Southern Company this week is set to install Chris Womack, a noted womanizer and practitioner of dubious workplace conduct, as its CEO and president. That might sound like trouble in the making, but trouble already is brewing beneath the surface in the form of a "pump and dump" stock scheme that involves several high-ranking executives at the scandal-plagued utility. It all points to the likelihood that insiders expect an ongoing stream of bad news to cause the company's stock price to plummet in the near future -- and that Womack, a black man in a corporate culture marked by thinly veiled racism and white privilege, could be designated as the "fall guy" for an accounting-fraud scandal that sits at the heart of the company's woes.
That's from a post today at DonaldWatkins.com, under the headline "The Southern Company is Ready to Make “Womanizer” Chris Womack CEO Amid “Pump and Dump” Stock Scheme." It's the latest in a string of hard-hitting reports from Watkins that reportedly had top executives on edge Friday at Southern Company's Management Council meeting. They apparently fear that Watkins' journalism -- he is a longtime Alabama attorney and businessman -- will lead to more bad news (perhaps from mainstream news outlets) for a company already drowning in glaring headlines.
The "pump and dump" stock scheme might be the strongest sign that the train has veered wildly off the tracks at Southern Company -- and corporate insiders know it. Writes Watkins:
In the midst of Chris Womack's controversial promotion to CEO, there is a "pump and dump" stock scheme that is lurking in the background. The scheme is led by outgoing CEO Thomas Fanning.
Apparently, Thomas Fanning, Bryan D. Anderson, and Stephen E. Kuczynski (Chairman, President, and CEO of Southern Nuclear Operating Company) know that something is amiss at the Southern Company. Since April of 2023, these three senior-management executives have been dumping shares of Southern Company stock that were “pumped” up in price via creative accounting techniques (a/k/a “accounting fraud”).
On April 10, 2023, Thomas Fanning, who made more than $24 million in total compensation for 2022, sold 50,000 shares of Southern Company stock at $71.54 per share for a total of $3,577,000. On May 10, 2023, Fanning sold another 50,000 shares of Southern Company stock at $75.16 per share for a total of $3,758,000.
On May 8, 2023, Bryan D. Anderson sold 9,491 shares of Southern Company stock at $75.09 for a total of $712,110. On May 10, 2023, Anderson sold 27,426 shares of stock at $75.11 per share for a total of $2,059,967. With respect to both of these transactions, Anderson exercised an option to purchase 9,491 and 27,426 shares of stock at $41.28 per share. The transactions allowed Anderson to acquire the shares and simultaneously sell them on May 8th and 10th for immediate windfall profits of $320,891 and $927,822, respectively.
On April 10, 2023, Stephen E. Kuczynski sold 5,000 shares of Southern Company stock at $71.89 per share for a total of $359,450. On May 10, 2023, Kuczynski sold another 5,000 shares of stock at $74.96 per share for a total of $374,800. Since joining the company on July 11, 2011, Kuczynski has dumped $12,985,287 worth of Southern Company stock.
It is clear that Kuczynski is diverting himself of Southern Company stock. The question is: Why?
For those keeping score, that is a total of $12,090.040 in stock dumps over about a one-month period, beginning on April 10 of this year. And it does not end there, reports Watkins:
On July 29, 2022, James Y. "Jim" Kerr exercised an option to acquire 25,000 shares of Southern Company stock at $42.16 per share. Kerr authorized the sale of these shares on the same day at $76 per share for a total of $1,900,000. At the time, Jim Kerr was Thomas Fanning’s executive vice president, general counsel, chief of compliance, and chief of staff.
Incidentally, the sale of Kerr's stock occurred approximately one month after Thomas Fanning's girlfriend, Kimberly Tanaka, learned for the first time that she had been the victim of an illegal surveillance operation carried out by Southern Company operatives. Tanaka promptly informed Fanning about the surveillance operation. Tanaka also advised Fanning that she planned to sue the company for this invasion of her privacy. To head off a PR nightmare, Fanning and Kerr arranged to pay Tanaka "hush money" with Southern Company funds that were laundered through a third-party vendor in order to buy her silence.
The Southern Company's “pump and dump” scheme was not limited to the transactions referenced above. Quite a few senior-management employees have sold Southern Company stock within the past six months.
Watkins describes the situation at Southern Company as a "hot mess," and insiders seem to know it might get worse before it gets better. Writes Watkins:
On May 19, 2023, top executives at the Southern Company met for their Management Council meeting. They were reportedly worried that my investigative articles might be picked up by mainstream media organizations that cover New York Stock Exchange companies.
After the meeting, the whispered consensus among many of the Management Council members was that the Southern Company is in one hot mess. Morale at the company is in the toilet.
Here is why:
First, departing CEO Thomas Fanning is embroiled in the “hush money” scheme referenced above in which corporate funds were used to silence Kimberly Tanaka, a victim of the company's illegal surveillance activities. The surveillance campaign and resultant “hush money” scheme were not disclosed to the Southern Company’s board of directors or approved by the board. We have reported the scheme to Fulton County, Georgia District Attorney Fani T. Willis.
Second, Jim Kerr was caught on a 2018 secret audiotape making racially insensitive remarks about the suppression of environmental-justice rights of the Southern Company’s 4,000 black customers in the North Birmingham, Alabama, communities of Collegeville, Fairmont, and Harriman Park. Kerr was not fired for his dismissive attitude towards the Southern Company's black customers. Instead, Kerr was promoted on March 31, 2023, to the position of Chairman, President, and CEO of Southern Gas Company. Black Southern Gas Company employees despise him. Kerr's chameleon brand of racism and elitist attitude appears to be incapable of reform.
Third, Bryan D. Anderson, the Southern Company’s Executive Vice President and President for External Affairs, was exposed for his history of racially discriminatory conduct in our May 19, 2023, article. Anderson, a top executive at The Coca-Cola Company from 1992 to 2010, was responsible, in part, for certain racist employment practices that forced Coca-Cola to pay a record-breaking $192 million to its black employees in a class action settlement. In 2010, Anderson reportedly brought some of his toxic employment practices with him to the Southern Company. Like Jim Kerr, Bryan Anderson’s chameleon brand of racism and elitist attitude appears to be incapable of reform.
The roll call of infamy extends to the board of directors:
Fourth, Lead Independent board member David J. Grain has been exposed as a “grifter” who uses his Southern Company platform for his non-stop “grifting" activities. We detailed a specific example of Grain’s “grifting” in an investigative report on the Southern Fiber Company.
Fifth, board member Kristine L. Svinicki is dripping with conflicts of interest. Svinicki is the former chairwoman of the U.S. Nuclear Regulatory Commission who departed office in Washington on January 20, 2021, and joined the Southern Company board of directors on October 18, 2021.
Sixth, board member Donald James is one of the subjects of a criminal complaint that was filed in April of 2023 with Fulton County, Georgia, District Attorney Fani T. Willis. The other four subjects of the complaint are: Jim Kerr, David Grain, Kristine Svinicki, and Thomas Fanning (who was added to the complaint after we learned of his involvement in the secret “hush money” scheme with Kimberly Tanaka).
Looming criminal complaints, and reports of woefully mismanaged construction projects, add to the grim picture:
Seventh, the company and several of its top executives are subjects of formal criminal complaints and law-enforcement reports pending with the U.S. Department of Justice, the Nuclear Regulatory Commission, the Fulton County District Attorney’s Office, and the Roswell, Georgia, Police Department. In general, the complaints allege that the Southern Company has engaged in a long-running racketeering enterprise, a massive $27-billion accounting-fraud scheme, and an illegal surveillance operation.
One of the complaints also contends that the Southern Company is unfit to own and operate the Vogtle Nuclear Power Plant near Waynesboro, Georgia. Two new units under construction at Plant Vogtle are currently $21 billion over-budget. Units 3 and 4 at Vogtle still have not been placed into commercial service after a decade of construction work.
That brings us back to the tawdry tale of Chris Womack, which on the surface, appears to be a head-scratcher. Is the company opening the door to a problem that could have been avoided? Writes Watkins:
On May 24, 2023, the Southern Company is set to install a well-known, perennial stalker and sexual harasser of women as its new Chief Executive Officer. His name is Christopher C. “Chris” Womack.
Womack, who was handpicked for the position by outgoing CEO Thomas Fanning, has a legendary reputation inside and outside of the Southern Company as a “womanizer.” This reputation apparently does not matter to Fanning or the company's male-dominated board of directors.
In a May 17, 2023, exclusive investigative article titled, “Christopher C. Womack: A Legendary Womanizer is Poised to Lead the Southern Company,” we reported on Womack’s reputation for engaging in inappropriate sexual behavior with Southern Company female employees and contractors, dating back to 1995.
Recent history teaches that this kind of conduct can lead to big problems, and unwelcome headlines, in the corporate environment: Writes Watkins:
Since April of 2023, at least two New York Stock Exchange companies have removed their CEOs for inappropriate sexual behavior. On April 23, 2023, NBCUniversal fired CEO Jeff Shell for inappropriate sexual conduct. On May 15, 2023, 3M fired Michael Vale for sexual misconduct. Vale had just been promoted to 3M’s group president and chief business and country officer four weeks ago.
Jeff Shell and Michael Vale are white. Chris Womack is black.
On Wednesday, the Southern Company will ignore Chris Womack’s long history of inappropriate sexual behavior with female employees and vendors in order to elevate him to the position of CEO. The rules governing inappropriate sexual behavior that apply to white CEOs at publicly traded companies apparently do not apply to Chris Womack at the Southern Company.
There is no doubt that Chris Womack is the beneficiary of a new kind of "unspoken" preferential treatment, despite his history of inappropriate sexual behavior.
Watkins describes the Womack promotion as a new form of "wokeness":
The Southern Company’s Code of Ethics contains this provision:
“We are an equal opportunity employer. We do not tolerate inappropriate conduct, intimidation, harassment, or discrimination on any basis, including race, color, religion, sex, national origin, age, disability, veteran status, genetic information, sexual orientation, or gender identity or expression.”
On its face, this provision prohibits inappropriate sexual conduct in the workplace at the Southern Company. This prohibition is fairly common among New York Stock Exchange/Fortune 500 companies.
On May 24, the Southern Company plans to ignore this prohibition in Chris Womack’s case in order to place him in a position of power over women who are at his mercy. This patently insensitive move is unprecedented in the modern era of corporate governance.
Womack’s promotion to CEO appears to usher in a new form of “wokeness," sexism, and preferential treatment at the Southern Company.
The Southern Company appears to be ready, willing, and able to lead all New York Stock Exchange/Fortune 500 companies in making 1990s-era sexism fashionable, once again.
Will Chris Womack's rise to the top end well? Watkins has serious doubts about that:
Based upon the totality of facts and circumstances surrounding Chris Womack’s impending assumption of the CEO position at the Southern Company and considering the board of director's willingness to ignore Womack's well-known reputation as a womanizer, we believe that Womack is Thomas Fanning’s handpicked “fall guy” in the company’s massive accounting fraud scheme. No other explanation makes sense for Womack's elevation to CEO.
Chris Womack is a deeply flawed Southern Company executive who is awash in: (a) four decades of lapses in professional judgment, (b) numerous violations of the company policy prohibiting inappropriate sexual behavior in the workplace, and (c) a litany of personal failings. Yet, Thomas Fanning's handpicked Chris Womack over candidates who were far more qualified and capable than him for the CEO position.
At this juncture, the Southern Company's “ship” is more vulnerable to sinking than the Titanic. The only questions are: How many of the company's top executives will survive the "sinking" in a sea of accounting fraud and racketeering activities? And, who will they be?
Coming Tuesday: Unveiling Chris Womack's most troublesome special personal relationship.