Thursday, February 16, 2023

Lax oversight, plus failure of Southern Company and Alabama Power to disclose legal frailties, could set the stage for a nightmarish scenario of investor fraud

Joe Perkins and Mark Crosswhite

Southern Company has failed to disclose, via Form 8-K filings with the Security and Exchange Commission (SEC), that the firm and certain executives are subjects of a criminal investigation, according to a post yesterday by longtime Alabama attorney Donald Watkins.

Writing under the headline "Southern Company Conceals DOJ Probe From Shareholders, Analysts, Investors," Watkins states that Southern Company has failed to disclose that the firm and its affiliates' fitness to own and operate the Vogtle Nuclear Power Plant in Waynesboro, GA, has been challenged. Such a failure to disclose could amount to investor fraud against its shareholders, Watkins reports.

It's not that Southern Company has failed to file Forms 8-K altogether; the filings just don't say much and leave out critical information. In fact, Watkins provides a summary of what little recent filings do say. From the post at

Since the beginning of 2023, Atlanta-based Southern Company has issued four Form 8-K filings with the U.S. Securities and Exchange Commission (SEC): (1) On January 5, 2023, the company announced the retirement of CEO Tom Fanning; (2) On January 11, 2023, the company announced the expected April 2023 start-up of Unit 3 at the Vogtle Nuclear Plant in Waynesboro, Georgia; (3) On February 7, 2023, the company announced the retirement of Comptroller Ann P. Daiss. (4) On February 14, 2023, the company announced the appointment of two new directors -- Mr. David E. Meador and Ms. Lizanne Thomas, effective April 1, 2023.

Is something missing here? Oh yes, and Watkins describes it with unflinching clarity:

A Form 8-K is known as a “current report” and it is the report that publicly traded companies must file with the SEC to announce major events that shareholders, Wall Street analysts, and potential investors should know about.

(A) To this date, the Southern Company has NOT disclosed in a Form 8-K that the company and/or certain of its executive officers have been designated as the "subjects" of a U.S. Department of Justice (DOJ) criminal probe since last December.

(B) The Southern Company has NOT disclosed in a Form 8-K that the company was named as a wrongdoer in several criminal complaints filed with the DOJ’s Criminal Division on January 27, 2023, that alleged a litany of violations of the Racketeer Influenced and Corrupt Organizations Act and various criminal antitrust conduct. The other named wrongdoers are: (a) Alabama Power Company, (b) Matrix, LLC, (c) Joseph W. Perkins, Jr., (owner of Matrix), and (d) other RICO participants who acted in concert with them.

The major goals of the alleged racketeering enterprise were to: (a) target, influence, compromise, corrupt, control, and/or destroy individuals and entities that posed a perceived or real threat to Alabama Power Company’s monopoly in Alabama as an energy producer and provider, (b) perpetuate Alabama Power’s ironclad control of local, state, and federal elected and appointed officials in Alabama, and (c) protect, expand, and solidify its grip on the political affairs in the state of Alabama.

(C) The Southern Company has NOT disclosed in a Form 8-K that the “fitness” of its affiliates to own and operate the Vogtle Nuclear Plant has been challenged in formal complaints filed with the U.S. Nuclear Regulatory Commission.

(D) The Southern Company has NOT disclosed in a Form 8-K that it is seeking a non-prosecution agreement from DOJ in Washington for its racketeering and antitrust conduct.

Are such acts of nondisclosure standard in the utility industry? No, and Watkins provides insight on how it is supposed to be done:

Florida Power & Light and NextEra Energy Disclosed Their Law Enforcement Entanglements, But Southern Company Has Not

On January 25, 2023, NextEra Energy (NEE) and Florida Power & Light Company (FPL) filed a Form 8-K with the SEC announcing that “Allegations of violations of law by FPL or NEE have the potential to result in fines, penalties, or other sanctions or effects, as well as cause reputational damage for FPL and NEE, and could hamper FPL’s and NEE’s effectiveness in interacting with governmental authorities.”

The Form 8-K stated that “FPL’s and NEE’s business and reputation could be adversely affected by allegations that FPL or NEE has violated laws, by any investigations or proceedings that arise from such allegations, or by ultimate determinations of legal violations.”

The violations of law referenced in the 8-K stem from the clandestine “dirty tricks” work Joe Perkins' Matrix, LLC, performed for these companies. Some of this work is described in a December 22, 2022, article I published titled, “Joe Perkins and Matrix in Deep Trouble” and a December 19, 2022, article National  Public Radio published titled, “In the Southeast, power company money flows to news sites that attack their critics.”

In “Dirty Secrets: The Joe Perkins Files, I detailed additional "dirty tricks" Joe Perkins and Matrix performed for Alabama Power Company and Southern Company.

On December 26, 2021, I revealed that Alabama Power had paid Perkins $2.5 million, without invoicing. I also published two of Perkins' secret contracts with Alabama Power.

On January 18, 2022, I published an article that identified all of the red flags with the Perkins-Alabama Power contracts.

In short, Florida utilities have been forthcoming about their ties to Joe Perkins and the Matrix "dirty tricks" machine; Southern Company and Alabama Power have chosen to conceal. That decision might come back to bite them, Watkins reports:

The “dirty tricks” scandal that has engulfed NEE, FPL, Perkins, and Matrix in Florida pales in comparison to the scope and depth of “dirty tricks” Perkins and Matrix have performed for Alabama Power and the Southern Company in Alabama and Georgia. The array of people implicated in the Alabama scandal has been mind-blowing for investigators. Based upon my experience in successfully representing former CEO Richard Scrushy during the highly publicized $2.7-billion HealthSouth accounting fraud scandal and criminal proceedings from 2003 to 2005, the issuance of NEE’s Form 8-K signals that federal criminal indictments of top executives at NEE and FPL may be forthcoming.

The $2.7-billion accounting fraud scheme, carried out by HealthSouth executives occurred over a six-year period, was very bad. However, the HealthSouth scandal pales in comparison to the long-running, multi-state, racketeering enterprise operated by the Southern Company and Alabama Power Company during Mark Crosswhite’s tenure as CEO of Alabama Power Company.

Crosswhite elevated the role of Joe Perkins and Matrix, LLC, to a level of “dirty tricks” that rivals anything a Hollywood screenwriter/producer could bring to life in his/her most ambitious film project. The Southern Company, Alabama Power Company, Matrix, Perkins, and others acting in concert with them, took money laundering to new heights. They also conquered every public official in Alabama that mattered, including law-enforcement officials, at a rate of speed that would make Olympic sprinters envious.

Alabama's lax regulatory environment has allowed "business as usual" -- plus corruption -- to flourish, reports Watkins:

If there were watchdogs in Alabama who were supposed to be safeguarding the interests of Alabama Power’s consumers, they were anesthetized. None of them – not the governor, legislature, state supreme court, state public service commission, state Attorney General, or U.S. Attorneys in Montgomery or Birmingham – has ever barked at or bitten Alabama Power in order to protect the interests of the company's consumers. All of them turned their heads and looked the other way while the Southern Company's and Alabama Power's racketeering enterprise was in full swing in the state.

The complete lack of effective regulatory oversight, consumer protection, and diligent law enforcement has allowed the Southern Company's and Alabama Power's racketeering to flourish in Alabama.

Do officials at Southern Company and Alabama Power have a plan to help them get off easy? Yes, says Watkins, and it's not pretty:

Today, the Southern Company perceives the Joe Biden administration as weak, distracted, and inept. Privately, the company believes it can hoodwink U.S. Attorney General Merrick Garland and his Department of Justice, head-fake the Department's chief of the Criminal Division, and run roughshod over the Department's career RICO prosecutors. They view Mr. Garland and his Criminal Division as "soft" on Wall Street corporate crooks.

As such, the Southern Company is quietly seeking a non-prosecution agreement from DOJ officials in Washington. The company believes it will get one by sacrificing a dozen or so senior management executives and promising to stop its racketeering conduct.

Who is at risk in this scenario? Watkins points to investors:

My experience in dealing with publicly traded entities like HealthSouth, Wells Fargo Bank (which has a rap sheet longer than that of former New York Mafia boss John Gotti), Southern Company, and Alabama Power Company leads me to believe that the Southern Company’s stock will probably take a dive whenever the company discloses to its shareholders, industry analysts, and members of the public that it is entangled with Matrix and Joe Perkins in a web of media and law-enforcement investigations.

This is why the Southern Company has not disclosed its racketeering conduct in any of the Form 8-Ks it has issued in 2023, to date.

The Southern Company's failure to timely disclose its nightmare of Matrix-related criminal and regulatory investigations is tantamount to investor fraud against its shareholders, who might want to flee the company before their share price tanks. This corporate misconduct is a modern-day version of Enron and Worldcom that is playing out on  the watch of Joe Biden and Merrick Garland.


legalschnauzer said...

A question that might occur to many readers: Balch & Bingham appears joined at the hip with Alabama Power and Southern Company, so where is the law firm now? Is it assisting in this failure to disclose, perhaps heightening risk for investors?

legalschnauzer said...

A comment at Facebook from Donald Watkins about his post regarding Southern Company's failure to disclose. Watkins includes at this Facebook page a very interesting letter regarding Enron:

Donald V. Watkins
When I found out that Enron was involved in massive investor fraud, I had to force them out as a Class B investor in my company, Pencor-Masada OxyNol, LLC. At least Enron had the decency to disclose its law enforcement problems to me. Thereafter, my lawyer and I acted quickly to get rid of them. The Southern Company has NOT publicly disclosed its criminal problems to its shareholders, or to Wall Street analysts, or to potential investors. They DO NOT respect Joe Biden's Department of Justice. If they did, this critical shareholder information would have been reported in a Form 8-K filing last month. I smell a rat in the DOJ's Washington office. The national class action lawyers in New York City need to gear-up for a fight against the Southern Company and its advisors.

Robby Scott Hill said...

Just wanted to point out that lots of Young Democrats as well as older ones do not understand that when former Senator Shelby left the Alabama Democratic Party with the assistance of Joe Perkins, Doug Jones didn’t leave & others didn’t switch sides immediately, but Joe Perkins kept helping candidates in both parties. This created a 3rd column. You had the traditional Democrats & Republicans, but then you had folks in both parties who were more loyal to Perkins & Alabama Power than to their party’s platform. That’s how you wound up with Democrats & their allies fighting each other & Republicans like Shelby facing no significant opposition from the Democratic Party. Alabama Democrats are afraid of Alabama Power & Joe Perkins. That’s why they wouldn’t help us with the William Barnes campaign versus Shelby in 2010 & why half the offices on my ballot last year had no Democratic challenger. Big shout out to the Libertarian Party of Alabama for doing what Democrats won’t, which is contesting all statewide races.

legalschnauzer said...

Thanks for an excellent comment, Rob. Very important material. The public needs to know about the Shelby/Perkins/Alabama Power "matrix," if you will.

Robby Scott Hill said...

And the reasons why they are afraid of him are because they’re just men who aren’t perfect and occasionally succumb to the pleasures of the flesh when they get excited & their juices start flowing. Hell, I’m just an average guy and a couple of female Republicans (whose names I won’t mention) flirted with me when I lived in Montgomery. Illicit sex and drugs and somebody having the goods on your partaking of them can get you blackmailed. I love Jimmy Swaggart for just coming out and telling everything so they couldn’t blackmail him & he was back on TV in a few months; more popular than ever. I think you & Jimmy have the same guardian angel because every time The Devil tries to destroy y’all, you two come back more popular than ever. Now that Matrix is losing its influence, maybe the Alabama Democratic Party can grow. I love how Georgia did it. They just circled their wagons & ran a Black guy & a Jew for Senate and told all the special interests to go to hell & both of them won. But in Alabama, where Alabama Power mailed every new attorney who passed the bar exam a check so they were on retainer for them & were conflicted out of representing anyone else, we have problems that still need addressing. Other states are getting rid of their public utility problem & we need to find a solution for our public utility problem. Alabama Power makes the poorest factory workers in Gadsden pay about $500 a month so their wives and daughters can dry and style their hair & have nice wrinkle free clothes to wear to work and school. It’s time to destroy that racket. About $200 actually goes to pay for the electricity and $300 goes to the likes of Matrix so they can hurt people. That’s wrong and shame on the Public Service Commission & State Bar for not doing anything about it.

Robby Scott Hill said...

Democrats can’t see it, but the Republic has already fallen. Like Darth Maul said, “There is no “justice,” no law, no order, except for the one which will replace it!” Roger, it’s time to stock up on beans, bullets & bandages because the threat of civil war is upon us.

legalschnauzer said...

Thanks for your comment, Rob. It's sobering stuff. WaPo had an article a day or two ago about the Taliban trying to establish a "religious emirate" in Afghanistan by attacking/suppressing the judiciary, constitution, media, and women. A lot of it sounds like what is going on in the U.S. The judiciary and constitution already are rigged or being ignored, women probably feel under siege, and the media is being attacked; Heck, I know of one reporter who even was attacked by law-enforcement brown shirts in his own home and thrown in jail for five months. This was in the U.S. (not Afghnistan), almost 10 years ago, and things only have gotten worse since.

Robby Scott Hill said...

I listen to an interesting British podcast called “The Rest Is History.” They just did a great story on Hitler and the brown shirts as he rose to power in Germany. The really interesting thing is that after Hitler’s arrest for the Beer Hall Putsch, he was helped by sympathetic judges and police. They were instrumental in his political comeback, which could not have happened without their assistance. We see this today with judges letting the January 6th bad actors off easy. They will be back.

legalschnauzer said...

Thanks for a powerful comment, Rob. Most Americans probably don't know about the role judges and police played in Hitler's rise to power. Did the same thing happen with Trump? I wonder. And yes, it does seem many connected to Jan. 6 likely will escape the justice they truly deserve. Reminds me of Obama's decision to "look forward, not backward" on all the scandals during the George W. Bush years, including the weaponization of Justice Department, and it probably paved the way for Trump.

legalschnauzer said...

As we learn more about the Southern Company/Matrix scandal in Alabama, we seem to be learning that opportunists like Richard Shelby, Jeff Sessions, Luther Strange, etc. have manipulated the judiciary to tighten their grip on power. No telling how many cases those guys have helped rig.