Attorney Client Privileged
Attorney Work Product

Report to the Special Committee of the Board of Directors of the
Connecticut Municipal Electric Energy Cooperative

March 28,2019

Eileen Duggan
Suisman Shapiro, PC
2 Union Plaza - Suite 200
PO Box 1591
New London, CT 06320

 TABLE OF CONTE VTS

I
I ntroduction ..........

,.

"

"

il.

Outline of tnvestigation Process"'

il .

Background-.-.-.-.""

2
3
3

A.

CMEEC's Structure'

B.

General
Rankin and Mr' Pryor and CMEEC's
CMEEC's Contracts with Mr.
EmPloYment Provisions

I
8

1.

Mr' Rankin

2.

Mr. Pryor'

3.

Card Procedures and Other
CMEEC By'Laws, Purchasing
EmPloYment Policies
P-Card Policies and Procedures

a

b.

Personnel PoticY Handbook

10

11

11

............1 5
19

M.

Factual Findings"
A.

B.

Overview
1. 2013 Kentucky Derby Trip """""
2. 2014KentucfDerbyTrip"""""
g. 2015 Kentuct<y Derby Trip """""
4. 2016 Kentucky DerbyTrip"""""
5. 2017 - Cancelled Kentuclry Derby Trip"""""'
6. Kentucky DerbyCosf Summ ary""""""
The Greenbrier TriPs
1. August 2015 The Greenbrier Trip""""
Kentucky Derby Trips-

2.

Trip
October 2015 The Greenbrier

"""""""""'19
"""""20
"""""22
"""""23
"""""25
"""26

""""""""27
"""28

"""""""""28

 C.

35

CMEECSponsored Gotf Outings""

1.
2.
g.

35

2013 Golf Outing

36

2014 Golf Outing

37

2015 Gotf Outings

a.

June 17' 2015 Golf Outing

b.

July 25,2015 Golf Outing""'

38
39

5 Golf Outinq " " " " " " " " " " "

c.

August 27,

d.

Summary 2015 Golf Outings""

201

37

40
41

2016 Golf Outing

4.

overallspendingauthorizedbyMr.Rankinand/orPryoronKentucky
and other non-operational
Derby, The Greeniiiii eon outings

D.

Expenses

E.

Paymentsforand/orreimbursementstoJamesSullivanforcertaintravel""""45

F.

lmpacttoCMEECoftheactivitiesoutlinedintheindictment,this
made bv Mr' Rankin to
andiii'*iliiat.r*,il{"n
investigation
"tatements
the Kentuckv Derby trips'
regarding
the media anarcr puoiic officials
ine statuie crealing CMEEC"'47

andaccompan4ngexpenses'

Greenbrier trips atndlor legislative

V.

"" 42

";;;';';"-i;

50

AnalYsis"

A.

Overview

B.

AnalYsis

c.
D.
E,
F.

50
54

- KentuckY DerbY TriPs
54
August 2015""""'
Trip
Greenbrier
The
Analysis 55
October 2015 """"
Analysis - The Greenbrier trip 55
AnalYsis - Golf Outings
by Mr' Rankin andlor Pryor on
Analysis - Overall spending authorized
t
;r'*, c o;i-;rk ; s " n d oth r n o n' o p r ati o """'56
Ke n tu c Ry D rb y, T;;-6;;;;
expenses.
a

e

G.

H.

e

e

na

Analysis.Paymentsforand/orreimbursementstoJamesSullivanfor
""""""'56
6iiiiio1l-2015""
travetandaccompanyingexpenses
this
the activities outlined in the indictment' to
of
IMEEC
to
Impact
Analysis
statements made by M, Rankin
investigation andTn" irJirdlorwriilen
regirding the Kentuckv Derby trips,
57
the media andlor iu'lic onicials
r"giiiitin" ;;;;';;" t; ine statuie crealins cMEEc"'
trips
Greenbrier

{iiti

 Vt.

Concluslons............

Appendtx A

Appendlx B

Ltst...'.....
Einlbt9.'.

Echtblt

58

"APP' 1'4
E& I'1 through lV'85

 ,.

lntroduction

On November 8, 2018, two (2) employees of the Connecticut Municipal Electric Energy
Cooperative ("CMEEC")t - Chief Executive Officer Drew Rankin and Chief Financial Officer
Edward Pryor - along with three (3) individuals associated with CMEEC as then-cunent or
former members of the Board of Directors ('BOD') - Edward DeMuzzio, John Bilda and James
Sullivan - were indicted on various federal criminal charges related to their work for and/or
service to CMEEC. Exhibit l-1. On November 9,2018, the CMEEC BOD issued an
Emergency Meeting Resolution 18-11-06, authorizing its General Counsel Robin Kipnis "to take
the actions necessary to conduct an internal investigation ... of the activities identified in the two
(2) federal indictments." Exhibit l-2. Attorney Kipnis then requested the assistance of our firm
in determining whether the two (2) CMEEC employees identified in the indictment - Mr. Rankin
and/or Mr. Pryor - had engaged in conduct, referenced in or related to that alleged in the
indictments, which violates the terms of their employment agreements. CMEEC then created a
Special Committee of the BOD to provide general oversight to this investigation, to review the
investigation report, and to make findings and recommendations to the full BOD. Exhibit l'3.
This investigation addresses issues or incidents raised in and/or related to the indictment
and involving Mr. Rankin and/or Mr. Pryor, namely the following:

(1)

May 2013, 2014,2015 and/or 2016 trips to the Kentucky Derby2, the planned
2017 trip to the Kentucky Derby, and/or purchases related to the same;

(2)
(3)

August 2015 trip to The Greenbrier Resort and/or purchases related to the same;

(4)

Golf events sponsored and run by CMEEC in 2013, 2014, 2015 and 2016;

(5)

Overattspending by CMEEC on (1) - (4), plus other meal, travel, gift and/or
entertainment expenses lrom 2013-201 6:

(6)

Payments for and/or reimbursements to James Sullivan for certain travel and
accompanying exPenses; and

(7)

lmpact to CMEEC of indictment, investigation and oral and/or written statements
made by Mr. Rankin to the media and/or public officials regarding the Kentucky
Derby trips, Greenbrier trips and/or legislative changes to the statute creating
CMEEC.

October 2015 trip to The Greenbrier Resort and/or purchases related to the
same;

1As background, The Connecticut Transmission Municipal Electric Energy Cooperative ('TRANSCO") was created by
CMEEC in 2009. As a separate joint action agency, it acquires local transmission assets in order to provide transmission
services required by CMEEC foi its membersand customers. TMNSCO is governed by the same body as CMEEC' The
management and siaff of CMEEC - including the CEO and CFO - operate TRANSCO and oversee its operations. For
purpoies of this investigation, and if and where applicable, any references to CMEEC incorporate TRANSCO.

,

The 2013 trip is not referenced in the indictment, but as it is the first in the series of trips to the Kentucky Derby, it is
considered here.
Page 1

of 58

 ll.

Outline of lnvestigation Process

The investigation involved, in general, review of CMEEC employment contracts, policies
and procedures; review of CMEEC minutes, resolutions, budget and other documents; review of
email correspondences and public statements; review of BlumShapiro's independent audit
reports3; review of forensic evaluation by CohnReznicka; interviews of employees and/or other
individuals currently or previously associated with CMEECs; identification of findings of fact; and
analysis of those findings to develop conclusions as to whether or not Mr. Rankin and/or Mr.
Pryor violated the terms of their respective employment agreements. Mr. Rankin and Mr. Pryor
were provided multiple opportunities to participate in interviews as part of this investigation.
Exhibit ll-3 and Exhibit Il-4. Mr. Rankin, through his attorney, declined to be interviewed and
his attorney submitted a letter on his behalf, which is attached as Exhibit ll-5. Neither Mr. Pryor
nor his attorneys of record in the pending criminal case replied to requests for an interview
and/or to participate in the investigation.6

3

See, e.g., Exhibit ll-l (excerpts of BlumShapiro's report on CMEEC's Financial Statements
2015 outlining purpose and scope of audit).

-

December 31, 2016 and

a See Exhibit ll-2 (December 21,2018 Forensic Evaluation by CohnReznick).

5 Current

and former employees and members of the Board of Directors who were associated with CMEEC during the
operative times were notified via memo of the opportunity to provide information relevant to the investigation. Only one (1)
individual proactively reached out and provided information.

6

Garritv v. New Jersev, 385 U.S. 493 (1967), generally allows CMEEC to compel Mr. Rankin (and/or Mr. Pryor while
employed) to participate in an investigatory interview under the penalty of finding him insubordinate for refusal to answer
questions and/or failure to respond truthfully to questions. Given the pending federal criminal matters, the investigator
considered it appropriate to confirm with the federal prosecutors that the information obtained in such interviews could not
and would not be used against them (i.e., a potential violation of their Fifth Amendment rights) in the criminal proceedings.
The federal prosecutors did not confirm the same. Absent that confirmation, the investigator has not compelled Mr. Rankin
and/or Mr. Pryor to participate in interviews, but rather has offered each the voluntary opportunity to participate.

Page 2 of 58

 lr,.

Background

A.

CMEEC's Structure

CMEEC was created pursuant to Conn. Gen. Stat. $7-233a et seq., and is a public
entity. The express purpose of this enabling legislation is:
to permit municipal electric utilities in Connecticut to join together and form
cooperative public corporations for the financing of the construction and
acquisition of facilities for the purpose of furnishing efficient, low cost and
reliable etectric power in their areas of operation. The provisions of this
chapter shall be deemed to apply to the acquisition, construction, reconstruction,
operation, repair, extension or improvement of such facilities, or the acquisition of
any interest therein or of any capacity thereof, by a separate legal entity created
by concurrent resolutions of two or more municipal electric utilities as herein
provided. lt is found and declared that there exists in the state a great and
growing need for the furnishing of efficient, low cost and reliable electric power to
the residents thereof; that the construction and acquisition of suitable facilities for
the furnishing of efficient, low cost and reliable electric power is an important
governmental function in which municipal electric utilities should be
enabled to act jointly for the purposes of carrying out the provisions of this
chapter and therefore the necessity for the provisions of this chapter is
hereby declared as a matter of legislative determination to be in the public
interest and for the public benefit and good of this state.

(Emphasis added.) Conn. Gen. Stat. $7-233a. A cooperative such as CMEEC is a:

public body corporate and politic, and in furtherance of its purpose of
providing facilities for the generation and transmission of electric power such
municipal electric energy cooperative shall be deemed to be exercising an
essential governmental function . . . .

(Emphasis added.) Conn. Gen. Stat. $7-233e (b).7 The powers granted under the statute
include the investment of "moneys of the municipal cooperative . . . as the cooperative utility
board shall deem prudent and in accordance with the laws of the state regarding the investment
of public moneys." (Emphasis added.) Conn. Gen. Stat. $7-233e (b) (14).8

The final specific power outlined in g7-233e is as follows: "(29) To exercise all other powers not inconsistent with the state
Constitution or the United States Constitution, which may be reasonably necessary or appropriate for or incidental to the
effectuation of its authorized purposes or to the exercise of any of the foregoing powers, and generally to exercise in
connection with its property and affairs, and in connection with property within its control, any and all powers that might be
exercised by a natural perion or a private corporation in connection with similar property and affairs." (Emphasis added.)
Mr. Rankin'i attorney asserts that "Board retreats and trips, specifically including Kentucky Derby and golfing events, are
classic corporate events", and as a result, per the enabling act legislation itself, Mr. Rankin may engage CMEEC in any such
activities. ihis position has no merit. Section 7-233e is part of the enabling that grants the corporation - i.e., CMEEC - lhe
same powers that are given to a private corporation. lt does not flow from this that officers can use CMEEC funds in violation
of CMEEC rules, policies, procedures, fiduciary duties or other provisions of the law, or for their own use.
7

ln addition to provisions in the enabling statutes, other indicia of CMEEC's status as a public, governmental entity are its
adherence to the Connecticut Freedom of lnformation Act; see Exhibit lll-l (2013 CMEEC By-Laws, Article V - Public
Meetings and Records) and Exhibit lll-2 (February 21,2017 Testimony of Drew Rankin); and its treatment as a political
subdiv'ision of the state for records retentions purposes. See Exhibit lll-3 (Attorney General Opinion 2013-03)'
8

Page 3 of 58

 CMEEC's By-Laws reiterate its statutory purposes, stating as follows:
ARTICLE I
DEFINITIONS, NAME, LOCATION, SEAL, PURPOSES, AND
GENERAL DESCRIPTION OF GOVERNANCE STRUCTURE,

Section 5. PURPOSES
The purposes for which CMEEC is organized are to undertake: (a) the
procurement, management, provision, and transmission of electric products,
including, but not limited to, electric commodity, ancillary and support services,
and tranlmission services; (b) the planning, financing, development, acquisition,
construction, reconstruction, improvement, enlargement, betterment, operation,
and maintenance of a project or projects to supply electric power and energy for
the present and future needs of its Members, and others as contractually
provided; and (c) to do and perform all acts and things for the benefit of its
Members, and others as contractually provided, which by law, expressed or
implied, it is authorized, empowered, or permitted to do and perform'

Exhibit lll-1 (2013 BY-Laws).e
CMEEC is governed by a Member Delegation and a Board of Directors; Exhibit lll'1
(Article l, Section 6); the Board is comprised of member representatives and charged with
management of the operational affairs and business of CMEEC. Exhibit lll'1 (Article l, section
6; Article lll, Section 1). The powers which the Board may exercise are identified in Article lll,
Section 11, namely: "all the powers of CMEEC provided in the Act10 and as otherwise further
defined in the Membership Agreement and Bylaws."
The duties of the Board are further described in the By-Laws as follows:
ARTICLE III
CMEEC BOARD of DIRECTORS
SECI ON

3.

DUTIES AND EXPECTATIONS OF BOARD OF DIRECTORS.

The duties of the Board of Directors shall be to govern the business and affairs of
CMEEC; to exercise all powers of CMEEC; to comply with the provisions of the
Act; and to keep the minutes of its proceedings. The Board of Directors shall be
comprised of the Member Representatives (and Alternate Representatives as
duly authorized pursuant to these Bylaws). The expectations of performance of
duties of the Member Representatives (and duly authorized Alternate
Representatives) in serving on the CMEEC Board of Directors are as defined
herein, and shall include, but not be limited to:

time
CMEEC amended its By-Laws effective October 2018. As the 201 3 version of the By-Laws was in effect during the
p"rioo .ou"r"d by this investigation, that set of By-Laws is referenced. of note, the 2018 amendments did not modify in
substance any of the provisions considered in this investigation'

e

i0 Article l, Section 1 of the By-Laws defines "Act" as follows: "Public Act 75-634 of the Acts of the State of Connecticut of
-ubsequenly

tSzS,

codified

is

Title 7, Chapter 101a, SectionsT-233a ef. seg. of the General Statutes of Connecticut, as

amended."

Page 4 of 58

 (a) To attend and participate in at least sixty-five percent (65%) of the combined,
applicable CMEEC Board of Director Committee meetings, with such attendance
and participation requirement satisfied by physical presence or presence by realtime electronic means as otherwise provided under these Bylaws, CMEEC Board
of Director meetings, and formally called industry and role development sessions;
(b) To become familiar and knowledgeable about, and develop opinions on, the
material provided to the CMEEC Board of Directors and presented at the
CMEEC Board of Director meetings and Committee meetings;
(c) To be prepared to discuss information provided to the CMEEC Board of
Directors for the scheduled Board of Director meetings and Committee meetings;
(d) To become knowledgeable about the issues of importance to the electric
utility industry, the Municipal Electric Utilities and the CMEEC Board of Directors
Committee matters in which the individual is participating;
(e) To be prepared to evaluate the performance of the CMEEC Board of
biiectors and CMEEC overall in achieving the goals established by the Board of
Directors for the benefit of achieving the CMEEC Vision, Mission, and Objectives

Exhibit lll-1
As part of and in addition to the Board, there are various officers of CMEEC, as follows:
ARTICLE IV
CMEEC OFFICERS

Section 3. DUTIES OF OFFICERS. ln addition to duties designated by the
Board of Directors, the duties of the Officers of the Board of Directors and of
CMEEC are as follows: . .
.

Chief Executive Officer: The Chief Executive Officer shall be the principal
executive Officer of CMEEC with full responsibility for the planning, operations,
and administrative affairs of CMEEC and the coordination thereof pursuant to
policies and programs approved by the Board of Directors from time to time, and
shall be the agent for service of process on CMEEC. The qualifications for the
office of Chief Executive Officer shall be determined by the Board of Directors.
Chief Financial Officer: The Chief Financial Officer shall be the principalfinancial
Officer of CMEEC with full responsibility for financial planning and reporting,
Treasury function, debt issuance, credit management, and the coordination
thereof pursuant to policies and programs approved by the Board of Directors
from time to time, and shall be the agent for financial service on CMEEC. The
qualifications for the office of Chief Financial Officer shall be determined by the
Chief Executive Officer.

Exhibit lll-1.
1n2013, CMEEC entered into a Membership Agreement with the following entities:
Borough of Jewett City, City of Groton, City of Norwich, Second Taxing District of the City of
Norwalk and Third Taxing District of the City of Norwalk. This Membership Agreement is
attached as Exhibit lll-4. The Town of Bozrah subsequently joined CMEEC as a member. ln
addition to the Membership Agreement, CMEEC entered into contracts with non-members to
Page 5 of 58

 provide various services and/or to develop projects. Under the Membership Agreement,
revenue generated from the non-member agreements, "less incurred expenses", was to go into
the Margin Account. Exhibit lll-4 (Section 1 - Definition of CMEEC Margin). Funds in the
Margin Account were then to be allocated to members per the specific terms of the Membership
Agreement, as follows:

6.1

Allocation and Disbursement of GMEEG Margin Generally. All

6.2

Disbursement of CMEEC Margin Allocable to Margin-Eligible
Members. Each Margin-Eligible Member as of the date of any allocation
and/or disbursement of CMEEC Margin shall receive disbursement of the
then-unallocated CMEEC Margin pursuant to such Margin-Eligible
Member's Membership lnterest Level. CMEEC Margin allocated
pursuant to this Section 6.2 shall be disbursed into each Margin-Eligible
Member's Rate Stabilization Fund unless otherwise directed by such

CMEEC Margin received in a given month shall be allocated and/or
disbursed on the first day of the next calendar month, pursuant to this
Section 6. Notwithstanding anything to the contrary contained herein, on
the first day of the first calendar month following the Effective Date, all
then-unallocated CMEEC Margin shall be allocated and/or disbursed
pursuant to this Section 6.

Margin-Eligible Member.

lll-4.

Money from the Margin Account was to be distributed to margin-eligible
members, either to the member's "Rate Stabilization Fund" or otherwise as designated by the
member. While the source of money (e.9., member or non-member) may be important for
determining to what account(s) the money is to be allocated, once money is received by
CMEEC and regardless the source, it becomes property of CMEEC. Whether funds are drawn
or expensed from one account or another, the funds must be drawn or expensed in compliance
with, for example, CMEEC's policies, procedures and the law.

Exhibit

The 2013 Membership Agreement addresses CMEEC budget approval and modification
as follows:

8.1

Annual Budget APProval

On or before December 1 of each year, the Board shall vote in accordance with
the voting requirements set forth in the Bylaws to approve a budget covering
CMEEC's operating expenses and CMEEC's capital expenses for the following
calendar year. Any budget approved pursuant to this Section 8.1, as the same
may be amended, shall be an "Approved Budget"

8.3

Authority of CMEEC Officers

When the Board approves an Approved Budget, unless otherwise stated in such
Approved Budget and subject to the requirements of Section 8.4 below, the
approval shall authorize Officers, including CMEEC's Chief Executive Officer and
any other Officer that the Chief Executive Officer may designate, to execute and
administer the Approved Budget within such Officers' reasonable discretion,
without further Board approval, including performing the following actions:
Page 5 of 58

 (a) Changing the use of approved resources within the Approved Budget based
upon operationalneeds and conditions; . . . .

8.4

Additional Board APProvals.

Actions taken by Officers in administering an Approved Budget shall only require
additional Board approval if (i) the need for additional approval is expressly
stated in such Approved Budget, (ii) the Officers'actions would cause
expenditures, with respect to items other than the procurement of Electric
Products and Transmission Services, to exceed the Approved Budget by more
than ten percent (10o/o), or (iii) as otherwise provided in the RPSC or the Bond
Resolution or Applicable Law.

Exhibit lll-4.

Page 7 of 58

 B.

CMEEC's Contractswith Mr. Rankin and Mr. Pryor and CMEEC's General
EmPloYment Provisions

Mr. Rankin currently is CMEEC's Chief Executive Officer ("CEO'), and Mr. Pryor retired
from the position of Chief Financial Officer ('CFO") in January 2019.11 Mr. Rankin was hired as
CEO in 2011.

1.

Mr. Rankin

Mr. Rankin's employment agreement with CMEEC, inclusive of his job description, is
attached as Exhibit tll-5.12 Section 3 of the agreement summarizes Mr. Rankin's duties as
follows:
3. DUTIES:
Mr. Rankin shall perform the customary duties associated with the position of
CEO of CMEEC as described in the most current job description of the CMEEC
CEO. He shall also perform other related duties, at such times and places and in
such manner as the CMEEC Member Delegation and/or the CMEEC Board of
Directors shall require and direct. ln the performance of his duties, Mr. Rankin
shall report directly to the CMEEC Member Delegation and to the Board of
Directors and will provide applicable information to said Member Delegation
and/or Board of Directors. Mr. Rankin shall use his best efforts in the
performance of his work under this Agreement. A copy of Mr. Rankin's job
description as CEO is attached as Exhibit C.

The referenced cEo job description provides, in part, the following:
Primary Responsibilities
Plan, develop and implement innovative and proven power supply strategies in
order to ensure predictable low cost of power for CMEEC member utilities. ' . .
Oversee CMEEC operations to ensure effective execution of established
objectives, mission, vision and values which include; enabling the municipal
electric utilities to be the providers of choice through a diverse, stable,
predictable, integrated portfolio of generation, transmission, energy efficiency
and load management resources that maximize the competitive position of
Connecticut's municipal electric utilities in the retail electric markets.

Establish policies and controls which manage risk in the following business
areas; trading and hedging energy costs, long-term resource procurement, credit,
financial and asset management and acquisition. . ' .

Mr. pryor joined CMEEC in 1982 and became the CFO in July 2011. Although Mr. Pryor is now retired, CMEEC
requested that the investigation consider whether or not his actions and/or omissions would have violated the terms of his
final employment agreement.
11

job
Mr. Rankin,s agreement has many attachments; the pertinent attachment for the purposes of this investigation is the
description, and this is the only attachment included.
12

Page 8 of 58

 Represent CMEEC and CMEEC member utilities interests before state and
federal legislative and regulatory agencies.
Ensure the credit worthiness of CMEEC is maintained and continues to be
enhanced with appropriate credit agencies to ensure financing of future projects
and access to credit.
Develop, maintain and manage CMEEC's operating budget.
Manage CMEEC and subsidiaries' interests to protect assets, margins, and net
income so as to provide a competitive cost advantage to member utilities. ' . .
Establish and maintain a customer (member utility) focused culture within

oMEEC.. ..
Establish a culture of teamwork, communication, collaboration and fiscal
responsibility.

Knowledge, Skills, and Abilities
Ability to communicate effectively orally and in writing and to interact with
individuals at all levels within and outside of the organization. . . .
Ability to make public presentations in a professional manner, and to establish
credibility with customers, employees and public officials.
Ability to act as the CMEEC contact and spokesperson with the media and
officials. . . .

Exhibit lll-5.
Mr. Rankin's agreement discusses disciplinary action in terms of termination for cause
as follows:
5. TERMINATION:

(a) Termination for Cause. . ."Cause" shall mean (i) any act or omission that
constitutes a breach by Mr. Rankin of any of his obligations under this
Agreement; (ii) the failure or refusal of Mr. Rankin to perform the duties required
of him as an employee; (iii) any violation by Mr. Rankin of any law or regulation
which is materially related to the business of CMEEC. Mr. Rankin's conviction of
a felony, or any perpetration by Mr. Rankin of a common law fraud; or (iv) any
other willful misconduct by Mr. Rankin which is injurious to the financial condition
or business reputation of, or is otherwise injurious to the CMEEC or any of its
subsidiaries or affiliates. Any termination for Cause may be contested via
arbitration under paragraPh 8.

Exhibit lll-5.
Page 9 of 58

 2.

Mr. Pryor

At the time of his retirement, Mr. Pryor had an employment agreement with CMEEC.
Exhibit lll-6. Mr. Pryor's duties, as outlined generally in Section 2 of the employment
agreement were as follows:
2. Duties
2.1 During the term of employment under this Agreement, Key Employee shall
serve as Director of Finance and Accounting for CMEEC and as such shall have
the responsibility for the supervising, maintaining, and implementing designated
functions of CMEEC and those assigned employees in such functions, and shall
perform such duties for the management of CMEEC as shall be assigned by the
Executive Director of CMEEC subject to the policies established by the Board of
Directors of CMEEC.

Exhibit lll-6.
Mr. Pryor's employment contract outlines cause for termination of employment as
follows:
5.3 Termination by CMEEC for Cause
Key Employee's employment with CMEEC may be terminated for Cause.
"Cause" shall mean conduct by the Key Employee which is: (i) willful, continued
material misconduct; (ii) repeated substance or alcohol abuse that affects Key
Employee's job performance; (iii) conviction of or plea of nolo contendere to a
felony; (iv) continued failure to perform the duties or discharges his obligations
described in Section 2 hereof or negligence in the manner of performance of his
duties or persistent failure to perform his duties at a competent level and
standard expected in accordance with the quality and quantity normal for the
position of the Key Employee; (v) continued failure to carry out the directives of
the Executive Director or Board of Directors, or (vi) a breach by the Key
Employee of his obligations under Section 6 of this Agreement. ln the event that
CMEEC seeks to rely upon items (i), (iv) or (v) above as a basis for terminating
the Key Employee for Cause, and assuming that the alleged misconduct, failure
or refusal to perform is subject to cure: (a) CMEEC shall first provide the Key
Employee with a written notification setting forth Key Employee's alleged
misconduct, failure or refusalto perform; and (b) the Key Employee shall have
such period of time as stated in such notification (not less than 10 days) to take
appropriate corrective action resulting in a cure of any material detriment to the
Company resulting from his her alleged misconduct, failure or refusalto perform.
ln the event that Key Employee takes such appropriate corrective action, Gause
for termination shall not be deemed to exist. ln the event that there is a Notice of
Termination of Key Employee by CMEEC, based on Cause, said notice shall
state that the Cause or Causes be asserted in reasonable detail, and said notice,
as stated, shall include a written statement of the facts and reasons for such
proposed termination. ln the event of the occurrence of an event described in
items (ii), (iii), or (vi), CMEEC may terminate Key Employee's employment
without prior notice.

Exhibit lll-6.

Page 10 of 58

 3.

CMEEC By-Laws, Purchasing Card Procedures and Other
Employment Policies

In addition to their employment agreements, Mr. Rankin and Mr. Pryor are also subject
to the terms set forth in, among other things, CMEEC By-Laws (see above and Exhibit lll-1);
CMEEC's Purchasing Card ("P-Card') Policies and Procedures; CMEEC's Personnel Policies
and/or Handbook (provided the terms are not in conflict with the employment agreements), and
the law. An overview of P-Card policies and pertinent Handbook provisions are outlined below.

a.

P-Card Policies and Procedures

ln 2013, CMEEC began individually assigning P-Cards to certain employees as an
alternative to company credit cards. Prior to issuing a P-Card, CMEEC requires an employee to
complete a P-Card Course on on-line regarding proper P-Card use. Exhibit lll-7.13 With regard
to the use of their individually assigned P-Cards, Mr. Rankin and Mr. Pryor acknowledged in
writing completion of a P-Card Course, and agreed as follows:
I agree I have read and understand all requirements for obtaining and
maintaining a P-Card, including any misuse or abuse of the privilege is subject to
corrective action up to and including termination.

Exhibits lll-8 and lll-9. CMEEC's P-Card Program
was implemented to reduce or eliminate the need for corporate credit cards, petty
cash, special checks, and travel advances; and to facilitate the low-dollar,
general supply purchasing process when products and services cannot be
obtained through the typical purchase order authorization process. . .
.

Finance & Accounting manages the P-Card program, and has the authority to
suspend or cancel P-Card privileges for any cardholder considered to be in
violation of CMEEC or P-Card policies and procedures.

Exhibit lll-7
As outlined in the P-Card Course, three (3) people are involved in the use, review and
administrative accounting of any P-Card purchase, namely the cardholder, the expense
approver, and the program administrator/accountant. Under the P-Card Policies and Procedures
set forth in the P-Card Course: Mr. Rankin and/or Mr. Pryor, as CEO and CFO, may approve
individual employees to become P-Card cardholders; individual cardholders "must abide by all
CMEEC procurement, travel and employee handbook policies and procedures when using the
P-Card"; the "expense approver" is "the 'check' to identify potential or actual misuse of the
card"; and the direct supervisor acts as the expense approver for a cardholder. For purposes of
Mr. Rankin's P-Card use, Mr. Pryor as CFO served as the "expense approver", and for
purposes of Mr. Pryor's use, Mr. Rankin served as the "expense approver." See Exhibit lll-8
and Exhibit lll-9. The Policies and Procedures further provide that:
13

The June 2013 course materials are attached, as these are the materials Mr. Rankin and Mr. Pryor attested to reviewing.
December 2013 course materials vary in non-substantive manners (e.9., modifying a log in process, updating program
administration contact names).

Page 11 of 58

 The expense approver and the cardholder are equally responsible and
accountable for the transactions.
The expense aPprover:

.

Must be able to determine the business appropriateness of transactions
Reviews transactions on the expense report and allsupporting
documentation (e.g. receipts) to ensure compliance ' ' ' '

(Emphasis in original). Exhibit lll'7'
regard to P-Cards is to
The primary role of the program administrator/accountant with
while the accountant/program
verify that the general ledger coding on a transaction is correct.
,,dispute, edit, flag and/or divide a transaction after the cardholder has signed
administrator can
for the appropriateness of the
off,, the cardholder and the expense approver are responsible
which outlined the roles of the
transactions.la ln early 2014. Mr. Rankin developed a flow chart
clarifies that the role of the
cardholder, expense approver and accountant; this further
Exhibit lll'10'
accountanvprogram administrator is administrative in nature.

with actual charges required
Reconciliation of charges listed on the P-card statement
allow the expense approver to
that employees submit proper receipts with enough detail to
properly' "A proper
perform his/her duty in determining whether the P-card is being used
of the items purchased (e.9. shows
receipt is flre orudnlet, shows the itemized description
payment." (Emphasis in original')
meals breakdown), the amount paid and the method of
lll-7. As further stated in the P-Card Policies and Procedures:

Exhibit

transaction must
All purchases must be business-related and necessary. Each
guidelines'
grant
projecu
also be consistent with departmental budgetary and

Key ComPliance lssues;
rne "expense Approver" also reviews transactions to ensure they are consistent
with the following compliance policies:

Items purchased with the P-Card are not restricted (e.9. alcoholic

beverages, airline club membership, capital equipment, cash advances'
donations)15
policies and
Each transaction complies with current cMEEC handbook
procedures
procedures, as well as budget
ra

that position as an administrative reviewer (versus a
one former program administrator indicated that the role of
to the employee' who had questioned a charge, that "you
stated
who
Pryor,
Mr.
by
was made clear

substantive r"ui"ti"4
are not the P-Card Police".

are prohibited from purchase with the P-Card' CMEEC
Although the wording is slighfly confusing, the items in bold
foi Mr. Rankin; an employee of the Finance and Accounting
ieJtriction
tnis
trom
existed
exemption
confirmed that no formal
P-Card for purchases that included alcohol' the employee
his
of
use
Rankin's
Department noted that *n". qI"tii""ing Mr.
okay for Board_functions. No documented policies or written
was informed by Mr. pryorlni-t G prr""n"sjr of arjghol was
correctly identified an exception in the P-card policy that
eryor
prvorf
vr.
if
statements support vr.
Fven
"onir"ntthese functionswould still need to be directly related to a business
allowed the purchase ot attono for Board functions,
other policies and procedures.
and
By-Laws
pripoi"
consistent with cMEEC's
1s

"n,i

Page 12 of 58

 A single item costs less than $5,000 and is not a "split" transaction

There is no conflict of interest involvement in the transaction
Sales tax was not paid (where applicable)

The P-Card was the appropriate buying/payment method for the transaction

(Emphasis in original.) Exhibit lll'7.
The P-Card Policies and Procedures also include a multi-page section on fiscally
responsible use of the card, which provides as follows:
Your Fiscal ResPonsibilitY
Stewardship of CMEEC's financial resources is the responsibility of all
employees. Those who purchase or authorize purchases on behalf of CMEEC
are responsible and accountable for those transactions. ln the PCard process,
the Cardhotder, the Expense Approver and the Accountant must each ensure
they are fulfilling their fiscal duties.
Your Fiscal Responsibility, continued ...
As an authorized participant in the buying process for CMEEC, you must
understand and adhere to the following policies and procedures:
Spending authoritY
Signature authoritY
Ethical responsibilitY
Conflict of interest

Appropriate buYing methods
Purchasing with grant or project (sponsored) funds
Restricted items and services

Avoid paying sales tax

Your Ethical ResponsibilitY
As a P-Card holder you are actively involved in the procurement function. You
must maintain a keen sense of professional ethics to serve CMEEC in a
responsible manner.

lf you are even unsure about a situation, give yourself an Ethics Test:
How would the headline read if the newspaper printed a story on
the situation?
Does it hurt or offend anYone?

Page 13

of 58

 Was the decision made in an open and competitive environment?

would you be comfortable defending the decision criteria in court?
ls the price fair and reasonable?

ls it worth the risk of having your purchasing capabilities removed
permanentlY?
Are you risking your job or reputation?

(Emphasis added.) Exhibit lll-7. The suggested "Ethics Test" above is broad, and reasonably
results in an individual's careful consideration of use of the P-Card'

An entire module of the P-Card Policies and Procedure then addresses "Using the P"[u]se of
Card for Business Meetings/Meals". The opening statement in this section provides
the p-Card to pay for necessary and reasonable business and business meals is allowable as
long as the expenses are directly related to CMEEC business." The provisions then outline
acceptable business use, as follows:
Business Purpose

A clear business purpose contains all information necessary to substantiate the
expenditure including a list of attendees and their purpose for attending, business
topics discussed, or how the expenditure benefited CMEEC.

Business Hosting and Business Meals Allowances
Business meal expenses and hosting meals include food, non'alcoholic
beverages, taxes and tips, and should not exceed the maximum allowances
detailed in the CMEEC Personnel Policy Handbook.
Note: Alcoholic beverages are expressly prohibited from federal funding, so it is
important to maintain the original receipts that detail the meal(s) purchased.

An explanation must accompany all expense submissions for business and
hosting meals. Any business meal cost that exceeds the maximum allowance
stated-in the CMEEC Personnel Policy Handbook must be accompanied by a
detailed explanation and have approvalfrom the expense approver (supervisor).

(Emphasis added.) Exhibit lll'7

Page 14 of 58

 b.

Personnel PolicY Handbook

ln addition to the P-Card Policies and Procedures, Mr. Rankin and Mr. Pryor also signed
off on receipt of CMEEC's Personnel Policy Handbooks at various times; see Exhibit lll'11 and
Exhibit lll-12 and Mr. Rankin authored the'Welcome' or "Appreciation Lette/'to the April 1,
2013 and January 1,2017 updates. ln both opening letters, Mr. Rankin inclusively stated:
A core element of a highly qualitative work environment producing exceptional
quantitative results is a reasonable set of standards for our diverse Employees to
understand and honor. ln that spirit, CMEEC utilizes a Personnel Policy
Handbook to clearly articulate the standards.
This Personnel Policy Handbook contains the key policies, goals, benefits, and
expectations of CMEEC for all of us as Employees, as well as other information
applicable to our emPloYment.

Exhibit lll-13 (2013) and Exhibit lll-14 (2017). The "lntroduction" to the Handbooks further
provides that "[e]ach Employee is responsible for understanding and abiding by CMEEC's
policies and formal practices." Exhibit lll-13 (2013) and Exhibit lll-14 (20171ln the 2013 and 2017 Handbooks, "Policy 210

Reimbursement

- Business

- Business Travel and Expense

Meeting/Training Travel, Meals and Lodging" reads as follows:

Policy 210 - Business Travel and Expense Reimbursement
Business Meetingffraining Travel, Meals, and Lodging
All business travel must be authorized by the immediate Supervisor. Employees
approved travel plans should be coordinated through the CMEEC Administrative
staff. When approved, the costs of travel, meals, lodging, and other expenses,
including the cost of the course, conference, or meeting, directly related to
accomplishing business travel objectives will be addressed by one of three
methods, including a) a reimbursement to Employee of the actual cost, or b) paid
in advance by the company, or c) by cash advance to the Employee provided
those expenses are documented and are reasonable in the discretion of CMEEC.
Employees may use personal credit cards or company credit cards to the fullest
extent possible to minimize cash advances. Employees should submit a written
request to their Supervisor detailing the amount requested when travel advances
are needed. Upon return from the travel, any unused cash advances and receipts
must be turned into accounting within five (5) business days.

To cover the Employee's expenses associated with personal dining,
CMEEC provides a fifty-five dollar ($55) per day per diem for each full day
on business travel, and a thirty dollar ($30) per day per diem for each day
of travel on each side of the trip. ln cases where an Employee may incur
expense for self and a non-Employee business associate for business
related reasons, the Employee shall submit an expense reimbursement
form for the non-Employee portion of the expense, subiect to Supervisor

approval.

Page 15 of 58

 Fetpense Reimbursement

CVtggC will reimburse Employees for reasonable out of pocket business
including travel expenses incurred while on assignments away from
"*p"nr"t,
the normalwork location. All expense reimbursement requests must be approved
by the immediate Supervisor and be accompanied with receipts for those
eipenses. Reimbursement requests for meals or entertainment need to
contain documentation of aftendees, titles, company name' name, and
location of where meal or event took ptace, the exact amount, and date of
the expense. Mileage reimbursement requests must contain date, purpose, to
and from locations and mileage traveled. Out of pocket business and travel
expense reimbursement requests must be submitted within ten (10) business
days of the business and/or travel completion.
CMEEC assumes no obligation to reimburse Employees for expenses that are
not authorized or in compliance with its business travel and expense policy' The
CEO or CFO must approve any deviation of the business travel and expense
policy.

Abuse of this business and travel expense policy by the Employee'
including falsifying expense reports to reflect expenses not in accordance
with the-policyli.e.: personal expenses unrelated to business), is subject to
corrective actlon, up to and including termination of employment.
Meals
CMEEC provides a per diem for meals while on business and/or training travel
outside of the local area. ln addition, meals and/or entertainment for
business meetings outside of CMEEG office building may be reimbursable

when the following occurs, business is discussed, and person(s) attending
have a potential oi actual business relationship with CMEEG'
Reimbursement requests need to contain documentation of attendees'
titles, company name, name, and location of where meal or event took
place, the exact amount, and date of the expense'

Lodging
t-oOiin{arrangements should be coordi nated through CM E EC Adm inistrative
stafl tricase Jcancellation is necessary, it is the Employee's responsibilityto
ensure cancellation is processed. lnvoices for lodging must be provided to
Finance and Accounting.

Air/Rail Travel

Travel arrangements should be coordinated through CMEEC Administrative
Staff. UpgraJes for travel are not expensed by CMEEC and would be at the
Employe6's expense. Parking for Air/Rail travel is reimbursable, as well as taxi,
bus, or shuttle fares.

Car Rental

Employees may rent a car with immediate Supervisor s authorization for
Ousineis travel if this is a more cost effective means for travel, such as in cases
of reimbursement for use of Employee's personal car, taxi fares, and or shuttles'
Employees should rent a car in the compact car rental category'

collision insurance should be taken. Mileage will not be reimbursed, however out
of poctet costs for fuel would be reimbursed. Rental vehicles must be returned
intact and on time. Should an accident occur while using a rental car, Employees
should notify the car Rental Company, local authorities, and Human Resources'
Page 16 of 58

 Itse of Company Car and Personal Automobile
Employees who are involved in an accident while traveling on CMEEC business
must plomptly report the incident to their immediate Supervisor, whether utilizing
CMEEC vehicles or not. Vehicles owned, leased, or rented by CMEEC may not
be used for personal use without prior Supervisor authorization.
ln the event an Employee is required to use their personal vehicle for CMEEC
business, reimbursement for use of Employee's car is in accordance with
CMEEC's expense reimbursement policy outlined above and with current IRS
mileage allowance. The Employee should confirm their personal automobile
insurance covers business travel. ln the event of an accident, the Employee will
need to contact their personal insurance company. CMEEC will not cover an
Employee's deductible or other costs if Employee is involved in an accident with
their personal automobile. The Employee should obtain and retain appropriate
coverage for their personal vehicle that would sufficiently cover liability/expenses
incurred in the event of an accident while using that vehicle for limited CMEEC
business.

(Emphasis added.) Exhibit lll'15 (2013) and Exhibit lll'16 (20171'

The 2013 and 2017 Handbooks also contain "Policy 214 - Code of Business Conduct,
Ethics Policy, and Complaint Procedure" which reads, in pertinent part, as follows:
Pof

icy

214

- Code of Business Gonduct, Ethics Policy, and Complaint

Procedure
Employee Conduct
The continued success of CMEEC is dependent upon our Members' and
customers'trust and we must be dedicated to preserving that trust. CMEEC will
comply with all applicable laws and regulations and expects its Employees to
conduct business in accordance with the letter, spirit, and intent of all relevant
laws and to refrain from any illegal, dishonest, or unethical conduct.

In general, the use of good judgment, based on high ethical principles'
should guide Employees with respect to lines of acceptable conduct. lf a
situation arises, where it is difficult to determine the proper course of action, the
matter should be discussed openly with the Employee's immediate Supervisor
and, if necessary, the CEO, for advice and consultation. Compliance with this
policy of business ethics and conduct is the responsibility of every CMEEC

Empioyee. Disregarding or failing to comply with this standard of business

ethics and conduct may lead to corrective action, up to and including
termination.
CMEEC's Code of Ethics

Employees have an obligation to conduct business within guidelines that prohibit
actual or potential conflicts of interest. The following are applicable to all CMEEC
Employees and include the prohibition against;

Page 17 of 58

 Use of posltion or confidential information gained in employment with
CMEEC for the financial benefit of the individual or their immediate
family (spouse, child, child's spouse, parent, brother, or sister) or
business (in which the individual is an owner, Officer or Director).

*********************************

-

Any direct or indirect financial interest, or if any relatives of such
Employee has any direct or indirect interest, on a transaction involving a
purchase (value at more than $200), any contract or lease without
disclosing such conflict of interest to the CEO or in the case of the CEO,
to the Chairman of the Board, prior to making any commitments for such
purchase, contract, or lease.

(Emphasis added.) Exhibit lll-17 (2013) and Exhibit lll-18 (20171-

Page 18 of 58

 w.

Factual Findings

various
Upon review and consideration of the information gathered, we have outlined
factual findings as follows:

A.

KentuckY DerbY TriPs' Overuiew

Mr.
CMEEC, as authorized by Mr. Rankin (and as atlowed and/or approved by CFO
pryor16), paid for trips to the Kentucky Derby from 2013-2016, and made a pre-payment for a
have been
similar trip in 2017, before canceling that trip. These trips and their circumstances
resulting
and
boards
ethics
chronicled in, among other places, investigations by local municipal
proceedings and history; and in
decisions; minutes of tocat municipal meetings; state legislative
Derby (inclusive of
the media. ln short, CMEEC paid for four (4) weekend trips to the Kentucky
employees,
the Kentucky Oaks races the day prior to the Derby) for various Board members,
and made certain
vendors, and/or others (totaling 24-40 people each year) between 2013-2016,
payments were made through
non-refundable payments towards an anticipated 2017 trip. Such
noticed in
checks, p-Cards and/or wire transfers. No Board or committee meetings were
presentations made on any of
accordance with law and/or identified in itineraries, nor business
boards in
these trips. Various municipal employees and officials were deemed by the ethics
the trips,
the City of Norwich and City of Groton to have violated local ethics rules by attending
found such spending
and a 5 year forensic audit completed by CohnReznick in December 2018,
,,appeared inconsistent with cMEEC's purpose", as outlined in cMEEC',S By-Laws.17

16

to the 2016 Kentucky Derby trip and for the ticket
See, for example, requisition approvals by Mr. Pryor for air transportation
for the anticipated 2017 Kentucky Derby trip' Exhibit lV'1 '

p"if"g"t

17 Of note, the forensic evaluation completed by CohnReznick; see

Exhibit ll'2; and the annual audits of financial

processes'
statements by BlumShapiro; see Exhibit l .1; are two different
for CMEEC throughout the time period covered in this
BlumShapiro has completed the annual audit of financial statements
is to determine if an entity's financial statements
statements
financial
of
audit
purpose
annr"f
oi
One
investigation.
"n
are considered to be material if they, either
misstatements
such
omissions).
of
include material misstatemenis iinctusive
the economic decisions of users made on the
individually or in the ,ggr"g;ti iortO r"""onrbly be eipected to influence
owners, investors, members, creditors, regulators
basis of the financial stateirenis. Financial statement users could include
and others.
a benchmark and the^n applying a
ln annual audits, the determination of materiality generally begins with choosing
For the period of 2013-14, BlumShapiro
benchmarks.
atcepted
iliOeV
each
are
1-"uinu""
Assets
percentage to it.
because it was a
benchmark for CMEEC. Theieafter, the benchmark was changed to revenues
used assets as the audit "nJ
ln those years, materiality was then calculated as
Members.
to
the
benefits
and
of
costs
in
terms
measure
more appropriate
The specific
p"i".irii"-g! of its overall revenues within a generally accepted range of 0.5% lo 1.Qo/o of such revenues.
"percentage within this r"ng" *"" selected eait' year Oy the'auditor based upon CMEEC'S recent history of any noted that
and quality'of accounting managemeni, and any other business changes or events
accounting adjustments,
"-onriitln"v
,""rs of th" financiil statements. Utilizing this concept of materiality, the actual costs
couro potJntiaily impact the
as anomalies in the audit, and would not result in
associated with the rentucty oeiby trips would not present themselves

n"ighten"oscrutiny(absentadifferentreason;see,infra,footnote22).
was mandated from PA 17-73. That public act
The task performed by CohnReznick, deemed a "forensic evaluation"
for five (5) years, an opinion on conformance to
expenses
and
rev-enue
of
tvaiuation
an
tn'ngs,
Irong otnei
if any, to ensure conformance to the
recommendations,
and
By-Laws,
chapter 101 a of tne state s"tatutes and cMEEC',s
th.at its evaluation was not an audit under either
indicated
specifically
CohnReznick
future.
in
in;
By-Laws
statutes and
procedurbs; rathei, this evaluation was designed to determine if expenditures'
auoitinJ oi
"""ountrg
statute and CMEEC's By-Laws.
with
state
iomplied
retreats,
on
Iuch asihose

;qril,

;; o;ltt;+ted

Page 19 of 58

 A brief review of each of these trips follows.

1.

2013 Kentucl<Y DerbY TriP

ln February 2013 (after the Board passed the 2013 Approved Budget), Mr. Rankin
utilized CMEEC funds (drawn from the Administrative and General account) to purchase twentyIour (24)ticket packages and pay related expenses (e.9., air fares and other associated
expenses), for events including the Kentucky Oaks and Kentucky Derby, spanning from May 25,2013. Mr. Rankin selected the "Trophy Room" ticket package, with a per person ticket price
of g 5,949. The Trophy Room package included, among other things, hotel accommodations,
gift bags, tickets to the races, viewing from the Trophy Room (on the fifth floor, allowing views of
the paddocks and finish line), along with gourmet food and an open premium bar. The signed
ticket package is attached as Exhibit lV-2. The initial mailed invite for the event makes clear
that all expenses would be paid by CMEEC; Exhibit lV-3; and all expenses and submitted
requests for reimbursement in fact were paid by CMEEC. There is no evidence that the funds
for this trip were identified in any proposed budgetls and/or that Board members took a separate
vote to approve of the use of CMEEC funds in this manner.
It is uncertain whether or not this initial invite was sent to all regular and alternate Board
members.le The invite provided, in part, as follows:
You and a guest are cordially invited to a "CMEEC Next Generation" strategic
retreat in Louisville, Kentucky, for the celebrating of multiple achievements;
. The completion of the Rate 9 contracts, the asset refinancing(s), the
revisions of Bylaws, and the creation of the Membership Agreement
. The reinforced and more solid foundation you as leaders and owners of
CMEEC created for all of those following, in sustaining customer value.
ln essence, we are celebrating YOU, for your incredible leadership, unrelenting
commitment to excellence on behalf of your customers, and of course, the
someone supporting and encouraging vou as vou shaped CMEEC's

;J?JJ::".,

Exhibit lV-3. Mr. Rankin utilized the phrase "strategic retreat" in the invitation to describe the

trip. ln organizational management, the phrase "strategic retreat" or a "strategic planning

session" typically involves reviewing and/or updating a strategic plan, or focusing on one or
more issues specific to the organization through work sessions, seminars or the like.2o The
invitation further referenced, in fact, that there will be a "Members' only meeting", as well as

18

The budget for "strategic retreats" for 2013 was $10,000'

these
No lists of actual invitees (versus attendees) were located. As both regular and alternate Board members went on
invited.
were
members
Board
and
alternate
regular
that
all
assumed
have
trips, the investigators
1e

20See, e.g., Liteman, M., Campbell, S., Liteman, J (2006)Refreats thatWo.rk, JohnWiley&Sons, lnc., San Francisco, CA

reasonstoholdandnotto
t".S-Ch""pi", 1-WorkingwiththeClient("aretreatisnotacompanypicnic,aparty...",p.9;
Planning Retreat); Garry, J.
not"O

retreats, pp. 10-14); tnapter 2- Planning the Retreat; Chapter 9 - Leading a Strategic

(n.d.). Board iietreats Oone fiignt. Retrieved from https://www.joangarry.com/board-retreaV.
Page 20 of 58

 ,,multiple strategic planning sessions" and "severatteam building events, including the
lv'3.
t<entucry oaks and Derby. . . ." (Emphasis added.) Exhibit
representations of
A subsequent, more detailed itinerary reflects that despite the
or noticed meetings of any type
meetings and planning sessions, there were no scheduled
meeting", "multiple strategic
during in" trip; Exhibit lV4; and in fact, no'Members'only
ln various prior proceedlngs
planning sessionso, or organized team building events were held.
(as wellthose attending the2014,2015 and
and/or in the media, individuals attending this event
pursuant to the law and no meetings
2016 event) have confirmed that no meetings were noticed
and afternoons in the Trophy Room
were held. Attendees spent Friday and saturday mornings
and then did whatever they
at churchill Downs to socialize, eat, drink and watch the races,

wanted in the evening.
Derby trips were to
Mr. Rankin subsequenly described the reasons for the Kentucky
create a higher achieving company and as follows:
and provide a
I created the retreats to try to foster a more collegial atmosphere

greater trust
forum to employees and Board Members as an opportunity to build
basis'
formal
and personal insight on a less

the trip as connecting
Exhibit lll-2. Mr. Rankin was consistent in describing the purpose of planning session or
of strategic
Board members and CMEEC employees (versus any type
commission meeting on october
utitities
Groton
of
city
ihe
Member meetings). The minutes'of
question why the city Mayor was not
26,2}16,likewise cite Mr. Rankin as stating, in reply to a
invited on these triPs,
trip was to create an
it was not a question of not inviting her, but rather that the

of
environment, and a forum, with focused attention to build lots
with the
working
those
and
Board
the
of
members
relationships between
would
that
environment
an
create
and
try
to
basis,
Board on a regular
p-6u"" an efTective board. Every dollar CMEEC has spent was done in the
.
best interest of the company and the best interest of our end users. ' '
(Emphasis added.) Exhibit

lv-5. The minutes further cite Mr. Rankin as indicating:

and to sustain
. . . .the retreat was intended to build qualitative relationships
tough to get
very
be
can
it
knows,
commission
the
As
those relationships.
preparation
iog"th.1 for a couple of hours a month, and the many hours of
Mr. Rankin
needed for those meetings, to build those types of relationships.
Mr' Rankin
needs'
stated he understands tnit'doesn't sell or meet everybody's
Derby
Kentucky
the
selecting
went on to sa[y]there was nothing "magical" about
and
nurture
to
trying
was
he
because
for the retreatJ,-he maAe the dec-ision

Rankin
build upon those relationships. lt wasn't a gift or a reward, but Mr'
.
event.
qualitative
A
strategic,
'
looked at it as an investment.
.

nothing more
Mr. Rankin said the Choice of the Derby was his choice, based on
better
and
that the trips were producing the desired results in team building
relationshiPs.

newspaper the importance to the
(Emphasis added.) Exhibit lv-S. He further noted to The Day
to foster positive relations, trust and
Member municipalities, stating that the trips "were designed
Page 21 of 58

 good rapport among the six member municipalities."2l (Emphasis added.) Exhibit lV'6' ln
Mr. Rankin described the purpose as an opportunity for employees and Board
""r.n"",
Members to meet and talk on a "less formal' basis than at a Board meeting'
The totatcost of the 2013 trip, paid by CMEEC, was approximately $143,500.22
As of May 2013, there were ten (10) regular Board members and eleven (11) alternate
(24)
Board members, for a total of twenty-one (21) Board members.23 Of the twenty-four
individuals attending in 2013, six (6) were regular members of the CMEEC Board of Directors;
(Mr. Rankin
two (2) were alternate members of the Board; and two (2) were CMEEC employees
(4)
and Mr. pryor), for a total of ten (10) Board members and employees of CMEEC. Four
regular and nine (g) alternate members of the Board did not attend. The remaining fourteen
(1
(14) attendees were guests (three (3) representatives an outside company; and eleven 1)
(eight (8) of
spouses/guests of Board members/employees). Less than half of the Board
and/or
twenty-one (21)) attended, and less than half of the total attendees were Board members
employees (ten (10) of twenty-four (24)). Exhibit lV'7'

2.

2014 KentuckY DerbY TriP

ln August 201g, Mr. Rankin executed a Purchase Agreement in the amount of $207 '720
per person price
for thirty (30) Trophy Room ticket packages for the 2014 Kentucky Derby at a
of g6,g24. Exhibit lv-g. Thirty-two (32) individuals ultimately attended.24 Per the requisition
as
approved by Mr. Rankin (and initiated by him as a result of the Purchase Agreement), and
drawn
were
payments
of $69,240
had been the case in 2013, funds for the three (3) installment
when any Board
lt
is
unclear
lv-g.
Exhibit
from the Administrative and General account.
members may have known about this planned trip (as no dated invitation with a list of recipients
was located), but by early March 2014, James Sullivan inquired about booking a flight for the
Kentucky Derby, and Mr. Rankin indicated to CMEEC's office and Facilities Manager that:
He can fly in and out from and to wherever and whenever. lf he wants to come in
early or stay late, we would have to find [a] hotel room for him'

2i Of note, there were five (5) member municipalities during 2013, 2014 and 201 5, and six (6) members, with the inclusion of
Board in 2013, but its members are not
the Town of Bozrah, in 201'6. The Town of Wallingford had members on the
Agreement'
included in the tallies, as Wallingford was not a party to the March 2013 Membership
of CMEEC's financial
The budgeted amount for "strategic retreats" in 2013 was $1 0,000. During the annual audit
percentage increase
si-gnificant
the
regarding
Pryor
questioned
Mr.
Blumshapiro
from
statements for 2013, representativei
retreat which the
pryoi
for
a
strategic
general,
was
this
that
in
them,
infoimed
in the actual expenditure to]. tnii line item. Mr.
of their
scope
nature
and
the
pryor's
under
and
reasonable,
appeared
respons-e
Mr.
Board considered important.
had no reason to probe more deeply into
engagement as auditors of financialitatements, reprbientatives from Blumshapiro
payment of the costs. Mr. Rankin's attorney suggests
for
existed
documentation
appropriate
to
than
this item, other
Exhibit ll-3; but the scope of
"ontirr
in"1 arrrsn"piro passeo
fo"itiub'1uo'gr"nt on CMEEC's use of funds for a retreat; see
did not in fact issue a judgment Shapiro
Blum
pronouncement,
and
such
inituOe
not
diO
Blumshapiro's
"ng"g"r"nt
- regarding such use of funds'
positive or negative

22

23

per footnote 13, two (2) regular and two (2) alternate members from the Town of wallingford were not included in these

calculations.
24

A thirty-third individual

-

CMEEC's office and Facilities Manager

-

flew to Kentucky but did not participate in the events..

Page 22 of 58

 lv-l0.

Mr. Rankin sent a brief invite/itinerary to Mr. DeMuzzio and a Groton Utilities
empfoyee in late March 2014, where he noted that "[a]ll air travel, rental car, lodging and food
will be provided" and that "[p]lanned activities are attending the Kentucky Oaks and the
Kentucky Derby." Exhibit lv-l1. There was no mention of any business activity in this invite,
as the only planned activity was attending the races.

Exhibit

A detailed itinerary was issued in late April2014. Exhibit lV-12. A "welcoming dinne/'
was held at a local Louisville restaurant on Thursday, May 1,2014, with a cost in excess of
$8,100. ThetripitineraryforFridayMay2,andSaturdayMay3,2llL,outlinedfulldaysatthe
race track, followed by free time in the evenings, with departure on Sunday, May 4,2014. As
with 2013, no business meetings were in fact noticed or held, nor were any minutes published.
The total cost of the trip, paid by CMEEC, was approximately $236,000.

25

As of May 2014, there were nine (9) regular Board members and nine (9) alternate
Board members, for a total of eighteen (18) Board members. Of the thirtytwo (32) attendees in
2014, six (6) were regular members of the CMEEC Board of Directors, two (2) were alternate
members of the Board (the same eight (8) regular and alternate members who attended in
2013) and four (4) were CMEEC employees (Mr. Rankin, Mr. Pryor and two (2) staff
members). The remaining twenty (20) were spouses, guests and/or others. Three (3) regular
members of the Board and seven (7) alternate Board members did not attend. Less than half of
the Board members (eight (8) of eighteen (18)) attended, and less than one-half of the total
attendees were Board members and/or employees (twelve (12) of thirty-two (32)). Exhibit lV-7.

3.

2015 KentuckY DerbY TriP

ln early June 2014, Mr. Rankin executed a Purchase Agreement in the amount of
$206,970 for thirty (30) Trophy Room ticket packages for the 2015 Kentucky Derby from April 30
- May 3,2015. Exhibit lv-l3. The per person ticket package cost $6,899. Mr. Rankin secured
these ticket packages without a2015 budget in place. Mr. Rankin further secured a private
airplane for attendees to leave from and return to Groton airport, with catering and beverage
service on board, at a cost itself of over $57,000. Exhibit lV'14.
After executing the Purchase Agreement (and CMEEC paying for a portion of the 2015
trip), Mr. Rankin's presentation to the Budget and Finance Committee for the 2015 proposed
budget included a slide titled "CMEEC A&G Budget Assumptions" with the bullet point "Changed
convention for funding Member Delegation Expenses and Retreats." The slide "CMEEC
Margin" had a line item identified as "Member Delegation Expenses and Retreats", with a
proposed budget of $350,000.26 Exhibit lV-15. ln 2014, this line item did not exist. 27 For the

25

The budgeted amount for retreats was $105,000.

Fot 2OiS, actual expenses under this line item (which also included the October trip to The Greenbrier (see Section lV B
2) totaled approximately $453,000.

26

27

Prior to 2015, CMEEC utilized funds from the Administrative and General Account for such items.

Page 23 of 58

 budget package presentation to the entire Board, this Iine item (as well as many others) was
shortened, in this particular case to'Expenses.".
While it is unclear whether all Board members were aware of the inclusion in the 2015
budget of funds for these types of activities, at least some individuals on the budget committee,
who analyzed the proposed budget on a closer basis, asked questions and were informed that
funds were for the Kentucky Derby trip. Expenses for this trip, and certain other Board events in
2015, were charged against the Margin Account.2s
Mr. Rankin created (or caused to be created) a multi-page package of materials titled
"2015 Strategic Retreat - Members and Guests Appreciation Celebration." Exhibit lv'l6.
These mate1als contained an introductory note from Mr. Rankin, which stated, in part:
Yes, a most wonderfultime of the year, where we take a few moments to
celebrate and honor you aS dedicated and awesome Board Members and your
Strategic Guests / Partners, who give so much of your precious time2e and talent
to CMEEC and the CMEEC Member Utilities. . . '
Thank you so much, for allyou do for CMEEC and your own Member Utilities,
direclyand indirectly, and accept your significance and positive contribution to
creating strong communities.

Exhibit lv-l6.
Upon arrival on Thursday, April 30,2015, CMEEC paid for a dinner at a local restaurant
at a cost of over 910,800. As with the prior Derby trips, the itinerary for the trip contained no
business meetings. When referencing the activities for Friday May 1 and Saturday May 2,
2015, the itinerary stated:
Eat, drink be merry, and watch races all day with open bar, open buffets, and
balconies overlooking the paddocks and the finish line. Wagering is available
within the seating area.

All expenses were paid for by CMEEC (CMEEC even offered, if needed, to
reimburse for shipping hats to and/or from Kentucky). The total cost of the trip, paid by CMEEC'
was approximately $403,000'

Exhibit

lv-l6.

As of April 2015, there were nine (9) regular Board members and nine (9) alternate
Board members, for a total of eighteen (18) Board members. Of the thirty (30) attendees in
28 CMEEC set up a ,,contra" Margin account for purposes of accounting for and tracking charges to the Margin account for
A&G budget, the Margin
Board activities. The question re-mains whether C]\4EEC funds - notwithstanding allocation to the
procedures,
employment
policies,
By-Laws,
with
CMEEC's
in
compliance
used
were
Account or any other line questioned by that employee regarding the
agreements, the law, etc. one former employee indicated that Mr. Rankin, when
pi"pri"tv oiusing funds from a public agencyfor these costs, stated the expense was for team building (and therefore
appropriate).
who volunteer their
note, the CMEEC Board is not comprised, as is more typical of non-profits, of all Board members
presumably
with
CMEEC
working
and
utilities,
member
by
- and attending
employed
time. Here, many Board members are
jobs. Board members not employed by member
aoaro meeiings 6uring their regular work day-(or otherwise) - is part of_their
,tititi"" are eli-gible tor'paymenis for attendancb and/or participation in Board meetings in consideration of the time required
jobs and/or other obligations)'
to piepare for-ano meaningtully participate in Board matters (and time taken away from
members are "volunteers", such
Board
that
suggests
tr4r.
Rankin
that
yeai.
extent
To
the
much
as
as
$t"o,ooo'a
utilities.
member
by
description simply is inaccurate, at the least, for those employed
2e

of

ioii"iir""

Page 24 of 58

 (six (6)of
Z1l1,four (4) were regular Board members and three (3) were alternate members
attended
these seven (7) attended in 2013 and 2014, as well). Four (4) cMEEc employees
(Mr. Rankin, Mr. pryor and the same two (2) staff members as tn2014). The remaining
(5) regular Board memberc
nineteen (1g) attendees were spouses, guests and/or others. Five
the Board (seven (7)
and six (6) alternate Board members did not aftend. Less than one-half of
Board members
of eighteen (1g) attended, and only about one-third of the total attendees were
and/or employees (eteven (11) of thirty (30))' Exhibit lV'7'

4.

2016 KentuckY DerbY TriP

event,
On Sunday, May 3,2015, apparently just after leaving Kentucky from the 2015
Kentucky
2016
packages
the
for
Mr. Rankin sought to reserve forty (a0) Trophy Room ticket
in the amount of
Derby, and by May 4, 2015, he signed a Purchase Agreement for the same
Mr. Rankin then executed an additional
$Zzg,gOO, or 96,g9g per person. Exhibit lV-17.
gg,000
for forty (40) paddock tours (the area where the horses are
agreement in the amount of
budget for
saddled). The expenses and obligations were incurred before CMEEC adopted a
Committee,
2016. For the presentation of the proposed 2016 budget to the Budget and Finance
of
Mr. Rankin included a line in the Margin Account for "Delegation Related Expenses"
line item in the Margin Account as
9400,000. The presentation to the full Board identified this
"Expenses". Exhibit lv'l8.
in March
Mr. Rankin subsequently signed a Purchase Agreement for an additional room
Kentucky
the
(2)
to
tickets
more
2016 in the amount of 93,779; Exhibit lV-19; and obtained two
jet at a cost of approximately $40,000, and
Derby for g1,400. CMEEC again secured a private
also reimbursed airline fees to those who flew separately.
issued in
Mr. Rankin prepared a CMEEC 2016 Strategic Retreat pamphlet, similar to that
citing
and
Member",
Board
2015, referencing a celebration of "you as a dedicated and awesome
Exhibit lV'20.
CMEEC's success to derive, in part, from "strategic retreats such as this one."
for forty (40) people
Upon arrival on Thursday, May 0,2016, cMEEc had secured a reservation
with the restaurant
at a local restaurant. The office and Facilities Manager previously confirmed
additional the
that CMEEC could prepay for dinner, and then pay for "cocktails and anything
gratuity),
and then
plus tax and
night of the dinner.,i cMEEc prepaid $9,828 ($1gs per person,
least
pu]o
additional g3,730 for "[c]ocktails and anything else" for a total dinner cost of at
$1

"n Exhibit lV'21.
3,558.

The itinerary for the events did not list any business meetings, and none in fact were
held. The itinerary for Friday and Saturday provided, in part:
Eat, drink be merry, and watch people and races all day with open bar, open
bufiets, and balconies overlooking the paddocks and the finish line. Many times,
is
there are live interviews occurring by national media on our balcony' Wagering
room
with
well,
as
is
available
available within the seating area. Paddock Tour
for twentY on both daYs.

Page 25 of 58

 Exhibit lV-20. When outlining the event to a potential attendee (who at times served as

a

consultant to CMEEC), Mr. Rankin echoed the above statement in the itinerary when he stated
the following:

. . . Thursday night once we check into the hotelwe will have dinner at a
revolving restaurant overlooking the Ohio River and Southern lndiana, called
Revue. Generally, we will hit the streets for a little bit of the street festival that's
going on to celebrate the Derby. Then on Friday we will board a bus about 9:30
and head to the track where we will be dressed in our pink garb for breast cancer
awareness and watch the Kentucky Oaks all day. ln the evening everyone kind
of wanders around so there will be a natural grouping of people based on their
respective appetites. Then on Saturday we get on the bus again in the morning
and spend the whole day at the Derby. We will return back to hotel again about
6:30 or 7 p.m. Again people will pursue their interest on the streets where there
are lots of festivals going on. We will have the limos pick us up on Sunday
morning about 1 1 o'clock or 12 o'clock will take us back to the airport. At the
racetrack itself, we are indoors where you have indoor food and drink all day, and
wagering windows. Then we have the ability to walk outside where one deck
overlooks the finish line and another deck overlooks the paddocks. I also got
tickets this year to have people go down to the paddocks and be next to the
horses :-)

Exhibit lV-22. Mr. Rankin included more vendors and guests for this trip (perhaps due to
CMEEC having prepaid for forty (40) ticket packages). For example, Mr. Rankin made an invite
to a member of Vistage Connecticut (an executive networking and coaching organization to
which he belonged), and then to that individual's daughter and son-in-law. Exhibit lV'23'
The total cost of the trip, paid by CMEEC, was approximately $374,000.

As of May 2016, there were twelve (12) regular Board members3o and seven (7)
alternate Board members, for a total of nineteen (19) Board members.3l Of the forty-four (44)
attendees (some of whom attended only in part), five (5) were regular Board members, three (3)
were alternate Board members, and four (4) were CMEEC employees (Mr. Rankin, Mr. Pryor
and the same two (2) staff members as in 2014 and 2015). The remaining thirtytwo (32)
attendees were spouses, guests and/or others. Seven (7) regular Board members and four (4)
alternate Board members did not attend. Less than half of the total Board (eight (8) of nineteen
(19)) attended, and only about one-quarter of the total attendees were Board members and/or
employees (twelve (12) of forty-four (44). Exhibit lV'7.

5.

2017

-

Cancelled Kentucky Derby Trip

A day after returning from the 2016 Kentucky Derby - on May 9, 2016 - Mr. Rankin
sought to secure forty (a0) ticket packages and paddock tours for the 2017 Kentucky Derby. By
May 23,2016, Mr. Rankin had authorized (and Mr. Pryor approved) a Purchase Agreement for
An alternate member from Groton Utilities also served as a regular member from Bozrah. For purposes of these
numbers, that individual is counted solely as a regular member from Bozrah.

30

31 Although included in the total of twenty (20), one (1) regular member passed away in June 2016, and one (1) alternate
member l6ined in April 2016. Their respective opportunities to participate and/or availabilities for the trip are uncertain.

Page 25 of 58

 June 2016, Mr.
40 ticket packages in the amount of $290,960 (or $7,274 per person), and in
paddock tours in the amount of
Rankin further approved a purchase Agreement for forty (40)
payments totaling about
$g,ooo. Exhibit lv-l and Exhibit lv-24. CMEEC made installment
public criticism of the trips. CMEEC received a
$202,000 before the trip was cancelled following
refund of approximately $90,000, and therefore paid approximately $112,000.

6.

Kentucl<Y DerbY Cosf Summary

(4) actual
Between 2013 and 2016, CMEEC paid approximately $ 1 ,268,500 for four
trips and one (1) canceled trip to the Kentucky Derby'

Page 27 of 58

 B.

The Greenbrier TriPs

Greenbrier, a
ln 2015, Mr. Rankin authorized for CMEEC to pay for two (2) trips to The
Mr. Rankin and
luxury resort in West Virginia with renowned golf courses and other amenities.
Rankin and
three (3) Board members traveled to The Greenbrier in August 2015, and Mr.
of these trips
twenty-two (22) others traveled to The Greenbrier in October 2015. Descriptions
follow.

1.

August 2015 The Greenbrier TriP

and Mr'
On July g,2015, Mr. Rankin sent an email to Mr. Bilda, Mr. James Sullivan
part:
DeMuzzio titled "August dates". This email provided, in
The plan is to have a board strategic retreat in October at The Greenbrier in
it would be beneficial for the four of us to
Wes[ Virginia. prior to such, I thought
-out
and craft the agenda. I have idea of what
visit the itace in August to check it
a quick summary,
I would like to cover and we can use that time to finalize. As
plan
enhanced
an[d]
year
strategic
you
10
our
plan to layout and share with
company'
the
within
on
working
operatingsystem we have been
I

We can evaluate the location and finalize the itinerary' ' '

Exhibit

'

I propose we visit in August during the week, arriving for example on a Monday
evaluating the hotel and Course on Tuesday with dinner that night, more
"u"ning
evaluaiion on Wednesday and then returning Wednesday night. To that end,
plan?
what weekdays in Augusi work well for the three of you to execute this

lV-25.

with
By July i7,2015, Mr. Rankin had secured four rooms at The Greenbrier
7,2015' The room
accompanying golf packages for Tuesday August 4 - Friday August
on that same
deposiis, at $osg per room, totaled 92,636. Exhibit lV-26 and Exhibitlv'z7booking,
the
ilate, Mr. Rankin notified Mr. Bilda, Mr. Sullivan and Mr. DeMuzzio by email of
5,2015;
providing a rough itinerary (arrive on August 4,2015: play two golf courses on August
fallout
play two golf courses on August 6, 2015; tour of the Bunker (an emergency cold war
to
the
a
link
included
shelter) in the morning and fly home on August 7,2015). Mr. Rankin
"You have to check this place
website, noting a video of the accommodations and further stated
He indicated he would secure flights when he received names and
out
with the requested
birthdates of everyone. einioit lv-28. Mr. Sullivan then replied via email
Rankin replied "l
information for flights, and stated "ls your name 'l deserve a raise?"'. Mr.
Exhibit lV'
always like to think so :-). I thought we would love the historic nature of Oakhurst'"
2g. Mr. Rankin informed the Office and Facilities Manager (who reconciled his PCard
Exhibits
purchases and receipts) that these expenses were for the Compensation Committee.

...

lV- 26 andlY-27.

indicated to August 2015 participants and then
The Greenbrier website currenfly (and consistent with what Mr. Rankin
rooms (and contact information for discussion of
meeting
regarding
intorr"tion
[i"it"O
participa"tJll""f
rO"'r
October 201s
of the property' as well as various videos.
aspects
other
purposes)
anO3tt
numbers and
appiopriate rooms for

32

"p""iti"

Page 28 of 58

 On July 19,2015, Mr. Rankin secured roundtrip flights for himself, Mr. Bilda, Mr. Sullivan
and Mr. DeMuzzio between Providence, Rl to Roanoke, VA for $2,552.80, and then also
purchased "ChoiceSeats" benefits33 for each person, totaling an additional $494.00, for a
combined total of $3,046.80. Exhibit lV-29, Subsequent fees related to a flight
cancellation/rescheduling and otherfees totaled $679.10. Exhibit lV-30. Mr. Rankin also
secured a rental car, with an approximate cost of $341. Exhibits lV-27,1V'31 and lV-32,
Exhibit. Mr. Rankin informed the Office and Facilities Manager this expense was to be charged
to the Compensation Committee. Exhibit lV'31.
Mr. Rankin emailed the three others on August 1 and 2,2015 with updates on the
itinerary and information on the dress code. As for itinerary, Mr. Rankin outlined the following:
Wednesday - 8/5 - The Old White 10:12 AM
Wednesday- B/5 - The Greenbrier Course - 4:06 PM
Thursday -816 - The Old White TPC - 8:36AM
Thursday- 8/6 - The Oakhurst Links 1884 - 3:00 PM (believe this is only nine
holes)

Friday 917 -The Bunker Tour

-

9:30 AM

After the tour of The Bunker the group would depart for a 2:30 PM flight from Roanoke. Exhibit
lV-33 and Exhibit lV-34. As for the dress code, Mr. DeMuzzio emailed to the group: "Can I
charge a pair of khakis to cmeec? just kidding". Exhibit lV-35.
The tab at The Greenbrier for lodging and golf for Mr. Rankin, Mr. DeMuzzio, and Mr.
Bilda, and likely also dinners for Mr. Sullivan, totaled an additional $11 ,261.39, which Mr.
Rankin identified as "Greenbrier trip for oct' Retreat Lodging + expenses Drew' John B' Ed D'
Jim S". Exhibit lV-32. Mr. Sullivan's lodging and golf fees actually were not included in this
invoice; he apparently paid for them separately and then submitted a reimbursement request
(which was paid). Between the down payment for four rooms for one night each of $2,636, the
911,201.3g invoice, and a miscellaneous P-Card charge of $153.53, the charges to CMEEC for
The Greenbrierwere at least $14,050.92. Exhibit lV-32. Among these charges were meal
charges to Prime 44 West of $1,100 on August 5, and $900 on August 6 (i.e., two meals totaling
$2,000). Mr. Rankin put additional charges on the P-Card for food ($105.61), rental car
($109.95 and $231.02), and excess baggage fees ($85), totaling $531.58. Exhibit lV-32.
Mr. DeMuzzio, Mr. Bilda and Mr. Sullivan allsubmitted expense reimbursement requests
related to this trip which were approved by Mr. Rankin and paid by CMEEC. Mr. DeMuzzio's
reimbursement requests totaled $390.58, and included additional baggage fees for the flights
($2ZO;, airport parking fees ($44.64), food ($18.44) and mileage to and from the airport
($5Z.SO;. Exhibit lV-36. Exhibit Mr. Bilda's reimbursement request was for an extra baggage
fee of $120.00. The description of the expense was listed as "Extra baggage Greenbrier Comp.
Committee Mtg." Exhibit lV-37. Mr. Sullivan submitted a total expense reimbursement request

33 purchasing "ChoiceSeats" benefits added some enhancement to the seats/travel, but the nature of the particular
enhancement is unclear.

Page 29 of 58

 ($2,658.24), excess baggage fees ($60)'
of $2,754.41, comprised of charges for The Greenbrier
airport food ($8.81) and taxis ($27'36)' Exhibit lV'38'
August 2015 trip to The
ln summary, the known costs to CMEEC associated with the
Greenbrier include (rounded to the dollar):

$3,047Flights/ChoiceSeats(Mr.Rankin/cMEEcP-Card)

$679
$14,051
$532
$391

Flight changes (Mr' Rankin/CMEEC P-Card)
The Greenbrier (Mr' Rankin/CMEEC P-Card)
Food, rentalcar, baggage (Mr' Rankin/CMEEC P Card)
(Mr'
Food, baggage, airport parking, mileage to/from airport
DeMuzzio - Reimbursement)

$120

Baggage (Mr. Bilda - Reimbursement)

$2,658

Lodging/golf at The Greenbrier, baggage, food, taxis (Mr
Sullivan - Reimbursement)

$21,478 =

Total

by Mr' Rankin's counsel as
The Augus l2}15trip to The Greenbrier has been described
,,scouting" trip; Exhibit ll-3; and Mr. Rankin in his email correspondence indicated that the
a
would be a good place for a full Board
intent of the trip was to determine if The Greenbrier
trip have been designated and/or
retreat later in that year. Exhibit lv-25. The costs of this
to the compensation committee.
identified on various CMEEC documents as those ailocated
but were charged against the
These charges were not applied against the Margin Account,
cEo Administrative Account as
Administrative and General Board committee Expense attributable to the Compensation Committee'
when the trip was taken, the
As of July 201b when the trip was booked and August 2015
Mr. Birda (chair), Mr' DeMuzzio,
forowing individuars comprised the compensation committee:
paur yatcko and James smith, with Mr. Rankin serving as the'cMEEc coordinato/'. Exhibit
August 2015 trip.
lv-3g. Mr. yatcko and Mr. Smith neither were invited nor attended the
the following six (6) categories
The charter for the compensation committee identifies
of Committee responsibilities:

1.

Provide the Board Focal Point for the Development of Employee
Evaluation criteria consistent with the Board strategic Plan

2.

Policies
Evaluate Human Resources and compensation strategies and

3.overseeSuccessionPlanningandLeadershipDevelopment
4.

ConductExecutivePerformanceReviewandSetExecutive
Compensation

Page 30 of 58

 5.

Oversight of Employee Benefit Plans

6.

Set Director ComPensation

Exhibit 1V40.
None of these responsibilities relate to coordinating or organizing Board retreats and/or
scouting locations for Board retreats. Only two (2) of the four (4) members of the Compensation
Committee were invited and participated in the August trip, and no Compensation Committee
meetings were noticed pursuant to law or held during the August trip, nor were any minutes
subsequently published.

To summarize, Mr. Rankin coordinated a trip from August 4-August7,2015 with the
then-Board Chair Mr. James Sullivan and two of the four Board members who comprised half of
the Compensation Committee - Mr. DeMuzzio and Mr. Bilda - to The Greenbrier resort in West
Virginia. Mr. Rankin authorized the expenditure of over $21,000 of CMEEC funds for himself
and three (3) Board members to, among other things, travel to and from The Greenbrier
(including, in one case, mileage reimbursement to the airport), dine twice at a luxurious
restaurant at a total cost of $2,000, golf four (4) times and take a tour of an historic site.

2.

October 2015 The Greenbrier Trip

On August 17,2015, a representative from The Greenbrier emailed Mr. Rankin a Letter
of Agreement for "20 Traditional Guest Rooms" from October 20-23,2015. Mr' Rankin
questioned whether "rooms other than the traditional" were available, and the representative
provided Mr. Rankin with a list as follows:
Traditional Guest Rooms at $239.00 per room, per night
Superior Guest Rooms at $279.00 per room, per night
Deluxe Guest Rooms at $316.00 per room, per night
Draper Suites at $359 per room, per night.

Mr. Rankin decided to "go with the Deluxe Rooms if you have enough available. . . . ljust want
to make sure the experience is wonderful for all involved, and those rooms should help make it
.,' Exhibit lV- 41. Due to room availability, Mr. Rankin ultimately signed an agreement
with The Greenbrier for nine (9) Superior Guest Rooms and eleven (1 1) Deluxe Guest Rooms,
with a required down payment of $4,460. Exhibit lV-42. Mr. Rankin also inquired about "gifts
may be able to purchase to have placed in rooms, is there a listing or catalog I can review?"

so.

I

Exhibit lV-43.

Page 31 of 58

 On Monday, September 14,2015, Mr. Rankin sent an email to Mr. Pryor and thirteen
(13) of the eighteen (18) regular and alternate Board members3a inviting them (and a guest) to
participate in a "strategic retreat" in October 2015 at The Greenbrier. Mr. Rankin then
forwarded the emailto two (2) staff members (who also had attended the Kentucky Derby).
Exhibit 1V44. The "high level itinerary" included in the emails identified departure from Groton
Airport on a chartered plane in the afternoon of Tuesday, October 20,2015, followed by a group
dinner; on both Wednesday, October 21 and Thursday October 22,2015, "Member Delegation
work session 9 AM to Noon", followed by individual/group activities and a group dinner; and
departure on a private plane at noon on Friday, October 23,2015. lnvitees were requested to
respond by Friday, September 18,2015. Exhibit lV'44.
By Thursday, September 17,2015, Mr. Rankin had added two (2) non-CMEEC affiliated

individuals (a local, former politician and spouse) as attendees. Exhibit lV-45. As of the
afternoon on Friday, September 18,2015, five (5) regular or alternate Board members indicated
they would attend. Mr. Rankin then invited two (2) of CMEEC's lobbyists, noting that "[i]f you
wish to bring your spouse, you are more than welcome. The treat is ours!" Exhibit lV-46.
These invitees did not attend. He also emailed a consultant, offering that he could bring a
guest; the consultant asked if he would be facilitating anything, and Mr. Rankin replied that they
would consider some exercises after determining the final tally of attendees. Mr. Rankin further
commented "lf you're not familiar with the Greenbrier, take a look at the link. You could bring
the whole family :-)." Exhibit lV-47. The consultant attended alone and made a presentation.
On Saturday, September 19, 2015, when Mr. Pryor indicated that his spouse would not be
joining him, Mr. Rankin replied "[y]ou are welcome to bring another guest, friend or family is you
wish." Exhibit lV-48. On Monday, September 21,2015, Mr. Rankin released three (3) Superior
(versus Deluxe) rooms, thereby reducing the total number of rooms each night from twenty (20)
to seventeen (17).
Mr. Rankin set up tee times for anyone who wanted to golf (and several did golf), and
advised individuals to ship their clubs to the hotel (with expenses forwarded to CMEEC for
reimbursement). ln an October 8,2015 email to all those then scheduled to participate, Mr.
Rankin stated that "[w]e have an excellent agenda set up for the retreat, with a constructive
balance of time to conduct essential business and to conduct essential recreation. . . . Thank
you . . . for all you do all year round in creating a higher performing CMEEC.' Mr. Rankin
included a brochure '2015 Fall Strategic Retreat - Members and Guests Appreciation
Celebration", with an introductory letter that made no mention of the business portion of the

retreat. Rather, Mr. Rankin stated:
I know many of you have checked out the Greenbrier website and learned what
an extraordinary place it is, rich with history and wonderful accommodations for
all to enjoy. We have a whirlwind of opportunities before us once we arrive at the
Greenbrier, with an overwhelming list of activities you are encouraged to utilize,
compliments of CMEEC. Each guest will receive a card to use for all services,
food, drink, etc., during our stay for maximum convenience. The list of available

3a The Office and Facility Manager also was included on the email as a part of coordinating the event. lt is unclear why the
email was not sent to all eighteen (18) Board members and/or if an invitation was sent in some other manner. None of the

five (5) Board members who were omitted from the email attended the event.
Page 32 of 58

 you contact them and schedule
activities follows in this summary, and I suggest
your fun now to secure your adventure'

21 andThursday, october 22'
Exhibit 1v49. The itinerary did include, on wednesday, october

by "individualactivities as desired and
2015 "CMEEC Meeting at d:30AM until 11:30", followed
then a group dinner. Exhibit lv'49.
schedured throughoutihe morning and afternoon", and
plans and snacks for the plane, gift baskets
Leading up to the trip, Mr. Rankin confirmed flight
plans (including authorization for $70-$80
for all the rooms, additional golf tee times, and dinner
Exhibit lV-50'
botles of wine paired with dinners) at The Greenbrier each night.
members, including nine
As of october 20,2015, there were eighteen (18) total Board
NPU had three (3)
(g) regular Board members and nine (9) alternate Board members.
left the cMEEc Board during
members in flux who are not included in this tally. Mr. sullivan
joined as a regular member on october 27 ' 2015
october, and one (1) individual who officially
who officially joined as an alternate
(but attended rhe Greenbrier event) and one (1) individual
rhe Greenbrier event)' of the twentymember on october 27,2015 (and who did not attend
(three (3) of whom had attended
three (23) attendees, four (4) were regular Board members
Board members (one (1) of whom had
multiple Kentucky Derby events), two (2) were alternate
(4) were CMEEC employees (Mr' Rankin' Mr'
attended multiple Kentucky Derby events), four
the Kentucky Derby events)' and
Pryor and the same two (z) staff members who had attended
guests. Twenty (20) people took a chartered
the remaining thirteen (13) were spouses and/or
three (3) others traveled from out of state
flight from Groton Airport on october 20,2015, and

andmetthegroupatTheGreenbrier.onethird(i.e',six(6)ofeighteen(18))oftheBoard

members and emproyees (i.e.,
members attended. Less than harf of the attendees were Board
ten (10) of twenty-three (23)). Exhibit lV'51'
the trip, and no minutes
No meetings were noticed in accordance with the law during
regarding' in general' an
were published. One (1) presentation was made by a consultant
lasted about an hour), and one (1) was
aspect of team-building (which is estimated to have
operating System' Absent
made by Mr. Rankin re-garoing cMEEC',s new Entrepreneurial
four (4) employees attended the
minutes, it is unclear whether all six (6) Board members and
the same day' ln addition to
presentation(s), and whether the presentations were made on
participate in any other recreational or
golfing and dining, attendees also had the opportunity to
to tour The Bunker'
spa otrerings at the resort as they wished, as well as
$19,000; food and
CMEEC incurred room and resort fees charges of approximately
(e.g', golf) fees of approximately
beverage charges of approximately $15,000; recreation
Exhibit lv'52' Retail fees included' in part'
$12,000; and retail fees of approximately $6,500.
purchase of seventeen (17) women's scarves
the gift baskets placed in all the rooms and the
charged to cMEEC, including food
totaiing $2,26034. Attendees incurred fees which were also
fees of approximately $4,500; and
and beverage charges of approximately $6,000; recreation
costs charged to CMEEC from The
retailfees of approiimately $200. exnioit lv-52. The total
october 20-23,2015 trip were $65,448'
Greenbrier (including the g4,460 down payment) for the
Exhibit lv-54;
Exhibit vl-52. crvrEc atso incurred flight charges of approximately $43,000;
35

payment was expressly approved by Mr. Pryor. Exhibit lV'53.
The scarves were purchased by Mr. Rankin and

Page 33 of 58

 and, upon receiving requests, CMEEC reimbursed various attendees for certain expenses,
golf shop
including, for example, the purchase of two (2) shirts and two (2) money clips at the
for approximately $200; and golf club and/or other shipping costs of approximately $300. ln
The
total, CMEEC spent approximately $110,000 on the October 2015 trip to The Greenbrier.
costs were charged against the Margin Account. As noted above, the 2015 approved budget
included a line for,'Expenses" in the Margin Account budget; there was no separate or express
Board
Board approval of the October 2015 trip to The Greenbrier, and it is not referenced in any
minutes.

Page 34 of 58

 C.

CMEEC SPonsored Golf Outings

Between 2013-2016, CMEEC sponsored six (6) golf outings36, paying in full for golf,
prizes, food, gifts, lodging (if requested) and transportation (by and between the golf club and
lodging). These were not charity events37, but golf outings paid in full by CMEEC for some
employees (generally Mr. Rankin, Mr. Pryor and the two (2) staff members who attended other
events), some Board members, vendors and guests.

1.

2013 Golf Outing

On August 9,2013, Mr. Rankin emailed regular and alternate Board members and
stated:
Our next Board meeting is August 22, and based on the fairly light tentative
agenda, it is a great day to sponsor a little team building event and to enjoy the
narrowing days of summer.
To that end, I invite you, and any staff, commissioners, and or guests you may
wish to include, to a golf outing at Mohegan Sun Country Club at Pautipaug. . .

.

I understand not allof us may be golfers, but I would not let that stand in the way
of good team building as there are options to not play, but to engage the other
activities.

After the outing, we will provide dinner and refreshments at the club. For anyone
traveling desiring overnight lodging, please let us know a well and we will
provide. . . .

Exhibit IV-SS. Documentation regarding the number of attendees at this event is not available,
but some documentation regarding costs is available; the cost of this outing was at least
$3,500.38

36 CMEEC paid for the associated expenses from the Administrative and General Board Committee Expense
Administrative budget line.

-

CEO

CMEEC also did sponsor some teams (and sometimes provided hole sponsorships, donated tee-shirts etc.) in various
charitable golf tournaments. ln its forensic evaluation, CohnReznick raised concerns regarding certain of CMEEC's
practices; it is
charitable gifts. The scope of this investigation does not include evaluation of CMEEC's charitable giving
anticipated that the Board will address, as necessary, CohnReznick's concerns.

37

38 Available documentation regarding this event is more limited than that for other golf outings, and the cost listed is the

minimum based on financial spreadsheets from CMEEC.

Page 35

of 58

 2.

2014 Golf Outing

members' inviting them to a team

on June 18,2014,Mr. Rankin sent an email to Board
buildingeventaftertheJu y24,2014Boardmeeting,asfollows:

employees and or key
Specifically, you and any o! your selected
Pautipaug Golf
i6in us for a golf outing at .tne
stakeholder,
"r"inuit"O'to
otflces. The rough ordgr scheduled is to leave
course near cMEic

cMEEcnolaterthanl2:30PMandtostartthecourseevents
will be provided at the end
approximaterv r:ioplrrr. n group dinner

of the

event.

openingtheinvitethisyeartoyourselectedinviteesisawaytotryand
of each others' staff
further enhance;;;;i;;iationships and awareness
those you believe will benefit
and key starenoioett, io feel free to include
from the event and interactions'
ExhibitlV.56'Thirty-six(36)peoplewerescheduledtogolfonJuly24,2014'Asofthatdate,
therewereeighteen(18)regularandalternateBoardmembers.Eight(8)Boardmemberswere
(21)
employees' The remainder of the twenty-one
slated to golf, as well as seven (7) CMEEC
vendors and guests' The total cost of this event'
golfers were employ"", of member utilities,
food' drink and golf was
various gifts (wicking shirts, golf towels' hats)'
including, for example,
approximately $9,500'3e Exhibit lV-57'

Mr' Rankin solicited input from
at the TPC River Highlands in Cromwell'.
The Board held its August 28,2014 meeting
tv-58. At least two (2) Board
Exhibir
r"eting.
Eo"ro
r" gotf after tnl
various Board members regarding the iJo-;nJ*v
intot*"tion to determine whether or not
been unable to locate
members expressed interest; we have
"O"qr"G "OOitioni
this outing in fact occurred
Page 35 of 58
3e

 3.

2015 Golf Outings

ln 2015, CMEEC sponsored three (3) golf outings - one (1) each in June, July and
August. Allthree (3) outings were preceded by Board meetings. The June and August Board
r"Ltingr were held at CMEEC, and the golf events were held at the Mohegan Sun (Pautipaug)
Country Club. The Board moved its July meeting to the TPC River Highlands in Cromwell;
those interested golfed after the meeting.

a.

June 17,2015 Golf Outing

ln March 2015, CMEEC paid deposits for two (2) outings of at least forty-eight (48)
people at Mohegan Sun Country Club, ultimately scheduled for June 17 and August 27,2015.
Mr. Rankin sent an invitation via email on May 15,2015 (the list of invitees is not stated, but it
appears to be to non-Board members and/or non-CMEEC employees) which provides, in part:
Two years ago we started dedicating an afternoon following a Board meeting to
hosting a celebration of success and production by inviting the many people
contributing to CMEEC's success to an afternoon of celebratory team building
golf and fun.
Now, in the third year, we find we have ever-greater reason to celebrate, and
hope you can join us at both, or at the very least, one of the two events, for you
are a valued contributor to our success and your participation would make the
day that much more phenomenal! I realize not all are golfers, but fun can be had
regardless, so do not limit yourself :-)
The general plan is listed immediately below, but obviously to your choosing:
Board Meeting 9:30 to 11:30 (optional)
Lunch at CMEEC 11:30-12:15 (optional)
Tee times starting about '1:30
Golf and cart refreshments 1:30-6
Refreshments, awards, laughter 6 to 7
Dinner, refreshments, elevating laughter 7 to ?

To aid those of us with overzealous "laughter", a vanao is provided and will pick
us up at Norwich lnn and Spa at 12:00 or so and return us at ? (10ish), where
you will have a room at the historic spa inn reserved especially for youa1, so you
may rest safely and enjoy a leisurely morning, or need be, hustle back to the job
thingy. of course, QMEEC treat on all, so being short on change is not an
excuie. you could always bring a golfing, or non-golfing, guest with you, and as
you enjoy the celebration, they could do spa stuff . . . .

40

CMEEC secured a 20 person "party bus" from a local vendor'

41

CMEEC secured a bloc of rooms at the Norwich lnn and Spa'

Page 37 of 58

 Exhibit lv-sg. Mr. Rankin sent out a reminder emailto non-Board members and non-cMEEC
them to
employees on June 1,2015, and also sent an emailto Board members inviting
partner golf
participate on June 17,2015, in the "third annual CMEEC customer and strategic
Board Meeting.' The
outing at Mohegan Sun Golf Club at Pautipaug, immediately following the
emailto Board members also indicated:
The format is the same as previous years, consisting of teeing off at 1:30
(probably shot gun this year), with classic hole contests, prizes, dinner and
iefreshments. ine event usually ends when the Pautipaug Pub has to close
which is approximately 9:30 or 10:00.

***********************************
We are holding an identical outing on August 27, so if you or one or your invitees
is not available, there is another opportunity!
.
Please invite your staff, strategic partners, and customers as you desire . '

.

Exhibit lV-59.
golf outing, including
Approximately forty (40) individuals were slated to participate in the
The
seven (7) of seventeen (17) Board members and eight (8) employees of CMEEC'
with CMEEC vendors
remainder included employees from member utilities, people associated
golf, prizes, giftsa2,
and/or guests unaffiliated with CMEEC. The costs of this event, including
from the course,
meals, b"u"r"g", (inclusive of alcohol), lodging, bus transportation to and
totaled approximately $1 7,000. Exhibit lV'60'

b.

JulY 23, 2015 Golf Outing

River Highlands
CMEEC held its July 23, 2015 Board meeting in cromwell at the TPC
per Mr. Rankin, "[flor
country club at g:30 am. Following the meeting, lunch was provided, and,
at 1:00 pm. You
those staying to participate in the team building, that tee-off event will start
in
time for lunch'"
may invite your guests to join us anytime during the meeting, but certainly
Exhibit lV-61. Mr. Rankin subsequently authorized that the club to prepare lunch for thirty-five
at CMEEC
(35) people, and ptan for twenty-five (25) golfers. The Office and Facility Manager
limit
Pcard
my
up
kick
confirmed the increases and indicated to Mr. Rankin "[w]e may have to
Exhibit lv'61'
again to $15k, just golf is $265 per player, then food, drinks, dinner, etc."
in
Ten (10) regular and one (1) alternate Board member attended the Board meeting
person. lt is unclear who and how many people actually golfed, as no list was available'
(25) golfers participated,
Assuming all eleven (1 1) Board members golfed and that twenty-five
total cost of this golf
less than half of the total number of golfers were Board members. The
outing, inclusive of alcohol, was approximately $11,800. Exhibit lV'62'

over $8,000' Given the volume' these items may
Shirts, golf towels and hats were purchased on June 12,2015, totaling
times'
giveaways
at
other
have alsdbeen utilized as gifts, donations or

42

Page 38 of 58

 c.

August 27,2015 Golf Outing

On August 10,2015, Mr. Rankin sent an emailto Board members reminding them that
"CMEEC is sponsoring the second customer and strategic partner social event on August 27,
immediately following the Board meeting." Exhibit lV-63. The event was scheduled for
Mohegan Sun (Pautipaug) Country Club. Mr. Rankin further informed Board members:
Please feelfree to invite anyone you desire to participate, including any
employees, customers, vendors, or other strategic partners with intent to
continue building a stronger network for our collective success.

Exhibit lV-63. On the same date, Mr. Rankin emailed a number of vendors (e.9., lobbyists,
insurance providers, alternate source energy providers, etc.) who had received notice of the
earlier June 2015 golf outing, stating:
As previously communicated, CMEEC is sponsoring the second 2015 customer
and strategic partner social event on August 27, immediately following the
regularly scheduled CMEEC Board Meeting . . . .
As a customer or strategic partner of CMEEC we are excited for your possible
participation in this fun afternoon as a small token of our appreciation for you and
all you do to help CMEEC succeed . . . .
For those wishing to enjoy the full evening, the dinner generally remains festive

until9:30 or 10:00.
lf you would like a room for the evening, please advise and we will secure one for
you, including your roundtrip transportation from the hotel to the course and

back.....
Exhibit lV-64. Leading up to the golf outing, Mr. Rankin continued to invite others not on the
original invitation to golf, with overnight stays also offered. As a giveaway for the event,
CMEEC also purchased special golf balls which bore imprints of some of the participants' faces.

The CMEEC Office and Facility Manager emailed Mr. Rankin on August 24,2015,
regarding the cost of the event, stating:
Hi Drew - Based on the cost estimate from Mohegan Sun Golf Club, the event
will be $11,250 NOT including the Bar Tab, which could be another $2-3K.
Would you have F&A increase my Pcard by another 12K please (for a totalof
$15K), unless you and I can split on our cards, in which case lwould need
another $7K. Thank you!

Exhibit lV-65. Mr. Rankin had requested and received temporary increases from his original
g10,000 monthly limit on his P-Card since 2013, and on August 10, 2015, Mr. Pryor authorized
a permanent monthly limit increase to $25,000. Mr. Rankin then requested another increase on
August 25, 2015, stating:
Due to combined event costs within same calendar period, please temporarily
(until Sept 1) my P Card limit from $25,000 to $35,000.

Page 39 of 58

 with Board
The Board trip, coupled with the Board customer Event, coupled
issue.
an
noom f-ogo Art Costs, the total may be compromised and cause

Exhibit lV-66.
participate in the golf outing,
Approximately sixty-nine (6g) individuals were slated to
ten (10) emproyees of CMEEC. The
incruding at six (6) of seventeen (17) Board members and
people associated with CMEEC vendors
remainder included employees from member utilities,
event, including golf, prizes, gifts,
and/or guests unaffiliated with CMEEC. The costs of this
to and from the course'
meals, b"u"r"g", (inclusive of alcohol), lodging, bus transportation
totaled approximately $20,000. Exhibit lV-67'

d.

Summary 2015 Golf Outings

above and paid for in full
The three (3) CMEEC golf outings sponsored in2015, outlined
by CMEEC resulted in a total cost to CMEEC of approximately $49,000'

Page 40 of 58

 4.

2016 Golf Outing

At the end of 2015, CMEEC began coordinating a golf outing for July 22,2016;this
would be the sole outing sponsored by CMEEC in 2016. ln email correspondence with the
Mohegan Sun Country Club, the Office and Facility Manager indicated that the CMECC outing
on July 22, 2016, would be the "big one . - .72 people, 1 p.m. tee off. lf we decide on a smaller
one, we will schedule that sometime in the future." Exhibit lV'68. CMEEC submitted a $500
deposit on December 30, 3015, for 72 golfers at $85.00 per person, for an anticipated total of
$6,120.
On June 17,2016, Mr. Rankin emailed Board members to notify them that CMEEC
would sponsor an "Owner / Customer / Stakeholder Appreciation Event" at the Mohegan Sun
Country Club following the Board meeting on Friday, July 22,2016. Exhibit lV'69. Mr. Rankin
further indicated that CMEEC was sponsoring a "social dinner meeting" at the Norwich lnn and
Spa on Thursday, July 21,2015, at 6:30 p.m. to catch up with a retired Board member, and
stated that CMEEC "would provide rooms for anyone desiring such for an overnight stay"
following the social dinner. Mr. Rankin separately noted that the dinner "is just social and not a
formal board meeting . . . it is just a social cause." Exhibit lV-70. CMEEC reserved blocs of
rooms on Thursday and Friday night.

Mr. Rankin, himself or through the Office and Facilities Manager and others, extended
invitations to non-CMEEC Board members or employees, and approximately eighty-eight (88)
individuals were scheduled to play on July 22, 2016. Of the nineteen (19) regular and alternate
Board members as of July 22,2016, six (6) participated in the golf outing. Approximately ten
(10) golfers were employed by CMEEC, and the remainder were employees of member utilities,
vendors and guests. The costs of this event, including the social Board dinner on Thursday,
golf, prizes, gifts, meals, beverages (inclusive of alcohol), lodging, bus transportation to and
from the course, totaled approximately $36,500. Exhibit lV'71.

Page 41 of 58

 D.

Overall spending authorized by Mr. Rankin and/or Pryor on Kentucky
Derby, The Greenbrier, Golf Outings and other non-operational expenses

Through P-Cards, wire transfers and/or checks, Mr. Rankin and/or Mr. Pryor (who
served as the expense approver for Mr. Rankin's P-Card use) also authorized CMEEC spending
on, among other things, holiday parties, holiday and/or other giftsa3, music and food for office
clean up and organization, and food for Performance lnformation Forum ('PlF') meetings.a
Gift cards were purchased in the thousands of dollars, whether for employee bonuses or
rewards, for golf prizes, and/or for other known and/or unknown purposes (P-Card statements
and/or receipts did not always specify the purpose for these purchases). Of the known
purposes for gift card purchases, documentation does reflect that in December 2014, Mr.
Rankin authorized the Office and Facility Manager to purchase $6,000 in American Express gift
cards for a retiring member of the Board; to be clear, the individual was not an employee of
CMEEC, but was a Board member who worked for and was retiring from a member community
(and who in turn was required, per CMEEC policy at that time, to resign from the Board). The
notes on the supporting documentation for the pertinent P-Card statement indicate that the
$6,000 charges were for gift cards for a Board member's "retirement Qty 2 - $3,000 each", to be
allocated to the A&G Board Committee Expense - CEO Admin budget line.as Exhibit lV'72.
ln addition, Mr. Rankin utilized his P-Card on a regular basis for meals for himself and/or
others, and he appeared to spare no expense in this regard. For purposes of providing a
perspective on Mr. Rankin's use (approved by Mr. Pryor) of his P-Card for meals and beverages
we focused on 2015, and excluded any charges for the Kentucky Derby, The Greenbrier and/or
golf outings (which are addressed above).
P-Card policies require the submission of itemized meal receipts, and prohibit the
purchase of alcohol. Despite the policies, Mr. Rankin did not submit itemized meal receipts
when using his P-Card, and as a result, specific alcohol (or any other) purchases are not listed.
However, Mr. Rankin consistently authorized CMEEC funds for alcoholic beverages (at the
Kentucky Derby, The Greenbrier and the golf outings), and attendees of certain small group
meals confirm that Mr. Rankin freely purchased alcoholfor anyone who wanted it. lt is more
than reasonable to find that meal receipts for a few people at significant amounts - in
consideration of the locations of the meal and the menu - included the purchase of either very
expensive and/or high quantities of alcohol. Mr. Rankin utilized his P-Card for non-catered
Such gifts included, for example, fruit and/or flower baskets to Board members and/or others at holidays and/or for get
well wishes, etc.
a3

We note this spending as a component of the climate of spending at the highest management levels within CMEEC, but
have not carefully quantlfied it, and leave to CMEEC consideration of, for example, the propriety of the selection of vendors
(e.g., should theie be any restrictions on use of companies affiliated with CMEEC through Board members and/or
im-pioyeesy, nature of item or service purchased (e.g., was the purchase itself for a legitimate purposes) and scope of
spending oh these items (e.g., extent or amounts). Separate from these costs, CMEEC utilized a company owned and/or
operatej by Mr. Bilda's spouse for certain purchases (e.9., t-shirts, hats, custom golf balls) forvarious outings and events;
the costs alsociated with the items are included in the analysis of the costs of the outings and events outlined above.

aa

Mr. Rankin initially authorized the purchase of a $5000 American Express gift card, but when the- Office and Facility
Manager indicated that the largest denomination was $3000 and suggest that she purchase a $3000 and $2000 gift card,
Mr. Rankin replied "get him two 3000 dollar."

a5

Page 42 of 58

 meals for groups under ten (10) people (and often-times under five (5)) in the amount of at least
$17,000 in 2015 alone. These charges included, for example:
February 26,2015

Two (2) receipts, totaling $1009, include references to'Sterling"
(which apparently involved a biomass project) for seven (7)
people (four (4) employees and three (3) Board or member utility
members). 2019 entr6e prices at this restaurant are
approximately $25-$40; coupled with appetizers and/or dessert,
the total cost of $1009 for seven (7) people more likely than not
includes alcoholic beverages. Further, the charges were broken
into one for $850 at 10:16 p.m., and a second for $159 at 1 1 :08;
it is reasonable to believe that the second charge was solely for
alcoholic beverages. Mr. Rankin did not submit any itemized
receipt.

April2l ,2015

"Coaching Session" with an interim CEO at the Griswold lnn, and
P-Card charged for $84 at 6:40 pm; followed by an additional
charge for Mr. Rankin and two (2) others for continued coaching
at the Griswold lnn, with his P-Card charged for $232 at B:38 pm.
Total meal cost for three (3) people of $316. 2019 dinner prices,
coupled with appetizers and/or dessert alone at the Griswold lnn
do not reasonably equate to this amount for three (3) people in
the absence of alcohol. Mr. Rankin did not submit an itemized

mealreceipt.
May 21,2015

Mr. Rankin wrote on two (2) receipts from a restaurant at the
Norwich lnn and Spa, in the total of $292, "Biz Dev - Drew
Michael". 2019 entr6e prices at this restaurant are
approximately $25-$40; coupled with appetizers and/or dessert,
the total cost of $292for two (2) people more likely than not
includes alcoholic beverages. Mr. Rankin submitted a third
receipt for $39.00 just after 11 p.m., with the only notation "P
Card." Mr. Rankin did not submit itemized receipts.

September 1,2015

"Neppa event resolution", with Mr. Rankin's P-Card swiped three
(3) times at a restaurant at the Norwich lnn and Spa for himself,
Mr. Bilda, a staff member, and the staff member's significant
other in the total amount of $965.00. A staff member confirmed
that alcoholwas purchased at this dinner. Mr. Rankin did not
submit an itemized receipt.

September 21,2015

Mr. Rankin wrote "Drew Jim John", with no other explanation for
a $359 meal at a restaurant at the Norwich lnn and Spa. The
cost for three (3) people reasonably includes alcoholic
beverages. Mr. Rankin did not submit an itemized receipt.

December 15,2015

Mr. Rankin wrote "post holiday party" and incurred a charge of
$152 at a restaurant at the Nonvich lnn and Spa for himself, Mr
Bilda and his spouse, and two (2) staff members and their
significant others. This charge occurred after the CMEEC
holiday party and reasonably was for alcoholic beverages.

Exhibit lV-73

Page 43 of 58

 Of note, the only instance discovered where Mr. Rankin acknowledged an "accidental"
use of his P-Card occurred in April 2015.46 Mr. Rankin used his P-Card at an airport and
received an itemized receipt for "G-Morn Shiraz" - i.e., wine - totaling $13.75. Exhibit lV-74. lt
is unclear why Mr. Rankin identified this purchase as an "accidental" use, but it is an instance,
unlike others, where an atcohol purchase, which is prohibited under the P-Card policies, is
clearly identified on the receipt. CMEEC has no documentation confirming that Mr. Rankin
actually repaid CMEEC for this purchase.
Although we did not analyze as closely Mr. Rankin's use of his P-Card for meals in other
years, his pattern of use in 2015 is consistent with his authorization of significant amounts of
CMEEC money on meals and alcoholic beverages for the Kentucky Derby, The Greenbrier and
golf outings; there is no reason to believe that his P-Card use in other years differed in nature
from his spending in 2015.a7 The following - focusing only on 2015 - outlines the type and
approximate extent of spending, outside of operations, authorized Mr. Rankin and/or Mr' Pryor:

2015

Kentucky Derby - MaY
Mohegan / Pautipaug Golf - June
TPC River Highlands Golf - July
The Greenbrier (4 person trip) - August
Mohegan / Pautipaug Golf - August
The Greenbrier (23 person trip) - October
Meals/alcohol on Mr. Rankin's P-Card

$403,000
$17,000

Total

$599,800

2015

2015
2015
2015
2015
-2015

$1

1

,800

$21'000
$20'000
$1 10,000

$17,00048

We combined our review of Mr. Rankin's P-Card statements for 201 3-2016 with an historical review by CMEEC's financial
staff of Mr. Rankin,s entire p-Card use, and identified this as the sole instance of a reported "accidental" use of the P-Card.

46

Of note, on several occasions, Mr. Rankin and/or Mr. Pryor requested increases on Mr. Rankin's P-Card limit, which
started at $10,000 per month and escalated, at times, to $40,000. Exhibit lV'75'
a?

The documentation submitted by Mr. Rankin in support of his use of his P-Card in this regard never included itemized
receipts, often lack specifics that would allow for a determination if the charges were directly related to accomplishing
business objectives, and the amount, at times, reasonably lead to the conclusion that alcohol was purchased.

a8

Page 44 of 58

 E.

paymenb for andlor reimbursements to James Sullivan for certain travel
and accompanying expenses between 2011'2015

James Sullivan was a Director on the CMEEC Board of Directors from 2001 to 2015; in
his professional life during that period, he worked as a lobbyist.4e Neither Mr. Sullivan nor his
firm was ever a registered lobbyist for CMEEC, but as member of the Board of Directors
between roughly 2009-11, Mr. Sullivan did act for and/or on behalf of CMEEC, along with
employees and others associated with CMEEC, in addressing legislators and/or government
of1cials on a fuel cell project involving the federal government, and received reimbursement for
travel expenses. Exhibit lV'76'
ln its audit, CohnReznick found that $66,000 had been paid by CMEEC to Mr. Sullivan
between 2013-2015 for "lobbying and other expenses."So As part of that $66,000, Mr' Sullivan
was paid for Board participation consistent with CMEEC policy. Exhibit lV'77. Mr. Sullivan
also requested and received reimbursement for certain Kentucky Derby and The Greenbrier,
trips, as did others.
Separate from the 2013-2015 payments outlined above, Mr. Rankin authorized
reimbursement to Mr. Sullivan during this time frame for certain travel and expenses for which
no documented reason, business or otherwise, exists and/or can be found. Mr. Sullivan made
several trips to Washington, D.C. (where his spouse serves as member of the House of
Representative from California) for which there are no documents (such as Board meeting
minutes) explaining what he was doing to justify direct payment or reimbursement by CMEEC.
Exhibit lV- Z8 (Examples from 2013,2014 and 2015). Mr. Rankin (directly to staff and through
his attorney) has maintained that Mr. Sullivan's political connections were of significant benefit
to CMEEC; Exhibit ll-5; there is, however, no documentation to support how his travel at
various times was utilized for CMEEC's benefit.

Of note, CMEEC had a history of approving all of Mr. Sullivan's requests for expense
reimbursement; as described above, when Mr. Sullivan inquired about travel plans to the 2014
Kentucky Derby, Mr. Rankin instructed the Office and Facilities Manager that Mr. Sullivan could
"fly in and out from and to wherever and whenever", and if Mr. Sullivan wished to arrive early or
stay late, then CMEEC "would have to find [a] hotel room for him." Exhibit lV'10. Further,
rather than pursue reimbursement for all travel expenses, Mr. Sullivan utilized the Office and
Facilities Manager to book travel which did not have an express, documented business
Side issues related to Mr. Sullivan's professional work as a lobbyist arose in the course of the investigation- Mr. Sullivan's
lobbying firm received payments from entities (e.g., the Metropolitan District Commission ("MDC') and Brightfields, LLC)
which e-ntered into contracts with CMEEC at the tjme Mr. Sullivan was receiving lobbying fees from those entities. While the
optics of these transactions are muddied due to Mr. Sullivan's position as a lobbyist, we camot state, after a general
overview of the transactions, that the transactions were not independently vetted by CMEEC and/or that Mr' Sullivan
inappropriately utilized any influence to cause CMEEC to enter into the contracts. Review of the MDC transaction also
inciJoed consideration of ihe fact that, at that time, the son of the Chair of the MDC was employed by the lobbying firm
per year, but no
Medici, LLC - utitized by CMEEC for state lobbying work. CMEEC paid Medici, LLC approximately $48,000
it is unclear
While
written
or
oral.
report,
to
make
any
Board
the
before
ever
appeared
nlo
apparenfly
1lc
one from Medici,
what work product Medici, LLb proviOeO C[4EEC, and while the optics again are problematic, the investigator cannot find,
on the basis of the information reviewed, that Medici, LLC or a particular lobbyist inappropriately utilized any influence to
cause CMEEC to enter into the contract with the MDC. CMEEC did not renew its contract for service with Medici in 2019.
4e

-

50

For ease in review, this investigation focuses on the time period of the forensic evaluation.

Page 45 of 58

 purpose. lt is unclear why Mr. Sullivan may have been given such treatment by CMEEC.
CMEECs 2O1g-2O15 reimbursements to and/or payments on behalf of to Mr. Sullivan, with no
documented reason, are approximately $20, 000-$25,000.

Page 46 of 58

 F.

lmpact to CMEEC of the activities outlined in the indictment, this
investigation and the oral andlor written sfatemenfs made by Mr. Rankin to
the media andlor public officials regarding the Kentuclcy Derby trips,
Greenbrier trips andlor legislative changes to the statute creating CMEEC

The impact to CMEEC of the activities outlined above, as well as the fact of the
indictment and this investigation, cannot be objectively quantified. Since October 2016, when
the Kentucky Derby trips were reported in the news, through ethics investigations in the City of
Groton and City of Norwich, through an FBI investigation and grand jury process, through
legislative changes to CMEEC's enabling statute in 2017 and continuing consideration of
additional legislative changes, through the issuance of indictments, and through this
investigation process, CMEEC personnel and service providers have spent incalculable
amounts of time, energy and effort in response to the fallout from the activities. There is no
reasonably foreseeable end to these costs of money, time and personnel. CMEEC has been
heavily criticized in the media and state legislature since October 2016; its value and reputation
have been, and continue to be, tested, even to the point of calls for its dissolution.
When the story regarding the Kentucky Derby broke in 2016, Mr. Rankin made
numerous comments to the press, along with statements before the City of Groton Utilities
Commission. Exhibit lV-79 and Exhibit lv-s. ln these statements, Mr. Rankin, for example,
defended the "retreats" at the outset, maintained that they provided a valuable benefit to
CMEEC, and commented on hundreds of hours put in by the Board in making CMEEC a
success. He subsequently provided written testimony to the state legislature on February 21,
2017, regarding proposed changes to CMEEC's enabling statute and indicated, in part:
As CEO, I created the retreats to try to foster a more collegial atmosphere and
provide a forum to employees and Board Members as an opportunity to build
greater trust and personal insight on a less formal basis. I now appreciate these
specific forums were not in the best interests of CMEEC and I am
professionally responsible and accountable for the adverse consequences
of my bad judgment in these business decisions. I am sorry for my actions
that are causing such harm, and will work to ensure we restore the full faith
and confidence of all stakeholders.

Exhibit

lll-2.51

ln June 2017 , the Connecticut legislature passed Public Act ("PA") 17-73, modifying the
enabling statute for CMEEC and placing various restrictions and oversight on CMEEC's
operations. On May 30,2017, at 10:46 p.m., the eve of a vote by the state Senate on the bill
that became PA 17-73 (Senate Bill 4), Mr. Rankin sent an emailto state Senators Cathy Osten
and Paul Formica which was highly critical of that bill (as well as Senate Bill 413, also aimed at
sl While Mr. Rankin stated in February 2017 that he had taken responsibility for exercising "bad judgment" and the
consequence of the same, his position in March 2019, as expressed through his attorney, is a denial that he "violated any
law, engaged in any misconduct, violated any agreement, or that his performance was deficient in any regard." There is no
mention of Mr. Rankin exercising "bad judgment" or taking responsibility for the consequences of the same in the letter from
his attorney. Exhibit ll-5.

Page 47

of 58

 to be a "myopic and single
CMEEC). Mr. Rankin considered certain of the proposed legislation
legislation as follows:
entity interest sponsored by Wallingford"s2 and then described the
personal.
we all know this is nothing more than senator Somers inflicting what

of Groton, and.
oaseo pain and punishme-nt she can to Groton Utilities, the city
principles
of doing what
your
CMEEC, in concert with Wallingford, and I call upon
in
actively
Connecticut
is right for your communities and the greater state of
defeating this bill. . . .
and these punitive, self-centered
I believe in you and trust you to do what is right,
-and
will be steadfastly opposed and
dimension,
every
*rong in

amendment"
"r" anl our sirmember municipalities for the contractual
fiiijateO by CMEEC
interference theY rePresent.

regarding
Exhibit lv-go. on May 31,2017, the state Senate passed certain of the legislation

Rankin a letter criticizing his
CMEEC, and six (6) members of the legislatures3 sent Mr.
"words were hurtful
questioning of their impartiality as "offensive and inaccurate", stating that his
officer of CMEEC", and
and inaccurate and show you are unfit to remain as Chief Executive
Rankin's email and the
requesting an apology to Senator Somers. Exhibit lV-81' Mr'
news coverage for cMEEc'
legislature,s reaction were the subject of additional unflattering

Exhibit lV-82.
for example,
As CMEEC continued to address the fallout from the trip through,
with the provisions of PA 17development of new policies regarding retreats and/or compliance
With the indictments,
73, the media continued to publish stories regarding the same.
pryor on administrative leave (prior to his retirement) and this
placement of Mr. Rankin and Mr.
ln late November 2018,
investigation, 6MEEC remains in the spotlight for negative reasons.
"Rating watch Negative", citing the
Fitch Ratings placed the A+ longterm rating for CMEEC on
indictment, this investigation and the fact that:
and
CMEEC has a small management staff. The sudden absence of the cEo
the
retiring cFo is likely to place additional time and capacity burdens on
the
to
support
needed
work
remaining staff, particularly in light of additional
internal investigation'

while cMEEC's
Exhibit lv-g3. ln Decemb er 2018, Moody's lnvestment Services noted that

,,core

course", the indictments are:
business fundamentals continue to be transacting in normal
and
clearly a credit negative development, raise governance related issues,
business
increase the potential for future strain on internal and external

relationshiPs....

Exhibit lV-84.
somers and pending
At the time of the incident in May-Ju ne 2017 regarding senator
Group" and stated in part:
legislation, Mr. Rankin emailed the "CMEEC Combined Distribution
CMEEC. Wallingford and CMEEC were in the midst of
The Town of Wallingford has previously been a member of
departure from CMEEC.
Wallingford's
to
related
arbitration proceedings regarding issues
Sen. Len Fasano, Sen. Gary Winfield, Rep' Lonnie
Formica,
53
Osten
Cathy
,-S"n.
Sen'
were
('6)
legislators
The six
Reed and ReP. Laura. HoYdick.

52

i"ir

Page 48 of 58

 Despite allthe chaos around us, l, Team One, and our Board, appreciate ?l!yoq.,
will
&"iyO"y to "Energize Customer and Community Prosperity', and as. this
you
for
thank
you
and
greatness
create,
undoubtediy pass, siay focused on the
all you do each and every daY'

Jo

pass is
(Emphasis added). Exhibit lv-gs. Exacfly what Mr. Rankin meant by "this'will
from certain of Mruncertain, but the acrimony and negative impacts to CMEEC flowing
Rankin's actions and/or statements have not ended'

Page 49 of 58

 v.

Analysis

A,

Overuiew

The investigator has sought to identify as many objective facts as reasonably possible to
allow a fair analysis of the conduct of Mr. Rankin and Mr. Pryor. The investigator relied heavily
on documentation requested and received from CMEEC.s4 Mr. Rankin and Mr. Pryor did not
consent to interviews, and others declined interviews or provided limited information. While
there is no guarantee that all objective facts pertinent to the employment of Mr. Rankin and Mr'
pryor have been identified, the nature and scope of the information gathered allows for a fair
analysis of the relevant conduct of Mr. Rankin and Mr' Pryor'
As described in Section lll, there are many external (e.9., the enabling statute) and
internal (e.g., CMEEC By-Laws; CMEEC policies and procedures;job descriptions; employment
contract provisions) documents that govern the employment of Mr. Rankin and Mr. Pryor. The
same employment policies and procedures that apply to other CMEEC employees apply to Mr.
Rankin and Mr. pryor; they signed off on CMEEC's Personnel Policy Handbook and P-Card
policies and procedures, and they are bound by such policies as no conflicts exist with their
em ployment agreements.
The employment contracts of Mr. Rankin and Mr. Pryor specifically identify certain forms
,,cause,,for termination from employment, and they also both cite the more generic "willful
of
misconduct". As to specific forms of cause, Mr. Rankin's agreement, as noted in Section lll,
identifies cause, in pertinent part, as:
(i) any act or omission that constitutes a breach by Mr. Rankin of any of his
obligations under this Agreement; (ii) the failure or refusal of Mr. Rankin to
perform the duties required of him as an employee; (iii) any violation by Mr'
Rankin of any law or regulation which is materially related to the business of
CMEEC. . . or any perpetration by Mr. Rankin of a common law fraud; . . . .

Exhibit lll-5.
part, as
Mr. pryor's contract, as noted in Section lll, likewise identifies specific cause, in relevant
follows:

.

(iv) continued failure to perform the duties or discharges his obligations
described in Section 2 hereof or negligence in the manner of performance of his
duties or persistent failure to perform his duties at a competent level and
standard expected in accordance with the quality and quantity normal for the
..

position of the KeY EmPloYee . . .

.

Exhibit lll-6.

5a

presented and/or
The investigator reserves the right to update this report should additional, material information be

become available.

Page 50 of 58

 These specific provisions are broad enough to include as "cause" (in addition to any
law,
cause established through violations of certain internal policies), violations of applicable
('FOIA'),
statutes
Act
lnformation
including, but not necessarily limited to, the state Freedom of
prohibiting civittheft, statutes and/or common law outlining the fiduciary duties and obligations
of
to CMEEC held by Mr. Rankin and Mr. Pryor in their capacities as key employees and officers
properly
CMEEC. As to the FOIA, meetings and/or committee meetings of CMEEC must be
noticed and minutes published in timely and accurate fashionss; employees at the management
levels of Mr. Rankin and Mr. Pryor are expected to be aware of such requirements.
With regard to the concept of fiduciary duties, a fiduciary owes its employer the duties of
good faith and trust. A corporate officer occupies a fiduciary relationship to the corporation;
the
because the officer occupies a position of the highest trust, the officer is bound to exercise
have
utmost good faith and fair dealing in all his relationships with the corporation.s6 Courts
or
mismanaged
found corporate officers to have breached their fiduciary duty when they
misused corporate funds. For example, in Voll v. Dunn ,2014WL7461644, the trial court held
"as his personal ATM
that corporate officer violated fiduciary duty when he used the company
machine." /d.57 Generally, when a breach of fiduciary duty is alleged, and the allegations
proof shifts to the fiduciary to
concern fraud, self-dealing or a conflict of interest, the burden of
prove fair dealing by clear and convincing evidence's8
Fiduciary relationships existed between Mr. Rankin and Mr. Pryor and CMEEC' This
means, in part, that their relationship with CMEEC is characterized by a unique degree of trust
for their
and confidence placed in them. Mr. Rankin and Mr. Pryor were employed expressly
expertise, as expressly outlined in the By-Laws:
The Chief Executive Officer shall be the principal executive Officer of CMEEC
with full responsibility for the planning, operations, and administrative affairs of
cMEEC and the coordination thereof pursuant to policies and programs
approved by the Board of Directors from time to time ' ' ' '
and

The Chief Financiat Officer shall be the principalfinancial Officer of CMEEC with
full responsibility for financial planning and reporting, Treasury function, debt
issuance, credit management, and the coordination thereof pursuant to policies
and programs approved by the Board of Directors from time to time, and shall be
the agent for financial service on CMEEC'

55

posting and/or publishing obligations
other statutes, including cMEEC's enabling legislation, may impose additional

beyond those set forth in the FOIA.
56

Conn' App' 59 (2017)'
See, e.g., Villaqe Mortqaoe Co. v. Veneziano. 2016 WL 720220, affd, 175

57

See also 12 Conn. Prac' UnfairTrade Practices S 4'13'

268 Conn' 441, 455-56,844 A'2d
Villaoe Mortqaqe Co. v. Veneziano. supra, footnote 56, citing C?dle Co. v. D'Addario.
836 (2004).

58

Page 51 of 58

 Mr. Rankin and Mr. Pryor, employees and officers, occupy positions of the highest trust and are
bound to exercise the utmost good faith and fair dealing in their respective relationships with
CMEEC.
Of note, Mr. Rankin's attorney has asserted that Directors approved budgets that
included money for, and attended, "retreats" that are under review here, and as such, deemed
the retreats acceptable to CMEEC.5e However, directors of a company must necessarily rely
upon others to manage the dayto-day affairs of the company, and they are not required to
suspect the fidei1y or skill of those whom they have carefully selected and properly appointed
as officers and employees.60 The CMEEC Directors thus could properly assume that each of
these employees was working exclusively in CMEEC's interest - complying with Directors'
financial policies in accounting for expenses and/or seeking and receiving legal advice
regarding the propriety of expenses - and was not pursuing his own interests. Directors are not
guarantors of the efficiency or integrity of an employee and have a right to rely upon the
employee's representations, conduct and honesty. ln turn, an officer's obligation to maintain his
fiduciary duty, integrity and honesty is not extinguished because of the actions of one or more
directors in actively participating in certain questionable activities supported or organized by the
officer.6l

See. e.g., 188 Am. Jur. 2d Corporations g 1400 (in accordance with the general principle that there can be no ratification
public policy may
of illegal transactions, onty those unauthorized acts that do not violate the corporate charter, state law, or
be ratified by acquiescence); Novella v. Hartford Acc. & lndem. Co.. 163 Conn. 552, 561-63 (1972) (waiver is the intentional
relinquishment of a known right. To constitute waiver there must be both knowledge of the existence of the right and
intention to relinquish it. Waiver involves the idea of assent, and assent is an act of understanding. This presupposes that
the person to be affected has knowledge of his rights, but does not wish to assert them. lntention to relinquish must appear.
Where one lacks knowledge of a right, there is no basis upon which a waiver of it can rest.) (lnternal quotations and citations
omitted.); 13 Williston on contract $ 39:28 (for there to be a waiver implied from conduct there must be an intent to waive,
and the must be clearly manifested, and cannot be inferred from doubtful or equivocal acts or language; there must be a
clear, unequivocal, and decisive act of the party who is claimed to have waived its rights; an implied waiver may arise only if
the actions or conduct of the person against whom the waiver is asserted are inconsistent with anything but an intention to
waive); Communitv Collaborative of Bridoeoort. lnc. v. Ganim. 241 Conn. 546,562 ('1997) (ratification in a given case
depends ultimately upon the intention with which the act or acts, from which ratification is claimed, were done); 188 Am' Jur.
2d Corporations $ 13g5 (a board of directors is without power to ratify what it cannot do directly or what it could not authorize
.tgB Am. Jur.2d Corporations
to be done initially);
S 1395 (there may be no corporate ratification of a director's self-dealing
without full disclosure. To prove ratification by a corporation, it must be shown that the governing body had full knowledge of
just knowledge on
all the material facts in connection with the transaction in question and that knowledge must be more than
2d
Corporations
purported
18B
Am.
Jur.
ratification);
of
the
$ 1453 (The
the
subject
acts
are
part
whose
of the agents
the
ratification
does not
and
authority,
an
officeis
outside
or
to
acts
vires
acts
judgment
to
ultra
not
apply
rule
does
business

5e

apply to such actions by alleging ratification)'

60

See Conn. Gen. Stat. $ 33-110a(b); 188 Am. Jur. 2d Corporations S 1448'

The task at hand is to assess issues related to the employment of Mr. Rankin and Mr. Pryor, not to evaluate
independenfly the actions and/or omissions of the Board of Directors. This review requires consideration of whether and/or
how the Boaid's actions and/or omissions impact the evaluation of Mr. Rankin and/or Mr. Pryor; such consideration,
however, is not a statement that the Board, or individual Board members, acted within or outside of their prescribed roles.

61

Page 52 of 58

 ln addition to fiduciary obligations, Mr. Rankin and Mr. Pryor are required to comply with
other laws governing emptoyee use of employer money, such as statutes relating to civiltheft.
Civil theft - defined in Connecticut General Statutes S 52'564 as stealing the property of
another - requires proof of a preponderance of the evidence and is synonymous with criminal
larceny.62 Criminal larceny, per Connecticut General Statutes $ 53a-119, occurs when a person
"with intent to deprive another of property or to appropriate the same to himself or a third person
. . . wrongfully takes, obtains or withholds such property from an owner." Embezzlement, which
is a type of larceny, occurs when a person "wrongfully appropriates to himself or to another
property of another in his care or custody." See, Conn. Gen. Stat, $ 53a-119 (1).
Embezzlement generally involves an individual, who by his agency or other confidential
relationship, has been entrusted with the property of another and wrongfully converts it to his
own use.63
Finally, as to "cause" established by willful misconduct, Mr. Pryor's contract prohibits
"willful, continued material misconduct", while Mr. Rankin's contract prohibits:
. . . any other willful misconduct by Mr. Rankin which is injurious to the financial
or' or is otherwise injurious to the GMEEC or anv

:lH $;;,!;:i;t";",'i"1$ion

This generic "willful misconduct" is not defined in the agreements, but case law describes it as
intentional, wrongful conduct without excuse; it is done purposefully with knowledge, or is of
such character that it demonstrates a reckless disregard of the consequences.oa
ln short, the conduct of Mr. Rankin and Mr. Pryor described above, in many instances,
reflects disregard for rules, policies, procedures and law; negligence or inattention to job duties
relating to finances and/or CMEEC money; failure to perform various job duties and/or breach of
contract relating to job duties; and/or misuse and/or mismanagement of CMEEC funds (and
including, in the case of Mr. Rankin, civil theft).65 Such conduct falls within the definitions of
"cause" in their contracts, whether meeting the specific bases for "cause" or falling within the
more generic "willful misconduct." A brief, but more detailed, analysis of the conduct follows'

62

see

ElgcMlLtL_@b@lL

120 Conn. App. 690, 700 (201 0); Lauder v. Peck. 1 1 conn. App. 161 ' I 65 (1987).

See, e.g., State v. Lizzi. 199 Conn. 462,467 (1986); see also Sullivan v. Thorndike, 104 Conn. App.297,306-07' cert.
denied, 285 Conn. 907 (2008).

63

See, e.g., Soucv v. Wvsocki. 139 Conn. 622,628 (1953); Greene v. Metals Sellinq Corporation, 3 Conn. App.40,44
(1e84).

6a

Mr. Rankin's attorney notes that Mr. Rankin's performance should be considered by the Board in making any
determination regarding his employment. Exhibit ll-V. lt is appropriate for the Board to consider Mr. Rankin's performance
(positive and/or iegatiie) when miXing such a determination. Performance that may generate or enhance employer
ieuenue, however, does not in turn authorize an employee to violate employer by-laws, policies, procedures and/or the law

65

related to employer funds.

Page 53 of 58

 B.

AnalYsis- KentuckY DerbY TriPs

The Kentucky Derby facts are replete with instances in which written policies established
by the Board and/or management were ignored and/or violated, by Mr. Rankin and/or Mr. Pryor.
CMEEC, as authorized by Mr. Rankin (and Mr. Pryor) expended over $1,000,000 on four (4)
actual and one (1) canceled trip to the Kentucky Derby. These Kentucky Derby "strategic
retreats", had none of the hallmarks of a strategic planning retreat (even though Mr. Rankin
suggested in invitations that the 2013 trip would actually include strategic planning); Mr. Rankin
touted this as a celebration of (i.e., reward for) Board member efforts in the completing various
significant projects. No meetings (and therefore no noticed agendas and/or published minutes),
no seminars, no workshops, and no business activity occurred. Mr. Rankin's claim that these
events fostered Board/employee development falters given, in part, the facts that at most, four
(4) CMEEC employees attended, fewer than half of the Board attended any trip (and those who
attended generally were repeat attendees), and non-CMEEC attendees always outnumbered
CMEEC Board members and employees. The facts speak for themselves in support of the
position that the trips, and the lavishness and excessive expenses on these trips, were simply
inconsistent with CMEEC's purposes as set forth in its By-Laws and in the enabling legislation.
The trips and spending on the same reflect that Mr. Rankin and Mr. Pryor, among other things,
breached their fiduciary duties to CMEEC, failed to carry out their job duties, and violated PCard and Handbook provisions regarding business, travel and meal costs.

C.

Analysis

- The Greenbrier Trip' August 2015

Again, as w1h the Kentucky Derby trips, the facts relating to the four (4) day excursion
for four (4) people to the tune of $21,000 speak for themselves. These facts present perhaps
the most cavalier use of CMEEC money, in a manner inconsistent with CMEEC's purposes, as
reviewed in this investigation.
Mr. Rankin decided to take three (3) friends, two (2) of whom were on the Compensation
Committee, for a four (4) day, three (3) night excursion to a luxurious resort in West Virginia. Mr.
Rankin did not invite all members of the Compensation Committee, and did not convene any
meetings of the Compensation Committee in West Virginia. Although Mr. Rankin allocated the
expenses for this trip to the Compensation Committee budget line (as well as the
reimbursement requests), he also stated that the purpose of the trip was to scout the location for
a later Board retreat, which is not within the charter of the Compensation Committee. Traveling
to West Virginia for multiple days for the stated purpose of determining the suitability of a
location for a Board retreat is beyond reasonable comprehension. Rather, the stated purpose is
an excuse for a free trip, particularly when The Greenbrier has an extensive website - to which
Mr. Rankin actually directed his three (3) companions - and ready access to staff via phone and
internet for assistance in evaluating the suitability of conference rooms and the overall location.

ln perhaps one of the most inappropriate uses of his P-Card reviewed,66 Mr. Rankin
charged over g14,000 to The Greenbrier (and spent over $17,000 in total including air fare and
a
The policies for the use of p-Cards leave little room for abuse. They provide clear and unambiguous rules, such as
proniOition against the purchase of alcoholic beverages- They set out that..even in a foggy circumstance the holder of the
printed a story on the
card must first reflect on several questions, including-"[h]ow would the headline read if the newspaper

66

Page 54 of 58

 car rental) including meals for four (4) people, replete with alcohol, costing $1,100 in one
instance and $900 on the other. Mr. Pryor signed off on Mr. Rankin's expenditures; Mr. Rankin
subsequently approved expense reimbursement requests from Mr. Bilda, Mr. Sullivan and Mr'
DeMuzzio. Mr. Rankin took his three (3) friends on a trip with no direct (or any) business
purpose - i.e., a vacation. The four (4) played golf, ate and drank as they wished, and spent
three (3) nights in resort hotel rooms. Simply stated, Mr. Rankin took CMEEC's money to go on
a boondoggle with his friends.
As w1h the Kentucky Derby trips, the actions of Mr. Rankin and Mr. Pryor reflect, among
other things, that they breached their fiduciary duties to CMEEC, demonstrated a failure to carry
out their job duties, and violated P-Card and Handbook provisions regarding business, travel
and meal costs. ln addition, Mr. Rankin's actions constitute civil theft (either as larceny and/or
embezzlement). He took CMEEC funds with which he had been entrusted to his care as CEO,
and used those funds to take himself and three (3) others on a vacation.

D.

Anatysis'The Greenbrier trip

- October 2015

The October 20-23,2015, trip to The Greenbrier did include two (2) business related
presentations. These presentations, however, do not render tne $110,000 trip free from
violations of policies and procedures and/or breaches of fiduciary duties. The lack of
compliance with the FOIA leaves uncertainty as to the number and scope of the meetings held,
as well as the identity of the attendees (e.g., did all of the six (6) Board members on the trip
attend the meetings?).6t The excesses of this trip - punctuated with, for example, "Deluxe
Rooms" to ensure everyone has a "wonderful" experience; gift baskets in each room; use of a
card, compliments of CMEEC for "all services, food, drink, etc."; $2,200 worth of scarves; and
reimbursement to a non-CMEEC attendee for shirts and money clips - reflect, in the least, a
misuse and/or mismanagement of CMEEC money68, expenditures that were inconsistent with
CMEEC's purpose, violation of P-Card and/or Handbook provisions on business travel,
negligent work performance, and breach of fiduciary duty by both Mr. Rankin and Mr. Pryor.

E.

AnalYsis

- Golf Outings

What began as a seemingly modest event in 2013 for Board members and certain
CMEEC employees (and for which we have limited information), the annual CMEEC sponsored
golf outing grew exponentially to eight-eight (88) golfers in 2016 (including six (6) Board
members). The 2013 event cost approximately $3,500; the 2016 event (with a social Board
dinner the night before golf) cost approximately $36,500, about ten (10) times the cost of the

situation?,, This question is obviously not meant to be answered on a purely subjective level, but is meant to remind the Pprotect CMEEC
Card holder that he is an agent of the company, should conduct himself with the highest degree of trust and
public
rebuke.
or
from harsh criticism
lf and/or when the other twelve (12) Board members received the formal presentations from Mr. Rankin and the consultant
which presumably included information for the entire Board to receive - is uncertain.

67

-

Funds for this trip were drawn from the "contra" Margin account. As indicated in a prior footnote, the specific account or
source of the funds is not material to this investigation. The fact that CMEEC money was used, regardless of whether it
came from members or non-members, is material.

6s

Page 55 of 58

 2013 event. Mr. Rankin had also authorized one (1) outing in2014 ($9,SOO1and three (3)
outings in 2015 ($49,000).
Here, as well, the above stated facts outlining the nature of these outings speak for
themselves. Even if a small scale golf outing for Board members, employees and customers
might have a legitimate business purpose, the increasing expenses and excesses associated
w1h these events - including transportation to and from the golf course (so attendees could
have as much "laughter" - i.e., drink - as they wished); overnight stays at the Norwich lnn and
Spa (even for individuals living or working in Connecticut); and golf balls with participant faces
imprinted on them - fall outside the realm of being consistent with CMEEC's purpose, as
outlined in the enabling statute and By-Laws. These golf expenditures reflect, in the least, a
misuse and/or mismanagement of CMEEC money, expenditures that were inconsistent with
CMEEC's purpose, negligent work performance and breach of fiduciary duty by both Mr. Rankin
and Mr. Pryor.

F.

by Mr. Rankin andlor Pryor on
and other non-operational
Outings
Golf
Keniucky Derby, The Greenbrier,
expenses
Analysis

- Overall spending authorized

ln addition to spending for the Kentucky Derby trips, The Greenbrier trips and golf
outings in manners that reflect misfeasance in the performance of their job duties and violations
of numerous policies, procedures, fiduciary duties and/or statutes (e.9., civil theft), Mr. Rankin
and Mr. Pryor (in the least as the expense approver on Mr. Rankin's P-Card) engaged in
similarly problematic everyday spending. Whether or not it was simply what Mr. Rankin and Mr'
pryor considered appropriate, or some other factor(s), Mr. Rankin, for example, regularly spent
on his P-Card with disregard for CMEEC policies and procedures (e.9., purchase of meals and
alcohol with at times little explanation on receipts; no breakdowns of meals as required by
policy on receipts), and Mr. Pryor approved the same. Mr. Rankin likewise considered it
appropriate to provide a Board member, retiring from a position with a member utility (and in
turn leaving the Board) with $6,000 in American Express gift cards.

Whether considered separately or as a whole with the trips and outings, Mr. Rankin's
use of his P-Card in everyday situations, and Mr. Pryor's approval of the same, again
demonstrate negligence in the performance of their job duties and violations of numerous
policies, procedures and fiduciary duties.

G.

Analysis Payments for andlor reimbursements to James Sullivan for
certain travel and accompanying expenses

Outside of the specific instances referenced above, where CMEEC paid Mr. Sullivan a
Board member stipend and where CMEEC paid for or reimbursed him for travel expenses
clearly associated with CMEEC business, the bases for the remaining payments by CMEEC for
Mr. Sullivan's travels are not documented. Mr. Rankin describes Mr. Sullivan as, in essence,
acting as an unpaid lobbyist for CMEEC in Washington, D.C., whose travel expenses are
covered by CMEEC. Mr. Rankin, however, didn't require from Mr. Sullivan, or record himself,

Page 55 of 58

 by Mr' Sullivan, and Mr'
the specific reasons for payment on the expense reports submitted
pryoi either didn't think there was an issue or chose not to address it'
concerns about
The payments to Mr. Sullivan for no documented reason raise significant
and Mr'
Rankin
purposes.
Mr'
the tegitimacy of these reimbursements as relating to CMEEC
pryor failed in their respective fiduciary and other duties by not requiring and/or clearly
respective fiduciary and
documenting the reasons for the payments, and they failed in their
travel. Their conduct, in the
other duties by approving reimbursement for non-CMEEC related
of their fiduciary duties'
least, involves failure to carry out their job functions and/or breach

H.

Impact to CMEEC of the activities outlined in the indictment, this
inveiiigation and the orat and/or written statements made by Mn Rankin to
Derby trips,
tne iebia andlor public officials regarding the Kentucky
--^
Ar""iiii"r trips ind/or legislative ihanges to the statute creating CMEEC
Anatysis

-

or would not have
Whether or not an immediate "mea culpa" in October 2016 would
public, state and local government
helped quell concerns about cMEEC expressed by the
to the public, local
officials and media is left for debate. Mr. Rankin's initial statements
2017, with legislation
government officials and the press defended these trips' By February
CMEEC, Mr. Rankin stated to members of the state
ienoing that could significantly impact
of cMEEc, acknowledged that
Senate that he recognized the trips were not in the best interests
,,professionully ,"rponsible and accountable for the adverse consequences of my bad
he was
causing
judgment in these business decisions" and noted he was "sorry for my actions that are
judgment
caused
his bad
such harm . . , .,, ln short, Mr. Rankin himself acknowledged that
jury
grand
CMEEC harm. That harm has included, for example, an FBI investigation
in significant expenses to
proceedings, federal indictments, legislative amendments (resulting
a "Rating watch Negative" from
and increased oversight of CMEEC), scathing media coverage,
Fitch, and significant legal and other costs to CMEEC'

harm, Mr' Rankin
Despite acknowledging his bad judgment which caused CMEEC
Formica in May 2017, blasting
chose to send the late night email to senators osten and
who) regarding the proposed
Senator Somers and threatening litigation (unclear as to against
email brought negative
amendments for alleged "contractual interference." Mr. Rankin's
as well as additional negative
reactions from varioui legislators and calls for his resignation,
again in the negative limelight' and
media coverage. ln other words, Mr. Rankin placed CMEEC
pass", he appeared not to recognize
in telling the CMEEC community that "this will undoubtedly
"retreats" and fallout from the same
that his past and then-present actions surrounding the
would continue to negatively impact CMEEC'
agreement includes
The job description incorporated into Mr. Rankin's employment
agencies; ensure that
provisions that he represent CMEEC before state and federal legislative
to be enhanced with appropriate
the credit worthiness of cMEEC "is maintained and continues
to credit"; and maintain the
credit agencies to ensure financing of future projects and access
outside CMEEc, to make "public
abilities to communicate effectively with individuals within and
public official" and to
presentation in a professional manner" and "establish credibility with ' ' .
Mr. Rankin's work
act as "CMEEC contact and spokesperson with the media and officials. '"
Page 57 of 58

 satisfying
performance as ouflined immediately above, and in the review of facts falls, short of
these job requirements.

Vl.

Conclusions

Rankin and Mr.
ln consideration of the above factual findings and analysis, both Mr.
"cause"
within the termination
pryor have engaged in conduct which meets the definition of
provisions of their contracts.

constitutes acts or
As to Mr. Rankin, his conduct as to any number of the items above
(e.9., negligent
omissions that constitutes a breach of obligations under his Agreement
of
performance of job duties, misuse or mismanagement of certain CMEEC funds; breach
to perform the duties
iiduciary, authorizing acts inconsistent with cMEEC's purpose); failure
job
employee (e.g., failure to perform certain job duties as set forth in his
required of him
", "n
of numerous internal
description, breach of fiduciary duty on multiple occasions, violations
civil theft and/or
policies and procedures, failure to follow the FolA); violation of the law - e'9.,
CMEEC; and other willful
breach of fiduciary duty - which is materially related to the business of
reputation of, or is otherwise
misconduct which is injurious to the financial condition or business
(e.g., to the extent any violation
injurious to the cMEEc or any of its subsidiaries or affiliates
it falls within this category).
noted in the Analysis does not fall within the above listed categories,
either failed to
As to Mr. pryor, his conduct as outlined above demonstrates that he
performed
such duties
perform the customlry duties of a CFo in competent fashion, negligently
(e.9., breach of fiduciary duty on
and/or engaged in repeated and material willful misconduct
general employment policies, etc.).
multiple occasions; failure to comply with internal finance or
not in a position to
Since Mr. pryor has retired, the Board, even if it wished to do so, is
on administrative
employee
an
pursue any disciplinlry action as to.him. Mr. Rankin remains
may, if it wishes,
Board
i""u", und in consideration of the above findings and conclusions, the
of his employment'
cnose to pursue disciplinary action, up to and including termination

Page 58 of 58

 APPENDIX A - EXHIBIT LIST

t.

Introductlon

1.
2.
3.
il.

lll.

November 8,2018lndictment.
November 9,2018 Emergency Meeting Resolution 18-11-06

November 20,2018 Resolution 18-11'13.

Outline of lnvestigation Process

1.

Excerpts - December 31, 2016 and 2015 Financial Statements Audited by
BlumShapiro.

2.
3.

December 21,2018 Forensic Evaluation by CohnReznick.

4.

February 6,2019 email correspondence from Attorney Duggan to Attorney
Miodonka and February 18, 2019 email correspondence from Attorney Duggan
to Edward Pryor.

5.

March 4, 2019 Letter from Attorney Raabe on behalf of Drew Rankin.

February 6,2019, through February 21,2019 email correspondence by and
between Attorney Duggan and Attorney Adler re: Drew Rankin's participation in
investigation.

Background
1

March 25,2013 CMEEC BY-Laws'

2.

February 21,2017 Testimony of Drew Rankin.

3.

June 7, 2013 Attorney General Opinion, AGO 2013-3'

4.

June 1 ,2013 CMEEC Membership Agreement dated as of June 1, 2013.

5.

January 1,2014 Employment Agreement Extension with Drew Rankin (Executed
September 25,2014) and Job Description.

6.

July 1, 2003 Employment Agreement with Edward Pryor.

7.

June 2013 P-Card Course.

L

July 1 5,2013 P-Card Application and Agreement

- Edward Pryor'
Page A1 of 6

 lV.

9.

october 4,2013 P-Card Application and Agreement Drew Rankin.

10.

January 2014P'Card Business Process Flow Chart'

11.

and
January 4,2011 Acknowledgement of Receipt of lnformation Handbook
Employment-At-Will Notice by Drew Rankin.

12

April 19, 2013 andJanuary 3, 2017 Acknowledgements of Receipt of Personnel
policy Handbook and Employment-At-will Notice by Edward Pryor.

13.

April 1 ,2013 Personnel Policy Handbook

14.

January 1,2017 Personnel Policy Handbook

15.

April 1 ,2013 Personnel Policy Handbook
Lodging
Expense Reimbursement Business Meeting/Training Travel, Meals, and

- lntroductory Letter.

- lntroductory Letter'
- Policy 210 - Business Travel and

16

and
January 1,201T personnel Policy Handbook - Policy 210 - Business Travel
Lodging
Expense Reimbursement Business Meetingffraining Travel, Meals, and

17

April 1 ,2013 Personnel Policy Handbook - Policy 214
Conduct, Ethics Policy, and Complaint Procedure'

18

January 1, 2017 Personnel Policy Handbook - Policy 214
Conduct, Ethics Policy, and Complaint Procedure'

-

Code of Business

-

Code of Business

Factual Findings

1.

25'
January 14,2016 Requisition Approval by Edward Pryor (Travel); and May
2016 Requisition Approval by Edward Pryor (Ticket Packages)'

2.
3.
4.
5.
6.
7.
8.
g.

February 4 and 8,2013 Purchase Agreements'

10.

February/March2O13 Kentucky Derby lnvite'
May 2-5,2013 Kentucky Derby ltinerary'

october 26,2016 City of Groton Utility commission Meeting Minutes.
October 24,2016 Article (The Day)'
2013-2016 Kentucky Derby Attendance Chart'

August 7,2013 Purchase Agreement'
March 7,2014 Requisition Approval by Drew Rankin (Ticket Package)'

Officer
March g,2014 Email Correspondence by and between Drew Rankin and

andFacilityManagerre:JamesSullivanTravelRequest.
Page A2

of 6

 11.

March 26,2014 Email Correspondence from Drew Rankin to Edward DeMuzzio.

12.

May 1-4, 2014 Kentucky Derby ltinerary.

13.

June 2, 2014 Purchase Agreement for 2015 Kentucky Derby.

14.

January 16,2015 Signed Proposal; January 28,2015 Requisition Approval by
Drew Rankin; April 14, 2015 Payment Documentation (Air charter).

15.

October 29,2014
2015 -2019.

16.

2015 Strategic Retreat - Members and Guests Appreciation Celebration
Brochure.

17.

May 4,2015 Purchase Agreement.

18.

November 12,2015 Budget and Finance Committee - CMEEC Proposed Budget
2015 - 2019 and 2016 CMEEC Budget.

19.

March 16, 2016 Supplemental Purchase Agreement.

20.

2016 Strategic Retreat - Members and Guests Appreciation Celebration
Brochure.

21.

April 2 - May 3,2016 Email String (Restaurant Payment) and Drew Rankin PCard Statement MaY 2016.

22.

February 29,2016 Email String (ltinerary).

23.

April27,2016 Email from Drew Rankin to Trip Participants.

24.

May 23,2016 Purchase Agreement (Ticket Packages) and June 22,2016
Purchase Agreement (Paddock Tours)

25.

July 9, 2015 Email from Drew Rankin to John Bilda, Jim Sullivan and Edward
DeMuzzio.

26.

July 28, 2015 Emailfrom Drew Rankin to Ellen Kachmar (Hotel Confirmation).

27.

July 2015 P-Card Statement

28.

July 17,2015 Email by and between Drew Rankin, John Bilda, James Sullivan
and Edward DeMuzzio.

29

July 1 9,2015 US Airways Reservation.

30

August 2015 P-Card Statement

31

July 20, 2015 Emailfrom Drew Rankin to Ellen Kachmar (Rental Car).

- Budget and Finance Commiftee

- CMEEC Proposed Budget

- Drew Rankin

- Ellen Kachmar.

Page 43 of 6

 - Drew Rankin.

32.

August 2015 P-Card Statement

33.

August 1,2015 Email from Drew Rankin to John Bilda, James Sullivan and
Edward DeMuzzio (Dress Code / Basic ltinerary).

34.

August 2,2015 Email from Drew Rankin to John Bilda, James Sullivan and
Edward DeMuzzio (Detailed ltinerary).

35.

August 1,2015 Email from Edward DeMuzzio to Drew Rankin, John Bilda and
James Sullivan.

36.

August 2015 Expense Reimbursement

- Edward

37.

August 2015 Expense Reimbursement

-

38.

July and August 2015 Expense Reimbursement

39.

CMEEC BOD Resolution 15-02-02

40.

November 21,2013 Compensation and Policy Committee Charter

41.

August 17-19 Emails by and between Drew Rankin and The Greenbrier.

42.

August 25,2015 Agreement with The Greenbrier.

43.

August 21,2015 Email by and between Drew Rankin and The Greenbrier.

44.

September 14,2015 Email from Drew Rankin to Board / Forward to Staff;
Forwarded Email by Edward Pryor

45.

September 17,2015 Email from Drew Rankin to Ellen Kachmar.

46.

September 18,2015 Email from Drew Rankin to Lobbyists.

47.

September 18,2015 Email from Drew Rankin to Consultant.

48.

September 18-19, 2015 Email by and between Drew Rankin and Edward Pryor

49.

October 8,2015 Email from Drew Rankin to Attendees, including "2015 Fall
Strategic Retreat - Members and Guests Appreciation Celebration" Brochure.

50.

October 19,2015 Email by and between Drew Rankin and The Greenbrier.

51.

October 2015 - The Greenbrier Attendance Chart.

52.

November 12,2015 lnvoice from The Greenbrier and Accompanying Payment
Documentation.

53.

November 19,2015 Requisition Approval by Edward Pryor (Scarves).

54.

October 19,2015 Jet Access Aviation lnvoice.

DeMuzzio.

John Bilda.

-

James Sullivan.

Page A4 of 6

 55.

August 9,2013 Emailfrom Drew Rankin to Board members (Golf).

56.

July 14, 2014 Email from Drew Rankin to Board members (Golf).

57.

July 2014 Golf Expenses

58.

August 17,2014 Email from Drew Rankin to Board members (Golfl.

59.

May 1 5,2015 Email from Drew Rankin to Board members (Golf).

60.

June 2015 Golf Expenses

61.

July 19-20,2015 Emails from Drew Rankin to Board and Ellen Kachmar.

62.

July 2015 Golf Expenses

63.

August 10,2015 Email from Drew Rankin to Board members (Golf).

64.

August 10,2015 Email from Drew Rankin to Others (Golf).

65.

August 24,2015 Email from Ellen Kachmar to Drew Rankin.

66.

August 25,2015 Email by and between Drew Rankin and Patricia Meek.

67.

August 2015 Golf Expenses

68.

December 28 - 30, 2015 Email by and between Ellen Kachmar and Mohegan
Sun Country Club.

69

June 17,2016 Email from Drew Rankin to Board members (Golf).

70

July 13,2016 Email from Drew Rankin to Ellen Kachmar

71

July 2016 Golf Expenses

72

December 2014 CMEEC P-Card Statement and Supporting Documents.

73

February 26,2015, April 21,2015, May 21,2015, September 1, 2015,
September 21,2015 and December 21, 2015 Receipts.

74

April 1 9, 2015Wine Receipt.

75

May 2013
Rankin.

76

April 23, 2009 and May 27,2010 CMEEC Board Meeting Minutes.

77

April22,2010- CMEEC Board Resolution 10-21

- November

-

-

-

-

Chart.

Chart.

Chart.

- Chart.

Chart.

2018 P-Card Limit lncrease/Decrease History

- Drew

Page A5 of 6

 78.

June-July 2013 Request for Reimbursement and Approval; October -December
2014 Request for Reimbursement and Approval; January 30 - March 31,2015
Request for Reimbursement and Approval.

79.

Examples - October 15 and 19, 2016 Articles in The Bulletin; October 21 and24,
2016 Articles in The Day.

80.

May 30, 2017 Emailfrom Drew Rankin to Sen. Cathy Osten and Sen. Paul
Formica.

81.

May 31 ,2017 Letter from Six (6) Legislators to Drew Rankin.

82.

June 1 ,2017 Article in The Bulletin; June 1 ,2017 Article in The Day.

83.

November 26,2018 Rating Watch Negative by FitchRatings.

84.

December 27,2018 Credit Opinion by Moody's lnvestors Service.

85.

May 31 ,2017 email correspondence from Rankin to CMEEC Combined
Distribution.

Page A5

of 5