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City of Jonestown outlines actions in failed wind turbine project

City of Jonestown officials said they weren’t told the company they hired to install electricity-generating wind turbines was under investigation by the Travis County district attorney’s office. If they had been notified, officials said, they could have stopped taxpayer dollars from going to fund the project.

“Had the city been made aware of the report of criminal activity back in August 2010, the city could have declined the grant,” a statement by City Attorney Paige Saenz said, referring to a federal stimulus grant. “Had the city been made aware of the criminal investigation before it submitted invoices for grant funds, the city could have stopped the project before any grant funds were paid.”

The letter, released Wednesday by the city’s attorney at the request of the council, explained the city’s involvement in the failed wind energy project. It comes after the resignation of Jonestown’s city administrator, who oversaw the turbine projects, and comes amid calls from residents for the removal of the mayor and a council member.

Court filings from October 2011 said that Charlie Malouff Jr., founder of CM Energies, and Mary Jo Woodall, a former state comptroller’s office staffer and grant administrator, conspired to illegally obtain up to $2 million in federal stimulus money by overselling CM Energies’ ability to deliver the electricity-generating wind turbines to the City of Jonestown.

The project is the subject of an ongoing grand jury investigation, and the city has also filed a lawsuit against CM Energies.

“At this point, the city should position itself to protect the citizens against further liability, primarily a $1.8 million judgement,” Saenz said.

In the letter, Saenz said the alleged crime was reported in August 2010, but Jonestown officials didn’t find out about the investigation until October 2011.

The letter also answered complaints from the Jonestown Action Committee, a citizens group calling for the dismissal of Alderman Lance Wedell, Mayor Deane Armstrong and City Administrator Dan Dodson.

In her letter, Saenz said the City Council can’t remove its own members. Dodson submitted his resignation in February.

Dodson was named as the “project director,” for the City of Jonestown on the grant paperwork. Court documents said Dodson was warned by CM Energies employees that the windmill company couldn’t provide the technology for the wind turbines.

“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,” court documents said.

Timeline of wind energy project

2008: City Council approves resolution to conserve electricity use in city facilities.

2009: Jonestown applies for federal stimulus grant. Hundreds of jobs are anticipated.

2010: Concerns from former CM Energies employee about wind energy project reported to Travis County district attorney.

October 2011: Jonestown officials learn about investigation into wind energy project; court documents say Charlie Malouff Jr. and Mary Jo Woodall conspired to illegally obtain up to $2 million in federal stimulus money.

November 2011: Malouff is charged with illegally possessing firearms and explosives.

December 2011: City Council decides to end $80,000-a-year contract with City Administrator Dan Dodson.

February: Dodson submits resignation letter; City Council says Dodson will no longer be in his job by April 30.

March: City attorney issues letter in response to citizens group’s complaints.