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Photo: Steve Burns
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Photo: James Vavrek
The Utilities District of Western Indiana (UDWI) issued a statement Wednesday morning confirming the Federal Bureau of Investigation is involved in looking into the electric co-op’s expenses.
During a May 2 meeting the board decided to place CEO Brian Sparks on paid administrative leave and hire an outside auditor to review the co-op’s finances. The decision came in the wake of allegations about mismanagement of UDWI money.
Wednesday’s statement from interim CEOs Mike Chapman and Shane Smith said that in addition to outside audit, the FBI was conducting it’s own review.
“In addition, authorities from the Federal Bureau of Investigation now are conducting a separate investigation; UDWI’s Board and leadership are cooperating fully in assisting with their review,” said the statement.
During a phone interview, Chapman stressed they are two independent investigations.
“The board president had taken steps to begin the independent audit before the board president was aware of any FBI involvement,” Chapman says.
FBI Investigates UDWI’s Tree Trimming Company
The investigation into the finances at the Utilities District of Western Indiana REMC also extends to the vegetation control company owned by the co-op.
UDWI started Hoosier Heritage Management LLC in mid-April 2013.
The co-op doesn’t provide administrative services to or management of Hoosier Heritage, although Sparks was a member of the HHM board. UDWI is essentially a customer of Hoosier Heritage, even though it owns the tree service company.
Tax returns show UDWI paid HHM $2,035,363 in 2015. That’s more spent on tree trimming than any year going back to 2008.
“Does it cost more than what we were getting before? Absolutely,” says Interim Co-CEO Shane Smith. “But we’re not getting the same product we were before, so it’s kind of hard to make an apples to apples comparison there.”
HHM is a for-profit company, unlike UDWI. And 2015 tax returns show Hoosier Heritage had a $323,000 profit.
We reached out to Hoosier Heritage board member Denny Green about whether that money was given to UDWI to return to its members. He said he was not at liberty to discuss the situation.
The UDWI board hasn’t started its internal audit yet, but the co-op says it will fully support the findings of that audit and the FBI investigations when those reviews are complete.
This post has been updated.