Monday, June 14, 2010

DeCluitt, BRA Probed by SEC On Possum Kingdom Bonds

Federal complaint of misfeasance hounds Waco Lawyer

Brazos River Authority Board Chairman Chris DeCluitt and the
BRA are the subject of a federal probe into allegations of
mismanagement and misfeasance in the issuance of bonds to
maintain the Possum Kingdom hydroelectric dam.

According to Darren Yancy, defeated candidate for the seat
of District 22 Senator Kip Averitt, "The SEC contacted me in
March and asked for my files. To date, this is still under

The probe focuses on some $3.8 million in bond funds that
went unspent for improvements to the penstocks and
hydroelectric generators at the Morris Sheppard Dam at
Possum Kingdom Lake pending the outcome of a dispute with
Brazos Electrical Co-Op to furnish a half million dollars
worth of electrical power yearly in that company's plan to
acquire the facility.

At the time, BRA made a decision to shut down the
hydroelectric power project, which went on-line in 1942,
because of trepidations that the maintenance of the project
would not be cost effective. This was in spite of the fact
that the Federal Electrical Power Commission had issued an
operating permit and the project has never failed an

That decision by BRA removed 25 megavolts of clean, renewable
electrical from the power grid.

In fact, the inspector wrote a glowing report on the good
condition of the generating facility and attached it to his
approval of the operating permit.

The bond issue was in 2005 and BEPC filed suit more than two
years later in the 414th State District Court in Waco for
breach of contract in multimillions of dollars of damages.

"It is a violation of securities and exchange law to issue a
bond and not spend the money," said Mr. Yancy today.

Mr. DeCluitt asserted and corroborated all this in a
statement that appeared on the BRA website in March.

He is fresh from a solid defeat of his incumbent post in the
State Republican Executive Committee on Saturday. Local
refuse hauler Jimmie Kerr received at least 20 more votes
from delegates to the caucus at the State Republican
Convention than did Mr. DeCluitt.

That is seen by many knowledgeable GOP insiders as a
repudiation of Mr. DeCluitt's "Keep Kip" campaign that
resulted in the re-nomination of Senator Averitt in spite of
his resignation of his Senatorial post and his assertion
that his health will not allow him to continue in public
office. That resulted in a special election for his
unexpired term, the run-off for which is slated for June 22
and for which early voting begins today between lobbyist and
former Senator David Sibley and retired Lt. Col. Brian

At the time Mr. DeCluitt launched the "Keep Kip" movement,
Mr. Sibley was the lobbyist for the BRA and 11 electrical
power companies, operating from his Austin law firm.

He has since then dissolved all corporate relations with
former clients.

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