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Our Opinion: IID board shatters public’s trust

January 18, 2008

It is very clear to us that the Imperial Irrigation District board is set to hire a person directly linked to the natural gas-hedging scandal as its new Energy Department manager.

That being the case, it is also clear that the board — specifically directors Mike Abatti, James Hanks and Stella Mendoza — has made a very bad decision. In fact, this decision is one of the worst we have ever seen made by a publicly elected board, and one the public should be aware of and upset about.

The public should be upset because these directors are seeking to hire Frank Barbera, a person who was involved in the hedging scandal that cost ratepayers an estimated $30 million to $50 million. Barbera was part of the Risk Oversight Committee that was tasked with insuring rules governing hedging were followed. He failed in that duty.

Not only did he fail in that duty, he also noted, wrongly, that the Energy Department was doing “what the policy dictates” when it came to the hedging.

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The hiring process almost seemed designed to arrive at this conclusion. Formerly, management, including the general manager, made a recommendation to the board on who should be hired as energy manager. The board last month changed that process, taking the general manager out of the mix and creating a three-person panel to make a recommendation.

The reasoning for the change — supported by Abatti, Hanks and Mendoza — was the current general manager only has interim status. Of course, this is flawed reasoning. If the board were that concerned, it should have simply waited until the new general manager was hired to hire a new energy manager.

Instead, the board created a committee that included energy consultants Dick Ferreira and Jack Allen. They both work with Barbera, and IID Legal Counsel Jeff Garber warned they could have a conflict of interest. The board, of course, ignored the advice of its own counsel and did what it wanted.

Finally, according to public documents, Barbera was one of those in the district who knew there were problems with hedging but did not tell the board. Investigators also found problems with management, which included Barbera, over the way hedging was handled. How does Hanks respond to that? He simply questions the investigation.

Frankly, this whole thing does not pass the smell test. In fact, it stinks. The public deserves much better, and this type of misrepresentation should not stand. It appears that at least some IID board members believe they can change the process to fit their own personal desires.

They are wrong, and this time they have simply shattered the public’s trust.

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