Co-op goes ahead with court action
The New Mexico Foundation of Open Government has been keeping a close eye on the dispute between the Socorro Electric Cooperative and its member-owners.
Notified that the Co-op followed through with a lawsuit challenging the validity of three bylaws overwhelming passed by member-owners at the annual meeting in April, NMFOG Executive Director Sarah Welsh responded with an e-mail to El Defensor Chieftain.
“It’s unfortunate that the SEC Board of Trustees has now decided to take its own members to court, seemingly to block access to basic information about how the corporation is being run. It’s certainly an interesting use of the members’ money,” she wrote in the July 8 e-mail.
Last month, Welsh wrote a letter to the Co-op’s board of trustees urging them to work with member-owners to guarantee transparency and access to information, thus avoiding a lawsuit.
Although the board did not respond to her letter and has since moved forward with a lawsuit, “if a judgment is issued fairly quickly from the courts, this may be the best way to resolve this dispute once and for all,” she wrote. “But it’s clear that the SEC members want basic corporate transparency, and we (NMFOG) wholeheartedly support that effort. Transparency promotes good governance in both the public and private sectors. If the corporation is being managed well, then why not share financial information with member-owners?”
Although her background is as a newspaper reporter and not as an attorney, Welsh seemed confident the Co-op would not prevail on the question of open access to SEC books, records and audits.
“That right has already been recognized by the New Mexico Supreme Court, in a case dealing directly with rural electric cooperatives,” she wrote. “Ironically, that case began when a newspaper reporter asked for her co-op’s legal bills. They denied access, she sued, and the Supreme Court sided with her.”
Welsh also questioned why the two local newspapers, the Mountain Mail and El Defensor Chieftain, were named as defendants in the case.
“As someone who’s particularly fond of the First Amendment, I’m always concerned by lawsuits against newspapers,” Welsh wrote. “They rarely succeed, given press freedoms, but they can be financially damaging to news organizations. The Mail and the Chieftain may be high-profile member-owners of the Co-op, due to the nature of your business, but you’re also just small businesses operating in a rough economy — and defending against a lawsuit is never cheap.”
In its notice of suit, the Co-op calls for defendants to respond with a pleading or motion within 20 days after the last publication date of the notice, or judgment by default would be entered against them.
In its complaint, the Co-op asks that the defendants pay the costs and reasonable attorney’s fees for bringing the case to court.