Bristol virginia utilities shows culture of corruption, entitlement and greed news roanoke.com circle k gas station locations

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Court records depict one case in which some top BVU executives and board members took a weekend trip to Texas, where they relaxed in hotels, dined in restaurants, rode in limousines and watched the NFL’s Dallas Cowboys from luxury skybox seats at AT&T Stadium, all courtesy of a company awarded a $4.5 million contract from the agency.

Rank-and-file employees picked up at least $48,000 total in untaxed bonuses paid as gift cards and cash. Top executives received country club memberships valued at $70,000 , fully loaded GMC Yukons for personal use, and car allowances. Those extras weren’t taxed either.

So far, just one official has pleaded not guilty. In February, a federal jury in Abingdon convicted Stacey Pomrenke, the utility’s former chief financial officer, on 14 of 15 counts, including extortion, wire fraud, federal program fraud and conspiracy.

She is scheduled for a criminal contempt hearing in June on charges she contacted witnesses during her two-week trial. The hearing is expected to coincide with her sentencing. Pomrenke faces a total of up to 210 years in prison and $3.5 million in fines, said Assistant U.S. Attorney Zachary Lee.

Formed in 1945 and made over in 2010 as a nonprofit state authority, the utility was once one of the most sought-after employers in Bristol, a city of 17,000 on the Tennessee border. The Institute for Local Self-Reliance hailed BVU, along with utilities in Chattanooga, Tennessee, and Lafayette, Louisiana, as offering one of “the best broadband networks in America.”

Since leaving town years before, he’d obtained a college degree in engineering at Virginia Military Institute, served five years active duty in the U.S. Navy (and more in the Naval Reserve), added a law degree from the University of Virginia and worked as in-house counsel at Mead WestVaco.

On March 26, 2015, two successive BVU vice presidents of field operations pleaded guilty to accepting kickbacks from BVU contractors. Robert J. Kelley Jr. pleaded guilty to money laundering, defrauding the IRS and conspiring to commit mail fraud. His successor, David Copeland, pleaded guilty to money laundering and conspiring to commit wire fraud.

Copeland followed Kelley at BVU in 2009. He acknowledged approving $143,000 in false invoices for work that ETI never performed and collected $40,000 in cash, according to court records. The source of the money used to pay the contractor was a grant BVU received from the Virginia Tobacco Commission.

On April 6, 2015, guilty pleas from two BVU contractors followed. James Todd Edwards, the owner of Edwards Telecommunications, pleaded guilty to conspiring with both Kelley and Copeland. A second contractor, Michael Albert Clark of Colbert, Georgia, pleaded guilty to conspiring with Kelley in a separate kickback scheme.

Rosenbalm also admitted he’d failed to report as income such benefits as the country club membership and BVU vehicle allowance. He also acknowledged circumventing federal tax withholding regulations to pay unreported bonuses to BVU employees.

On Oct. 26, Paul Hurley, a former BVU board chairman, pleaded guilty to mail fraud and perjury. Those charges stemmed from thousands of dollars in Bristol Motor Speedway race tickets BVU purchased from 2009 to 2014 as economic development incentives.

But the evidence painted another picture. Prosecutors produced emails Pomrenke sent contractors requesting tickets to pro football and baseball games and other sporting events. In one, she expressed disappointment she couldn’t get luxury skybox tickets to Keeneland, a thoroughbred horse-racing track in Lexington, Kentucky. The contractor could get only grandstand tickets.

“The Judicial Panel of the Graduate Honor System met on March 6, 1998 to hear the charge against you of cheating in the course ISE5015, Management of Change, Innovation and Performance in Organizational Systems. The Judicial Panel found you guilty of the charge of cheating.”

The statement of facts in his guilty plea included transcribed conversations from the board’s private Sept. 16, 2013, meeting. That’s when members discussed the fate of Rosenbalm and the fact that he’d solicited Cincinnati Bengals tickets from a BVU contractor.

“You know the problem is, if, and what worries me about our liability is, if you give this to Randy Ramseyer at the U.S. Attorney’s Office … he’s going, he’s going all over it … so we have to be careful about what we say coming out of this board, ’ cause if you give it to the U.S. attorneys, political corruption … that’s their thing.”