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Jonestown officials hope to curb further litigation over failed wind project

JONESTOWN – The Jonestown City Council took steps this week to fend off an ongoing criminal investigation into a failed wind energy project in the city that was the subject of a grand jury inquiry. The council also tried to ease the concerns of residents, some of whom have questioned the city’s handling of the issue.

During one of its few public updates about the matter, the City Council approved on Thursday a measure that would allow city attorney Paige Saenz to file additional lawsuits if necessary tied to the wind energy project. According to state prosecutors, a former state employee and a businessman conspired to illegally obtain up to $2 million in federal stimulus money by overselling a wind energy company’s ability to deliver electricity-generating wind turbines to the Lake Travis community.

During the meeting, Alderman Bill Nichols said the city would continue with plans to remove the wind turbines and related equipment from various locations in Jonestown. He said the city has been paying $100 a month, instead of the council-approved $1,000 a month, for storage of items from the failed project.

Saenz told the council that city officials have met with representatives for state Attorney General Greg Abbott to find a resolution that wouldn’t involve additional litigation. The City of Jonestown has filed a lawsuit against CM Energies Inc., the wind energy company hired to do the Jonestown project.

In October, officials from the state comptroller’s office said they would seek restitution of up to $2 million in federal stimulus money that prosecutors said was fraudulently obtained by CM Energies to do work for the City of Jonestown.

Court filings said Charlie Malouff Jr., founder of CM Energies, and Mary Jo Woodall, a former comptroller’s office employee and grant administrator, conspired to illegally obtain the stimulus money. In November, Malouff was charged with two federal counts. According to the indictment, police confiscated four handguns, two rifles and nearly a dozen grenades during searches as part of the wind-energy fraud investigation. Malouff is prohibited from owning and possessing firearms because of a previous felony conviction.

A pretrial hearing for Woodall is set for March 5 in Travis County District Court, Assistant District Attorney Gregg Cox said Friday.

Also during Thursday’s City Council meeting, the council said it received a letter of resignation from City Administrator Dan Dodson, who was named in the grand jury investigation.

The council said it will take up the employment issue at its next meeting but didn’t say whether Dodson would continue to work for the city.

City Secretary Linda Hambrick said Friday that there would be a special council meeting Feb. 17 but that a final agenda wasn’t set.

In court documents, authorities said Dodson was warned in 2010 by CM Energies employees and associates that CM Energies was acting suspiciously.

“Dodson responded that defrauding the government was ‘an oxymoron’ and that he was not going to lose sleep over a little white lie to get a grant,” the court documents said.

In December, the City Council unanimously decided against extending Dodson’s $80,000 annual contract with the city. However, Dodson has remained in his city position without a contract because of his experience and involvement in other city matters, council members said.

The American-Statesman filed an open records request in December with the City of Jonestown seeking all contracts related to the wind energy project, all documents related to any payments made by the city for the project and all correspondence between city officials and Woodall and Malouff and any officials or employees of CM Energies.

Saenz gave the newspaper few documents about the case and submitted a request to Abbott to withhold contracts and all correspondence between Jonestown officials and Woodall, Malouff and CM Energies employees because of ongoing litigation and the investigation, she said.

A decision from the attorney general is expected by early March.