Judge Rules in Favor of KCEC Injunction

At District Court on May 19, 2011, Judge Peggy Nelson issued a “limited preliminary injunction.” The injunction effectively stops a membership petition or mere “request” to put an item on the agenda of the annual membership meeting for the purpose of voting on the recall and removal of nine trustees.

During the hearing Coop Attorney Arthur Jaramillo argued that the charges lacked “specificity” and that the “charges” should be identified “for cause.” The Petitioners representative Peter Adang argued that the by-law provisions were vague and implied that trustees could be charged “at will.” So it was a question of how the vague language in the Coop’s by-laws should be interpreted. Adang and the protesters who circulated the petition used vague language–words like “malfeasance,” “misfeasance,” and violations of “fiduciary duty.”

Trustees, according to reports in the press and their own audits and records, have been accused of using the Coop as a slot machine to pay for travel and per diem expenses. Currently members are using a the PRC hearing process for an electricity rate increase to point out how the Coop has allegedly mismanaged millions of dollars for the sake of diversification into Propane, Internet, Command Center, and Broadband. Allegedly, the Coop has used electric side assets to guarantee loans for cross-subsidization.

The petition for removal reflects the vague language of the Coop’s bylaws. As Adang pointed out, the Trustees could vote, in the alternative, whether or not to place the recall petition on the agenda of the annual meeting. But, as Adang also pointed out, the Trustees wanted the court to make the decision instead. Nelson apparently agreed with Coop attorneys, including Jaramillo and Jack McCarthy. The longtime thirty-year plus lawyer for the Coop sat ominously as second chair during the hearings.

Today, the Trustees can breathe a sigh of relief and will avoid the embarrassment of appearing before an enraged membership at the June 18 annual meeting. The judge killed what promised to be the most entertaining event of the summer and sent a chilling message to local activists. While she said the injunction was limited and preliminary and implied that there would be a trial on the merits, we all know better.

The petitioners, who tried to recall the trustees and whose petitions were signed by 3% of the membership, as required by the bylaws, don’t have the dollars to match the power of the Trustees’ purse. Meanwhile, the Trustees and their CEO continue to plunder the treasury for the sake of publicity, attorneys, travel, and mismanaged enterprises—even as they prepare for the PRC hearing.

Yet, the protesters have saved the members about $350,000 a month since Dec. by stopping rate increases—according to the Coop’s own estimates of income, which would come from the request for increased charges to members.

It would have been easy and arguably legal to interpret the vague bylaws as a Coop problem. Let the people gather and decide at a public meeting whether or not the Trustees should be removed.  If the Coop and their attorneys can’t write better bylaws, why should the members be censored and trustees saved from facing their accusers?

So the Trustees, like little boys, ran and hid behind Tio Jack’s long trousers and Tia Peggy’s billowy robes.

If the petitioners had argued specifics about excessive spending and violations of fiduciary duties, then the Coop attorneys would have argued that these were “policy” matters and the court would have probably sided with them anyway. And if the petitioners argued in specific terms, then they could be sued for libel. In other words, there is no way for the members who own the Coop to correct the Trustees and the CEO except for elections.

Regardless, the PRC hearings will reveal much about the incompetence of the trustees and management. And, next year’s elections will subject the Trustees to an election on the issues. Meanwhile, the courts have acted like emergency responders to keep the “Naughty Nine” out of harm’s way.

During the last semester, among other books on Southwest Regional Literature, my students at UNM read Suzanne Forrest’s fine sociological analysis of the Hispanic New Deal in “The Preservation of the Village.” The book refers to the rise of the patron class, due to the way local politicos disperse the largesse of the federal government. On the one hand, the REA, thanks to the federal government, brought electrical service to El Norte. On the other hand, we see how the spirit of those programs has been abused by the current coop culture, thanks to cheap loans from the USDA’s RUS loan programs.

Forrest also makes a point about “social engineering” and how the “do-gooders” keep the people down while allegedly trying to help them.

As was obvious from the remarks by the distinguished panel during the judicial hearings on the selection of judges, attorneys and judges are much impressed by “class” and “money”—see how they all fawned over Floyd Lopez, thanks to Brother Owen’s phone calls. (He of the McCune Foundation, which has done much good in New Mexico.) No doubt, Mr. Lopez would make a good judge. But when attorneys and judges continue to patronize the people with paternal airs, they engage in a kind of passive-aggressive pandering that keeps people from taking destiny in hand and defining life on its own terms.

Regardless of the alleged causes re: personal motives—whether do-gooding on the part of Tia Peggy—save the poor trustees from the ire of la gente or profit for the law firm on the part of Jaramillo and McCarthy, the members lose. The status quo continues. It might be legal but it ain’t democracy. And the decision will cost you, the membership, an arm and leg to keep the traveling trustees on airlines and CEO Reyes’ name in lights as Mr. Diversification.

The Trustees may have won the battle on Thursday, but they are losing the war of public relations. Nelson’s decision is a band-aid. Instead of resolving the issue in June, the charges and counter-charges will continue to embroil the community from now until next spring’s Coop elections.

Viva Los Protesters: Power to the People.