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South Carolina Electric Co-Op Corruption Exposed

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A tip of our cap this Monday morning to reporter Avery Wilks of The (Columbia, S.C.) State newspaper, who published an excellent long-form piece yesterday exposing corruption within the Palmetto State’s network of electric cooperatives.

These cooperatives – or co-ops – were created during the Great Depression to provide power to rural regions of the state.  Twenty of them exist in South Carolina, providing energy to an estimated 1.5 million citizens in all forty-six counties.  Two additional co-ops provide wholesale power, while another sells utility supplies to the other.

A final entity – the Electric Cooperatives of South Carolina – serves as a trade association for the entire network.

For those of you keeping score at home, that’s two dozen fiefdoms.

The leader of this rabble is Mike Couick – a staunch ally of incumbent “Republican” governor Henry McMaster (and former top staffer to ex-Senate president Glenn McConnell).

More on him in a moment …

The co-ops receive their power from beleaguered government-run utility Santee Cooper, which is currently eyeball-deep in the #NukeGate fiasco.  #NukeGate, of course, is state government’s spectacularly failed intervention in the energy industry – in which “Republicans” and Democrats in the S.C. General Assembly socialized billions of dollars in investment risk related to a pair of now-abandoned nuclear reactors in Fairfield County, S.C.

We write often of the $2 billion ripped from the pockets of ratepayers of West Columbia, S.C.-based SCANA to subsidize this project, but another $3 billion of the investment risk associated with the doomed reactors at the V.C. Summer nuclear generating station came from co-op customers.

The co-ops are now (surprise) suing Santee Cooper over the fiasco … while the state-owned utility is in turn asking the S.C. Supreme Court to affirm its right to continue raising rates in order to stave off fiscal armageddon.

Oh, and against this backdrop a massive criminal investigation is underway into the whole debacle …

“They’re not concerned about ratepayers,” Couick told The State a month ago, referring to Santee Cooper. “They care about preserving the status quo.”

We agree … wholeheartedly.  But according to Wilks’ exclusive report, Couick’s co-ops have their own scandal to deal with – one every bit as rooted in the preservation of a corrupt status quo.

In other words, Couick should probably take a page from Ice Cube and check himself (before he wrecks himself).

According to Wilks – who spent about a month researching the financial dealings of the co-ops – corrupt board members of these local organizations have been awarding themselves hundreds of thousands of dollars in payments, perks and benefits.  For years on end.

These questionable outlays are rampant across a sprawling network that remains “unwatched by state regulators and ignored by many of their customer-owners,” Wilks wrote.

Dozens of politically connected board members – many of whom have been serving for decades – have been receiving health insurance, retirement benefits, swanky travel expenses and exorbitant per diem payments from the same ratepayers whose interests they are supposed to be protecting.

It is a fleecing of massive proportions … and it has gone virtually unnoticed for years.

If anything, state lawmakers have been enabling it.

Even worse, the system is incestuously self-perpetuating …

“At 17 co-ops, boards pick the members of the nominating committee that screens candidates for board positions, effectively giving directors control over any potential challengers,” Wilks reported.

In one case, Wilks uncovered a nine-member “nominating board” that contained six relatives of current co-op board members.

Vintage South Carolina, people …

State representative Russell Ott of Calhoun County, S.C. – one of the rural areas of the state served by the co-op network – is eying reform legislation that would mandate certain transparency standards for co-ops, but we all know how that goes.  Bills get proposed, they get watered down and then they are either passed without teeth or put on a shelf …

Meanwhile, the issue that prompted their passage in the first place is ultimately forgotten.

Don’t believe us?

We wrote about the need for greater transparency and accountability over the co-operatives seven years ago (here and here) … and nothing happened.

Actually we take that back, something did happen … the status quo got even more embedded.

Tucked within former governor Nikki Haley’s “government restructuring” proposals back in 2011 was a sinister “legislatively-driven effort (allowing) the state’s electric cooperatives to continue reaping … taxpayer largesse.”

The architect of this scam?  Mike Couick …

It worked, too.

Millions of taxpayer dollars were funneled to the co-ops following this “restructuring,” which the entities’ powerful leaders clearly used to enrich themselves.

Ordinarily, we would say “enough is enough.”  We would say “something has to be done.”  We would say “people need to be held accountable.”

And all of that is most certainly true.

But we have been to this rodeo before, people … and in South Carolina, it simply never happens.

The structures are simply too entrenched … and based on the misguided belief that government should be in the energy generation and utility business.

And people are too damn busy trying to make ends meet to focus on the problems …

Ott is a well-intentioned lawmaker and we will support him wholeheartedly in his efforts to shine more light on this subject, but if government has decided it is going to prop up these corrupt local bureaucracies in the name of guaranteeing electric power to rural areas of the state (which is not a core function of government) – then those in charge of the operation are going to continue fleecing with impunity until the entire rotten structure is overturned.

“Reform” won’t do a damn thing to stop them … only a fundamental reinvention of the way our state approaches power generation and energy distribution can accomplish that.

***

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