Feds won’t confirm possible investigation into LP&L contract

Reported by: Henry Ramos
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Updated: 4/10/2013 10:54 pm

According to an emailed statement from Lubbock Power and Light questions, related to an LP&L job order contract could be gaining the attention of federal authorities.

The statement contains several references to federal authorities.

In part it states:  "On Tuesday March 19 the Lubbock City Manager for the first time informed members of the Electric Utility Board that she had received a phone call from federal law enforcement officials regarding a potential fraud related to an LP&L job order contract. The statement adds, "LP&L believes that the city manager received this information in mid-January." 
An LP&L spokesman refused to comment or give specifics. The city manager has not returned our call.

After a special called City Council meeting last month. Mayor Glen Robertson told FOX 34 about a pending civil lawsuit filed February 6 by an LP&L contractor against a sub-contractor.

Robertson told FOX 34 on March 5, "There is a lawsuit filed that involves one of the contractors that's doing business with LP&L. There has been allegations of fraud in this company not in LP&L."

In 2009, LP&L hired Amarillo based contractor Talon LPE to do some work at the Messengale Cooling Tower. Three years later, Talon is suing one its former employees and sub-contractors, claiming he filed false invoices and received more than $340,000 in payments from Talon.

Robertson said the city and LP&L aren't involved in this lawsuit.

"The lawsuit involves LP&L only because of the sub-contractor," he said. "It involved to my knowledge no LP&L employees." 

Whether this lawsuit is related to the job order contract mentioned in the LP&L statement that is something Robertson and an LP&L spokesman couldn't say.

The utility's statement added: "LP&L is unaware of any official investigation by federal authorities of LP&L."
"I cannot comment on any federal investigation at all," Robertson said.

FOX 34 obtained statements from spokesmen with the FBI and U.S. Attorney's office who said per Department of Justice policy they could neither confirm nor deny the existence of any investigation.

"It does bother me that every month we seem to have another shoe drop," Robertson said. "I hope this is the last one. I hope we can get through this unscathed."

The LP&L statement also added: "The independent third party auditor was aware of the situation and issued a clean unqualified opinion of LP&L's finances."

Robertson said when he first got a hold of the statement from LP&L there were some things that he didn't agree with.

"I guess that is what's bothering me is a lot of it was misleading," he said. "When I guess they said the auditors found no evidence of fraud that's true, but the auditors weren't looking for any fraud."

Spokesman Chris Sims said LP&L attorney Matt Wade contacted the U.S. Attorney's office expressing LP&L's desire to cooperate fully in any inquiry. 

Robertson also adds the city and LP&L is making progress.

Below is the entire LP&L statement:

Statement Regarding LP&L’s Full Cooperation

(Lubbock, TX) – On Tuesday March 19, 2013, the Lubbock City Manager for the first time informed members of the Electric Utility Board that she had received a phone call from federal law enforcement officials regarding a potential fraud related to an LP&L job order contract. LP&L believes that the City Manager received this information in mid January.

By the next day, Wednesday March 20, 2013, the Chairman of the Electric Utility Board and LP&L staff contacted our independent third party financial auditor BKD, LLP and informed them of this issue. BKD, LLP was already aware of the situation.

LP&L also contacted the federal authorities expressing LP&L’s desire to cooperate fully in any inquiry. Federal authorities could not confirm nor deny any investigation and to this date LP&L is unaware of any official investigation by federal authorities of LP&L.

It is important to note that BKD, LLP, when they did the additional audit on LP&L’s procurement procedures, were already aware of this federal inquiry and they did not find any evidence of inappropriate activity on the part of LP&L. In fact, BKD, LLP issued a clean unqualified opinion of LP&L’s finances.
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Liberty Seeker - 4/11/2013 9:03 AM
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If we include the procurement method the City of Lubbock Utilities uses to extract funds from the customers, improprieties can be discovered by merely looking at a common bill, and comparing it to the true expense of such service, whether the service is performed by a contracted city employee, or a contracted independent company. The mayor cried "excessive" when Atmos charged $11.00 monthly to read and maintain their meters, but LPL&W charges $28.00 to read each residential water meter, which is even more excessive. I invite LPL&W or the mayor to disclose the actual expense paid to read and maintain the water meters, and the total revenue collected for such fee. Which department or official is embezzling water meter funds into other projects? Why is there a sewer charge exceeding $15.00 for customers that purchase only $5.00 of water? why is there a stormwater fee during the worst drought in Lubbock's recorded history? When are the victims of the monopoly going to receive a complete refund of the excessive fees? Guilty or innocent, the feds should arrest the city manager, council, & utility board, hold them for an indefinite amount of time, make them pay bail from their own pockets, with no compensation from their employer. A federal prosecutor should persecute, as well as prosecute, on terms at least as favorable as the mayor accepted after he was annoyed by a member of the public.
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