FOG chimes in on SEC dispute
The New Mexico Foundation for Open Government let the Socorro Electric Cooperative board of trustees know how it feels about the board’s reluctance to accept transparency requirements imposed on it by member-owners.
In a letter addressed to SEC President Paul Bustamante, and copied to the nine other members of the board and the co-op attorney, NMFOG Executive Director Sarah Welsh urged the board to go along with what the member-owners want.
“Your members have made their wishes clear — they seek a guarantee of free access to information about how their corporation is being managed,” she wrote in the letter dated June 15. “Transparency promotes good governance, in both the public and private sectors. Secrecy promotes the concentration of power and control in the hands of a few, in direct contravention of democratic cooperative principles.”
The board voted at its May meeting to challenge the validity of three new bylaws overwhelmingly passed by member-owners at the April 17 annual meeting.
All three bylaws the board voted to contest by asking for a declaratory judgment requesting injunctive relief promote transparency of governance by:
• Requiring the co-op to follow the Open Meetings Act and the Inspection of Public Records Act
• Permitting members and the press to attend board meetings and that time be set aside for audience members to address the board
• Allowing members to inspect co-op records, books, audits and other information, except information that would violate the Privacy Act
Welsh noted in her letter that member-owners already have the right to inspect records.
“Furthermore, regardless of what the Cooperative’s bylaws say now or in the future, an individual member’s right to inspect the books of his rural electric cooperative is already guaranteed by state corporate law,” she wrote.
Welsh cited the 1997 New Mexico Supreme Court case of Schein v. Northern Rio Arriba Electric Cooperative, which affirmed the public’s right to inspect records of a rural electric cooperative. She quoted a portion of the court’s ruling, which read in part: “Schein has a legal right to be informed as to the management of the cooperative property by the Board in charge of that property. Such information would indicate whether the legal and financial choices being made by NORA were sound; also, such decisions would directly impact the capital accounts of NORA. Shareholders generally are entitled to monitor the activities of their agents.”
Welsh ended her letter by urging the board to work toward transparency, because honesty is the best policy.
“Given this strong presumption of shareholder rights, we urge the Board of Trustees to work with its member-owners to guarantee and provide access to corporate information. This is the practice of private companies the world over, and we submit that it is the best way to ensure honesty, quality service and value to your shareholders,” she wrote.
Welsh was in Socorro last month for the New Mexico Attorney General’s Office Road Show, a series of seminars designed to inform the public and public officials about OMA and IPRA.
Contact T.S. Last