As Birmingham focuses on environmental justice, Southern Company's "De Facto" CEO seems untouched by the suffering many of his customers face

K.B. Forbes (left) and Jim Kerr

Just-released audio files capture a high-level Southern Company executive dismissing concerns about environmental racism in the North Birmingham neighborhood, which is predominantly Black and riddled with pollution, according to a report today at DonaldWatkins.com. Meanwhile, K.B. Forbes (CEO of the CDLU public charity and advocacy group) reports at banbalch.com that the CDLU, and law enforcement, now possess documents (including financial spreadsheets) that conclusively show Southern Company was involved in the North Birmingham Bribery Scandal and the Burt Newsome Conspiracy Case.

As for the audio files in question, they do not just capture the voice of a high-level executive, it's the voice of a man who, for now, essentially is running Southern Company. That's according to Donald Watkins, a longtime Alabama attorney and businessman. Under the headline "Jim Kerr, Southern Company's Top Lawyer & Chief of Staff Exposed!"Watkins writes:

James Y. (Jim) Kerr serves as the Southern Company’s general counsel, chief compliance officer, and chief of staff to CEO Tom Fanning. Kerr also functions as the company’s “De Facto” CEO.

Documents and audiotapes made available to us have exposed Jim Kerr's true colors. This is a man who smiles in the faces of black company executives, employees, and board members, while defiantly refusing to acknowledge and condemn environmental racism when concrete examples of such racism are brought to his direct attention.

Jim Kerr is dripping with a dangerous form of racism, albeit polite in form and sophisticated in delivery. He is embedded in a Wall Street utility company that serves a heavily black customer base. In the ordinary course of business, the Southern Company takes money every month from millions of black customers and uses this money to maintain and fortify the very apparatuses that keep blacks downtrodden and trapped in poor, polluted neighborhoods.

In this article, you will hear Jim Kerr’s insensitivity to the environmental racism suffered by a group of North Birmingham black residents who are also Southern Company customers. Listen to the tone of his voice and his spoken words.

That brings us to the audio files, which are from an interview K.B. Forbes conducted with Kerr. Watkins sprinkles sections of the audio throughout his article, which can be found by clicking this link. The full interview, in one piece, can be heard by clicking on the link in the following paragraph:

The entire Kevin Forbes-Jim Kerr audio recording is available for your listening pleasure by clicking the link below: https://youtu.be/wjWDDwH8Y5E

What do we learn from the audio? Jim Kerr seems to have little, or no, concern about the suffering of Black people, many of whom are customers of Southern Company and Alabama Power. Such suffering, it appears, does not touch the world in which Jim Kerr operates. Writes Watkins:

An audiotape we have obtained captures a 2018 phone call between Jim Kerr and Kevin B. Forbes (referred to as "K.B." on the audio recording), who serves as the chief executive officer of CDLU. During the call, Forbes discussed several topics with Kerr, including racketeering activity, criminal conspiracy, obstruction of justice, and the environmental racism involved in the infamous North Birmingham Bribery Case.

This article focuses on the environmental racism discussed during the call. Future articles will focus on the nature and scope of Kerr's knowledge of the Southern Company's criminal racketeering enterprise, accounting fraud, and obstruction of justice.

The backdrop for the environmental racism discussion begins with the North Birmingham Bribery Investigation in 2016. In this bribery case, the Southern Company knowingly allowed Alabama Power Company, one of its most profitable affiliates, and Balch & Bingham, its longtime law firm, to establish a phony non-profit entity to raise $360,000 that was later laundered through another entity and used to bribe former state Rep. Oliver Robinson. Email chains show that Southern Company was in the loop on the bribery scheme from the beginning.

Robinson took the bribery money in a quid pro quo arrangement in which he agreed to oppose community and regulatory efforts to designate heavily polluted black neighborhoods in North Birmingham as EPA Superfund sites. Designation as a Superfund site would have forced the industrial polluters to clean-up the neighborhoods at company expense.

Watkins breaks down the interview for readers, and it does not portray Jim Kerr, or his firm, in a flattering light:

Kevin Forbes characterized the toxic pollution in North Birmingham and related Oliver Robinson bribery scheme as an example of modern-day environmental racism. Kerr bluntly dismissed this characterization, “I don’t accept your proposition or your hypothesis.”

Forbes responded, “Should [Balch & Bingham] have the right to suppress African-Americans? You think that’s okay? I’m asking you point-blank, do you think it’s okay? Do you find it morally repugnant or not, Jim? Come on take a stand!”

Jim Kerr did not react with any degree of passion until Forbes brought up an analogy of Southern Company’s refusal to hold Balch & Bingham accountable would be like refusing to hold Woolworth accountable when they “wanted to keep Blacks out of the soda fountain.”

Kerr called Forbes’ analogy “preposterous.” Forbes rebutted Kerr, saying, that it was accurate because the bribery scheme “discriminated against poor African-Americans in North Birmingham CERLA.”

Again, Kerr refused to acknowledge or accept that the North Birmingham scheme discriminated against poor blacks, by declaring, “I have no evidence that that is the case that any entity involving my organization or any entity based on the information that I’ve been given that that is the case. Your analogy is unfounded.”

The conversation then reaches a five-second gap, which seems to speak volumes in its silence. Writes Watkins:

Forbes then confronted Kerr with the fact that Jeffrey H. Wood, a lobbyist for Balch & Bingham, was lobbying on Capitol Hill in 2016 about the North Birmingham EPA matter at the same time as the bribery scheme in North Birmingham against the EPA was happening.

Oliver Robinson and two other co-defendants (i.e., a Balch & Bingham partner and a Drummond Company executive) were sentenced to federal prison in the bribery and money-laundering scheme.

Jeffrey Wood, however, was not lobbying on behalf of Drummond. He was lobbying for Alabama Power, whose top three executives at the time (i.e., CEO, General Counsel, and VP of Government Affairs) were all former Balch & Bingham partners.

All three executives eventually reported to Jim Kerr in his role as Southern Company general counsel, chief compliance officer, and chief of staff for Tom Fanning.

At first, Jim Kerr said he wasn’t sure what Forbes was asking, but after Forbes repeated the question with certain reminders, Kerr took 5 seconds to respond with this canned legal answer: “It’s, um… I told you that I looked into the information provided me. We reviewed the information and I have no concerns about anything inappropriate.”

Documents now available, including internal Southern Company emails, add significant context to the equation, Watkins writes:

Today, we know from a flood of Southern Company internal emails and other documents made available to us that Jim Kerr lied to Kevin Forbes when he claimed that neither the Southern Company, nor any entity affiliated with it, participated in the North Birmingham Bribery Scheme. Based upon the emails and other documents, the bribery scheme appears to have been a Southern Company operation, from concept to execution and from top to bottom.

This bribery case was "fixed" to avoid any mention of Southern Company or Alabama Power during the trial. U.S. Attorney Jay Town shutdown the criminal investigation before it could touch the true ringleaders in the bribery scheme.

Jay Town and then-Alabama Power CEO Mark Crosswhite celebrated Town's "fix" of the bribery case by chugging down drinks at a secluded Birmingham lounge.

What is worse, a racially insensitive, obviously untruthful, and very compromised Jim Kerr is presently overseeing the Southern Company's internal investigation by the law firm of King & Spalding into the company's criminal racketeering enterprise, accounting-fraud scheme, and obstruction of justice. This is a major conflict of interest for Kerr. He is too implicated in all aspects of this legal mess. At this juncture, Jim Kerr needs his own lawyer.

The King & Spalding investigation is part of the Southern Company's request for a non-prosecution agreement, which Jim Kerr thinks Bill Clinton can deliver for the company and its affiliates via his political hookups in Washington.

The audio recording is a damning piece of evidence against the Southern Company. It also supports the criminal RICO complaints filed with the Department of Justice in January and March of 2023 against the Southern Company, Alabama Power, and those entities and persons who acted in concert with them.

Jim Kerr seems oblivious to Alabama's tortured history on race, so Watkins provides a few reminders:

Here is the documented history of racism and discrimination against blacks that Jim Kerr refused to acknowledge or condemn:

In May of 1933, Birmingham, Alabama City Engineer A.J. Hawkins released a city map that ranked its neighborhoods and communities as follows:

1. Best

2. Still Desirable

3. Definitely Declining

4. Hazardous

5. Negro Concentration

6. Commercial and Industrial

7. Undeveloped

Black neighborhoods were deemed less desirable than those areas that were contaminated with hazardous waste. All-white city, county, and state public officials ran the state of Alabama in 1933. Jim Crow laws and customs were rigidly enforced.

Black Birmingham residents could do very little to improve the quality of their neighborhoods. The delivery of basic city services to “Negro Concentration” neighborhoods was pretty much an afterthought. Yet, this did not stop these black residents from trying to improve their communities and plight in life.

By the 1960s, blacks in Birmingham decided that they were willing to face fire hoses, police dogs, church bombings, home bombings, and death in order to end the sweltering heat of Jim Crow oppression. Dr. Martin Luther King, Jr., wrote about the suffocating conditions of racial segregation in his infamous 1963 “Letter from Birmingham Jail."

Birmingham played a pivotal role in the passage of the Civil Rights Act of 1964, the Voting Rights Act of 1965, and the Fair Housing Act of 1968. The Voting Rights Act made it possible for blacks in the South to register to vote and elect candidates of their choice to public office. Over time, the Voting Rights Act changed the color, face, and responsiveness of state and local governments throughout Alabama and across the South.

In 1979, Birmingham elected Dr. Richard Arrington, Jr. as its first black mayor. With his election, the civil rights movement that began in the streets had been ushered into City Hall. City government became inclusive, responsive, and progressive in all facets of municipal services, and in all neighborhoods.

By 2018, environmental justice had moved to the forefront of the national civil rights agenda. Black residents in North Birmingham wanted the industrial polluters who poisoned the air, ground, and water in their community to clean it up.

By then, these polluters were in an unholy alliance with the Southern Company, Alabama Power, and seven other networking partners.

Jim Kerr knew, or should have known, all of this shameful history. Yet, he chose to summarily dismiss it. To Kerr, the pain, suffering, and plight of North Birmingham's black residents, who are also Southern Company customers, simply did not matter.

What is more, Jim Kerr, who is the chief lawyer for the Southern Company and all of its affiliates, knew, or should have known, that a federal court in Dillard v. Crenshaw, 640 F. Supp. 1347, 1357 (M.D. Ala. 1986), found, as a judicial fact, that Alabama "had an unrelenting historical agenda, spanning from the late 1800s to the 1980s, to keep its black citizens economically, socially, and politically downtrodden, from the cradle to the grave." This judicial finding had been cited and adopted by dozens of courts by the time of the Forbes/Kerr recorded conversation.

Jim Kerr, it turns out, has played a major role in placing Southern Company in a legal, public-relations, financial, regulatory, and moral jam. Writes Watkins:

In light of the established historical record of environmental racism in Alabama and across America, Jim Kerr represents the most dangerous form of white racism – a highly-educated person with an Old South, dismissive attitude toward racism who characterizes the black experience with racism as a "hypothesis" and who willfully disregards the environmental protection rights, pain, and suffering of poor blacks whose housing options are limited by pervasive discrimination and unchecked bank redlining practices.

Since 2014, Jim Kerr has been peddling this brand of racism throughout the Southern Company and its affiliates. Because of his positions within the company, Kerr’s brand of racism can spread like wildfire throughout the Southern Company ecosystem, and beyond.

Jim Kerr's words and deeds have caused irreparable harm to the Southern Company's brand and good name. The Southern Company saga just gets worse from here.

Stay tuned! Much more mind-blowing Southern Company news is coming your way. The company's board members are up next.

Reports of a possible Alabama Power spinoff drives high anxiety among employees as spotlight shines on board members who have allowed scandal to bloom

Jim Kerr: It's a matter of trust

Online journalist Donald Watkins was swamped with messages from Alabama Power employees and their loved ones after his report yesterday that the company might be spun off and sold in an apparent effort to deal with mounting problems related to massive accounting fraud, according to an article today at DonaldWatkins.com under the headline "Southern Company: Trust Them at Your Own Risk."

We had a similar experience here at Legal Schnauzer after our post yesterday, based on Watkins' original reporting, about the possibility of an Alabama Power spinoff. Our blog statistics showed that the post, under the headline "Southern Company's plans to cleanse its dirty books by spinning off Alabama Power could dump a heaping load of stinky laundry in someone's unsuspecting lap," drew heavy traffic. Our posts on the evolving scandal at Southern Company (of which, Alabama Power is an affiliate) have been drawing strong readership for weeks, but yesterday's particularly heavy volume seemed to be centered on two posts -- the one about the possible Alabama Power spinoff and one with this headline "Eleven executives are shown the exits at Alabama Power and other Southern Company entities as the parent firm seeks to heal its self-inflicted wounds." Our readership trends suggest there is considerable angst among those whose livelihoods are tied to Alabama Power. Watkins says, in his post today, there is good reason for that:

As I demonstrated in “Sunshine and Transparency: Southern Company Regrouping in Atlanta Today, Tomorrow," Southern Company executives do not trust each other. They are documenting and tape recording their conversations with each other, and for good reason. 

Yesterday, Southern Company executives went into overdrive to assure anxious Alabama Power Company executives and employees that the company had no plans to sell Alabama Power to NextEra Energy, or any other purchaser. This assurance was intended to calm their fears -- for a while.

This is the same false assurance that Southern Company executives gave to Gulf Power Company executives and employees to calm their fears after word leaked out in 2018 that the Southern Company was selling Gulf Power Company to NextEra Energy.

NextEra's acquisition of Gulf Power  was completed in January 2019, and a lot of Gulf Power managers and employees got screwed after the deal was consummated.

Alabama Power employees obviously remember that episode, and in a rare instance of the company actually being transparent, it has put the writing on the wall for everyone to see, Watkins reports:

Alabama Power executives and employees do not have to rely on me to learn the truth about the Southern Company's spinoff plans. They can read about the company’s plans for asset acquisitions and disposals for themselves in the Southern Company’s February 15, 2023, K-10 filing. On page I-23 of the document, the Southern Company specifically warns Alabama Power employees and other stakeholders that:

“Southern Company and its subsidiaries have made significant acquisitions, dispositions, and investments in the past and may continue to do so. Such actions cannot be assured to be completed or beneficial to Southern Company or its subsidiaries. Southern Company and its subsidiaries continually seek opportunities to create value through various transactions, including acquisitions or sales of assets.”

Personally, I do not trust the integrity of the Southern Company’s words, regulatory filings, or actions. I saw this rodeo up close at HealthSouth from 2003 to 2005.

Why the lack of trust? Watkins places the blame for that at the feet of Jim Kerr, who is described as "De Facto Chief Executive Officer of the Southern Company." The actual CEO, at least for a little while longer, is Tom Fanning. Writes Watkins:

Yesterday, I introduced my readers to James Y. (Jim) Kerr. Mr. Kerr is the general counsel and chief compliance officer of the Southern Company. He also serves as chief of staff for CEO Tom Fanning. Beginning on March 31st, Jim Kerr will become the CEO and president of Southern Company Gas.

Kerr orchestrated the sale of Gulf Power in 2018-19. He is an M&A [mergers & acquisitions] guy. Kerr will say whatever he needs to say to company executives and employees in order to get a deal done.

Jim Kerr’s official titles at the Southern Company are superfluous. In reality, Kerr is running the Southern Company. He is making all of the major decisions for the company.

At this juncture, Tom Fanning is focused on getting his retirement package secured and making sure nothing blows up in his face before he exits the company. Fanning is tired, spent, and ready to get on with his life.

As Fanning exits the Southern Company on May 24, 2023, and his designated successor, Chris Womack, awaits his turn as CEO, Jim Kerr has moved to consolidate his relationship with the company’s board of directors. 

Those close to the situation in Atlanta have described how Jim Kerr used his legal skills, aggressive personality, assertiveness, arrogance, and subconscious “white superiority complex” to seize control of the major operations of the Southern company and its affiliates. He often uses “organized chaos,” much of which he created, as an opportunity to cement his grip on power within the company.

Very few Southern Company executives like or trust Jim Kerr, according to our sources. Many of them know, suspect, or believe that Jim Kerr shares responsibility with Fanning for the Southern Company’s widespread racketeering and massive accounting-fraud problems.

For now, the relationship between Kerr and the board of directors merits special attention, Watkins reports:

According to our sources, Jim Kerr has lulled Southern Company board members into a false sense of complacency and security by gaslighting them into believing that he has their backs, and that he can make the company’s regulatory and law-enforcement problems go away. He portrays himself as a "fixer" of all corporate problems

Jim Kerr is the reason why "dirty tricks" operative Joe Perkins and his company, Matrix, LLC, still work for the Southern Company. Kerr is the reason why Perkins gets paid millions of dollars each year, without invoicing. He is the reason why Matrix's "dirty tricks"records are maintained off-site, hidden away from auditors and compliance officials. Kerr is the reason why ex-felon Kimberly G. Hines was able to serve as Matrix's CFO while the company performed its work assignments for the Southern Company and its affiliates.

Kerr's gaslighting has aided him in crowning himself as the “de facto” CEO of the Southern Company.

How does Kerr operate? Watkins provides examples:

Reportedly, Jim Kerr advised board member and former Nuclear Regulatory Commission Chairman Kristine Svinicki that her multiple conflicts of interest on the board really didn't matter. Kerr reportedly assured Ms. Svinicki that he has the political juice in Washington to handle this issue.

According to my sources, Jim Kerr also believes that the Atlanta-based law firm of King & Spalding, working together with a properly incentivized Bill Clinton, can get Assistant Attorney General Kenneth Polite (who heads the Department of Justice’s Criminal Division) to let the Southern Company off the hook for its long-running, multi-state, racketeering enterprise and accounting-fraud schemes. After all, the Southern Company is "too politically connected to prosecute."

Furthermore, Kerr has convinced board members that: (a) the Southern Company’s problems with the Department of Justice and the negative media publicity surrounding these problems stem from infighting between Joe Perkins/Matrix and former Matrix president Jeff Pitts, (b) these problems are isolated to Alabama Power Company, (c) he (Kerr) “fixed” the Perkins/Pitts infighting problem before Matrix's "dirty tricks"information spilled into the public domain and tainted certain board members, and (d) the negative publicity engulfing the Southern Company will fade away with the passage of time.

We are also told that Jim Kerr has zero respect for Southern Company board members. Kerr believes that he is much more intelligent than they are, and that he is better equipped to make major decisions for the board. He views board members as pampered "flunkies." Board members do what they are told to do after they have been "wined and dined," according to sources familiar with Kerr.

Where does the story go from here? Watkins is preparing to shine light on board members. Until now, they largely have avoided scrutiny:

Going forward, my articles will focus on Southern Company board members. They have abdicated their duty to set and enforce operational policies that: (a) eradicate criminal activity, (b) promote “sunshine and transparency,” and (c) give life to the empty words and phrases in the Southern Company’s Code of Ethics.

When Southern Company employees feel compelled to send their company-related questions to me to publish in a news article, there is a complete breakdown in trust in the company’s workforce. Now we see why. No major Wall Street company can survive in an ecosystem that is devoid of trust.

It’s time to shine the spotlight on the Southern Company’s board members. Their apparent dereliction of duty, as a group, has allowed Jim Kerr to reign supreme at the Southern Company, without adequate supervision and oversight. In the process, Kerr has allowed the company to hurt too many innocent people.

Southern Company's plans to cleanse its dirty books by spinning off Alabama Power could dump a heaping load of stinky laundry in someone's unsuspecting lap

Alabama Power: going for a spin?

Southern Company might be planning to cleanse its dirty books by seeking a spinoff of Alabama Power, according to a report today from DonaldWatkins.com. Watkins, a longtime Alabama attorney and businessman, reports under the headline "Southern Company Reportedly Seeks Spinoff of Alabama Power":

On March 5, 2023, we reported that the Southern Company might be in the midst of an M&A transaction to (a) cleanse its financial books and records of the existing accounting fraud and (b) pump up the company's stock prices as CEO Tom Fanning departs the company, which is expected on May 24, 2023.

The company's February 15, 2023, 10-K filing discloses the possibility of merger and acquisition (M&A) transactions in vague terms in several sections of the financial report. These sections were included as "fig-leaf" provisions to provide cover for an M&A transaction, should one occur.

We have received reports from multiple sources that an M&A transaction is in process. Reportedly, the Southern Company is spinning off Alabama Power Company to Florida-based NextEra Energy for an undisclosed amount. We have not been able to independently confirm the identity of the purchaser. 

NextEra is the largest electric-utility holding company in the U.S. by market capitalization. NextEra is also the parent company of Florida Power & Light and Gulf Power Company.

Southern Company's stock price was $67.13 per share, as of March 21, 2023. NextEra's was $75.36 per share.

Who has been at the center of the M&A process? Watkins points to a man named Jim Kerr:

The Southern Company's General Counsel is James Y. (Jim) Kerr, II. He is scheduled to become the CEO and President of Southern Gas Company, effective on March 31st. Mr. Kerr has reportedly worked closely with Tom Fanning for several months to shepherd this M&A transaction to a successful closing.

Jim Kerr currently serves as executive vice president, chief legal officer, and chief compliance officer for Southern Company -- a position he has held since 2014. Mr. Kerr's job is to make sure that the Southern Company maintains full compliance with all federal, state, and local laws and industry regulations.

As general counsel and chief compliance officer, Mr. Kerr also reviews Southern Company regulatory filings like the Form 10-K for 2022 that was filed with the U.S. Securities and Exchange Commission on February 15, 2023. In this regard, Jim Kerr would have reviewed the Sarbanes-Oxley "Certification of Chief Executive Officer" signed by Jeff Peoples for Alabama Power. [See, Exhibit 31(b)1 of the hyperlinked Form 10-K].

Peoples' Sarbanes-Oxley certification attests to the accuracy, completeness, and truthfulness of Alabama Power's financial condition for 2022, and it was based upon Jeff Peoples' knowledge as CEO.

Mark Crosswhite worked as Alabama Power's CEO for 11 months of 2022. Crosswhite actually held the title of CEO through December 31, 2022. Jeff Peoples did not assume the CEO position until January 5, 2023.

Yet, Mr. Kerr accepted a Sarbanes-Oxley certification from Jeff Peoples that contained the following material statements and representations knowing that they would be relied upon by shareholders, investors, and Wall Street lenders.

Kerr and Peoples, it appears, cut a corner, and that could prove to be dangerous for investors, Wall Street analysts, and others who rely on the accuracy of financial statements, as Watkins explains -- using Kerr's own words:

1. I have reviewed this annual report on Form 10-K of Alabama Power Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer [the Chief Financial Officer] and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

   a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared. 

   b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

   c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

   d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

   5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors [Deloitte & Touche] and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

   a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

   b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
   

   Date: February 15, 2023 /s/J. Jeffrey Peoples J. Jeffrey Peoples Chairman, President and Chief Executive Officer

5.  

   Why does this raise a suspect eye? Watkins makes the answer clear:

   It would have been literally impossible for Jeff Peoples, who only became CEO on January 5, 2023, to perform the Sarbanes-Oxley-related CEO duties and responsibilities for 2022 that are described in his certification. Prior to becoming CEO, Peoples was executive vice president of Customer and Employee Services at Alabama Power, where he oversaw customer services, marketing and economic development strategy and operations. In addition, he was responsible for Alabama Power’s labor relations, human resources, safety, wellness, health and disability management functions.

   The matters entailed in Peoples' certification are not mere ministerial functions. They are substantive matters that attest to the financial integrity of the numbers in the 10-K.

   The level of knowledge required for a Sarbanes-Oxley certification is typically derived from a host of meetings between the signatory CEO and the company's operating officers, controllers, and accounting managers, as well as the head of internal audit over the course of the year in question. This function cannot be adequately performed by a newly installed CEO on an after-the-fact basis or be delegated to someone else to affirm. After all, the certification imposes personal criminal liability on the signatory CEO and Chief Financial Officer.

   If the financial numbers in the 10-Ks and 10-Qs are wrong, a publicly traded company can collapse overnight like Silicon Valley Bank did earlier this month, or the way HealthSouth did in 2003.

   Jim Kerr knew, or reasonably should have known, that Jeff Peoples' Sarbanes-Oxley certification for the Southern Company's second largest revenue affiliate -- Alabama Power Company -- is false and misleading.

   Unfortunately, for Southern Company shareholders, investors, and bankers, Peoples' Sarbanes-Oxley certification is only one readily understandable example of accounting fraud in just one Southern Company affiliate for just one of four regulatory filings required for 2022. In these economically challenging times, this example would be considered "low hanging fruit" for a competent federal prosecutor.

   The jointly-filed 10-Ks and 10-Qs for the prior years are also rife with a plethora of accounting fraud schemes and techniques. Based upon my review of the Southern Company's 10-Ks and 10-Qs and my personal experience in the HealthSouth case, they all need to be amended and restated.

   All of this indicates the Alabama Power M&A process is deeply flawed. Instead of resolving some of the company's problems, it could make them worse:

   The Southern Company's reported spinoff of Alabama Power is a technique for exporting liabilities arising from an accounting-fraud scheme and other unlawful acts from a host company to third-party business entity. This technique comes straight out of the HealthSouth $2.7-billion accounting fraud handbook.

   As you can see from Jeff Peoples' false Sarbanes-Oxley certifications, Jim Kerr’s role as general counsel and chief compliance officer was central to either detecting accounting fraud, or enabling it. Did Jim Kerr fail Jeff Peoples and the Southern Company in this critical role? Apparently, he did.

   Like the general counsel in the HealthSouth case, Mr. Kerr’s involvement in the transactions that facilitated, enabled, and/or fueled the Southern Company’s massive, long-running, multi-affiliate accounting-fraud schemes deserves heightened scrutiny by board members, utility regulators, and U.S. Department of Justice officials.

   Despite his role as the company's chief compliance officer, neither Mr. Kerr, nor anyone working under his direction and supervision, has ever contacted us to request any information that we may voluntarily share with the company regarding the accounting-fraud schemes at the Southern Company. Even after we published the handwritten notes made by Southern Company contractor Joe Perkins during an April 6, 2017 off-site meeting that outlined the broad areas of the accounting fraud, we never heard from Mr. Kerr.

   As we reported on March 5, 2023, the accounting-fraud schemes arose from the $25 billion in cost overruns at the Southern Company’s Kemper, Mississippi and Vogtle power plants. The aggregate amount of the fraud over the past decade appears to be at least $27 billion.

   Even though the Southern Company is seeking a non-prosecution agreement from the U.S. Department of Justice, no attorney from the King & Spalding law firm that is handling this DOJ matter for the company has reached out to us for the pertinent information in our possession that may help them document the nature and scope of the accounting fraud.

   Of particular concern in this matter is whether Mr. Kerr knew, or reasonably should have known, the Southern Company’s true reason for pursuing the Alabama Power spinoff transaction, and whether Kerr gaslighted board members when discussing the purpose of this transaction with them?

   At the moment, it appears the Alabama Power spinoff could wind up leaving someone holding a smelly load of baggage, Watkins reports:

   If consummated, the spinoff of Alabama Power would allow the Southern Company to bundle most of its known racketeering problems with some of its accounting-fraud baggage and pawn these liabilities off on the purchaser. The Southern Company will leave it to purchaser to clean-up the ranks of senior-management executives at Alabama Power and terminate the contracts of shady vendors like Matrix, LLC, and its owner, Joe Perkins.

   It is unknown at this time whether a business valuation firm has performed a “fairness opinion” for the purchaser on Alabama Power’s revenue potential, assets, and liabilities and has become aware of the accounting fraud embedded within the Southern Company’s consolidated 10-Q and 10-K regulatory filings.

   Despite its legendary lawlessness, growing legal problems, and mounting financial liabilities, Alabama Power remains one of the Southern Company’s most profitable affiliates. In 2022, Alabama Power grossed more than $7.8 billion in operating revenues. Only Georgia Power, with nearly $11.6 billion in operating revenues in 2022, was a more profitable affiliate.

   What is more, Alabama Power is the only utility company in America where taxpayers guarantee the company’s shareholders a minimum return on their equity. Despite a 21% increase in operating revenues for 2022 (over its revenues for 2021), Alabama Power still gouged its customers with crippling rate increases in 2022.

   To date, this spinoff transaction has NOT closed, and the Southern Company has NOT secured a non-prosecution agreement from the Department of Justice.

Alabama Power CEO Jeff Peoples' promise of "sunshine and transparency" apparently includes payment to terrorize family of lawyer Burt Newsome

 

Alabama Power CEO Jeff Peoples promised employees they would receive "sunshine and transparency" from him. But evidence suggests that promise did not hold up very long, according to a report at banbalch.com, which operates under the CDLU public charity and advocacy group. 

Writes K.B. Forbes, CEO of the CDLU, under the headline "Use of Fear, Threat of Death: Alabama Power CEO Jeff Peoples Approved Terrorizing Children and Hid Payment as “Transportation Organization Management”:

Yesterday’s breaking news report from DonaldWatkins.com that included audio of Alabama Power’s new but embattled Chairman and CEO Jeff Peoples declaring “what ya’ll are going to get from me is sunshine and transparency” has caused a firestorm at the utility.

Peoples comments of “sunshine and transparency” go counter to the hard evidence law enforcement and others have.

Peoples, as Executive Vice President of Employee and Customer Services at Alabama Power, hid additional payments to Matrix, LLC, the obscure political consulting firm that allegedly engaged in nefarious if not criminal misconduct and other entities tied to Matrix’s founder, Joe Perkins, by issuing vague “extra work authorizations.”

As we pointed out in December, shortly after ex-Alabama Power Chairman and CEO Mark A. Crosswhite resigned in disgrace, Peoples signed off on an “extra work authorization” in 2018 paying Perkins an additional mid-five figures on top of the secret multi-million-dollar annual contracts the firm and its founder, Perkins, received.

Now, today, we publish that work authorization in its entirety. (See document above.)

[Note: How does a top executive at an American international conglomerate -- the 33rd largest firm in the country -- react to news about Southern Company's actions, as described in this post? Find the answer in a news item at the end of this post.]

The document reflects a payment of $39,300, and Forbes shines light on that figure:

And what was the $39,300 allegedly for?

For “transportation organization management” according to the document, but a blatant lie, insiders confirm.

The reality is the extra work authorization was to target and terrorize the young children of Burt Newsome.

Newsome, an attorney who represents banks and financial institutions, was stunned when his wife and four young children were sent a threatening package tied to the “extra work authorization.”

As we wrote in August of 2018:

But now come the real sick idiots who sent the Newsome family a threatening package:

 Five pieces of luggage and numerous clothing outfits. 

The message was crystal clear: get ready to pack and leave town.

Were they threatening the family? The father, Burt Newsome? Was he going to be injured, killed or murdered?  Or were the wife and children going to “disappear” on a permanent vacation?

The extra work authorization was OK'd on August 3, 2018 and the incident against the Newsome family happened four days later on August 7, 2018 according to the police report.

A stolen credit card obtained from the break in of Newsome’s wife's car a few days earlier was used in the purchase of the travel bags and outfits. Use of a stolen credit card is a felony.

Perhaps all of this helps explain the lack of trust employees have in Peoples, according to a press report. Writes Forbes:

As Donald Watkins.com reported yesterday:

Alabama Power Company employees are very uncomfortable with Jeff Peoples, but they are meeting his leadership demands. After all, Peoples is their new CEO.

However, top Alabama Power employees have been documenting Peoples’ demands to cover themselves in the event things at the company blowup because they know that Jeff Peoples funded all the Joe Perkins/Matrix “dirty tricks” projects, with absolutely no accountability.

Perkins’ Southern Company-related work assignments are the subject of multiple media and law enforcement investigations in multiple states. Perkins handwritten notes have also implicated Southern Company in a massive $27-billion, multi-year accounting fraud scheme.

And the massive, multi-year accounting fraud scheme is evident in these obscure “extra work authorizations” used to pay for insidious, nefarious, if not criminal misconduct, and allegedly including identity theft, robbery, retaliation against an informant, use of a stolen credit card, use of fear, threat of murder, threat of bodily injury or death, invasion of privacy, intrusion of seclusion and much, much more.

And these Southern Company executives cannot foresee a criminal RICO case right before their eyes?

Maybe Joe Perkins is barking at Peoples like he barked at Crosswhite before Crosswhite’s sudden but expected demise.

This bogus “transportation organization management” work order adds to last week’s sensational allegation from DonaldWatkins.com that Peoples allegedly spent up to $30,000 a month in corporate funds on hookers and party pads.

A forensic audit is in order and the U.S. Securities and Exchange Commission must broaden its probe to look at bogus work orders, wire fraud, and alleged misappropriation of corporate funds. Any criminal findings should be referred to the U.S. Department of Justice.

In the meantime, Southern Company must terminate Joe Perkins, Jeff Peoples, Balch & Bingham, and all the elements involved in the criminal RICO enterprise.

Newsome’s children deserve it. Investors deserve it. Rate payers deserve it.

The era of dirty deeds, dirty lingerie, and dirty accounting methods must come to an end, no matter how ugly or painful the consequences might be.

          -------------------------------------------------------------------------------------------------- 

A top attorney for General Electric (GE) is aghast over the above report about Southern Company's apparent disconnect from standard business ethics

A high-level corporate attorney reacted with a mix of revulsion and bafflement upon learning via social media about Southern Company's actions described in the above post.

Claudia Sibert-Power

Claudia T. Sibert-Power, senior legal counsel for General Electric (based in Switzerland), seemingly could hardly believe the words she was reading. Here is her response on social media after reading an account of Southern Company's willingness to spend significant dollars to terrorize the family of Birmingham-area lawyer Burt Newsome, including his wife and four young children. Wrote Sibert-Power:

Thank you for sharing this article. I want to like and share further for awareness, but I feel a thumbs-up icon doesn't express my real feelings of such a monstrosity. It simply is unbelievable the lengths one would go just to compromise simple ethics.