Federal cases allege millions mismanaged, wiretapping at CPS Energy

Four million dollars. Normally when a company bean counter exposes mismanagement of the seventh-digit variety you expect them to be lured into the talk-show shredder.

Those of us wearing our own timid little grooves inside the belly of the Ant Farm want our more courageous kin honored by a passing celebrity. Or, failing that, an appearance on C-SPAN.

For CPS Energy employee Linda Knowlton, there’s been none of it. The woman who allegedly discovered nearly $4 million in payments on expired contracts at the City-owned utility isn’t even raking in bonus chips as Most Valued Employee. To the contrary. Thanks, apparently, to her findings, Knowlton has been stripped of her former responsibilities in HR, kicked out of CPS HQ, and fed to a dingy outpost on South Salado Street. Still, she punches the clock like a good

“The job itself has the kind of recognition that keeps her motivated,” says James Conley, legal assitant* to Knowlton's attorney Sam Beale. “She tries to do her job better each day.”

Partial motivation may be her complaint pending in U.S. Federal Court.

With more than 20 individual discrimination lawsuits festering and a lawsuit by the International Brotherhood of Electrical Workers involving dozens more CPS employees sitting in state district court, Knowlton is by no means the only employee of the City-owned utility to allege harassment by her superiors. Former 26-year employee Pedro Gonzalez netted more than $620,000 earlier this month in a discrimination case that shares some fundamentals similar to Knowlton’s. However, with Knowlton’s assigned FBI whistleblower protections — and those misguided millions — it’s a grade higher than “mere” discrimination. If settled in her favor, it would do more than drain another $300,000 from the city. It would be yet one more black mark on the reputation of a utility that has made much of its low rates, drastically reduced workforce, and customer-satisfaction rankings.

Knowlton’s complaints of racially based harassment were settled in-house, following an Equal Employment Opportunity Commission hearing. To separate her from her manager, she was shuffled into a new office in CPS’s Human Resources department. Once there, according to several people familiar with the case, she made a problematic discovery: a purchase order mistakenly written out to a former contractor, one who had been providing CPS pre-employment drug-testing services. Problem was, there was already a new contractor that should have gotten that money. When she investigated, those in the purchasing and accounts-payable wings each pointed fingers back across the hall. So she pushed a little further.

Thus began the audit that allegedly unearthed a mountain of wrongful payments being made to as many as 43 different companies with expired contracts. In all, Knowlton found nearly $4 million in such payments. Some of the companies listed on her documents include HS Labs, Eurostaff, Career Builder LLC, and Insurance Information Exchange.

CPS Energy chose not to participate in this story since it involves “pending litigation.”

Knowlton herself could not be reached for comment by press deadline.

But according to Knowlton’s lawsuit, the 58-year-old woman wasn’t exactly commended for her find. Instead, over the course of several months both of her supervisors were replaced. (Her new boss being the very same one she had originally brought her EEOC complaint against.) Her responsibilities were stripped away and, ultimately, she was transferred in June to the Salado Street warehouse.

With so many cases piling up, City leaders may wonder how much CPS spends on legal counsel each month. Or how much is paid out in out-of-court settlements.

CPS mouthpiece Theresa Cortez referred our questions to the utility’s “legal staff.”

Repeated calls to both Councilmembers and likely mayoral candidates Diane Cibrian and Philip Cortez have gone unanswered. However, Councilman Justin Rodriguez said he has become skeptical of CPS practices during his 15 months of Council service.

“My issue really with CPS predates even this last rate increase. I just never felt like they were real forthcoming with information. And I told them, essentially, they were running that place like it was Valero, not a municipally owned company,” he said.

So, while some may see Knowlton’s complaint as just another high-digits case of sour grapes, it also represents a financial and managerial challenge to the City.

Conley said his client’s work inside CPS has required personal discipline.

“It’s like track. You run against yourself every day. She’s trying to do it as well as she can, looking over her shoulder saying, ‘I don’t want to give them any legitimate reason to ever be disappointed to feel they can justify the way they treat me.’”

It would be wise for council members and mayoral would-bes to run with a similar devotion. If not eternal vigilance for the welfare of City workers, than at least do what is necessary to limit court-ordered judgments tapping into City coffers. •

`Conley was originally identified as Knowlton's attorney. Correction made 9/2/08.`

Buggin’ in unison

BexarMet’s former GM Gil Olivares continues to make headlines as the BM board works to disentangle themselves from the water executive following a string of Grand Jury indictments on wiretapping and sexual-harassment charges.

Though unlikely, the next round of high-profile executive excommunications may come from CPS Energy. While complaints against the City’s power company are so far free from Olivares-grade tales of sexual predation, two high-ranking union leaders and a CPS employee filed a complaint in U.S. Federal Court last month alleging that CPS employees bugged a meeting room where they met in May to discuss workplace grievances.

“On or about” March 26, CPS staff “intentionally installed an eavesdropping and recording device in or near a CPS conference room for the purpose of intercepting and recording conversations where a meeting between Ralph Merriweather, Gary Kirby, Rosie Hopkins and third parties was to be held,” the complaint filed on July 30 reads.

Merriweather is the international rep for the electrical workers’ union. Kirby is the local IBEW president. Hopkins the aggrieved union-loyal employee.

CPS staffers (again) refused to comment on the case, and their attorney on the case failed to return a phone call seeking information. However, in a written response, CPS’s hired guns urged the court to dismiss the suit since (among other things) the Texas Civil Wiretap Act requires both evidence of interstate traffic and “the aid of a wire or cable.”

Damn Wireless Age.

Local attorney David Van Os vouched for the group’s inside source that alerted them to the potentially illegal recording.

“It does represent an ongoing problem, and that is fundamental disrespect for the union, fundamental disrespect for employees wanting to be represented by the IBEW,” Van Os said.

Ongoing meetings between the union and CPS officials have downgraded many allegations, claims, and counterclaims to the status of mere fodder for the barter board. Not the wiretapping charge, Van Os insists. That one will ride.

“There’s a possibility of monetary damages, an injunction, and attorney fees for having to bring the lawsuit,” he said. “In my view, whatever it takes to deter this from happening again.” •

-- Greg Harman

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