Members of Denton County Electric Cooperative, doing business as CoServ Electric, have filed suit against their co-op on February 18, 2009.
The lawsuit alleges that through improper accounting practices, the co-op has wrongfully taken $54 million of the members' money for its own use. The suit also alleges that controlling directors of the cooperative's board have subverted democratic control of the co-op, conducted their operations in a culture of secrecy, and placed the members' funds at risk in for-profit business endeavors. The allegations in the lawsuit are based upon information provided by Mark Glover, a director of the cooperative.
One of the members suing the cooperative is Janice Brady, who ran for a director position to replace board chairman Jerry Cobb in 2008 and lost by a narrow margin. In particular, Ms. Brady alleges that CoServ has unlawfully provided member lists and daily vote tallies to its incumbent directors while denying the same information to challengers, and that as a result board elections are effectively rigged.
CoServ is the second largest electric cooperative in Texas, ranking second only to Pedernales Electric Cooperative ("PEC") near Austin, which was sued by its members in 2007 over similar allegations of mismanagement, waste and a lack of transparency in its affairs. Because of the problems encountered at PEC, Senator Troy Fraser (Rep. -- Horseshoe Bay) has recently introduced a bill in the Texas Legislature to require open meetings and records at the state's electric cooperatives.
