By: Donald V. Watkins
Copyrighted and Published on April 22, 2023
An Editorial Opinion
If things go according to plan, Southern Company CEO Thomas Fanning will depart from the Southern Company on May 24, 2023, with a “retirement” package of cash, bonuses, stock options, and other incentives with an estimated value of up to $100 million. This payout is the biggest and boldest heist of fraud-tainted corporate funds by a New York Stock Exchange /Fortune 500 company in two decades.
It is also Thomas Fanning’s last “con job.”
Fanning has led the Southern Company in a massive accounting fraud scheme that has ballooned to $27 billion over a 10-year period. The company has been faking profitability since 2017.
For years, the Southern Company has paid dividends from borrowed money rather than earnings. Its total fixed debt and credit lines of $63 billion far exceeds its self-reported $59 billion total gross operating income in 2022.
The company’s physical plants and hard assets are inflated in value, given the nature of these assets, their age, and their challenges in meeting today’s greenhouse gas emissions reduction state and federal requirements.
The Southern Company’s financial future is tied to new operating income that it expects to generate from Units 3 and 4 at its Vogtle Nuclear Power Plant near Waynesboro, Georgia when they are placed into commercial service. Because of shoddy construction work, basic engineering failures, and poor construction management, these units are seven years behind schedule and $21 billion over budget.
The Southern Company was forced to demolish a brand new $7.5 billion coal gasification facility in Kemper, Mississippi in 2021 because of the same failures the company is experiencing with Units 3 and 4 at Vogtle.
Rather than firing Tom Fanning for losing the $28.5 billion on two showcase construction projects, the Southern Company elected to engage in an ongoing accounting fraud scheme to create a mirage of profitability and success. This mirage has kept its stock prices artificially high and has allowed the company to borrow money that it otherwise would not be entitled to receive, in the absence of the accounting fraud scheme.
The Southern Company and Its Top Executives are the Subject of Three Criminal Complaints
Since January 27, 2023, the Southern Company and several of its top officials have been the subjects of at least three separate criminal racketeering, accounting fraud, and antitrust complaints filed with the U.S. Department of Justice (DOJ). One such criminal complaint was filed by my son and me.
On April 13, 2023, a criminal complaint was filed with Fulton County, Georgia District Attorney Fani T. Willis against several Southern Company officials for violations of Georgia criminal laws for the same acts of racketeering and accounting fraud.
While the federal and Fulton County complaints are pending, the Fulton County case appears to be the most promising.
Unlike U.S. Attorney General Merrick Garland, who is weak, inept, too often “missing-in-action,” and not respected by anybody in the prosecutorial profession, District Attorney Fani Willis has demonstrated her courage, strength, professionalism, preparedness, and intellectual acumen as a lawyer and tough district attorney who can't be bought off.
Reportedly, the Southern Company laundered $5 million through a Washington, D.C. law firm for the purpose of paying former president Bill Clinton to quash any federal law enforcement action by the Department of Justice into the racketeering conduct and accounting fraud scheme alleged in the pending complaints.
Southern Company officials privately brag about how they have Merrick Garland and his DOJ Criminal Division under their control.
Freezing Fanning’s Tainted Retirement Payout Protects the Public Interest
In 2003, the U.S. Securities and Exchange Commission (SEC) froze all of HealthSouth CEO Richard Scrushy’s cash and assets eight months before he was indicted on 85 felony counts arising from a $2.7 billion accounting fraud scheme at the company. Scrushy’s cash and other assets were frozen from March 2003 until we defeated the SEC in May 2003 following a hearing on the government’s motion to make the asset freeze permanent.
In 2005, Scrushy was acquitted of all criminal charges, while 14 HealthSouth subordinate executives pled guilty to perpetrating the $2.7 billion fraud scheme.
Fortunately, District Attorney Fani Willis has the opportunity and means to get the Securities Division of the Georgia Secretary of State’s Office to file a regulatory enforcement complaint in state court against the Southern Company and its board members for an injunction to freeze the payment of Fanning’s retirement package, pending her office’s investigation into the companion criminal complaint.
The Securities Division of Secretary of State Brad Raffensperger regulates securities activity statewide. The Division protects against investment fraud and promotes financial literacy.
Freezing Fanning's cash and assets is a lot better than trying to claw this tainted money back after he leaves the Southern Company on May 24, 2023. This law enforcement action would protect the public interest and safety.
Comentários