Zheng accused of allowing favored vendor to write RFP

Zeng reportedly admits to meeting with only one of five top bidders then recommending that bidder to the EUB

Sandstorm Scholar sources have told us that Lubbock Power and Light CEO Dr. Gary Zheng acknowledged allowing Alpine Energy Group (AEG) to write the RFP for power generation for Lubbock for 2019 forward.

AEG is one of the bidders for the purchase power agreement considered by the LP&L Electric Utility Board. Zheng allegedly allowed AEG to write all or most of the RFP.

LP&L Director of Electric Utilities Dr. Gary Zheng

When confronted with the allegation in EUB closed session last week Zheng reportedly first denied this, then later came back to the board and said he had forgotten but that he had allowed AEG to write the RFP.

Gary Zheng did not return Sandstorm Scholar phone calls for comment on this story.

In open session today, on Vice-Chairman Emilio Abeyta’s motion, the EUB voted to allow Zheng to continue in his position as Director of Electric Utilities for LP&L. EUB members Marc McDougal and Clayton Isom were the only dissenting votes.

“Zheng allegedly allowed AEG to write all or most of the RFP for future power generation.”

Zheng also allegedly admitted under questioning from the EUB that he attended only one of the five meetings with top five bidders for the purchase power contract. That meeting was with AEG.

Despite having met with only one of five top bidders for the contract Zheng reportedly ranked the bidders himself and made the recommendation to the EUB for AEG to be awarded the bid.

Mayor Glen Robertson
Mayor Glen Robertson

Sources tell Sandstorm Scholar that Zheng has acknowledged all of the above to the EUB.

We also contacted Mayor Glen Robertson who said, “I cannot comment on this story due to pending litigation against me by LP&L employees.”

Sources tell us that Zheng and LP&L Assistant Director Dale Stephens have both threatened to sue Mayor Robertson.

The Sandstorm Scholar previously reported that the FBI is investigating allegations of bid rigging at LP&L.

In other developments at Wednesday’s EUB meeting, in open session board members voted unanimously to have a Houston based international law firm of Andrews Kurth, LLP to investigate allegations of bid rigging at LP&L. It also voted to take no action on bids for future power generation at this time.

What we expect from Lubbock Power and Light

It is time that people were held accountable at Lubbock Power and Light. No more excuses and no more delays. Two very important meetings are about to be held. Thursday evening the City Council meets and before that, Wednesday morning the 23rd, the EUB meets. 

The Sandstorm Scholar has been patient with the Electric Utility Board. We’ve supported it through Council induced rate shocks. When we’ve been critical it has been ssurgically, not criticizing all members, but focusing on the leadership, or lack thereof.

“Kring has allowed CEO Gary Zheng to lead him by the nose right into an FBI investigation.”

There’s no doubt the leadership of the EUB is a failure. By all reports Chairman Gail Kring is a good man. There are lots of those in Lubbock. We know of no allegations of criminal behavior on his part. But, bless his heart, Kring has allowed CEO Gary Zheng to lead him by the nose right into an FBI investigation and then, last week, when confronted with allegations of bid rigging, Kring refused to call a meeting to investigate the possible corruption at Lubbock’s publicly owned utility. 

That may be the Chairman’s prerogative, but LP&L isn’t Gail Kring’s business to mismanage into ruin. LP&L belongs to the citizens of Lubbock. They gave Kring stewardship over the business and he has abdicated. If he does not step down it is the responsibility of the City Council to appoint someone else in his place. Lubbock citizens ought to look with suspicion on any Council member who votes to reappoint Kring.

This brings us to the apparent good guys. Marc McDougal and Clayton Isom are pushing for an internal investigation. Wednesday’s meeting is a start, but let them and the rest of the LP&L board be on notice: we expect transparency and accountability. No more solutions in closed door meetings that have EUB members coming out singing off the same page. We won’t buy it.

“It’s time for the EUB to get naked with the public.”

As hard as it may be, it’s time for the EUB to get naked with the public. Mayor Glen Robertson said on “Listen Lubbock” broadcast by radio KRFE Monday, “the statute allows for closed meetings, it does not demand them.” 

The EUB will never regain the confidence of the public while it is spending the majority of its time in closed session. We demand to know what’s going on.

Let’s return to the the subject of Council appointments and examine what may happen on Thursday’s City Council meeting. Dwight McDonald, another one of the good guys, was booted from the EUB because of a conflict determined by the City Attorney. His replacement should be named on Thursday.

But three EUB members are set for reappointment in Thursday’s City Council meeting. The Sandstorm Scholar has learned that Robert Musselman has asked the City Council to not reappoint him on Thursday. Musselman has served with honor on the EUB and he should be thanked for his service.

“This is the major leagues of Lubbock boards and commissions, not a training ground for beginners.”

This allows the City Council to appoint two new members on Thursday. Its appointments must be citizens with maturity, experience and independence. We want no puppets, no good ole’ boys and no one riding at their first rodeo. We expect experienced business people who have risked their own capital successfully. This is the major leagues of Lubbock boards and commissions, not a training ground for beginners.

Finally, while Gail Kring should step down or not be reappointed, Marc McDougal must be reappointed by the Council. If we’ve learned anything about this board it is that Marc McDougal and Clayton Isom are leaders who listen. While Kring and Vice Chairman Emilio Abeyta dissembled, McDougal and Isom stepped up to address the problem.

If McDougal has a conflict that disqualifies him then the Council must allow the City Attorney to make that determination. For this Council, particularly the Foolish Five, who arrogantly maintain their right to accept free tickets, to make a determination about conflicts of interest is like Bill Clinton giving advice on marital fidelity.

“For this Council to make a determination about conflicts of interest…is like Bill Clinton giving advice on marital fidelity.”

If the City Attorney’s determination was good enough to give them a pass, and to conflict out Dwight McDonald, then the City Attorney ought also to be allowed to make the determination with regard to McDougal. Anything else is suspect on the part of the Council and will appear, quite rightly, to be an attempt at an LP&L cover-up.

All of this requires much of those involved. The Council must collectively surrender personal agendas for the good of the city. If Gail Kring doesn’t step down he should not be reappointed because he isn’t up to the job. And the EUB must show all. Enough closed meetings; wash your dirty laundry, if any exists, in public. Tell us what’s going on. 

The Sandstorm Scholar believes in Lubbock exceptionalism. Americans are great; Lubbockites are a cut above. We can rise to this challenge.

Prairie Scholars release song to help flood relief

The Prairie Scholars have released a song written by Andy and Jessica Eppler (The Prairie Scholars) in the days following a devastating flood on the front range in Colorado.

All proceeds will be donated to the Longmont/Lyons, Colorado flood relief effort.

Lubbock TX: Andy Eppler releases his "Long and Lonesome Way" CD featuring the hit single "Lubbock, TX"
Andy and Jessica Eppler.

Andy and Jessica Eppler are Lubbock singer/songwriters transplanted to Longmont, Colorado. If you’re not familiar with their unique brand of folk/rock you are in for a treat. They are Lubbock originals.

And if you wonder, the answer is yes, our name probably came from a subliminal influence by the Prairie Scholars. It wasn’t intentional, but we were associating with Andy when Sandstorm Scholar was in its formative period and we’re not ashamed to say that association had an impact.

The song can be sampled and purchased by clicking here.

Analysis and commentary: What’s going on at LP&L?

What we know…
Electric Utility Board members Marc McDougal and Clayton Isom have called for a special meeting of the EUB for Wednesday at 9 a.m. and in the process overruling EUB Chairman Gail Kring who refused to call a meeting on his own initiative. The controversy at LP&L seems to quickly be coming to a head.

There are three items on the agenda for Wednesday:

  1. Discuss procurement of electric generation beginning in 2019.
  2. Investigation regarding alleged improper generation procurement activities & retention of outside counsel.
  3. Deliberate the appointment, employment, evaluation, reassignment, duties of a public officer or employee (Director of Electric Utilities).
EUB members Marc McDougal
and Clayton Isom

This is explosive. Before we start reading between the lines let’s review what else we know for certain.

Marc McDougal told the Sandstorm Scholar that on Thursday he asked Gail Kring to call a special meeting of the EUB to ask for an investigation of the purchase power agreement bid process.

McDougal said Kring refused to call a meeting. Kring could not be reached for comment on this story and did not return our calls.

We contacted EUB member Clayton Isom and he confirmed that he also called for a meeting by communicating with EUB General Counsel Todd Kimbrough. EUB rules allow that two members can call a meeting at any time with proper notice.

We understand that allegations of potentially unlawful misconduct were made in the Thursday October 17 meeting. Those allegations include the possibility of bid rigging in the purchase power agreement RFP process.

How serious is this crisis? Mayor Glen Robertson said it this way, “If all of the allegations are true, people could go to jail.”

In our news links you will find a story on EverythingLubbock.com.

What we think we know…
Here’s our best effort at the interpretation of the agenda: The EUB is going to look at the bids for power generation procurement and table or reject all of them because of the allegations of impropriety, then retain outside counsel to investigate how widespread the improper dealings are, if any exist.

It appears that EUB members have heard enough that at least two believe there is sufficient evidence to warrant a discussion of the demotion, suspension or firing of CEO Gary Zheng.

Now, all or none of this may happen on Wednesday but it is clear that at least two of the members of the EUB, McDougal and Isom, want to get to the bottom of this.

Director of Electric Utilities Gary Zheng may not survive the meeting. If he does, don’t be surprised if Dr. Zheng is placed on administrative leave until the investigation is complete.

What we want to know…

EUB Chair Gail Kring &
Vice-Chair Emilio Abeyta

Why did the Chairman of the EUB refuse to call a meeting to root out allegations of corruption at LP&L? Gail Kring apparently didn’t want to know the truth badly enough to do the right thing. He was forced by members McDougal and Isom to call a meeting.

Hiding his head in the sand and neither asking nor answering questions is one more indicator of weak leadership on Kring’s part.

Who will attend the meeting? Perhaps more to the point, who will choose to not attend the EUB meeting? Board members who want to stall an investigation or delay difficult personnel decisions may choose to absent themselves from Wednesday’s meeting.

We asked Mayor Glen Robertson if failure to attend the meeting in an attempt to thwart a quorum was cause for removal from the EUB. Robertson responded, “It would be for me.”

The public may be able to tell some of the good guys from the bad guys by who has an unexcused absence on Wednesday morning.

How deeply is Councilman Victor Hernandez involved in all of this? Other than the Mayor, who is an ex officio member of the EUB and who has been openly critical of the board, Hernandez has been the Council member most active in LP&L’s business issuing personal white papers with suggestions for solutions to LP&L challenges and even coordinating his releases with LP&L news conferences in the past.

The Vice-Chairman of the EUB is Hernandez’ close friend and confidant, Emilio Abeyta.

Could this reach as far as members of the LP&L board or the Lubbock City Council? “There is the potential for a lot of involvement and an investigation needs to cast a far and wide net,” said Robertson, who made no specific accusations.

Is there an FBI investigation of LP&L? Mayor Robertson’s “I can neither confirm nor deny” answer to our direct question about an FBI investigation is standard federal-speak for “Yes, but they told me not to talk about it.” Add that to his “people can go to jail” comment and what you have are allegations of criminal behavior being investigated by law enforcement.

What kind of business does the Director of Electric Utilities have outside the country? Two weeks ago, when Gail Kring sent the memo from general counsel to EUB members we were told by staff that Zheng was out of the country on business. There is probably legitimate business to be done but we’d like to know what it is. Or, staff may have been misinformed and it may not have been a business trip after all.

And probably most important, what is Dr. Zheng’s role in the alleged bid-rigging? If bid rigging exists it would almost necessarily involve LP&L personnel at the highest levels of management.

There are many more unanswered questions. The Sandstorm Scholar has submitted a Public Information Act request for Zheng’s travel, email and phone records. Those may tell us more when and if and when they are turned over.