC., Art. 1.03 ........................................................................... ix
TEX. CODE CRIM. PROC., Art. 1.12 ........................................................................... ix
TEX. PENAL CODE § 7.01(a) .......................................................................................3
TEX. PENAL CODE § 7.02(a)(2)...................................................................................3
TEX. PENAL CODE § 31.03 .................................................................................. vi, vii
TEX. PENAL CODE § 32.45 .................................................................................. vi, vii
TEX. PENAL CODE § 34.02 .................................................................................. vi, vii
Rules Page(s)
TEX. DISCIPLINARY R. PROF’L CONDUCT 1.12(a) .......................................................1
iv
TEX. R. APP. P. 66(a)(c) .......................................................................................... vii
TEX. R. EVID. 201 ................................................................................................... viii
Other Authorities Page(s)
A Review of the Investigative Report on the Pedernales Elec. Coop., Inc.,
TEX. STATE AUDITOR’S OFFICE (Rept. 09-019, Feb. 2009)
http://www.sao.state.tx.us/reports/main/09-019.pdf ................................ vii, 3
Pedernales Elec. Coop., Inc. Report of Investigation,
Navigant Consulting, LLC (Dec. 15, 2008), available at
http://www.pec.coop/docs/default-source/navigant-
report/navigant-report-2008.pdf?sfvrsn=4. ......................................... vii, xi, 3
v
TEX. R. APP. P. RULE 11 REQUIREMENTS
This Brief complies with the Briefing rules for parties. No fee was paid, or
will be paid, for the preparing of this Brief. A certificate of service certifying that
copies have been served on all parties is set forth at the end of this Amicus Brief.
INTEREST OF AMICUS CURIAE
Amicus Curiae Ernest Altgelt is a member of the Texas and New York bars,
the U.S. Supreme Court, and several Federal Courts. Both he and his wife, Amicus
Curiae Ingrid R. Altgelt, are Member-Owners of the Pedernales Electric
Cooperative, Inc. (PEC).1 For the reasons and arguments made by the Attorney
General in his Replies and Cross-Petition, the Court should deny the Petitions for
Discretionary Review, as separately filed by “co-conspirators” Fuelberg and
Demond and grant the State’s Cross-Petition filed against Demond.
STATEMENT REGARDING ORAL ARGUMENT
Petitioner Bennie Fuelberg’s white-collar crime felony convictions are
for money laundering, misapplication of fiduciary property and theft-by-deception.
See, TEX. PENAL CODE §§ 34.02, 32.45, 31.03. As to Clark, Thomas & Winters
attorney and “co-conspirator,” Walter Demond, his white-collar crime convictions
1
Amicus Curiae are granted “intervenor” status as to certain matters involving the
“continuing and exclusive jurisdiction” of the Travis County District Courts set forth in the
court-ordered class action settlement Agreement. See, Hall v. Pedernales Elec. Coop. Inc., 278
S.W.3d 536 (Tex. App.—Austin 2009, no pet.); Cause No. D-1-GN-7-002234, in the 353rd
Judicial District Court, Travis County, Texas, Order filed Sept. 14, 2009 (Livingston, J.) (The
“Plea in Intervention of Owner-Members Ingrid and Ernest Altgelt is GRANTED . . . .”
vi
(as affirmed by the court of appeals) are for misapplication of fiduciary property
and money laundering. See TEX. PENAL CODE §§ 32.45, 34.02.
The court below, however, overturned Demond’s verdict and conviction
for theft-by-deception. See TEX. PENAL CODE § 31.03. In the State’s Cross-
Petition, the Attorney General asks for the Court to reinstate Demond’s theft-by-
deception jury verdict and judgment pursuant to TEX. R. APP. P. 66(a)(c).
Relevant to the above-numbered criminal Cases, the witness testimony,
companion Indictments, conspiratorial activities, and circumstances, overlap and
are interrelated with each other. Considerations of judicial economy, accuracy and
efficiency, suggest future proceedings before the Court (including oral arguments,
if any), should be assigned to the same panel members who hear or determine both
Cases.
In addition, Amicus Curiae respectfully submit oral argument is not
warranted. This is because the decades-long conduct and crimes which involve
underlying fiduciary breaches, “padding or laundering” of legal bills, deep
corruption, “tampering with and deleting of” computer-based evidence, are clearly
established by the overwhelming Witness Testimony and Evidence herein.
The Court should further review the circumstances, corporate governance
and accounting irregularities, chronicled in the court-ordered independent
vii
Navigant Investigative Report2 (and of other proceedings listed in ANNEX B,
infra.). The Navigant Report and State Auditor’s Report we believe also
corroborates and illuminates the merits, justice and fairness, of the white-collar
crime convictions at issue.
The Court should not be misled by the Petitioners’ fanciful and “sky-is-
falling” corporate governance arguments, which are apparently intended to seek
further delays and sympathy, principally for Attorney, Walter Demond. The legal
aspects of the criminal findings at issue herein − from the prospective of sound
corporate governance principles, judicial disqualification or recusal considerations,
and the law of parties− we submit are pedestrian and not “ground breaking” in any
sense.
Moreover, the factual findings and conclusions at issue were reached in
companion jury trials held in separate Texas Cities and Counties. They should
not be reinterpreted or second-guessed by this Court. See, Jackson v. Virginia,
443U.S.307, 319 (1979) (Reviewing appellate courts must give full play and
deference to the role of the jury as fact finders); Matchett v. State, 941 S.W.2d 922,
2
We ask for the Court to Take Judicial Notice of the court-ordered Navigant Investigative
Report and companion State Auditor’s Report, as listed in ANNEX B, at p. B-2. See Pedernales
Elec. Coop., Inc. Report of Investigation, Navigant Consulting, LLC (Dec. 15, 2008), available at
http://www.pec.coop/docs/default-source/navigant-report/navigant-report-2008.pdf?sfvrsn=4; A
Review of the Investigative Report on the Pedernales Elec. Coop., Inc., TEX. STATE AUDITOR’S
OFFICE (Rept. 09-019, Feb. 2009) http://www.sao.state.tx.us/reports/main/09-019.pdf. See TEX.
R. EVID. 201; Olde v. Wal-Mart Stores, 747 F.3d 315, 323 n.1 (5th Cir. 2014) and authorities
cited therein.
viii
936 (1996) (en banc) (Jurors are the exclusive judges of the facts); Cf., TEX. CODE
CRIM. PROC., Art. 1.03 (Objects of this Code), §§ 3 & 5 (“To insure criminal trials
are conducted which are “consistent with the ends of justice . . . “; and Art. 1.12
(Right to Jury) (“The right to trial by jury shall remain inviolate”). We believe
Oral Argument is not likely to substantially assist the Court to resolve the issues
now before it -- regarding the co-conspirators’ conduct, or as to the controlling
events and circumstances. Amicus is not entitled to oral argument.
STATEMENT OF THE CASE
At pages 1-11 of the reply in Case No. PD-1537-14 (Fuelberg), and at pages
3-12 in the reply and cross-petition in Case No. PD-1636-14 (Demond), the
Attorney General accurately describes the extent to which the State is dissatisfied
with the Statements of the Case and the contentions by Fuelberg and Demond in
their Petitions. Accordingly, we adopt and incorporate by reference in their
entirety, the Attorney General’s Replies and Cross-Petition with respect to
Petitioners Fuelberg and Demond’s respective Statements of the Case.
In its Replies Opposing Discretionary Review and Cross-Petition, the
Attorney General also briefly discusses the portions of the Statements of Facts and
Contentions of Fuelberg and Demond which should be supplemented or corrected.
At pp. 3-8 of the State’s Cross-Petition in Demond, the Attorney General
further cites the specific portions of Witness Testimony, direct and
ix
circumstantial evidence, that establish the merits of the theft-by-deception jury
verdict and judgment against attorney Demond. Said pp. 3-8 are incorporated by
reference herein.
Petitioners’ criminal convictions, as previously noted, are based upon similar
and duplicative witness testimony, factual circumstances, evidence and findings.
These matters were presented and adjudicated in companion, separate jury trials
held in Fredericksburg, Texas and Boerne, Texas.
Because of the forgoing, and in light of the very extensive briefing,
numerous prior delays herein and in the interest judicial efficiency and justice, we
ask for this Amicus Brief to be considered a Joint Brief, as to the Petitioners’
Petitions and Respondent State’s Cross-Petition.
STATEMENT OF PROCEDURAL HISTORY
The Court of Appeals on July 16, 2014, issued its decision in Fuelberg v.
State, 447 S.W.3d 304 (Tex. App.—Austin, 2014) (Field, J., Pemberton, J. &
Jones, CJ.), reh. denied. On Nov. 21, 2104, the Third Court of Appeals’ decision
is issued in Demond v. State, ---S.W.3d---, 2014 WL 661250 (Tex. App.—Austin
2014) (Field, J., Pemberton, J. & Jones, CJ.).
To understand the facts, procedural background, context and timeline
regarding the multiple felony convictions at issue, this Court also should
recognize, the circumstances relevant to the above-numbered criminal cases.
x
These criminal cases are either directly related to or follow from, the same:
decades-long corporate governance irregularities, “padding or laundering” of
legal bills, collusion, deep corruption, “tampering with and deleting” of
computer-based evidence, conspiratorial activities, cover-ups, and dishonesty,
as discussed and reported in the court-ordered December 2008 Navigant
Investigative Report and the companion February 2009 State Auditor’s
Report.
We further note, the general factual background and procedural history as to
the underlying “white-collar” crimes, companion indictments, corporate
governance and accounting irregularities, self-dealing, dishonesty, fiduciary
breaches and conspiratorial activities, are also summarized, at some length, in the
two opinions authored by Justice Scott K. Field and issued in appellate Case No.
03-11-00553-CR (Demond), in his companion prior opinion in Case No. 03-11-
00317-CR (Fuelberg) and in the Attorney General’s Cross-Petition.
The Court is well-served to re-read the State’s Brief [72-pages] in the
Third Court Appeals in Demond dated Oct. 15, 2012, Brief of Amicus Curiae dated
Dec. 3, 20123 and Supplemental Brief of Amicus Curie on Judicial Disqualification
and Recusal dated June 4, 2014. These previous Amicus Curie Briefs, are
3
Such Amicus Curiae Appellate Brief is received Dec. 3, 2012, by the Third Court of
Appeals. This prior Amicus Curiae Brief is incorporated by reference herein. Upon further
request, additional hard copies will be furnished by Amicus Curiae to the Clerk and Justices of
the Court.
xi
provided in both appellate Case Nos. 03-11-00553-CR (Demond), and 03-11-
00317-CR (Fuelberg)4.
We submit it may be particularly helpful and enlightening for the Court to
read each of the above-referenced Appellate Briefs by the State and by Amicus
Curiae − including the specific record citations to the testimony included therein
about “co-conspirator” Demond’s fiduciary and professional duties to PEC Co-op
as a legal entity, as opposed to the PEC’s CEO.
The grand jury indictments and conspiratorial activities relevant to the
Petitioners’ separate jury trials and felony convictions, and their appeals, also
follow from the events as addressed in: prior civil lawsuits related to corporate
governance and irregularities, the appeal of a non-opt-out class action settlement
lawsuit before the Third Court of Appeals, the closely-related court-ordered
Navigant Investigative Report5, a companion State Auditor’s Report, Employee
Theft Insurance litigation, Supreme Court Board of Disciplinary Appeals decision,
4
A PDF copy of the referenced Amicus Brief dated June 4, 2014, as provided in Fuelberg
& Demond v. State of Texas, is available at http:// www.search.txcourts.gov/Case.aspx?cn+013-
11-553-CR&coa03.
5
The June 2009 Grand Jury Indictments of “co-conspirators” Fuelberg and Demond,
occurred some six months after the Navigant Investigative Report was issued and four months
after the companion State Auditor’s Report is issued. See, 1.CR.9-11, Appellate Case No. 03-
11-00553-CR. The Dec. 2008 Navigant Report is a major catalyst, factual basis, and cause for,
Petitioners’ Grand Jury Indictments. See Pedernales Elec. Coop., Inc. Report of Investigation,
Navigant Consulting, LLC (Dec. 15, 2008), available at http://www.pec.coop/docs/default-
source/navigant-report/navigant-report-2008.pdf?sfvrsn=4.
xii
Clark Thomas & Winters, P.C.’s bankruptcy and state and federal legislative
investigative hearings. See, ANNEX B, infra.
QUESTIONS PRESENTED FOR REVIEW
The Attorney General at pp. 1-11 of his Reply in Fuelberg and at pp. 3 to 12
in his Reply and Cross-Petition in Demond, correctly responds and disavows, the
Issues as Presented for Review by Petitioners. We adopt and incorporate by
reference in its entirety, the Attorney General’s Replies and Cross-Petition for the
State, with respect to the questions and cross-ground for discretionary review, in
Fuelberg and Demond.
We submit, nevertheless, a more accurate and informative version of the
applicable Questions for Review now before the Court and include the following
Restated items:
1. Are the fiduciary duties which are owned by “co-conspirator” and Attorney
Walter Demond to the PEC as a legal entity, trumped by business judgment?
2. Does the alleged blanket and questionable authority given by only some
Directors to CEO & Gen. Mgr. Bennie Fuelberg, as asserted by Petitioners,
render totally meaningless the concept of fiduciary duty?
3. Does Petitioner Demond’s argument that he cannot be held criminally
responsible along with his “co-conspirator” Fuelberg, because he allegedly
did not know a crime was being committed, deviate from the real world of
criminal prosecutions. For example, the driver of the get-a-way car in a
planned bank robbery did not know the crime of murder was being
committed by the other participants − yet the driver will be charged with
murder notwithstanding the fact the plan was only to rob the bank and did
not kill anyone?
xiii
4. Whether given the fiduciary, professional and ethical standards, which apply
to the conduct of “co-conspirator” attorney Demond, as to his client, PEC as
a legal entity6 − the Court should confirm that both “co-conspirators” are
criminally accountable for their long-running secretive invoicing, bill
padding and payments scheme, and conspiratorial activities?
5. Whether the Third Court of Appeals below erred when it concluded that
Petitioner Demond’s theft-by-deception conviction rested on legally
insufficient evidence?
6
At pp. 27-31, in the Oct. 15, 2012 State’s Brief in Appellate Case 03-11-00553-CR,
Demond v. State of Texas, considerable specific record citations and legal authorities, are
provided − all of also which refute the false premise of the principal defense of Demond.
xiv
TO THE HONORABLE CRIMINAL COURT OF APPEALS:
Amicus Curiae Electric Co-op Members, Ernest Altgelt and Ingrid R.
Altgelt, file this brief in opposition to petitions for discretionary review and in
support of cross-petition. Amicus Curiae respectfully show:
SUMMARY OF ARGUMENT
We adopt and incorporate by reference in its entirety, the contentions and
authorities set forth in the Attorney General’s Replies Opposing Discretionary
Review and Cross-Petition in Demond.
Further, we believe a correct reading of both Petitioners’ requests are that this
Court is being asked to rule, in essence, that the PEC’s board, CEO Fuelberg, and
defacto General Counsel Demond, owed no fiduciary obligation to safeguard
PEC’s assets and that the insider ransacking of the business entity, generally
called white crime, should not be criminalized but rather regarded as acceptable
business practice.
ARGUMENT
In the interest of brevity, we fully incorporate the citations to the clerk’s
records, reporter’s records, case authorities, set forth in the State’s Cross-Petition
to Demond’s Petition for Discretionary Review. Also refer to TEX. DISCIPLINARY
R. PROF’L CONDUCT 1.12(a) (Organization as Client and commentary). We assert
each of these items serve as an effective antidote to the arguments of attorney
1
Demond and Fuelberg, as made in their Petitions for Discretionary Review. In
addition, we further emphasize the following:
I. Petitioners fail to address activities by co-conspirators Curtis and
Demond.
Petitioners in their Petitions seem to ignore several facts: 1) the PEC did not
need the services of Curtis, co-conspirator Bennie Fuelberg’s brother, as the PEC
interests at the Texas Legislature were being protected by Texas Electric
Cooperatives (TEC) and others; 2) the PEC did not need or use Price, the son of a
longtime Director − really $106,000 in retainer fees, for practicing in just one of
the PEC’s 24 counties service area; 3) Curtis did not register as a Lobbyist for the
PEC in order to hide his relationship with the PEC and to keep his $872,000 in
payments sub rosa; and 4) the whole scheme was to secretly authorize unnecessary
payments to Curtis and Price, and to fraudulently hide the nature of these payments
from the PEC’s accounting system by including them in Clark, Thomas & Winters,
PC’s monthly billings − theft, misapplication of fiduciary property and money
laundering.
II. Petitioners are criminally accountable for the long-running, bill
padding, payments scheme and conspiratorial activities.
Petitioners, in essence, erroneously argue that fiduciary duty is trumped by
business judgment. In each Petitioners’ view, Fuelberg could hire and fire anyone
he wanted at any time. Such blanket authority under the circumstances renders as
2
meaningless, the concept of fiduciary duty. The concepts of reasonable and
necessary are not recognized.
III. The factual findings and conclusions at issue are reached in companion
jury trials held in separate cities.
The Jurors in the cities of Fredericksburg and Boerne, properly determined
that attorney Demond and General Manager & CEO Fuelberg, are co-engineers,
co-participants and co-conspirators, in orchestrating the long-running
invoicing and bill padding scheme to effectuate secretive monthly payments of
PEC moneys to lobbyist Curtis, and to Bill Price, the son of a prominent Director.
See Navigant Investigative Report and State Auditor’s Report, supra, n. 2, at p vii
and the discussion and references, supra at p. x.
IV. Whether the Court of Appeals erred when it concluded that Petitioner
Demond’s theft-by-deception conviction rested on legally insufficient
evidence, misstated the State’s burden, and ignored the law of parties?
The Jurors in the cities of Fredericksburg and Boerne, properly determined
that attorney Demond and General Manager & CEO Fuelberg, are co-engineers,
co-participants and co-conspirators, in orchestrating the long-running
invoicing and bill padding scheme to effectuate secretive monthly payments. See,
TEX. PENAL CODE § 7.01(a), 7.02(a)(2).
3
PRAYER FOR RELIEF
Wherefore, for the foregoing reasons, and for the reasons set forth in the
State’s Replies Opposing Discretionary Review and Cross-Petition, Amicus Curiae
respectfully pray for this Court to first fully review the information included in
ANNEX A & B.
After its review and consideration of ANNEX A & B, and of any other
relevant information, the Court should identify and address, any potential grounds
for recusal which may arise from the very large number of parties, business
entities, law firms, insurers, and attorneys, which are possibly interested in any of
the various issues and witness testimony as to the above-numbered criminal cases.
In addition, Amicus Curiae further prays for the Court to deny Petitioners’
petitions for discretionary review, grant the State’s cross-petition and reverse the
portion of the court of appeals’ judgment reversing Demond’s theft-by-deception
conviction, and render judgment affirming the trial court’s judgment in whole.
The Court should also award such other and further relief, as will expedite
the timely, cost efficient and fair administration of criminal justice. Any further
relief granted, should be fully consistent not only with the findings and conclusions
of the jurors, but also the sentences and judgments, following the conclusions of
Petitioners’ separate criminal trials.
4
Respectfully submitted,
/s/ Ernest J. Altgelt
Ernest J. Altgelt
State Bar No. 0112000
615 Flamingo Blvd.
Lakeway, Texas 78734
(512)261-3681 (Telephone)
ealtgelt@austin.rr.com
CERTIFICATE OF COMPLIANCE
This document complies with the typeface requirements of Texas Rule of
Appellate Procedure 9.4(e) because it has been prepared in a conventional typeface
no smaller than 14-point for text and 12-point for footnotes. This document also
complies with the word-count limitations of Rule 9.4(i), if applicable, because it
contains 815 words, excluding any parts exempted by Rule 9.4(i)(1).
/s/ Ernest J. Altgelt
Ernest J. Altgelt
5
CERTIFICATE OF SERVICE
On February 9, 2015, in compliance with Texas Rule of Appellate Procedure
9.5, I served this document by e-service, e-mail, facsimile, or mail to:
David L. Botsford James C. Ho
BOTSFORD & ROARK Kyle Hawkins
1307 West Ave. Prerak Shah
Austin, Texas 78701 GIBSON, DUNN & CRUTCHER LLP
Fax: (512) 479-8040 2100 McKinney Avenue, Suite 1100
Email: dbotsford@aol.com Dallas, TX 75201-6912
Counsel for Petitioner Fuelberg Fax: (214) 571-2917
Email: jho@gibsondunn.com
Counsel for Petitioner Demond
Bill Davis Lisa McMinn
Dustin M. Howell Office of State Prosecuting Attorney
Assistant Solicitors General P.O. Box 13046
OFFICE OF THE ATTORNEY GENERAL Austin, Texas 78711-3046
P.O. Box 12548 (MC 059) Email: Lisa.McMinn@SPA.texas.gov
Austin, Texas 78711-2548
Fax: (512) 370-9191
Bill.Davis@texasattorneygeneral.gov
/s/ Ernest J. Altgelt
Ernest J. Altgelt
6
ANNEX A
Case Nos. PD-1337-14 & PD-1636-14
Amicus Brief on Discretionary Review
IDENTITY OF PARTIES AND COUNSEL
To assist the Court to identify potential grounds for recusal, Amicus Curiae
submit the following are interested parties or counsel:
1. Attorneys for “co-conspirator”* James C. Ho
Walter Demond at this Court of Daniel L. Geyser
Criminal Appeals and the Third Prerak Shah
Court of Appeals (including for prior Kyle Hawkins
Mandamus) GIBSON, DUNN & CRUTCHER, L.L.P.
2. Attorneys for “co-conspirator” David L. Botsford
Bennie Fuelberg at this Court of BOTSFORD & ROARK
Criminal Appeals and Third Court of
Appeals (and prior Mandamus) Christopher (Chris) Gunter
Gene Anthes
GUNTER & BENNETT, P.C.
Charles O. Grigson
Austin, Texas
3. Attorneys for “co-conspirator” E.G. (Gerry) Morris
Walter Demond (at his criminal
trial) Roy Q. Minton
Warren L.“Rip” Collins
MINTON, BURTON, FOSTER & COLLINS
4. Attorneys for “co-conspirator” Christopher (Chris) Gunter
Bennie Fuelberg at his criminal trial Charles O. Grigson
David L. Botsford
*
The term “co-conspirator” is in italics to emphasize, “co-conspirators” are all agents of
each other, and where the acts of one are the acts of all.
A-1
5. Attorneys for State of Texas Greg Abbott, Atty. Gen., Ken Paxton,
at Trial and or at the Third Court of Atty. Gen., Harry White, Asst. Atty.
Appeals, and Court of Criminal Gen., Tom Cloudt, Asst. Atty. Gen.
Appeals (for prior Mandamus) Eric J. R. Nichols, Deputy Atty. Gen.,
Don Clemmer, Deputy Atty. Gen.,
Jessica Hartsell, Asst. Atty Gen.
Bill Davis, Asst. Solicitor Gen.,
Dustin Howell, Asst. Solicitor Gen.,
Jonathan Mitchell, Solicitor Gen.,
Scott Keller, Solicitor Gen.,
Lisa McMinn, State Pros. Atty
6. Special Counsel for Intervenor Paul E. Coggins
Amicus, PEC Co-op (for matters as Kiprian (Kip) Mendrygal
to the recusal or disqualification of LOCKE, LORD, BISSELL & LIDDELL
Chris Gunter, “co-conspirator”
Bennie Fuelberg’s attorney)
7. Attorneys for Defendant PEC Co- David C. Duggins
op in the related class action lawsuit Joanne Summerhays
in the Travis County District Courts Don C. Lewis
and or the Third Court of Appeals L. Parker (Larry) McNeill
CLARK, THOMAS & WINTERS, P.C.
Douglas W. Alexander
ALEXANDER, DUBOSE & TOWNSEND
A-2
8. Attorneys for “co-conspirator” David C. Duggins
Bennie Fuelberg, other PEC Co-op Joanne Summerhays
Defendants, in the class action Don C. Lewis
lawsuit in the Travis County District Mark Santos
Courts, or as Appellees in the Third L. Parker (Larry) McNeill
Court of Appeals CLARK, THOMAS & WINTERS, P.C.
Douglas W. Alexander
ALEXANDER, DUBOSE & TOWNSEND
Stephen E. McConnico
S. Abraham Kuezaj
Jane M. N. Weber
SCOTT DOUGLASS & MCCONNICO
9. Attorneys for Defendant PEC Co-op David C. Duggins
in the related class action lawsuit in Joanne Summerhays
the Travis County District Courts Don C. Lewis
and or as Appellee at the Third Mark Santos
Court of Appeals CLARK, THOMAS & WINTERS, P.C.
Douglas W. Alexander
ALEXANDER, DUBOSE & TOWNSEND
Stephen E. McConnico
S. Abraham Kuezaj
Jane M. N. Weber
SCOTT, DOUGLASS & MCCONNICO
A-3
10. Attorneys in the related class-action David C. Duggins
lawsuit in the Travis County District Joanne Summerhays
Courts, and or as Appellees in the Don C. Lewis
Third Court of Appeals, for PEC Mark Santos
Officers and Directors – Bennie C. Joseph Cain
Fuelberg, Will Dahmann, W.W. L. Parker (Larry) McNeill
“Bud” Burnett, E .B. Price, O. C. CLARK, THOMAS & WINTERS, P.C.
Harmon, R. B. Felps, Val Smith, VI
Cloud, Libby Linebarger, Blas Douglas Alexander
Trenorio, Rusty Allen, Stuart ALEXANDER DUBOSE & TOWNSEND
Nunnally, Duwan Ruff, Robert
Reed, Barry Adair, Ola Armstrong, Stephen E. McConnico
Kenneth Kennedy, Lamont Ramage, Abraham Kuzej
Barbara Schaffer. Jane M.N. Weber
SCOTT, DOUGLASS & MCCONNICO
11. Criminal defense and/or white-collar Roy Q. Minton
crime Attorneys, retained for, or by, Samuel E. Bassett
the PEC Co-op, and or its Officers, MINTON, BURTON, FOSTER & COLLINS
Directors, Employees, and
Insurers -- relevant to the Attorney Paul E, Coggins
General’s Investigations, the court- Kiprian (Kip) Mendrygal
ordered Navigant Investigative LOCKE, LORD, BISSELL, & LIDDELL
Report, State & Federal Legislative
Investigative Hearings, and the 2008 Christopher (Chris) Gunter
thru 2009 Blanco County Grand Jury GUNTER & BENNETT, P.C.
Proceedings and Indictments.
Kimberly Paffe
Van G. Hilley
GOLDSTEIN, GOLDSTEIN & HILLEY
Zachary P. Hudler
Johnson City, Texas
A-4
12. Attorneys for named-Plaintiff Class- William Ikard
Co-op owner-members, John Anne Wynne
Worrall, Lee Beck Lawrence, et Carrie Helmcamp
al., in the Travis County District Kimberly Selinger
Courts, and or as Appellees in the IKARD WYNNE, L.L.P.
Third Court in this Third Court of
Appeals. Paul Lawrence
Jan Soifer
LAWRENCE SOIFER SATIJA, L.L.P.
Graham K. Blair
BAKER & MCKENZIE, L.L.P.
13. Attorneys for PEC Co-op and W. Roger Wilson
Navigant Consulting, relevant to Mike Ferrill
the Dec. 2008 court-ordered Mary M. Potter
Investigative Report. Such legal COX SMITH MATTHEWS, INC.
representation also includes
Attorneys interactions with Paul E. Coggins
prosecutors; Texas State Auditor; Kiprain (Kip) Mendyrgal
and KPMG LLP, -- during related LOCKE, LORD, BISSELL & LIDDELL
criminal investigations, Grand Jury
Proceedings; and Clark, Thomas
Attorney Demond’s resignation, as
well as in relation to the subsequent
efforts by the Atty. General and Co-
op, for the “recusal” of criminal
defense attorney, Chris Gunter, and
the Co-op’s interests as to the 2011
“punishment” hearings for co-
conspirators Fuelberg and
Demond.
A-5
14. Attorneys for PEC Co-op for its Jimmy Williamson
negligence, professional misconduct, WILLIAMSON & RUSNAK
dishonesty, etc. claims against
Clark, Thomas & Winters Luis Garcia
including those as to “co- PEC General Counsel
conspirators” and Appellants,
Walter Demond and Bennie
Fuelberg, and as to the corporate
governance irregularities and
misconduct set forth in the
independent and court-ordered
Navigant Investigative Report.
15. Attorneys for Clark Thomas, & Martha S. Dickie
Winters its past and present partners Boone Almanza
and employees, relevant to the above AKIN & ALMANZA
Item #14; and as to the related June
2009 $4.1 Million Settlement with L. Parker (Larry) McNeill
the Co-op. The PEC’s contingency
fee attorney receives 1/3 of this
Settlement.
16. Attorneys for Clark, Thomas & L. Parker (Larry) McNeill
Winters, in the “Debtor-in- CLARK, THOMAS & WINTERS, P.C.
Possession” Chapter 11 Bankruptcy.
This Chap. 11 Bankruptcy Filing, Joseph D. Martinec
occurs after the class action lawsuits, MARTINEC, WINN, VICKERS &
and the Testimony by Clark, Thomas MCELROY, P.C.
& Winters lawyers and witnesses, at
the criminal trials of co-
conspirators/Appellants, Bennie
Fuelberg and Walter Demond.
A-6
17. Attorneys for The Bandas Law Roy Q. Minton
Firm and Texas lawyer John L. Foster
Christopher Bandas. Bandas and MINTON BURTON, FOSTER & COLLINS
his law firm, represent un-named
class member, PEC owner-member, Jeffrey Meyer
and Appellant/Attorney James Max Cynthia Mouton
Moudy. Bandas in his lawsuit, MOUTON & MAYER
alleges an Agreement, for himself to
be paid a portion of the $4 Million Christopher Bandas
attorneys’ fees awarded to the named James Max Moudy
class Plfs. in the non-opt-out class BANDAS LAW FIRM
action lawsuit.
18. Attorney for Defs. William Ikard, William Ikard
Ikard Wynn LLP, Graham Keith Anne Wynne
Blair, and Baker & Mckenzie LLP Kimberly Selinger
as to the lawsuit and Counter Claim Cartrie Helcamp
related to prior Item # 17. IKARD WYNNE, L.L.P.
Graham Keith Blair
BAKER & MCKENZIE, L.L.P.
19. Attorneys for PEC General Counsel Martha S. Dickie
Clark, Thomas & Winters, and its Boone Almanza
witnesses / lawyers, David C. AKIN & ALMANZA
Duggins, et al. -- at Defendant
Bennie Fuelberg’s criminal trial and
punishment hearing.
20. Attorney for L. Parker (Larry) Randy T. Leavitt
McNeill -- Clark, Thomas &
Winters, President --regarding
Defendant / co-conspirator Bennie
Fuelberg’s criminal trial and his
punishment hearing.
A-7
21. Attorneys for Defendant PEC Co-op Craig Enoch
as to Plaintiff /criminal defense Melissa Lorber
Attorney Chris Gunter’s claims and ENOCH KEVER, PLLC
lawsuit, for his recovery of certain
2008 legal fees, expenses, and costs.
22. Attorneys for Plf. R. B. Felps, S. Abraham Kuczaj
former PEC Board Member and Stephen E. McConnico
Board President, for his lawsuit for SCOTT, DOUGLASS & MCCONNICO
an Injunction and Declaratory
Judgment against the Co-op, for
Felps’ future Medicare Supplement
Insurance of approx. $585.00 per
month, for himself and his wife.
23. Attorneys for Defendant PEC Co-op Howard P. Newton
in R. B. Felps’ lawsuit for an COX SMITH MATTHEWS, INC.
Injunction and a Declaratory
Judgment, against the Co-op. Refer
to prior Item #22.
24. Attorneys for Plaintiff PEC Co-op Craig Enoch
in its Bennie Fuelberg “Employee Melissa Lorber
Theft” Insurance policy lawsuit ENOCH KEVER, PLLC
against Hartford Insurance Co.
25. Attorneys for Defendant Hartford Mike F. Pipkin
Ins. Company in the PEC Co-op’s Jared Scott
Bennie Fuelberg “Employee Theft” SEDGWICK, L.L.P.
insurance policy recovery lawsuit.
Also refer to Items #24, 14 & 15.
A-8
26. Attorney & Witness for “co- James McCormack
conspirator” CTW Atty. & Def.,
Walter Demond -- at his jury trial.
In addition, this legal representation
relates to the Disciplinary
Proceedings of the State Bar against
Walter Demond for his felony
criminal convictions, and or for his
alleged Professional Misconduct and
Ethics violations.
27. Attorneys for the State Bar of Linda Acevedo
Texas, Office of the Chief Maureen Ray
Disciplinary Counsel, Commission Judith Gres Deberry
for Lawyer Discipline, State Board Chad Childers
of Disciplinary Appeals, and Michelle Hunter
Grievance Oversight Committee – as Don Jones
to professional disciplinary
proceedings and grievances relevant
to “co-conspirator” Demond. Refer
to prior Item #26.
A-9
ANNEX B
Case Nos. PD-1537-14 & PD-1636-14
Amicus Brief on Discretionary Review
CRIMES AND CORPORATE GOVERNANCE IRREGULARITIES
WITH REFERENCE TO THE PEC ELECTRIC CO-OP
Relevant Related Legal Proceedings and Court Records
1. Appellate Case No. 03-11-00317-CR, styled Bennie Fuelberg v. State of
Texas, filed in the Third Court of Appeals, Austin. [This is an Appeal of
the criminal jury trial and convictions as to Defendant Bennie Fuelberg,
former Pedernales Electric Co-op General Manager and CEO and “co-
conspirator” of Walter Demond, Clark Thomas & Winters attorney].
See, Fuelberg v. State, 477 S.W.3d 304 [Tex. App.—Austin, 2014] (Field,
J., Pemberton, J. and Jones, C.J.)
2. Appellate Case No. 03-11-00553-CR, styled Walter Demond v. State of
Texas, filed in the Third Court of Appeals, Austin. [This is an Appeal of a
criminal jury trial and convictions as to Defendant Walter Demond,
Clark Thomas & Winters and Pedernales Electric Co-op Attorney, and
“co-conspirator”]. See, Demond v. State, ---S.W.3d---, 2014 WL 661250
[Tex. App.—Austin, 2014] (Field, Jr., Pemberton, J. and Jones, C.J.)
3. Case No. 11-12059-cag, styled In re Clark, Thomas & Winters, P.C.,
filed in the U. S. Bankruptcy Court for the Western District of Texas,
Austin Division. [This proceeding is filed as a Chapter 11
reorganization. Wells Fargo Equipment Finance, Inc. and other
creditors, however, thereafter apply for this bankruptcy to be converted
to a Chapter 7 liquidation, and or for the appointment of a disinterested
Trustee]
B-1
4. Appellate Case No. 03-08-00373-CV, styled David Allen Hall v.
Pedernales Elec. Coop., John Worrall, Individually and as representative
of others similarly situated . . . Bennie R. Fuelberg . . . W. W. ”Bud”
Burnett, E. B. Price . . . R .B. Felps, et. al., filed in the Third Court of
Appeals, Austin. [This proceeding relates to an underlying Class Action
lawsuit against the PEC Electric Co-op, its General Manager Bennie
Fuelberg, its Directors, and certain of its Officers, for claims of
negligence, gross negligence, breach of fiduciary duties, based upon
various allegations of decades-long mismanagement, self-dealing, civil
conspiracy, corporate governance irregularities, and dishonesty. The
Third Court of Appeals’ decision in the non-opt-out “Settlement” Class
Action Settlement lawsuit, is published at 278 S.W.3d 536 (Henson. J.,
Waldrop, J., and Patterson, J.)]
5. Dec. 2008, 390-page court-ordered Navigant Investigative Report as to
the Pedernales Electric Co-op, as directed by the Trial Court, under the
Settlement Agreement, and subsequently approved by the Third Court of
Appeals in the above-referenced Appellate Case No. 03-08-00373-CV
proceedings. [This independent and court-ordered Navigant Investigative
Report, sets forth detailed findings relevant to the corporate governance
irregularities, padding of legal bills, breaches of fiduciary duties and
dishonesty, occurring at times Clark, Thomas & Winters attorneys serve
as the General Counsel or De Facto General Counsel, for the co-op.
Both Appellants Fuelberg and Demond are indicted 7 months after the
Navigant Report is used. This Report is available at
http://www.pec.coop/docs/default-source/navigant-report/navigant-
report-2008.pdf?sfvrsn=4
6. Feb. 2009, Independent Review by the Texas State Auditor of the
Investigative Navigant Report on the PEC (SAO Report No. 09-019).
[This Report is addressed to the Legislative Audit Committee, and
confirms the numerous corporate governance irregularities, breaches of
fiduciary duties, specific acts, and other findings, as detailed in the court-
ordered Navigant Report. This official and independent Report by the
Texas State Auditor, is available at:
http://www.sao.state.tx.us/reports/main/09-019.pdf
B-2
7. Cause No. CV-06636, styled Cattleman’s Nat’l Bank v. Texland Elec.
Coop., Pedernales Elec. Coop., Bluebonnet Elec. Coop., and Lower
Colorado River Auth., filed in the 424th Judicial District Court, Blanco
County Texas. [This lawsuit addresses the “off the books and non-
interest bearing account” of the Texland Electric Co-op -- a PEC
subsidiary. Refer to the findings at pp. 152-168 in the Navigant
Investigative Report (Above Item # 5). Texland Electric Co-op in its
Original Answer and Counterclaim (filed Sept. 14, 2008), further asserts
causes of action and counterclaims for Breach of Fiduciary Duty, Civil
Conspiracy etc.; and also with regard to “unauthorized payments for
unearned fees and expenses” to Bennie Fuelberg, W.W. “Bud” Burnett,
and A.W Morrison III. Also refer to the record in Appellate Case No. 03-
11-00317-CR at 22.RR.916-918 (Table of Itemized Losses and Damages
Texland Electric Co-op). In the same Appellate Case, also refer to
56.RR.556-569; and to the related, State’s Exhibit 48 -- Items nos. 4 & 5,
Misapplication of Fiduciary Property]
8. Cause No. CV07148, styled Pedernales Elec. Coop. v. Illinois Nat’l Ins.
Co. and Bennie R. Fuelberg, filed in the 424th Judicial District Court,
Blanco County, Texas. [This is an Interpleader lawsuit in which “co-
conspirator” Defendant Bennie Fuelberg in his Answer, among other
things, seeks indemnification, and further to recover, both his past and
future criminal defense costs]
9. Appellate Case. No 03-10-0024-CV, styled In re Walter Demond and
Appellate Case No. 03-10-0027-CV, styled In re Bennie Fuelberg. Both
such actions request mandamus relief, and are filed in the Third Court of
Appeals at Austin. [In these proceedings, alleged “co-conspirators”
Walter Demond and Bennie Fuelberg, seek (unsuccessfully) to reverse the
orders of Judge Bert Richardson denying motions to Disqualify or Recuse
District Judge Dan Mills from serving as the Trial Judge in the
underlying criminal cases. A 2-page Feb. 19, 2010, Memorandum
Opinion is available at: http://www.txcourts.gov/3rdcoa / Opinions]
B-3
10. Appellate Case No. WR-73,621-01 styled In re Bennie Fuelberg and
Appellate Case No. WR-73,626-01 styled In re Walter Demond. Both
such mandamus actions are filed with the Texas Court of Criminal
Appeals. [Co-conspirators Bennie Fuelberg and Walter Demond, in these
mandamus actions as filed with the Court of Criminal Appeals, ask for
the removal or disqualification of District Judge Dan Mills, from hearing
the criminal trials. Such mandamus proceedings are initiated following
the Memorandum Opinion by the Third Court of Appeals referenced in
above item #9. On March 31, 2010, the Court of Criminal Appeals
denies the Motions for a Writ of Mandamus in both cases, WITHOUT
Order. Available at http://www.txcourts.gov/cca / Opinions
11. Cause No. D-1-GN-10-002277, styled Bandas Law Firm, P.C. and
Christopher Bandas v. William Ikard, Ikard Wynn, L.L.P., Graham Kerin
Blair and Baker & McKenzie, now renamed and filed in the 419th
Judicial District Court, Travis County, Texas. [The claims herein of the
Bandas Law Firm and Lawyer Bandas, relate to an alleged contingent
agreement for a portion of the class action attorneys’ fees awarded in the
class action settlement. Such claims are first brought by The Bandas Law
Firm as Case No. 2009-1910, in the 280th Judicial District Court, Harris
County, Texas. Pursuant to the continuing jurisdiction and venue
provisions in the court-ordered class action settlement, such lawsuit is
ordered to be abated; and for the Bandas Law Firm’s claims to be
addressed in Cause No. D-1-GN-07-002234, in the 353rd Judicial
District Court, Travis County, Texas. A limited severance from such
Cause No. is thereafter ordered; and the severed case is renamed and
refiled by the Travis County District Clerk, as Cause No. D-1-GN-10-
002277. The style “In re Bandas” is also used to apply to this lawsuit.
Defendants William Ikard and Ikard Wynne LLP, in 2012 file a Third
Amended Answer with a Counter Claim for a Declaratory Judgment
against the Bandas Plaintiffs]
B-4
12. Cause No. D-1-GN-10-001612, styled Gunter & Bennett, P.C. v.
Pedernales Elec. Coop., Inc., filed in the 419th Judicial District Court,
Travis County, Texas. [This lawsuit was brought to collect at least
$38,000 +, for attorneys’ fees billed for the “criminal defense” legal
services of Chris Gunter, from Jan. 15, 2008 until July 25, 2008.
Following a Summary Judgment Ruling, against the Co-op, an Agreed
Settlement in April 2011, is entered into which requires a $64,000
payment to the Plaintiff law firm. As allowed under that Settlement,
however, the Co-op on Aug. 12, 2011, files a formal Grievance with the
State Bar, against attorney Chris Gunter for his alleged violations of the
Texas Disciplinary Rules of Professional Conduct]
13. April 2010, Independent Accountants’ and Auditor’s Report, Notes to
Consolidated Financial Statements, Note 8, Commitments and
Contingencies, Litigation -- Settlement of Dispute with Previous Legal
Counsel (CTW). [Refer to the CPA’s determinations and findings in this
published Report, as to the claims, threatened litigation, liabilities,
contingencies, and reservations, which are relevant to the $4.1 Million
Settlement Payment to the PEC by CTW (and its insurers). This
Independent Auditor’s Report is available (and published) at:
www.pec.coop / Libraries / Annual Reports / 2009. Relevant to the
referenced $4.1 Million Settlement, also refer to the witness testimony,
business records, and other evidence, in the official records for the
Appellate cases, criminal and other proceedings, listed in this ANNEX B.
The following legal proceedings and court records, appear to either
directly address or otherwise concern, the claims, threatened litigation,
liabilities, and reservations, as to the $4.1 Million Settlement payment to
the PEC by CTW (and its insurers). See, Items # 1, 2, 3, 4, 5, 6, 14 & 16 ]
B-5
14. Cause No. 48985, styled In re Walter Demond, filed in the Board of
Disciplinary Appeals, Texas Sup. Ct. (BODA) [In this action, the
Commission for Lawyer Discipline in July 2011 files a Petition for
Compulsory Discipline with BODA against Clark, Thomas & Winters
attorney Walter Demond, after the Judgment of Conviction by Jury is
entered against Demond in Case No. CR-1016 (refer to above item #2).
“Convicted felon” and “Co-conspirator” Walter Demond and Petitioner
Commission for Lawyer Discipline, thereafter enter into an Agreed Order
of Interlocutory Suspension of Demond’s Texas law license.1 Also
pending, however, is a formal “Just Cause” determination by the Chief
Disciplinary Counsel of the State Bar of Texas against Clark, Thomas &
Winters attorney Walter Demond relevant to the July 2011 Request for
Investigation, Complaint and Grievances made by co-op owner members.
Since attorney Walter Demond does not affirmatively elect to have the
subject Complaints and “Just Cause” Determinations tried in District
Court, the Office of the Chief Disciplinary Counsel directs that the
subject PEC owner-member Grievance Complaints “will be heard by an
Evidentiary Panel of the District Grievance Committee, in accordance
with Rule 2.17 of the Texas Rules of Disciplinary Procedure”] 2
15. Cause No. CV07265, styled R.B. Felps v. Pedernales Elec. Coop., filed
in the 424th Judicial District Court, Blanco County, Texas. [In this
lawsuit, Plaintiff R. B. Felps -- a former Co-op Board President -- seeks
to enjoin the electric Co-op’s discontinuation (as of Dec. 31, 2011) of his
and his wife’s Medicare Supplement group insurance benefits, which
totals approximately $586.00 a month. Plaintiff R.B. Felps is also a
named Defendant Director, in the underlying Class Action Settlement
lawsuit identified in the above item #4. In addition, R. B. Felps is a
witness in the Grand Jury Proceedings and 2010 & 2011 criminal trials
relevant to “co-conspirators” Walter Demond and Bennie Fuelberg,
related to in above Items #1 & 2]
1
The BODA Interlocutory Suspension Decision against Walter Demond is available at
http://txboda.org/cases/re-walter-e-demond-0.
2
Refer to Jan. 4, 2012, Letters from Judith Gres DeBerry, Asst. Disciplinary Counsel, to
PEC Co-op Owner-Members and Grievance Complainants, Merle Moden and Ernest Altgelt.
B-6
16. Case No. A:11-CA-0446-SS, styled Pedernales Elec. Coop. v. Hartford
Cas. Ins. Co., in the U. S. District Court, Western District of Texas Court
(Austin). [This lawsuit is first filed by the Co-op on April 29, 2011, as
No. D-1-GN-11-0012486, in the 98th Judicial District Court, Travis
County, Texas. Defendant Hartford Insurance thereafter removes this
“Employee Theft” Insurance policy lawsuit to Federal Court. In its
lawsuit, the Plaintiff Co-op seeks, among other things, to recover under a
$250,000 Crime Shield Policy for “Employee Theft” by its former
General Manager. On July 10, 2012, Summary Judgment is entered in
favor of Hartford Insurance by U.S. District Judge Sam Sparks. In his
11-page Order, Judge Sparks expressly determines that a summary
judgment is proper because “PEC materially breached its (employee
theft) policy . . . in that it prejudiced Hartford’s subrogation rights by
releasing CTW and Bennie Fuelberg.” ref. added]. Refer to above Item
#13, and to n. 3 below.3
17. Texas Senate Business and Commerce Committee, PEC Co-op
Investigative Hearing, Mar. 27, 2008 (investigative findings and
testimony as to the decades-long documented corporate governance
irregularities, fraud, abuses and criminal investigations relevant to the
PEC) [avail. video/audio archives — www.senate.state.tx.us]
18. Governance and Financial Accountability of Rural Electric
Cooperatives: The Pedernales Experience, Hearing before the House
Comm. on Oversight and Government Reform 110th Cong. 2d Sess.. 1-
175 (2008) (congressional findings and testimony as to the decades-long
documented corporate governance irregularities, fraud, abuses and
criminal investigations relevant to the PEC) available at:
http://www.gpo.gov/fdsys/pkg/CHRG-110hhrg46194/html/CHRG-
110hhrg46194.htm
3
Relevant to the facts and records as to the above-listed 18 matters, in addition there are
also related Professional Conduct Disciplinary Proceedings, with the Texas State Board of Public
Accountancy and State Bar of Texas. Such proceedings relate to the professional standards and
ethics of Pedernales Electric Co-op CPA’s and their Accountancy firms, former Clark Thomas &
Winters, P.C.’s attorney Walter Demond, and criminal defense attorney Chris Gunter.
B-7
Fuelberg, Bennie
Combined Opinion