Two officers in Friends of Maine’s Mountains, a group formed to oppose construction of wind-power farms along the state’s scenic mountain vistas, have agreed to resign to settle accusations of conflict of interest.
They allegedly ousted members of the group’s board who refused to approve a settlement in a suit against a wind energy developer.
The suit then was settled and the proceeds used partially to fund a consulting contract for one officer, Christopher O’Neil, and to leverage a financial settlement in a separate suit filed by the other, Rand Stowell, according to an agreement between the officers and the attorney general’s office.
The state Board of Environmental Protection on Thursday takes up FMM’s appeal of a decision to license a wind energy project in Bingham.
Attorney General Janet Mills launched the investigation into FMM’s settlement of the suit and the use of the proceeds of the settlement last March. In a statement of allegations, the attorney general claimed that Stowell, the president and treasurer of FMM, and O’Neil, a board member and its corporate secretary, “participated in improper conflict of interest transactions and engaged in improper governance practices.”
As part of the settlement signed late last month, the two denied the allegation that they did anything improper, while agreeing to resign their positions with FMM within four months. O’Neil and Stowell said they have submitted their resignations, which take effect when their successors are appointed.
The investigation began after complaints from former FMM board members that they were ousted from their positions after refusing to support settlement of a lawsuit filed by FMM against Saddleback Ridge Wind Project LLC and its parent, Patriot Renewables LLC.
Though no formal charges were brought in the case, the settlement agreement signed in late February recites the attorney general’s contention that Stowell and O’Neil benefited financially at the expense of the organization.
The investigation, launched in March 2014, centered on the removal of three board members from the organization’s board of directors while the group was negotiating settlement of a lawsuit filed by FMM against Patriot over development of a wind farm in Carthage. O’Neil and Stowell both supported the settlement, while the three remaining board members were against it.
In addition to the FMM suit against the wind farm developer, Stowell, who owns property in Weld near the proposed wind farm, filed his own suit aimed at stopping the project.
The five-person board of directors voted twice – in December 2013 and again in early January 2014 – to reject the FMM settlement with the Saddleback Ridge developer, according to the attorney general.
Toward the end of January 2014, Stowell and O’Neil used a two-person executive committee, which O’Neil said had been created in 2010, to remove Michael Bond and Richard McDonald as members of the board, the settlement agreement said. McDonald said he received a letter on Jan. 28, 2014, saying he had been appointed to the board illegally and would be removed. Bond said he received a similar letter from O’Neil and Stowell.
A third board member, Paula Moore, was removed the next day and replaced by a new director who voted with O’Neil and Stowell to approve the settlement the same day.
Moore could not be reached for comment Tuesday.
The attorney general claimed that the three directors who were replaced “state that they were unaware of the existence and actions of said Executive Committee.”
The allegations said O’Neil benefited from the settlement because its proceeds were used in part to pay him 80 percent of an outstanding $30,000 consulting fee, an amount that O’Neil said he would have been paid for his services regardless of whether the FMM board ultimately approved the settlement with Patriot. In its allegations, the attorney general’s office said that since 2010, O’Neil had been paid $130,000 by FMM, and that his monthly billing was never less than $3,000. While he received 80 percent of what he was owed for his services, other FMM creditors received payments that were “de minimus,” a legal term that means insignificant.
The attorney general claimed that Stowell benefited from the FMM settlement “by receiving a monetary payment for settling his individual lawsuit which would not have occurred without the FMM settlement since (Saddleback Ridge Wind) wanted ‘global peace’ with all litigants.”
Stowell would not disclose the amount of his settlement.
“They wanted the money and believed that we stood in the way,” said Michael Bond, one of the board members deposed by the O’Neil and Stowell executive committee in January 2014.
“We didn’t believe it was right for an anti-wind group to be taking money from a wind company,” he said.
“We believed strongly that (the settlement) was a level of hypocrisy that would be destructive to the organization,” said Richard McDonald, another former board member. “People are looking at us to lead the charge against wind, and here we go, taking money from a wind developer. It just didn’t feel right, so we voted it down.”
The two have since formed another nonprofit group, Saving Maine, that aims to prevent industrial wind development.
Tim Feeley, a spokesman for the attorney general’s office, said the amount of the lawsuit settlement was not available. Stowell said he could not disclose the number, though both Bond and McDonald said it was upward of $100,000. A spokesperson for Patriot Renewables could not be reached late Tuesday.
Stowell said he has moved from Weld after having had a home there for about 40 years, in part because of the wind farm being built.
“I have not been compensated in any way for being an officer and director for FMM,” he said. “My lawsuit was totally independent of that, and I got no compensation out of any settlement FMM had with the wind company.”
Stowell said he supported FMM taking the settlement because it would have been expensive to continue opposition, and the group had a weak case against the wind farm developer, which already had received its permit from the Maine DEP.
The decision to remove three board members was the result of a disagreement about the “direction of FMM,” according to Stowell, although two of the three former members say they were pressured to support the settlement to the point that they were removed illegally.
“The majority of the board voted not to proceed with the settlement,” McDonald said. “But the pressure continued. We were very uncomfortable that the FMM settlement was tied to Stowell’s settlement and felt that was a direct conflict of interest.”
The formal settlement of the attorney general’s allegations states that Stowell and O’Neil cooperated in the investigation.
The agreement requires that Stowell resign as president of FMM within four months and that O’Neil give up his seat on the board of directors. O’Neil also agreed that he will not be eligible to serve on the board for as long as he is a contractor for the group. O’Neil had worked as a consultant for FMM since 2010, but until April 2014, there was no written contract reflecting the terms of O’Neil’s consulting position, according to the attorney general.
The money paid to O’Neil from the settlement proceeds now will be subject to approval by a newly elected five-member board of directors, according to the agreement with the attorney general.
The group also is required to rewrite its bylaws to eliminate the executive committee and prohibit formation of a similar body in the future. Feeley said he could not comment on whether the attorney general’s office had considered bringing up formal charges against FMM.
Both O’Neil and Stowell said they plan to cooperate with the attorney general’s requests and said the changes would improve FMM as an organization, but McDonald and Bond said the settlement already has damaged FMM’s credibility.
“Friends of Maine’s Mountains has no relevance anymore,” Bond said. “It is not a viable organization, and it’s going to disappear as soon as they spend the rest of their ill-gotten gains.”
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