Monday, January 24, 2022

An easy call turned into a torturous process, but the Alabama Supreme Court finally got it right in restoring David Roberson's claims against Balch & Bingham

Alabama Supreme Court

A former Drummond Company executive's lawsuit against Balch & Bingham has new life after the Alabama Supreme Court reversed itself on Friday and found a Jefferson County circuit judge wrongfully dismissed David Roberson's claims against the Birmingham law firm. Drummond failed in its efforts to be dismissed from the lawsuit, so Friday's ruling means Roberson's $75-million lawsuit will move forward against both the coal giant and its law firm.

The new order replaces a ruling dated July 23, 2021, which upheld dismissal of Roberson's Balch claims based on the tight two-year statute of limitations in the Alabama Legal Services Liability Act (ALSLA). With Friday's ruling, the state's highest court found the ALSLA did not apply to Roberson's claims, so they are not time-barred; essentially the court wound up saying, "Oops, we screwed up back in July. Sorry. Our bad." That might not build public confidence in the Alabama Supreme Court, but at least, the justices did get it right -- finally.

How do we know? We've been reporting since December 2020 that the Roberson-Balch matter boils down to two simple legal issues -- both of which are well-established in Alabama -- so it should be an easy call for the Supreme Court to reverse the trial court's dismissal of Roberson's claims. Why did the appeal hang in limbo for much longer than it should have, and why was the screwed-up original appellate ruling ever issued? That brings us to a number of oddities about the high court's handling of this case:

(1) The original appellate ruling never made sense -- and clearly ran contrary to Alabama precedent; a reasonable observer might wonder: Why did the justices not see that the first time around? What caused them to change their minds?

(2) What about the revolving cast of characters? Six justices (Bolin, Shaw, Wise,  Bryan, Sellers, and Mitchell) recused themselves in the Roberson-Balch matter. Four justices (Stewart, Main, Lyons, and Welch) came out of retirement to serve as special justices for the Roberson case. Why so many conflicts of interest? Do they involve connections to Balch?

(3) Friday's ruling covered 67 pages, including a dissent. Why was so much ink spilled on an opinion that could have been spelled out in 3-4 pages?

(4) The high court's machinations give the impression this was a tortured process on an exceedingly close call. It should have been neither.

Here's how we described the basic issues on Dec. 20, 2020, under the headline "Alabama Supreme Court should have an easy call in reversing trial court and restoring Balch Bingham to David Roberson's $75-million fraud lawsuit." Our analysis plainly shows where Jefferson County Circuit Judge Tamara Harris Johnson went off the tracks:

The Roberson brief is 80 pages long and touches on a host of issues that indicate Balch Bingham should be brought back into the lawsuit to join codefendant Drummond, which had Circuit Judge Tamara Harris Johnson deny its motion to dismiss. . . .

The appeal, however, probably can boil down to two dispositive issues:

(1) Judge Johnson erred in failing to accept as true Roberson's factual allegation that he did not have an attorney-client relationship with Balch Bingham -- 

Johnson apparently found this allegation was conclusory and improperly pled, but that runs contrary to Alabama Supreme Court precedent, as found in a case styled Ex parte Austal USA (2007). From our post on the Austal finding:

In Austal, several employees were injured while using a "Miller saw," and they alleged that Austal intentionally injured them, asserting a claim for fraud and stating, "Austal “intentionally made false statements regarding the safety of the Miller Saw” and that those statements were made “with the conscious and deliberate intent to injure its workmen, including plaintiffs, with the Miller Saw so that it could build its ships without having to incur the costs associated with finding a safer alternative method to perform the work. . . .” Austal fraudulently “suppressed, concealed, hid or withheld important facts from the Plaintiffs regarding the known safety hazards associated with the Miller Saw ․ and that Austal knew the tool was unsafe and had made the conscious and deliberate decision to intentionally injure its workmen with the tool so that it could build its ships without having to incur the costs associated with finding a safer alternative method to perform the work.”

Austal labeled the allegations "conclusory" and claimed the injuries were accidental, the kind for which the company was immune from tort liability. The trial court denied Austal's Motion to Dismiss, and the Alabama Supreme Court denied the company's petition for mandamus review. 

The factual allegations in Austal, particularly those involving reliance on false statements, are similar to those in the Roberson case. The Supreme Court's reasoning on denial of a Motion for Dismiss also is instructive for Roberson:

Austal urges this Court to look only to the specific factual allegations pleaded in the plaintiffs' complaint concerning how the injuries occurred and the alleged business motivations Austal had for requiring the plaintiffs to work with a dangerous tool. Those allegations, Austal contends, describe precisely the type of workplace accidental injuries for which it is immune from tort liability. . . . 

At the motion-to-dismiss stage, however, a court's ability to pick and choose which allegations of the complaint to accept as true is constrained by Alabama's broad and well settled standard for the dismissal of claims under Rule 12(b)(6). In this case, there is no question that the plaintiffs have pleaded that Austal “made the conscious and deliberate decision to intentionally injure its workmen.” That allegation -- that a company would deliberately injure multiple specific employees -- is so shocking that it invites skepticism. Moreover, we agree with Austal that a specific intent or desire to cause injury to its employees is not particularly consistent with the alleged cost-saving motivation for causing such injuries. Nevertheless, our standard of review does not permit this Court to consider the plausibility of the allegations. Rather, in considering whether a complaint is sufficient to withstand a motion to dismiss, we must take the allegations of the complaint as true, Ussery v. Terry, 201 So. 3d 544, 546 (Ala. 2016); we do not consider “'whether the pleader will ultimately prevail but whether the pleader may possibly prevail,”' Daniel v. Moye, [Ms. 1140819, November 10, 2016] ___ So. 3d ___, ___ (Ala. 2016) (quoting Newman v. Savas, 878 So. 2d 1147, 1149 (Ala. 2003) (emphasis added)); and “[w]e construe all doubts regarding the sufficiency of the complaint in favor of the plaintiff.” Daniel, ___ So. 3d at ___. Furthermore, a Rule 12(b)(6) dismissal is proper “'only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief.”' Knox v. Western World Ins. Co., 893 So. 2d 321, 322 (Ala. 2004) (quoting Nance v. Matthews, 622 So. 2d 297, 299 (Ala. 1993)).

In this case, regardless of our view on the likelihood of the plaintiffs' ultimate ability to establish the truth of the intent-to-injure allegations, or even to survive the summary-judgment stage, we cannot deny that there is at least some possibility that those allegations are true. Accordingly, the plaintiffs are entitled to at least limited discovery on the issue whether their claims are subject to the exclusivity provision of the LHWCA.5 Thus, Austal has not shown a clear legal right to a Rule 12(b)(6) dismissal.

In Austal, the plaintiffs' allegations clearly could be labeled as conclusory; in fact, they border on mind reading. But the Alabama Supreme Court made two central findings:

(a) Despite the unlikely nature of the plaintiffs' claims, they had to be taken as true for purposes of a motion to dismiss.

(b) All doubts about the sufficiency of the complaint must be construed in favor of the plaintiff at the motion-to-dismiss stage.

Johnson failed to apply these standards in the Roberson matter, so her dismissal of Balch & Bingham should be reversed on those grounds alone.

Those, however, are not the only grounds for reversal:

What about the second dispositive issue? Here's how we explained it in the earlier post:

(2) Judge Johnson erred in finding the Alabama Legal Services Liability Act (ALSLA), and its tight statute of limitations, applied to Balch Bingham even if Roberson had no attorney-client relationship with the firm.

Again, this runs afoul of Alabama Supreme Court precedent as stated in Mississippi Valley Title Ins. Co. v. Hooper, 707 So. 2d 209 (Ala., 1997) From our post on the Mississippi Valley finding. 

Alabama law is clear that ALSLA -- and its tight statute of limitations, which could make the Roberson complaint time-barred -- applies only where there is an attorney-client relationship. Circuit Judge Tamara Harris Johnson correctly stated the law in her recent order dismissing the Balch & Bingham law firm from the Roberson case, citing a case styled Mississippi Valley Title Ins. Co. v. Hooper, 707 So. 2d 209 (Ala., 1997). Harris wrote:

The Court held further that “an attorney-client relationship is an essential element of a claim under the Legal Services Liability Act... To create an attorney-client relationship,there must be an employment contract‘either express or implied’ between an attorney and the party for whom he purports to act or someone authorized to represent such party. . . . ”

The Court in Mississippi Valley, supra, further held, The test for determining the existence of [an attorney-client] relationship is a subjective one and ‘hinges upon the client’s belief that he is consulting a lawyer in that capacity and his manifested intention is to seek professional legal advice.”

In our view, Johnson correctly stated the law in the Balch dismissal, but she applied it incorrectly -- and her order should be reversed by the Alabama Supreme Court, where it stands on appeal.

To summarize:

(1) Roberson must have had an attorney-client relationship with Balch & Bingham for his complaint to fall under ALSLA and be time-barred.

(2) Roberson said in his complaint that he had no such relationship with anyone at Balch, and that must be taken as true. On top of that, the record shows no sign of an employment contract, "express or implied," between Roberson and any lawyer at Balch. Finally, there is no hint that Roberson believed he was consulting a lawyer in the capacity of being a client. In fact, the words of Roberson's complaint, which must be taken as true, show just the opposite -- that he had no such belief.

For the reasons cited above, the Alabama Supreme Court should have an easy call in reversing Johnson and bringing Balch Bingham back into the Roberson lawsuit.

Moving ahead to Friday's order, the court turned on page 33 to a case that probably is more analogous to Roberson-Balch than any other case on record. From the opinion (some citations omitted for ease of reading):

In Fogarty v. Parker, Poe, Adams & Bernstein, L.L.P., 961 So. 2d 784 (Ala. 2006), the nonclients sued attorneys asserting, among other things, fraud, alleging that the attorneys had "misrepresented to [the nonclients] Alabama law by stating that under Alabama law the [nonclients] were not entitled to review the books and records" of a majority shareholder in a venture in which the nonclients were minority shareholders. . . The venture was failing and the nonclients had become suspicious of the activities of the majority shareholder. The attorneys represented the majority shareholder and, as noted above, denied the nonclients access to the books and records. The attorneys moved to dismiss the nonclients' complaint on the ground that "the [nonclients'] claims arose out of the rendition of legal services" and that the ALSLA provided their exclusive remedy. . .  They also asserted, however, that since "the [nonclients] were not clients ... [the attorneys] owed no legal duty to the [nonclients]." This Court rejected those arguments and held that the nonclients' fraud claims were not legal-malpractice claims. The Court held: "The ALSLA applies only to allegations of legal malpractice, i.e., claims against legal-service providers that arise from the performance of legal services . . . ." This Court in Fogarty also noted: "After a thorough examination of the language of the entire act, this Court [in Cunningham v. Langston, Frazer, Sweet & Freese, P.A., 727 So. 2d 800, 804 (Ala. 1999),] held that 'the ALSLA does not apply to an action filed against a "legal service provider" by someone whose claim does not arise out of the receipt of legal services. . . .' " Consequently, this Court held, the lack of an attorney-client relationship did not bar the nonclients' fraud claims asserted independently of the ALSLA. . . .

That statement from Fogarty essentially was the court's final word on Roberson-Balch. Roughly three paragraphs later the justices concluded with this:

The trial court's order dismissing Roberson's third amended
complaint against Balch is reversed, and the cause is remanded for
further proceedings consistent with this opinion.

Those words probably ensured a few folks at Balch & Bingham would have an unpleasant weekend. The call was not as easy as it should have been. But to its credit, the high court got it right in the end.

Friday, January 21, 2022

Balch & Bingham's dubious history on matters of race -- including staunch support for George Wallace -- rises up in 2022 battle over redistricting in Auburn

From banbalch.com
 

The racially dubious history of Birmingham's Balch & Bingham -- which includes support for George Wallace's "stand in the schoolhouse door" to keep black students out of the University of Alabama -- has come back to bite the law firm in 2022, according to a report at banbalch.com (BB). The current-day issues involve Balch's support for a redistricting plan in Auburn, AL, that appears to restrict access for black voters. BB Publisher K.B. Forbes explains, under the headline "Unbelievable! Divisive Balch Slams NAACP’s Proposed Electoral Map in Auburn as Allegedly 'Invalid'”:

Embattled and alleged racist law firm Balch and Bingham has hit a land mine in Auburn.

The optics were horrific: two white men denouncing the work of the NAACP, the historic African American Civil Rights organization.

Last night, the city council unanimously voted to postpone the matter until January 25th after fireworks flew.

What caused sparks to ignite? Forbes writes:

Balch’s Darmon Walker brought on a professor to help denounce the map provided by the National Association for the Advancement of Colored People as allegedly invalid.

As The Auburn Plainsman summarized:

[Balch & Bingham’s] Walker praised the City’s efforts and called it’s plan “exemplary” while claiming the NAACP map does not meet the legal standards and redistricts based on minority groups. 

The summary confirms what Opelika-Auburn News reported:

The delay followed a report from Balch and Bingham attorney [Dorman] Walker, who attended Tuesday’s council, to determine whether the alternate proposal from Lee County NAACP Branch 5038 was compliant with the Voting Rights Act of 1965.

The Lee County NAACP submitted their map to the City of Auburn on Dec. 21 ahead of when the council was initially prepared to vote on its own map. The NAACP’s proposal includes two majority-minority wards as opposed to the singular majority-minority Ward 1 among the city’s current districts present and in its planned map.

Walker was joined by Trey Hood, a professor at the University of Georgia’s Department of Political Science. The two put the NAACP’s map up against three conditions, or prongs, of the Gingles Test….

“I was unable to find any evidence, statistically speaking, to sustain any of the three Gingles prongs, and you need all three of them to sustain a vote dilution claim,” Hood told council members…

As the old saying goes, there are “lies, damned lies, and statistics. ”

Gee, it's hard to imagine why NAACP representatives reacted poorly to the Balch-backed report: 

The NAACP swiftly responded to the egregious attack. The Opelika-Auburn News wrote:

[The NAACP] contended during a public hearing that their map was a valid submission and compliant with the Voting Rights Act. “Our map is legal – the districts are evenly sized, it does not hurt minorities (and) it does not dilute the ability of minorities to elect representatives of their choosing,” [Tabitha] Isner said. “I find it very bizarre that it’s being presented as if it’s not a legal map.”

Isner asserted the Gingles Test is intended for courts if a redistricted map is believed to be invalid after adoption by a municipality. She said council members should instead base their process on having equally sized wards above other factors.

Terra Foster, executive director of the NAACP Alabama State Conference, attended Tuesday’s council meeting and appeared at the podium after Isner with a scathing conclusion. “I can’t help but think our map, the NAACP map, is being discredited,” Foster said.

Balch's sketchy history on race-based issues did not manage to escape the fray:

Balch’s Walker was grilled about his association with the late Thomas Hofeller a redistricting consultant and alleged racist who allegedly “divided and diluted” the African American vote for decades according to various news reports. 

Walker responded that his correspondence with Hofeller was brief and didn’t include any discussion on the views that were revealed after the strategist’s death in 2018.

“After he died, his daughter … got copies of computer files that portrayed some fairly egregious positions with regard to how redistricting could be used to steal votes from Democrats and from minority voters, and perhaps some racist views,” Walker told the council. “I don’t believe those are the appropriate things to do. I think distribution should be done in a way that makes our democracy function, and I certainly think we have to be very vigilant in the protection of minority voting rights.”

Perhaps?

Walker’s defensive comments last night appear to contradict news reports after the Hofeller Scandal broke. In 2019, the Montgomery Advertiser reported:

Thomas Hofeller, who drew maps for Republicans in North Carolina and Pennsylvania, corresponded with then-Rep. Jim McClendon, R-Springville, who helped oversee Alabama’s redistricting process, and Dorman Walker, a Balch and Bingham attorney who defended the state plan in court, as the redistricting process in Alabama began in 2011.

The legislature was later forced to redraw the maps after federal courts ruled that legislators improperly used race in drawing a dozen districts.

The documents published by The Intercept suggest Hofeller saw guidelines used by the redistricting committee and was researching or had received data on racial breakdowns in the state.

McClendon declined to answer follow-up questions about how the maps were drawn. Walker had no comment …. Hofeller died in 2018.

Forbes was left searching for words to describe Balch's role in the redistricting plan:

From “no comment” to “perhaps,” Balch’s Walker appears to have misled the Auburn City Council.

To reiterate, in 2011, Balch’s Walker defended the state’s redistricting plan that was later tossed out by the federal court because the state improperly used race.  

While the Auburn City Council is deliberating redistricting, the one decision they can make is to terminate Balch & Bingham immediately. 

Balch consultants appears to be dividing the Auburn community by foolishly slamming and denouncing the honest work of the NAACP. 

When we started this blog in 2017, we asked, “Is it 1961 in the South again?”

Last night in Auburn, Balch’s sheer stupidity made it feel like it.

Thursday, January 20, 2022

Environmental watchdog group picks up on the story of Alabama Power's peculiar contracts with Matrix LLC -- a "shadowy" group with ties to scandal in Southeast

 

A prominent watchdog organization, known for exposing attacks on renewable energy and countering misinformation from fossil-fuel and utilities interests, has picked up on the story of Alabama Power's dubious contracts with Matrix LLC, of Montgomery. In its headline, the Energy and Policy Institute (EPI) refers to the power company's payment of "millions to shadowy consulting groups involved in scandals throughout the Southeast." Writes Daniel Tait, research and communications manager for EPI:

Documents recently posted online suggest that Alabama Power engaged in a multi-million dollar effort to monitor environmental groups, exert pressure on regulators, and conduct other political activities. 

The records appear to be contracts between Alabama Power and companies controlled by Joe Perkins, a longtime Alabama-based political consultant whose companies have been connected to numerous utility-adjacent controversies, including the “ghost-candidate” election scandals in Florida and the North Birmingham bribery scandal in 2018, which has been referred to as “Alabama’s Watergate.”

The contracts were posted on the blog of Donald Watkins shortly after Christmas 2021. Watkins is an attorney who last year lost a $1.5 million defamation lawsuit brought by Perkins and is currently serving time in a federal prison on wire fraud and bank fraud charges.

An Alabama Power spokesperson was tight-lipped when EPI sought comment:

These new records appear to show two Alabama Power contracts, one for “consulting services” with Perkins Communications LLC, and another for “governmental relations” with Matrix LLC; both corporations are owned by Joe Perkins. The contracts were worth just over $2.5 million from January 1, 2018, to July 31, 2019. They contained reporting provisions that required Matrix and Perkins Communications to provide information to Alabama Power upon request and to keep detailed records of activities performed on behalf of the utility.

EPI reached out to Alabama Power seeking comment on the contracts posted on the blog, and Alabama Power replied with the following statement: “Matrix has provided strategy and policy advice to Alabama Power for many years.” 

Matrix's involvement in Florida political controversy did not escape EPI's attention:

Perkins, who founded Matrix, is currently embroiled in a legal battle with the consultancy’s former CEO Jeff Pitts, who is now the head of a competing company called Canopy Partners.

UPDATE: After publication of this piece, Matrix LLC and Joe Perkins, via an attorney, demanded retractions. Their letter asserts in part, “Neither Dr. Perkins nor any Matrix employee provided legitimate services to or had any direct or indirect involvement in any of the Florida ghost candidate campaigns. To the extent Mr. Pitts or others were involved with any ghost candidate campaign, their involvement was without Matrix’s knowledge or consent and contrary to Matrix policy.” EPI stands by the reporting that Matrix LLC was involved with this scandal, involvement which was originally reported by the Orlando Sentinel. Jeff Pitts was CEO of Matrix LLC during the time period in question.

EPI notes peculiar language in the Alabama Power-Matrix contracts, as first reported at donaldwatkins.com

The purported contract between Alabama Power and Matrix LLC, worth $90,000 per month from January 1, 2018, through December 31, 2018, tasked Matrix with a variety of tracking and monitoring duties, such as to “monitor the policies of” existing environmental groups, and to watch for the creation of new environmental groups. The alleged contract tasks Matrix with monitoring the actions of regulatory boards and agencies – likely including the Alabama Public Service Commission – and maintaining relationships with those who influence state environmental policy. Alabama Power asked Matrix to “continue the development and maintenance of a grassroots database of organizations.”

Alabama Power’s contract with Perkins Communications LLC, worth $124,000 per month from August 1, 2018, through July 31, 2019, tasked Perkins with monitoring and providing “direct relations” with groups that impacted Alabama Power, such as the Alabama Education Association and the Alabama AFL-CIO. The contract was later broadened to include any external organization that may affect Alabama Power. Perkins was also tasked with promoting Alabama Power in the Black Belt (the region that gets its name from the rich soil that made it an agricultural hotspot, spanning across Mississippi, Alabama and Georgia). The company is listed as “Perkins Communication L.L.C.” by the Alabama Secretary of State’s office and is registered to Joe Perkins and Amy Todd Perkins.

The contracts allowed the two companies to collect fees from Alabama Power “without invoicing” or the submission of documentation to justify a payment. Under the contract, Alabama Power had the right to request a report describing the work the companies did for the utility, but it is unknown whether such reports exist.

The apparent contracts further required the companies to maintain records related to their work for the utility for at least three years and gave Alabama Power the perpetual right to audit and make copies of such records.

The records appear to show the Alabama Power-Matrix nexus was active during the North Birmingham Superfund bribery scandal, EPI notes:

The recently published records also appear to show that Alabama Power contracted with Matrix LLC and Perkins Communications during a period in 2018 when former state representative Oliver Robinson, then-Balch & Bingham partner Joel Gilbert, and former Drummond Company executive David Roberson were on trial for bribery. Robinson, who represented Alabama’s House District 58 from 1998 until he resigned on Nov. 30, 2016, sold his influence as a state legislator to aid Balch & Bingham and Drummond in opposing the Environmental Protection Agency’s efforts to prioritize and expand a Superfund site near Robinson’s legislative district. Drummond has historically been one of the largest suppliers of coal to Alabama Power, and the two have maintained a close relationship spanning decades, including a price fixing scandal in the late 1970s.

All three men were later convicted, and their appeals were denied. Balch and Bingham was the law firm for Drummond Company and also serves as the law firm for Alabama Power.

Alabama Power contributed at least $30,000 in 2015 to the Alliance for Jobs and the Economy, the shell group at the heart of funneling money for the North Birmingham bribery scandal.  Court records from the 2018 North Birmingham bribery trial show that Pitts met with Balch and Bingham regarding “community outreach”; court testimony indicated that such outreach was connected to efforts to stop a North Birmingham community from being added to the Environmental Protection Agency’s National Priorities List for Superfund sites.

EPI provides important history about the Alabama Power-Matrix relationship:

Matrix LLC is a lobbying and opposition research firm that has provided political consulting services to Alabama Power for decades. Utility-backed front groups including JobKeeper Alliance and EnergyFairness, the latter of which was formerly known as the Partnership for Affordable Clean Energy, were born out of Matrix, and have supported the positions of Alabama Power. 

The two front groups worked to stop a 2013 formal rate review of Alabama Power, which had not been completed since 1982. Terry Dunn, a Republican public service commissioner at the time, pushed for the formal rate review due to what he believed were Alabama Power’s excessive profits, saying, “They’ve [Alabama Power] had a free pass for the last 30 years. That’s what the problem is. It’s time to have a checkup.” 

GASP, an environmental group, has said its website was hacked after criticizing the regulatory process in Alabama, and Dunn has said that he was trailed by private investigators. The Alabama Public Service Commission ultimately changed the formula used to calculate Alabama Power’s profits in an attempt to quell the public scrutiny, but an Energy and Policy Institute analysis found that Alabama Power still ranked as one of the most profitable utilities in the country, pulling in more than one billion dollars in profits on top of the electric utility industry average from 2014 to 2018.

JobKeeper Alliance and EnergyFairness have also worked on behalf of other utilities in the Southeast. EnergyFairness has supported Florida Power & Light (FPL)’s attempts to roll back net metering, a policy which requires utilities to compensate rooftop solar owners for excess energy they send to the grid.

Matrix and its former employees, such as Pitts, have worked to influence elections in Florida in the past few election cycles. Richard Alexander, whose sister worked for Matrix, chaired Grow United, the non-profit organization at the heart of Florida’s “ghost-candidate” election scandals, and is being investigated by prosecutors in South Florida, according to a report by the Miami Herald. Alexander also created groups to promote the agenda of FPL, according to reporting from the Orlando Sentinel. (UPDATE: The letter that the Energy and Policy Institute received from Matrix’s lawyer states, “To the extent Mr. Pitts or others at his direction were involved with Grow United, those activities were never authorized and were kept secret from Matrix and Dr. Perkins.”)

Pitts sent FPL CEO Eric Silagy a detailed proposal for how FPL money could be hidden through an array of entities which would then make campaign contributions to politicians to “minimize all public reporting of entities and activities,” according to reporting by the Orlando Sentinel. Silagy received the emails from Pitts under the pseudonym of “Theodore Hayes,” the Sentinel reported.

Editor’s note: In response to a letter from Matrix, LLC and Joe Perkins through their attorney, EPI has clarified some language in this article, while standing by specific factual assertions. Their full letter is available here.

Wednesday, January 19, 2022

Joe Perkins demands removal of Alabama Power contracts from Web site, forcing more scrutiny and raising new red flags from donaldwatkins.com

Donald Watkins
 

If anyone had doubts about reporting at donaldwatkins.com regarding peculiar contracts between Alabama Power and the Matrix LLC "dirty tricks" firm of Montgomery, they might want to rethink things. That thought arises in the wake of a Watkins post yesterday in which an attorney for Matrix and owner/founder Joe Perkins demanded links to two Alabama Power contracts be removed from the Watkins Web site.

Did attorney Cason Kirby present sufficient grounds for removal of the links? Not to Watkins' satisfaction, and the links remain at his site. In fact, the demand caused Watkins, an attorney by training, to take a  closer look at the contracts and report on them again under the headline "Joe Perkins-Alabama Power Co. Contracts Raise New Red Flags": Writes Watkins:

On December 26, 2021, donaldwatkins.com published two contracts executed between Joe Perkins/Matrix and Alabama Power Company ("APC"): (a) Agreement No. 3-18-00552, which paid Joe Perkins $124,000 per month, "without invoicing," and (b) Agreement No. 3-18-00487, which paid Perkins' Matrix, LLC ("Matrix"), $90,000 per month, "without invoicing." [Click here to read Agreement Nos. 3-18-00552 and 3-18-00487]. In total, $2.5 million in APC ratepayer money was paid to Perkins and Matrix between January 1, 2018 and July 31, 2019.

On January 12, 2022, Birmingham, Alabama attorney Cason M. Kirby contacted donaldwatkins.com on behalf of his client, Joe Perkins, and demanded that these two APC Agreements be removed from my online news website. Mr. Kirby claimed: (a) the APC Agreements were "stolen," (b) Agreement No. 3-18-00552 contained Perkins' Social Security number, and (c) the APC Agreements contained Joe Perkins' "trade secrets." For the reasons discussed in this article, Mr. Kirby's demand was rejected.

Was it a good idea for Perkins to seek removal of the documents, which show that Alabama Power paid Matrix some $2.5 million without the need for itemized invoices? Maybe not, as Watkins reports:

Perkins' efforts to remove the APC Agreements from public view forced me to take a closer look at them. When I revisited the Agreements, they raised new red flags.

Agreement No. 3-18-00552, which is dated August 1, 2018, purports to be a contract between APC and Perkins Communications, LLC. According to records on file with the Alabama Secretary of State's office, Perkins Communications is an Alabama limited liability company that was formed on January 2, 1997 by Joseph W. Perkins, Jr., and Amy Todd Perkins (his wife).

Rather than using the corporate tax ID number for Perkins Communications in order to receive $124,000 per month from APC, Joe Perkins used what his attorney has confirmed is Perkins' Social Security number to access APC's money. Joe Perkins, as an individual, and Perkins Communications, LLC, are two separate legal entities for federal income tax reporting purposes.

APC contracted with Perkins Communications, LLC, in Agreement No. 3-18-00552, not Joe Perkins, in his individual capacity. Yet, it appears that APC paid $1,488,000 ($124,000 per month for 12 months) to Joe Perkins "without invoicing," even though Perkins Communications is the legal entity specified in the first paragraph of Agreement No. 3-18-00552.

Why the curious "no invoicing" language in the contracts? Watkins explains it with this sub-headline: "APC Wanted Its Business Relationship with Perkins Concealed from Public Disclosure":

To conceal its business relationship with a known federal lawbreaker from ratepayers, government regulators, media organizations, and the general public, APC seems to have inserted this "stealth" activation clause into Agreement No. 3-18-00552: "Consultant agrees to treat this Agreement, the existence of this Agreement, the business relationship established hereunder, and the Services performed pursuant to this Agreement as Protected Information. Consultant will not issue or make a public statement concerning the work hereunder or the existence of this Agreement without Company's prior consent, except to the extent required by law."

The same "stealth" language also appears in APC's Agreement No. 3-18-00487 with Matrix.

Until the publication of my December 26, 2021 article, the public did not know that APC paid a confessed federal lawbreaker $2.5 million between January 1, 2018 and July 31, 2019 to perform secret, politically sensitive, and highly suspect public relations work on its behalf.

Could this situation get dicey for Alabama Power and Matrix? The answer appears to be yes. Writes Watkins:

Because APC is a regulated public utility, various federal statutes and provisions of the Code of Federal Regulations impose an affirmative duty upon the Company to disclose the names and contracts of its vendors to federal regulators and members of the public.

Additional disclosure requirements apply to APC because the company engaged in interstate commerce each time it used Alabama ratepayer dollars to pay for the billions of dollars in cost-overruns that have plagued the Southern Company's construction of a troubled nuclear power plant in Mississippi. Ironically, the Mississippi nuclear power plant was never intended to provide electrical power to APC's Alabama customers. Yet, APC's money was conscripted by the Southern Company for the Mississippi nuclear plant without disclosure to APC ratepayers.

What about Perkins' contention that the contracts constitute "trade secrets"? Watkins addresses that issue:

In "Alabama Power Co. Paid $2.5 Million to Joe Perkins, 'Without Invoicing'," I described the nature and scope of Perkins' clandestine work for APC. In essence, Perkins was tasked with controlling and/or silencing: (a) the Alabama Education Association, (b) the Alabama AFL-CIO, (c) the Atlanta-based National Southern Christian Leadership Conference ("SCLC"), (d) various education groups and associations, (e) media outlets in Alabama, (f) Black Belt officials, and (g) any other organization or entity that might threaten or adversely impact Alabama Power's: (i) monopoly as an electric utility in Alabama, (ii) cozy relationship with federal, state, and local environmental protection agencies, (iii) control of news reporters in Alabama who cover environmental and regulatory matters, and (iv) decades-long chokehold on the governor's office, state legislature, Public Service Commission, state and federal courts, the Alabama Attorney General's Office, Alabama's three U.S. Attorneys, and mayors of the state's major cities.

Perkins claims the APC contracts define his "trade secrets." Law enforcement agencies in Florida, along with the Environmental Protection Agency, U.S. Department of Commerce, and Federal Election Commission in Washington, may have a different view of Perkins' scope of work, particularly in light of a lawsuit filed in Florida on September 2, 2021 by Matrix's former CEO [Jeff Pitts] that claims Perkins engaged in a pattern and practice of "racketeering activity."

Whether Perkins' work for APC is characterized as "trade secrets" or "racketeering activity," there is no dispute that it has benefited APC. By leveraging donations from APC's charitable Foundation in 2017 (along with Foundation donations in prior and subsequent years), Perkins has been able to: (a) silence the Congressional Black Caucus on environmental justice issues with a $10,000 APC Foundation donation, (b) quiet the voice of Dr. Martin Luther King's SCLC on environmental justice issues for a $50,000 donation, (c) neuter the Martin Luther King Center with a $10,000 donation, (d) silence the NAACP with a $1,000 donation, (e) quiet the National Council of Negro Women with $100, (f) muzzle the National Voting Rights Museum and Institute in Selma, Alabama with a $5,000 donation, and (g) silence the United Negro College Fund with a $10,000 donation.

Where does Southern Company, parent firm of Alabama Power, fit into the equation? For one, it can't claim ignorance, Watkins reports:

Both of Joe Perkins' secret APC Agreements were signed by Zeke W. Smith, whose email address is: ZWsmith@southernco.com. Mr. Smith's email address removes any doubt about whether the Southern Company knew that APC was in a clandestine business relationship with a known federal lawbreaker.

Where could all of this be headed? Watkins suggests that Alabama law enforcement isn't likely to get involved, partly because of Perkins' longstanding friendship with U.S. Sen. Richard Shelby (R-AL). But a protective coating might not be present in Florida, where the Pitts lawsuit is unfolding amid political turmoil that appears to involve Matrix:

In recent years, Joe Perkins has tried to replicate his successful "trade secrets" in Florida. Today, these "trade secrets" are the subject of news media investigations by the Orlando Sentinel and Florida Times-Union, as well as Florida-based law enforcement officials.

Meanwhile, donaldwatkins.com is committed to continuing its news investigation into the unholy alliance between APC and Joe Perkins. We are following APC's money into Perkins and his businesses to see where this money went from there. This is painstaking investigative work because APC did not require Perkins to submit invoices for the $2.5 million he received between January 1, 2018 and July 31, 2019.

Despite the built-in roadblocks to transparency, donaldwatkins.com is making substantial progress with its investigation. The public will be stunned to see where some of APC's ratepayer money finally ended up.

Tuesday, January 18, 2022

What's that smell? Alabama Power pays "dirty tricks" firm Matrix LLC, of Montgomery, $2.5 million for services that are not described in itemized invoices

 

Alabama Power paid $2.5 million to Montgomery-based Matrix LLC for services that are not described in invoices, according to a post at banbalch.com (BB). Matrix is known in political circles as a "dirty tricks" outfit, raising this question; Were some of its tricks for Alabama Power so dirty that power-company executives did not want them described in invoices?

The BB post is based, in part, on original reporting at donaldwatkins.com. Writes BB Publisher K.B. Forbes, under the headline "Smoking Gun! Crosswhite, the SEC, and $2.5 Million Carte Blanche to Matrix":

What a miserable start of the new year for Southern Company’s wholly owned subsidiary, Alabama Power and the subsidiary’s embattled CEO Mark A. Crosswhite.

The Matrix Meltdown is causing a storm of documents to be leaked and now a published report outlines how Alabama Power allegedly dished out $2.5 million to Joe Perkins, the founder of the obscure political consulting firm Matrix, without the need to provide itemized invoices.

Website donaldwatkins.com writes (providing links to the contracts in question:

[Alabama Power] has made Perkins its perennial contracting partner. We have obtained copies of two recent APC contracts with Perkins. [Click here to read contracts APC Agreement No. 3-18-00552 and No. 3-18-00487]. The agreements cover an 18-month period from January 1, 2018 to July 31, 2019. Perkins pocketed $2,568,000 from these agreements.

In an unusual and highly suspect departure from standard billing procedures for public companies, Joe Perkins was relieved of the obligation to submit itemized monthly invoices for his payments. APC’s $2.5 million flowed to Perkins automatically.

Perkins’ “Scope of Professional Services” under the agreements was likely intentionally vague and ambiguous. The agreements required Perkins to establish and maintain direct contact with federal elected officials, which is the political zone Perkins pledged to avoid in a “Conciliation Agreement” he executed after he confessed to making $8,000 in illegal campaign contributions to the 1986 Congressional campaign of close friend and ex-felon Roy Johnson.

The APC agreements also authorized Perkins to cultivate and maintain direct relationships with state and local elected and appointed officials, federal and state regulatory bodies, news reporters, grassroots community organizations and their leaders, the Alabama Education Association (AEA) and other educational associations, trade unions, civil rights groups, Black Belt officials, environmental justice groups, aspiring politicians, and any other individual or entity that might pose a threat to APC’s business monopoly and growing political influence.

(Note: Agreement No. 3-18-00552 includes the following language in Sec. 5.(a) -- Fees and Expense Reimbursement: "Company will remit fee payments to Consultant on or before the 10th business day of each month, without invoicing by Consultant." The same language appears in the same section of Agreement No. 3-18-00487. The "without invoicing" language also appears in Exhibit A, Sec. 3. Fees to be Paid. for both contracts.)

A public utility's payment of a substantial sum, without itemized monthly invoices, raises a number of troubling questions, Forbes writes:

Now with these new allegations and documents, we, the CDLU, are reaching out to our law enforcement contacts at the U.S. Security and Exchange Commission and a list of institutional investors of Southern Company, a publicly traded corporation.

Investors won’t like the fact that Alabama Power is pouring out millions without detailed invoices.

Did Crosswhite or Southern Company mislead or rip-off investors?

For years, incredible rumors and colorful innuendo circulated around Matrix, now in the middle of an ugly, two-state divorce between founder Joe Perkins and his once-protege Jeff Pitts.

The allegations include using actors, smearing political opponents, setting up AstroTurf campaigns, hiring brain-dead journalists, and engaging in fear-tactics that could appear to be criminal acts.

And these alleged fear-tactics and criminal acts, could they include these worrisome allegations?

Let’s see what the SEC and other law enforcement agencies find.

Happy New Year Mark!

Wednesday, January 12, 2022

Report shows Alabama-based Matrix LLC is in the midst of Florida turmoil that involves utility firms, money trails, lawsuits, and election intrigue


 

Matrix LLC, a Montgomery, AL-based political communications and consulting firm, was in the midst of a plan to turn a Jacksonville, FL, public utility into a private concern -- in a deal that would have been worth about $11 billion. The plan involved luring an opponent of privatization off the Jacksonville City Council with an enticing job offer. It did not work, but the plan has ties to a political scandal that has rocked Florida over the past year, according to a report at the Orlando Sentinel. It also touches on dueling lawsuits, crossing two states, that involve Matrix owner Joe Perkins and former CEO Jeff Pitts. Write reporters Jason Garcia and Annie Martin:

In the middle of 2019, Jacksonville City Council member Garrett Dennis was approached by a friend about a mysterious job offer.

The offer was to lead an organization Dennis had never heard of before. He’d make close to $250,000, expenses included, and travel the country advocating for the decriminalization of marijuana — an issue Dennis was passionate about.

There was just one catch: Dennis would have to resign from the City Council.

“I said, ‘Man, I’m not doing that,’” Dennis recalled this week.

Dennis said nothing ever came of the cryptic job offer. But records and interviews show it was orchestrated by consultants working with Florida Power & Light (FPL) — the utility giant whose parent company soon after submitted an $11 billion bid to buy Jacksonville’s city-owned electric company.

Any sale of the public utility, known as Jacksonville Electric Authority (JEA), was going to need approval from the City Council — and Dennis was firmly opposed to privatization.

How did the job offer materialize, and what did it mean? The Sentinel provides answers that trace to Alabama -- and a roiling scandal in the Sunshine State:

   

    The job offer plan was hatched by employees at an Alabama-based political and communications consulting firm called Matrix LLC, which was one of many outside consultants FPL enlisted to promote its ultimately unsuccessful campaign to buy JEA. It’s now part of a bitter legal dispute involving Matrix, some of its former employees and FPL.

    

      But it’s also part of an election scandal that has rocked Florida politics over the past year. That’s because the Jacksonville City Council member’s job would have been through “Grow United Inc.” — the same dark-money group used in 2020 to finance an ad campaign for the so-called “ghost” candidates who ran in three battleground state Senate elections.

FPL points a finger directly at Matrix LLC and its founder/owner, Dr. Joe Perkins. (FPL, by the way, is a subsidiary of NextEra Energy). Matrix, in turn, points fingers in other directions. From the Sentinel report:

A spokesperson for FPL confirmed that Matrix suggested creating a job for Dennis. But he said FPL rejected the proposal and pointed the blame at Matrix and its owner, longtime Alabama political consultant Joe Perkins.

“In July 2019, a Matrix representative working for Joe Perkins approached FPL about a plan to offer Garrett Dennis a job working to decriminalize marijuana,” FPL spokesperson David Reuter said. “FPL flatly rejected the plan and communicated our lack of interest to Joe Perkins’ team.”

An attorney for Perkins pointed to the company’s former CEO, Jeff Pitts, who left Matrix at the end of 2020 to start a new Florida-based consulting firm — with FPL as a client. Matrix has since sued Pitts and other former employees, accusing them of conspiring with an unnamed Florida-based client on secret projects and cheating Matrix out of fees.

“Matrix never participated in the proposal or implementation of any plan involving payment to a member of the Jacksonville City Council,” Matrix attorney Cason Kirby said. “To the extent any rogue Matrix employees were involved in those activities, they were undertaken in secret, without Dr. Perkins’ knowledge or consent.”

A spokesperson for Pitts’ new company, called Canopy Partners, would not answer questions but accused Perkins of leaking documents — which Perkins has denied. Pitts has countersued Perkins, accusing his former boss of extortion, and Canopy Partners has broadly denied any wrongdoing.

“Joe Perkins continues to leak false and misleading documents and we are not going to comment on his multimillion-dollar extortion scheme,” Canopy spokesperson John Collins said. He did not cite any examples of false or misleading documents.

It does appear, however, that someone did leak documents to the press:

Details of the proposed job for the Jacksonville City Council member are included in a cache of documents anonymously delivered to the Orlando Sentinel in late November. The records include checks, bank statements, emails, text messages, invoices, internal ledgers and more, all apparently unearthed during an internal investigation Matrix launched after Pitts and several other employees left the firm. The Sentinel partnered with Florida Times-Union metro news columnist Nate Monroe in Jacksonville to report this story.

The documents shed new light on how the then-Matrix consultants worked behind the scenes — including through intermediaries, political committees and dark-money nonprofits — to influence Florida politics on state and local levels, in ways that often advanced the utility company’s interests.

Why is Jacksonville Electric Authority an attractive target for privatization? 

The 127-year-old JEA is one of the largest publicly owned utility companies in the country, with nearly half a million electricity customers and nearly 400,000 water customers. Private companies have expressed interest in buying it for years — including FPL, which controls the territory surrounding Jacksonville.

The most recent attempt to privatize the agency began in late 2017, when an ally of Jacksonville Mayor Lenny Curry — Republican fundraiser Tom Petway, one of the mayor’s appointees to JEA’s board of directors — announced he believed JEA should consider privatization.

Around the same time, an obscure new group appeared called “Fix JEA Now.” The group was organized, according to three people, by Rev. Deves Toon, the National Field Director for Rev. Al Sharpton’s National Action Network who had recently arrived in Jacksonville.

Toon recruited Angie Nixon to serve as the public face of Fix JEA Now. Nixon, who is now a Democratic state representative from Jacksonville, said she initially agreed to get involved because she was concerned about a controversial deal JEA had struck to buy electricity from a nuclear power plant in Georgia.

But she said she soon concluded that Toon wanted to use Fix JEA Now to promote privatization.

“I decided to leave because I noticed some stuff that was fishy — it seemed as though they were going the route to sell JEA,” said Nixon.

That leads to a tangled money trail:

The records sent to the Sentinel include ledgers for various entities controlled by the former Matrix employees that show more than $180,000 in combined payments to Toon in 2018. Some of those payments are explicitly associated with JEA.

It’s not always clear from the ledgers which entities the payments came from. But one payment — $15,000 for “consulting” in December 2018 — came from a nonprofit organization called Mothers for Moderation directly funded by FPL.

The Mothers for Moderation records — which also include copies of corresponding bank statements, checks and fundraising solicitations sent to FPL CEO Eric Silagy — show that FPL donated $14.15 million to the group in 2018. That represented more than 90% of the money that Mothers for Moderation raised that year; all of the remaining money came from other nonprofits.


A November 2018 letter from the dark-money nonprofit Mothers for Moderation, one of several soliciting millions from Florida Power & Light via its CEO, Eric Silagy. Records show FPL donated $14.15 million to Mothers for Moderation in 2018, nearly all of the money the dark-money group raised that year.

Reuter, the spokesperson for FPL, said the company was “aware” that Matrix was paying Toon for work related to multiple clients. One of his tasks was to build support for a sale of JEA.

“As we understood it, Rev. Toon was engaging with members of his community to ask for their support to privatize JEA,” he said.

Part of the money trail led from FPL to Matrix LLC:

Invoices show that Alabama-based Matrix LLC was billed Florida Power & Light for millions in the days before the consulting firm began moving money through Grow United Inc., the dark-money nonprofit central to the "ghost" candidate scheme.

But Kirby, the lawyer for Matrix, said Matrix had explicitly forbidden its employees to engage in any projects related to the sale of JEA “due to the public controversy surrounding the sale,” which became a political lightning rod in Jacksonville and eventually sparked local and federal investigations.

After Nixon quit, Toon brought in a new person to serve as the public face of Fix JEA Now: Dwight Brisbane, a political consultant in Jacksonville — and a longtime friend of City Council Member Garrett Dennis.

It was Brisbane who approached Dennis about the job offer.

In an interview, Dennis said Brisbane called him sometime in the spring or summer of 2019. The City Council member said he was in the middle of two big policy debates at the time: His own push to decriminalize marijuana and the debate over whether to sell JEA.

“[Brisbane] called me up one day, he said, ‘I was talking to Toon and they’re going to offer you this job doing the whole [decriminalization] thing for this organization,’” Dennis said. “‘They’re going to pay you about $250,000 a year, full expense account, to go around and speak on the decriminalization ... But the catch is that you’re going to have to resign from City Council.’”

Dennis said he couldn’t find any record of the organization existing and he suspected it was a scam. He also said he was suspicious of the motives behind the offer.

Dennis was seen as one of the staunchest opponents to selling JEA on Jacksonville’s 19-member City Council. Privatization was expected to be a tough sell to the council, because multiple past efforts to sell JEA had never gone anywhere and proven very controversial, both with the community and JEA’s own employees.

In a separate interview, Brisbane also confirmed that he approached Dennis about a potential job with a marijuana advocacy organization — and that he did so at the request of Toon. Brisbane said Toon told him that Toon “had a group that [Toon] would like to see if Garrett would be interested in.”

Brisbane said he did not recall telling Dennis that he would have to resign from the City Council, though Brisbane said he may have told Dennis that it would be difficult to remain in elected office because of all the travel the new job would involve.

A strategy memo shines light on the job offer:

Dennis’ memories align with a memo that was included in the records sent to the Sentinel.

The document is a three-page “strategy report” outlining a plan to create a nonprofit called Grow United to promote the legalization and decriminalization of marijuana around the country. It identified two “project goals” — one of which was to “create a job opportunity for District 9′s Garrett Dennis.” And it proposed paying a director $180,000, with another $60,000 set aside for travel and expenses.

The strategy report is dated July 21, 2019, two days before the JEA board of directors voted to begin the formal process of privatization — and three days before Grow United was formally incorporated in Delaware.

There is no author listed. But the summary of the internal Matrix investigation said it was written by April Odom, another former Matrix employee who is now being sued by the company. Odom’s brother is listed in public records as the chairperson of Grow United.

Odom did not respond to requests for comment.

The records provided to the Sentinel do not show FPL donating money directly to Grow United or communicating with the consultants about it. But they do show that the former Matrix employees appear to have created Grow United with FPL in mind.

Grow United wound up becoming entangled in Florida politics, which led to Republicans winning key state races under dubious circumstances -- and that has sparked a criminal investigation:

Ultimately, Grow United was used for other purposes — including supporting little-known independent candidates who ran for office in three key Senate races, including District 9 in Central Florida and Districts 37 and 39 in South Florida.

Though those candidates did no campaigning of their own, Grow United provided $550,000 to a pair of political committees that paid for mailers that appeared worded to appeal to Democratic voters. The political committees were run by Republican strategists in Tallahassee out of the headquarters for the big-business lobbying group Associated Industries of Florida, whose members include FPL.

Republicans ultimately won all three races, helping the GOP retain its majority in the 40-member Florida Senate. But the scandal has sparked a criminal investigation out of Miami-Dade County, in which two people have been arrested: Alex Rodriguez, who ran as the independent candidate in one of the South Florida races, and former Republican Sen. Frank Artiles, who authorities say bribed Rodriguez to run. Rodriguez has pleaded guilty and agreed to testify against Artiles, who has pleaded not guilty and is awaiting trial.

Nobody else has been accused of wrongdoing, though Miami-Dade authorities say the investigation is still ongoing.