Electric co-op sues Fanning, but receipt of payment could mean suit is dropped

A lawsuit filed by Barton County Electric Cooperative against their ex-CEO Jim Fanning could be dropped soon according to co-op officials.

An arbitration hearing held in Springfield on Jan. 23 determined Fanning was responsible for the repayment of more than $112,000 in co-op funds he is believed to have used for personal home upgrades in 2002.

Fanning's deadline for the payment of these funds was March 6. On March 10, still without payment, Barton Electric filed suit against Fanning, seeking nearly $300,000 along with attorney fees and punitive damages.

The four-count suit filed with the Barton County Circuit Court claims materials totaling $299,445.49 were being used by Fanning to purchase Smart Home Technology for his personal residence and charged to the co-op through work orders coded for co-op line construction.

The complaint also requests that a lien be placed on Fanning's property until the co-op is paid.

The suit claims that the co-op was unaware of these purchases until after Fanning's retirement from the company in 2007, at which time Barton Electric disputed the charges and sought the return of the money in its entirety. Fanning offered to pay back $53,164.50. This offer was declined by the co-op.

The arbitration hearing which found Barton Electric to be entitled to a reimbursement of $112,088.58, was binding; therefore, both parties had to agree to the arbitrator's findings.

On Tuesday, Jeff Hull of Barton County Electric said the co-op had received payment from Fanning on Monday, March 31, and would likely drop the lawsuit once the funds were cleared. He said, "I think once the check clears the bank, basically the suit will be dropped."

Fanning introduced Smart Home Technology into the co-op's inventory under their subsidiary company, Tiadon, Inc. Later, he received approval by the board of directors to use company funds to purchase Smart Home Technology products for his home hoping to offer tours of the house to potential customers.

Less than $85,000 of the total $299,445.49 was actually spent on Smart Home products. Other purchased items raiding concerns include; more than $12,000 worth of plasma televisions, a personal Jacuzzi and a $76 toilet handle.

The work order in question, No. 8045, was approved by Neal VanGilder former president of the Barton County Electric board of directors. VanGilder claimed in testimony submitted to the arbitrators that he never saw a dollar amount with the order. Beverly Ramseyer accountant for the co-op, said she prepared the work order and the copy she designed for Fanning included monetary amounts. She said Fanning removed the numbers prior to submitting it for approval to VanGilder.

Barton Electric also announced in September 2007, their intentions to conduct an audit looking into the spending of many other employees and board members between 2001 and 2007. At this point the co-op claims they have contacted four audit firms and only two were willing to conduct portions of the requested audit.

Current president of the board at Barton Electric Doug Haile said that they would continue looking for a firm which could conduct the entire audit, otherwise they will require, in writing, an explanation as to why the firm was unable to complete a requested task.

Many, including a Vernon County customer of Barton Electric, Wendell Mayfield have expressed their beliefs that the co-op's board and ex-CEO have not been punished enough and wish for further action to be taken. Mayfield has received signatures from around 600 of the 6,400 metered customers requesting a Grand Jury investigation and hearing of Fanning and all board members going back to 1993. He also requests that all board members serving between 2001 and 2007 step down from their positions. Currently four out of the nine board members served under fanning when the request to use company funds to upgrade his home was approved.

Beyond the personal spending of company funds, Fanning reportedly received severance packages and bonuses totaling approximately $2.8 million while the company as a whole lost close to $6 million between 2001 and 2006. On top of that, the board approved a motion in 2003 allowing Fanning to receive these packages tax free, costing the company an additional $324,000.

Since the retirement of Fanning and the introduction of Bobbi Jeffries as the co-op's new CEO, Tiadon and all subsidiary companies belonging to Barton Electric have sold, and in 2007 the company produced a positive revenue of more than $1 million.