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IID - Hedging report released |
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Written by George Gale
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Tuesday, 10 July 2007 |
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 (The investigation into the Imperial Irrigation District’s Hedging fiasco is complete)….The Baker Street Group conducted the investigation, and Tuesday they delivered their final report to the IID Board of directors. In fact, they delivered two reports to the Board. A complete report on the Planning and Implementation of the Natural Gas Hedging Strategy was given to the Board in closed session.
A General Summary was given to the public. The reasoning was that the full report contained details and names that could effect employee due process and, for now, that had to be protected. The result was public accusations of a further cover-up. Albert Allison, a Baker Street representative who took part in the investigation, gave a general overview of the report and conclusions reached, as a result. The Hedging strategy was to purchase natural gas futures, guaranteeing a supply at a set price. Allison says the IID suffered financial consequences because of a high-priced natural gas market and a lack of strong oversight of the execution of the hedging strategy. The investigation covered the very beginning of the program in 2005. They determined the first there was actually a positive impact of $4.8 million. Purchased increased after that, beyond the actual need for natural gas. Allison said over 40 people were interviewed in the course of the investigation, including former Energy department manager Glen Steiger who now works in Massachusetts. They concluded no employee received any personal gain from the $57 million fiasco, nor was there any intent to harm the district. The general conclusions from the report are that there was a management communications breakdown; a management oversight breakdown; no written plan to execute the hedging strategy; No mechanism to record decision justification; and there was flawed execution of the Hedging strategy. Several members of the public said somebody had to pay for costing the district and it’s ratepayers millions of dollars. Many on the Board agreed disciplinary action would probably be decided in closed session. Director Mike Abatti said he felt public funds had been handled illegally. Director John Pierre Menvielle said he was on the Board at the time. He said it was unfortunate, and he was willing to take the shots at election time. Director James Hanks said, as usual, it took the District too long to recognize there was a problem. He said public trust had been eroded and he wanted to discuss disciplinary action in closed session. Director Anthony Sanchez said he agreed discipline was in order. Director Stella Mendoza, who was also on the board in 2005, said at the time she believed in giving staff the tools to do a job and letting them do it. She said she feels staff betrayed the Board and the public. She asked the public for patience, saying the issue would be addressed in closed session. |
