In Southern Company's twisted tale of deceit, you can't tell a "good guy" from a "bad guy" without a scorecard -- and that includes board member John D. Johns

John D. Johns (center)

 

The Southern Company racketeering enterprise is so wide-ranging and intertwined through multiple locations that it's hard to tell the good guys from the bad guys. Take board member John D. "Johnny" Johns: Is he a "good guy," who could help clean up the mess internally and perhaps ensure that folks who have been harmed externally receive a chance to be made whole -- or is he a "bad guy," who will help drag out the systemic wrongdoing, to the benefit of certain elites in the company hierarchy?

Even Donald Watkins, a longtime Alabama attorney with vast experience on the legal landscape -- including his role as a criminal-defense lawyer in the HealthSouth accounting-fraud case -- struggles to understand Johns' status in the Southern Company saga. Consider this headline at Watkins' editorial-opinion piece on the subject: "John D. Johns: Is He a “Material Witness” or “Target” in the Southern Company Criminal Probe?"

John D. Johns joined the Southern Company’s Board of Directors in 2015. He is a senior advisor at Blackstone Inc. and the former chairman and CEO of Protective Life Corporation (2002 to 2017).

In 2017, Johns served on the board’s Audit Committee at a time when the cost overruns at the Southern Company’s Vogtle Nuclear Plant Units 3 and 4 were skyrocketing, and the company’s accounting-fraud scheme was ramping up.

I know from my successful legal representation of Richard Scrushy, the former CEO of HealthSouth, that it is entirely possible for subordinates at a New York Stock Exchange/Fortune 500 company to conceive, birth, and implement a massive accounting-fraud scheme without the knowledge of the company’s CEO or its board of directors' Finance and Audit Committees.

How did Johns' name become front-and-center in the Southern Company story? It happened because of internal documents that Watkins uncovered. He writes:

On April 6, 2017, one or more Southern Company senior-management executives participated in a meeting that was held at an off-site location to devise a plan to attack Southern Company board member “Johnny Johns” (whose real name is John D. Johns) for “Audit Board performance,” while specifically mentioning the “clean coal" plant construction project in Kemper, Mississippi,  and the Vogtle Nuclear Power Plant construction project for Units 3 and 4 in Waynesboro, Georgia. The participants documented the meeting and the Southern Company’s massive accounting-fraud scheme in the “Homewood Notes.”

In the end, the Kemper project had $4 billion in cost overruns, while the Vogtle project now has $21 billion in cost overruns. The Kemper project, which ultimately cost the Southern Company $7.5 billion, was abandoned in 2021.

Whether John Johns, 71, was a knowing participant in the accounting-fraud scheme or a mere “material witness” is a question for criminal investigators to determine. What is clear at this juncture is that a massive $27-billion accounting-fraud scheme occurred on John Johns’ watch as a member of the board of directors’ Audit Committee. The participants in the April 6, 2017, meeting wanted to “blow the whistle” about "Money going to [Southern Company Services] to prop-up bad decisions by SO [the Southern Company's ticker symbol on the New York Stock Exchange], according to the “Homewood Notes.”

That casts a different sort of light on John Johns, as does his current role as chair of the board's Compensation Committee. Writes Watkins:

Today, John Johns chairs the board of directors' Compensation Committee. This committee determines and recommends the amount of departing CEO Thomas Fanning’s retirement package, which reportedly is valued at up to $100 million. Fanning will exit the company on May 24, 2023.

Sources close to the board of directors have confirmed that John Johns is on board with paying Fanning this bloated retirement package even though the calculated amount may be inflated and tainted by the accounting-fraud scheme.

At this juncture, Fanning is pre-occupied with two things: (a) getting out the door with his retirement money in hand on May 24th and (b) curbing media inquiries about why he and his then-girlfriend were the subjects of surveillance in 2017, as reflected in the “Homewood Notes.”

According to the "Homewood Notes," a team of Southern Company operatives, with the knowledge and approval of Southern Company Executive Vice President, General Counsel, Chief Compliance Officer, and Chief of Staff James Y. "Jim" Kerr, used a private investigator named "Derreck (sic)" (meaning, Derek Uman) to do "research" on “Kim Tananka (sic),” who was Fanning’s girlfriend (and whose correct name is Kim Tanaka). The participants in the meeting believed that an anonymous complaint they intended to submit to the Southern Company’s board of directors “need[ed] more intel” on Ms. Tanaka.

Ms. Tanaka was an innocent third-party who held no position in any Southern Company business entity at the time she was targeted for clandestine surveillance activities. The surveillance was greenlighted by Jim Kerr in the hope of capturing Fanning with another person whom Kerr believed was intimately involved in his life at the time.

Jim Kerr, who privately loathes Tom Fanning, was extremely close to then-Alabama Power Company CEO Mark Crosswhite. Kerr believed that Fanning engaged in a personal lifestyle in Atlanta that would compromise and embarrass him, if exposed publicly. Had the surveillance project been successful in its intended goal, Kerr believed that Fanning would have been forced to resign and Crosswhite would been named as his successor.

Jim Kerr's attempted coup d'etat failed. It was first reported by us on August 3, 2022. Three months after our article was published, Crosswhite was forced out of his Alabama Power CEO position.

John Johns has built a career of distinction in Birmingham's corporate environment. But does that mean he will act honorably, going forward, in the Southern Company matter? We aren't sure. And that's partly because of Johns' ties to a major business figure who held less than forward-thinking ideas on matters of race. As Watkins writes:

Prior to joining the Southern Company’s board of directors’ John Johns served as general counsel of Sonat, Inc., a diversified energy company headquartered in Birmingham, Alabama. The Chairman and CEO of Sonat from 1979 to 1985 was Henry C. Goodrich, a fellow Birmingham resident, mentor, and friend of John Johns.

It is well known in Alabama that Henry C. Goodrich, William Houston Blount (former CEO of Vulcan Materials), and Elton B. Stephens (founder of EBSCO Industries) were the titans of business in Birmingham during the 1980s and early 1990s. They were rich and powerful men.

Southern Company board member Donald M. James, another Birmingham business icon, later succeeded William Houston Blount as CEO of Vulcan Materials. James is named in the criminal complaint I submitted to Fulton County, Georgia District Attorney Fani T. Willis on April 13, 2023.

Watkins had a close encounter with one of John Johns' mentors, and it left him with vivid memories -- not the pleasant kind:

Henry Goodrich is the white corporate leader who was tasked with the responsibility for running me out of Birmingham in 1994. At the time, I served as special counsel to Birmingham mayor Richard Arrington, Jr.

Henry Goodrich summoned me to a meeting at his private office. He refused to shake my hand when we met and did not look at me when he spoke. In a 30-minute uninterrupted and demeaning scolding, Goodrich told me in brutally frank language that: (a) I was a troublemaker in Birmingham who was disturbing the business community’s “good relations with the colored community,” (b) I was responsible for Birmingham city council hearings on discriminatory lending practices, or “redlining” by metro-area banks, (c) I was the force behind the City’s efforts to increase the volume of city contracts awarded to women and minorities for the procurement of goods and services, (d) I was leading Mayor Arrington astray with my legal work on achieving greater equality in employment opportunities within City Hall, (e) I was making unnecessary waves by suggesting that the City leverage its hundreds of millions of dollars in banking deposits as a tool for encouraging corporate reinvestment in the city’s underserved neighborhoods and communities, and (f) I needed to leave town, immediately.

Naturally, I disagreed with Goodrich's warped assessment of my work as Mayor Arrington’s Special Counsel. I thought my nine years of services (as of 1994) had (a) brought accountability and transparency to city government, (b) promoted equal employment opportunities within the executive ranks of city government, (c) made it possible for blacks and women to participate equitably in city contracts for goods and services, (d) sensitized local banks to the unfairness of “redlining” practices, and (e) helped Arrington to move Birmingham forward.

I even bragged about my solid personal and professional relationship with Emory Folmar, Montgomery’s ultra-conservative, white Republican mayor and former Alabama state GOP chairman. I was Mayor Emory Folmar's Special Counsel, as well.

What kind of mindset would drive a white business titan to speak with such disrespect toward a high-ranking member of the mayor's office? That leads to this question: Is John D. Johns tainted by his association with Henry Goodrich, and others who perhaps hold a similar mindset? Writes Watkins:

Is John D. Johns tainted by his Audit Committee work on the Southern Company’s board of directors, as described in the "Homewood Notes"?

Has John D. Johns’ professional and personal exposure to Henry Goodrich and Jim Kerr blinded him to (a) the Southern Company’s systemic racism against black vendors and entrepreneurs, as quantified in dollars, and (b) the company's pattern and practice of suppressing the environmental protection rights of its black customers?

Is John D. Johns the reincarnation of Henry C. Goodrich's "Old South" spirit and attitude?

Was John D. Johns aware of the massive accounting fraud scheme that was documented in the "Homewood Notes"?

Is John D. Johns going to let Tom Fanning walk out the door with a $100 million retirement package that may be tainted by a massive accounting fraud scheme, or will Fulton County District Attorney Fani T. Willis freeze Fanning's money pending a determination by her office as to whether it is "clean" money?

Is John D. Johns a “material witness” or “target” in any criminal probe?

The answer to all of those questions might not be comforting, considering Johns' apparent alignment with Jim Kerr, writes Watkins:

In closing, after we exposed Jim Kerr's racism on a secret tape recording, Kerr tried to change his image within the Southern Company. Below is a photo Kerr posted on his LinkedIn page last week showing him snuggling with black Southern Gas Company employees in Atlanta in a phony display of camaraderie.

Prior to our publication of the secret tape recording of Jim Kerr's unguarded racism, the multitude of his LinkedIn photos -- for years -- showed Kerr with white employees, executives, and patrons of the Southern Company.

Jim Kerr, with Black Southern Company employees

Jim Kerr is the ultimate chameleon. He is capable of changing his clothing, physical appearance, and surroundings, but not his racist attitude towards blacks. Trust Kerr at your own risk.

The list of Southern Company executives and rank-and-file employees whom Jim Kerr has betrayed since 2014 is long and distinguished. Just ask Thomas Fanning, or Mark Crosswhite, or the Southern Company employees who were royally screwed after NextEra Energy bought Gulf Power Company in 2019 whether they trust Jim Kerr.

When people show you who they are by their words and deeds, believe them!