Crow Wing Power members vote, urge board of directors to fire CEO Kraemer

In a heated 82nd annual meeting-temps and tempers alike-the Crow Wing Power membership voted to send the board of directors a message: Fire CEO Bruce Kraemer.

"Where was our approval? When were we ever asked? Never," said Mary Jenkins, a co-op member of Brainerd, to Kraemer with regards to $1.9 million he garnered from the sale of a for-profit subsidiary in 2006. "And the nondisclosure? It ends with the sale. You took the money. You did your secret meetings. And now you're justifying and justifying. It is wrong, wrong, wrong."

"This is our co-op. They have excluded members from board meetings except to present a specific issue or comment and leave," said another member. "That is wrong. The board, the first thing it does during its first meeting, should be to reverse that policy and open up these meetings for members. We've been held in secrecy too long and it needs to stop."

These were among many biting critiques leveled at Kraemer by members of the co-op, a microcosm of a meeting that stretched from morning into mid-afternoon, filled with impassioned speeches punctuated with shouts, applause and jeers at varying turns.

With lime green cards waving in the air, Saturday's vote by the members to fire Kraemer-which passed 66 to 44-48 by a rough count-is an advisory resolution from the membership, as members can't vote on personnel matters, corporate initiatives, or changes to company protocol. That authority is delegated to the board of directors elected by the membership, per the cooperative's bylaws.

In his defense, Kraemer touted the co-op's successful forays into for-profit subsidiaries, including Hunt Technologies and its later sale (where the membership received $12 million total), the magnesium deposit by Emily (which the co-op has spent just short of $23 million on development, with no profits), People's Security Co., and others that yielded returns for membership.

"Before this uprising had occurred, I had been very proud of all the accomplishments I've made for this co-op," Kraemer said after another round of calls for his ouster. "The members benefited, everyone benefited ... We were very, very successful and I'm proud of how this all shook out. To tell you the truth, I certainly wouldn't ask the members to give the money back either."

But, while a significant portion of members present voiced often passionate and scathing critiques of the board of directors and the co-op's executive staff, the membership voted to keep three seats up for election in the hands of incumbent directors-Doris Mezzenga for District 1B, Gordon Martin for District 2A and Paul Koering for District 3's At-large seat.

Amid temperatures in the high 80s Saturday morning and afternoon, members packed Crow Wing Power headquarters at 17330 Highway 371 for the co-op's annual meeting. The appreciation event was billed as an opportunity for the membership to socialize, discuss and vote on matters of interest to the electric power co-op's 38,000 members, who are spread across rural portions of Cass, Crow Wing and Morrison counties. Members convened for more than three hours to hash out their concerns with board members, executive staff, legal counsel and a professional parliamentarian contracted to moderate proceedings.

This year's iteration took on different dimensions than years past. Crow Wing Power officials have been dogged with accusations of impropriety going back decades, first outed publically by a Minneapolis Star Tribune article dated Aug. 31 last year.

In that span, controversial details of how management handled the sale of a profitable subsidiary, Hunt Technologies, in 2006 and the purchase of an Emily magnesium deposit, potentially worth hundreds of millions, in 2008, have all come to light. Scrutiny was placed on extraneous forms of compensation-particularly, a royalty stake in the Emily deposit and a $1.9 million payout from the sale of Hunt Technologies for Kraemer, as well as a $70,000 payout given to seven directors after the sale-all of it, not disclosed to co-op members until the last nine months.

Debate raged-from member to member, between the membership and co-op officials-on these counts and others, vacillating in terms from mishandling management of the deposit, to extraneous payouts; a lack of transparency and "stonewalling" members from meetings; purging directors of the co-op board, firing executive staff; demanding some kind of settlements or compensation from the co-op or accused parties; enacting term limits; as well as cutting off involvement in non-electric power related subsidiaries.

At one point, members urged the two board directors who declined the $70,000 option in 2006-Gordon Martin and Dwight Thiesse-to explain why they refused compensation. Thiesse iterated what he's said in the past-that it was unethical then, and it's still unethical now.

Martin, on the other hand, doubled down on his commitment to work alongside other members of the board, even if he has deep disagreements with them.

"You have to work with the board," he told the membership. "You might not be in the majority of the board. There's going to be different opinions, but to really get things done, you have to work with the rest of the board."

Board member Bryan McCulloch-who's been vocally critical of his colleagues and the executive staff-slammed Martin's position as a poor excuse.

"I truly believe a board has to be cohesive. Absolutely," McCulloch said, bounding up to the podium. "But when there's unethical, immoral and possible criminal things-no. Then a board member doesn't stand with the rest of the board."

Members recommend changes

Transparency-often cited as a point of focus by co-op officials and a point of contention among the membership-factored in Saturday's discussion, forming the backdrop to a bevy of sweeping motions intended to make Crow Wing Power more accountable to its paying membership base.

In addition to the Kraemer vote, attending members also voted:

• To reverse an amendment that allowed meeting closures at the directive of the board, while allowing members to attend these meetings at will, without applications or pre-determined requirement for admittance and participation.

• For an advisory motion to revert bylaws back to previous statutes that stated only 500 signatures are required to recall a director from their position.

• For a motion that once board meetings are finished, any minutes or notes-excluding trade secrets, sensitive personnel information or sensitive legal content-must be posted on the Crow Wing Power website for ease of information and ease of access to monitor proceedings.

• For an advisory motion to call for a forensic audit of Crow Wing Power and subsidiaries, particularly as it pertains to the sale of Hunt Technologies and mining operations in Emily, from 2000 to the present.

1/3: Members of electric power co-op Crow Wing Power vote by holding up certified cards in lime green during the 82nd annual meeting Saturday, June 8. Accusations of impropriety against co-op officials came to a head during the meeting, with members voting to advise the board of directors to fire CEO Bruce Kraemer. Kelly Humphrey / Brainerd Dispatch

2/3: Crow Wing Power CEO Bruce Kraemer speaks during the 82nd annual meeting of the power electric co-op, Saturday, June 8. Kraemer has come under fire with accusations of impropriety and has, in recent months, disclosed he received a number of extraneous payments throughout his tenure. Kelly Humphrey / Brainerd Dispatch

3/3: Crow Wing Power Board member Bryan McCulloch lambasts handling of co-op management by the executive staff and other directors. A vocal critic the last few months, McCulloch told members he only came forward after eight years of futility addressing impropriety inside Crow Wing Power. Kelly Humphrey / Brainerd Dispatch