“Crow Wing Power Executives: Why such high salaries and bonuses?”
Compensation for Crow Wing Power executives raises concerns they are not managing in the best interests of members as their non-profit status and by-laws require.
The story can be separated into
1) what they are reporting;
2) what they have hidden; and
3) what they may be hiding from members.
Reported compensation information
Crow Wing Power has many hard working employees who we feel deserve their compensation. Our focus is on the pay of Co-op Executives.
Based on most current information reported on required non-profit tax forms:
- CEO Bruce Kraemer was paid a total compensation amount of $373,247.
- Outgoing CFO Steve Smolke was paid a total compensation amount of $240,900.
- COO Eric Quale was paid a total compensation amount of $195,046.
- Public Relations Manager Char Kinzer was paid a total compensation amount of $191,319.
Board member pay varies by member from year to year, but we believe Crow Wing Power’s compensation—which varied from $13,000 to $17,000 in the last return-- is reasonable and in line with other non-profit board compensation. However, we believe that CWP executive pay is among the highest of any Co-op in the state-- and not in line with expectations for a non-profit organization.
CEO Kraemer alone has taken in over 1 million dollars in the last three years.
At the last in-person annual meeting of members, members voted to oust CEO Kraemer after admission of his self-enriching actions related to the sale of Hunt Technologies and Emily Mine royalties.
To date, that has not happened, with one explanation for lack of action given as a desire to wait for the results of outside investigations into malfeasance by CWP management.
We’d like to know why—under the cloud of investigation and clear distrust from CWP members regarding the CEO’s management— has he continued to receive bonus money on top of regular reported compensation each year?
And—the above amounts are only what is reported and released to members.
- In 2019—13 years after it occurred—Crow Wing Power finally admitted to members that CEO Kraemer personally pocketed 1.9 million dollars from the sale of their interest in Hunt Technologies.
- That high compensation was not noted in the non-profit tax return the year after it was taken, as none was filed. They instead filed a standard corporate tax return that year-- and have NOT made that return public.
- It also finally came out in 2019 that 7 out of 9 board members present at the time of the sale (including current board members Bob Kangas and Gert Roggenkamp) took $70,000 from the Hunt sale—that compensation was also not noted on tax returns.
- Thanks to media coverage by the Star Tribune and Brainerd Dispatch, we became aware that CEO Kramer and two other former executives have a royalty agreement in place regarding the Emily Mine in place. If the mine is developed, this royalty agreement will pay each of them millions of dollars. CEO Kraemer has publically stated that royalty agreement is not in effect. This is not accurate— it has NOT been revoked.
Suspicious Tax Filings/Hiding of Information?
- Examination of filed non-profit returns raises a number of questions regarding patterns of non-salary compensation. For example, some amounts are exactly the same from year to year, and they vary by individual despite position. Those who did not receive such compensation appear to not have been working for CWP when significant subsidiary decisions were made. We wonder: are executives hiding significant one-time compensation agreements taken from subsidiary businesses by reporting it spread over time as other compensation on non-profit returns?
- One of our members who reviewed the for-profit tax return filed after the Hunt Sale found strong resistance to sharing of that information publicly—he was required to view it in person, not allowed to take notes or pictures while viewing it, and found a significant number of redacted portions.
Why such secrecy? What is the nature of things they don’t want to become public?
What can be done?
Crow Wing Power management repeatedly tells us that all business—including subsidiary business-- is being managed for our benefit. But the high reported compensation; hiding of huge payments until media coverage forced admission; and limiting of information to members on other CWP business--suggests otherwise.
We believe the answer is clear. A forensic audit is needed. And we aren’t alone—at the 2019 annual meeting of members, a majority of members voted to require that a forensic audit be performed. To date, CWP executives and the board have refused to approve such an audit.
Hunt Technologies was formed in the mid-1980s by the Hunt Family in Pequot Lakes. They produced remote meter reading technology that was very successful. The company grew rapidly until a combination of equipment issues and Y2K related problems led to a shortage of operating capital.
In an effort to look for investors or buyers, Hunt eventually approached Crow Wing Power to assist in raising capital. In 2000, CWP entered into an agreement with Hunt to help raise money and co-sign Hunt’s operation loan. In exchange for doing so, CWP was granted a slight majority in ownership and executive management control.
One effort to find a potential partner was a success, but the offer was not accepted by CWP management due to concerns CWP’s stake in Hunt might not be valued appropriately. This led to an offer from the Bayard group to buy Hunt outright, which was eventually approved.
Be committed to change! Take an active role in board meetings, ask questions and expect/demand answers, and moving towards ending long standing management practices that benefit executives over the interests of Co-op members. (end bulleted list)
Our hope would be to promote just one candidate for each position—for several years we have noted that multiple candidates for open positions have the effect of diluting the vote and resulting in re-election of the incumbent.
Our CWP accountability group would be glad to talk with prospective candidates and advise/assist them in running a campaign.
- The publically announced price for the sale of Hunt was $129 million dollars; our group has obtained credible information that the actual sale value may have been $150 million dollars.
- Crow Wing Power has told us it received 42 million dollars in the $129 million dollar sale—that’s less than ½ of the reported sale value when we know Crow Wing Power had a majority ownership position. We have heard that some money went to bonuses designed to assist completion of the sale. Did some of that money go to CWP executives, and if so why was that not reported to CWP members?
- Also, if it in fact was a 150 million dollar sale that was reported as 129 million, what happened to the $21 million dollar difference?
- We understand that in addition to the sale of CWP’s share in Hunt, a data processing company started by CWP was also sold-- but CWP has not shared with members what that was sold for nor where the money went. .
- Announced distribution of money from that sale:
- $5.2 million dollars was sunk back into Co-op operations;
- Approximately $12 million was split up and distributed back out to the 30,000+ members of the Co-op (most members received a few hundred dollars or less);
- The biggest announced portion of profit—a reported $24.8 million dollars—was used to purchase a potential manganese mining operation near Emily.
- Following persistent rumors and questions regarding CWP executives and board members personally profiting from the Hunt sale, in early spring of 2019 CWP admitted that 7 out of the 9 board members present at the time of the sale of Hunt Technologies took $70,000 apiece (See https://www.startribune.com/undisclosed-70-000-payments-to-crow-wing-power-directors-come-under-scrutiny/509029892/ )
- Note: Two of those Members—Gert Roggenkamp and Bob Kangas—are still on the board. Gert is up for election this year.
- Two other members still on the Board—Dwight Thiesse and Gordon Martin—did not take the money. But they did help keep news of the payment from members for 13 years. Dwight is up for election this year.
- In June of 2019—just one day before the annual meeting and after the vast majority of members had already voted in the board member election—CWP took out a full page ad in the Brainerd Dispatch (now posted here: https://www.cwpower.com/letter-our-members Should we put this letter on our website as well?) acknowledging that CEO Bruce Kraemer personally pocketed 1.9 million dollars in the Hunt sale. (see https://www.startribune.com/ceo-s-bonus-sparks-anger-in-crow-wing-power-members/511024201/ )
- Official CWP power response to criticism that these hidden personal payments to Board Members and executives conflicted with CWP‘s non-profit by-laws was that they “deserved” them.
- A Non-disclosure agreement was blamed for not telling members about this compensation earlier. CWP management says such agreements are typical—they are not, especially for non-profits like CWP. Even with that--the sale occurred in 2006. The non-disclosure agreement expired LONG before the spring of 2019 when payments were finally disclosed!
- In response to questions at the 2019 annual meeting regarding transparency in executive compensation, members were told that compensation information can be found in the publically available tax returns CWP files each year. Checking up on that assurance told a different story:
- Crow Wing Power did not file a non-profit tax return in the year of the Hunt Sale.
- We were able to discover that Crow Wing Power filed a corporate tax return in the year of the Hunt Sale.
- When a Co-op member asked for a copy of that tax return, CWP refused to provide a copy.
- That member was eventually allowed to see a copy of the tax return, but only after board approval and conditions:
- portions were redacted;
- no pictures of the return could be taken;
- No notes could be taken while viewing the return.
- One board member—Gert Roggenkamp—voted against allowing the Co-op member being allowed to see the tax return.
- The tax return filed for the year of the Hunt Sale made no mention of the $1.9 Million dollars CEO Kraemer took.
- The tax return filed for the year of the Hunt sale also made no mention of the $70,000 that 7 out of 9 board members took. Executive compensation was noted to be less than the year prior and the year following the Hunt Sale.
In a highly unusual move for a small electric co-operative, using our proceeds from our Hunt Technologies sale, in 2008 CWP began the purchase of a manganese deposit near Emily that we understand will now cost much more than reported 22.5 million dollars. Our team initially was led to believe than an innovative mining technique (borehole mining) would allow the manganese to be removed from the earth with minimal impacts and cost. CWP management reported that effort failed and ended in 2011.
Ten years later, nothing has happened with the mine, despite many annual unanswered calls, letters and messages requesting reports about of progress or lack of progress from CWP management. They are supposed to give us, the Members, actual detailed reports on how they are doing with the mine. We are aware of at least two offers to buy CWP’s interest in the mine—one of which would have returned a profit over CWP’s initial investment--that were not entertained by CWP management.
We feel CWP management has no experience in mining and lacks the skills or training to run a mining operation. Development of the mine is very complex and requires resources and knowledge that CWP does not have and has not yet been able to procure. Furthermore, after the promising initial mining attempts failed, it is our belief that extracting the Manganese is a highly complex and very costly endeavor. We also feel mining operations have significant potential for environmental problems if note executed properly. We have many members in the beautiful Emil lakes area and it provides recreation for many others—we think the mine requires experienced and careful management to avoid conflicts that have plagued other mining ventures in the state.
Our group has not taken a pro or anti-mine stance, but we strongly feel that a non-profit electric co-operative and its member owners are not the right group that should be in control of attempts to implement mining operations there. We feel that Crow Wing Power should sell our interest in the mine and return the revenues to us as Members, in the form of capital credits.
A number of specific concerns related to this mine are present:
- We have heard that some money went to bonuses designed to assist completion of the sale. Did some of that money go to CWP executives, and if so why was that not reported to CWP members? Crow Wing Power has told us it received 42 million dollars in the $129 million dollar sale—that’s less than ½ of the reported sale value when we know Crow Wing Power had a majority ownership position
Also, if it in fact was a 150 million dollar sale that was reported as 129 million, what happened to the $21 million dollar difference?
* In 2018, the presence of mine royalty agreements with the potential to pay CEO Kraemer and several other CWP executives millions of dollars over the years surfaced after complaints of inaction brought by the Carlton group, who have a significant royalty stake and interest in the mine. CWP’s share of mine royalties are profits that should go to CWP Members as capital credits (as our by-laws clearly state), not to CWP management.
We understand that in addition to the sale of CWP’s share in Hunt, a data processing company started by CWP was also sold-- but CWP has not shared with members what that was sold for nor where the money went. .
Announced distribution of money from that sale:
$5.2 million dollars was sunk back into Co-op operations;
Approximately $12 million was split up and distributed back out to the 30,000+ members of the Co-op (most members received a few hundred dollars or less);
The biggest announced portion of profit—a reported $24.8 million dollars—was used to purchase a potential manganese mining operation near Emily.
Following persistent rumors and questions regarding CWP executives and board members personally profiting from the Hunt sale, in early spring of 2019 CWP admitted that 7 out of the 9 board members present at the time of the sale of Hunt Technologies took $70,000 apiece link
* CWP management and CEO Kraemer specifically have publicly disputed the continuing existence of those royalty agreements. We have credible information that shows they never were removed and are still in effect. We believe the management should show us - the member - the mine royalty agreements. We have called for the board and/or CWPWe believe that management should show us—the members the mine management to drop out of royalty agreements or present convincing evidence they have been voided - we feel they present a strong conflict of interest if in fact the mine is to be managed in the best interest of the co-op member. To date, no such action has occurred.
* Right before and during the annual meeting in 2019, members finally heard of the mine royalty agreements and Hunt technology related payments of $1.9 million to CEO Kraemer and $70,000 to some board members. That was followed by news that CWP entered into an agreement with a brand new group—North Star Manganese—to explore development of the mine. North Star Manganese was formed in May 2019, mere weeks before this announcement. At that time, and to date—it had no real business/ internet presence or significant presence in the state of which we are
* According to media reports and verified by sources our group has heard from, CWP has been offered millions more than its initial reported investment to be bought out of its mine interest. CEO Kraemer has publicly said he doesn’t recall a 30 million dollar offer to buy out CWP’s interest, but we have had that and other offers to buy the mine verified by trusted sources. We believe CWP should sell the mine, return most profits to members in the form of capital credits, and sink any remainder into improvements that benefit members.
* Before the latest agreement with North Star Manganese, CWP entered into Mining agreements with several Canadian companies: Star Minerals (in 2015), Octopus Technologies (in 2015), and the MIAS group (in 2017-2018). All of these agreements failed. How much of our Co-op money was wasted pursuing these deals, and the latest one with North Star?
* CWP management continues to present members with unofficial tales of mine development progress and “soon to come” returns that have never materialized; Co-op members cannot get information on how much has been spent or is being spent on these ventures. This is OUR Co-op, and we deserve to know this information!
* CWP management has told its members that environmental permit needs have previously been approved or work on them is progressing well. We understand little such work can begin until a formal application for a permit to mine is submitted. North Star Manganese representative Rick Sandri recently told the Emily city council that two years of additional drilling followed by two or more years of analysis remain before they can even apply for permits and start the Environmental Impact Statement process—and that the total process may take ten years or more to complete.
* We understand that Crow Wing Power recently purchased land near Emily. What is the purpose of that purchase, and where did the money come to fund the purchase?
* At the same Emily city council meeting referenced above, North Star Managanese representative Rick Sandri estimated the cost of developing the mine to be hundreds of millions of dollars or more, and timing before mining begins to be a decade or more in the future. We as Members of this coop need to be clearly informed about the royalty and mining agreements; the Co-op investment in the mine; and mining plans until the mine has been sold.
CWP’s Char Kinzer and North Star Manganese representative Rick Sandri told the Emily City Council at their February 9, 2021 meeting that they will provide monthly updates on the mine and mine progress.
We—the member/owners of the Co-op—feel we deserve to be similarly informed about the mine and progress towards development. CWP executives have an obligation to manage the Mine for the benefit of the Co-op members--instead they are helping themselves.
It’s obvious by now that CWP management will continue to manage this mining venture in their best interests rather than the members. We members need to vote to elect new board members who will demand management changes and insert new management.
Thank you for reading this. Want to do something? Please see our website and join us in keeping Crow Wing Power accountable for this and other issues.
From Bryan McCulloch, Board Director: District 1 at Large;
Statement Number 2 of My Crow Wing Power Cooperative (CWP) Board Experience
This statement is a continuation of a previous statement I put out a few weeks ago. I am presenting this information to you, the members /owners of CWP Coop, to inform you of the many issues I have been concerned about over the past several years, since I have been a board director. Keep in mind that what I am giving you is only the tip of an iceberg from which I have had to pick and choose my battles. I urge you to read my first statement posted on the CWP Accountability Group (CWPAG) website and Facebook page as well.
I would like to start out by saying some positive things about CWP, the Credit Union (CWPCU), and People’s Security. We have many great employees working for us. I have only good things to say about the majority of these people. We are also involved in many great community projects such as Project Round Up, youth tours and scholarships, to name a few. I can’t say enough good things about these programs either.
Having said that, my conscience would not allow me rest if I did not inform you about some internal problems. This particular statement is primarily meant to highlight how badly CWP has treated a man for whom I have the utmost respect. His name is Brian Finch and he has served you with integrity for over 40 years at CWP. The last 20 of which he was CEO of the credit union.
Before I tell you how management wronged this man, I would like to tell you that I first met Brian back when we both attended Brainerd High School; he was a senior and I was a junior and we were also both on the football team. I looked up to Brian even back then because I recognized his strong character, scholarly attributes, athletic skills and perseverance.
During Brian’s years of service as CEO for CWPCU, our company was the first electric sponsored company in the US. This is an important point because of all the challenges this status presented and he was amazing in his ability to manage it. Brian’s duties were split between the credit union side and CWP Coop side - fifty/fifty. Brian was loved and admired by the board of directors and his fellow co-workers. He was an outstanding employee of CWP and CWPCU with an exemplary career. Keep in mind that Bruce Kraemer was only supposed to manage Brian’s work on the power side (not the credit union side), but as you will see later, Kraemer went far beyond his bounds and began interfering in the credit union as well.
During my last statement I brought up the fact that a high-level credit union employee found me sitting in a room alone, during a meeting of the board on Crow Wing Mineral Resources (CMR) and the Hunt Technology (a subsidiary). I was there because I wouldn’t sign the non-disclosure agreement (NDA), meant to hide all the financial information and details from you the members /owners (see my previous statement for more on that).
Brian Finch was that employee. It was at that time that I told him about the royalties agreement for the top three employees of the CWP and how they could possibly be able to enrich themselves with millions of members /owner’s money, over 25-30 years time.
Brian, very calmly and without batting an eye, stated “I have been here for over 40 years and I have seen a lot of things that don’t meet the standard of a cooperative.” Then he added “no one should profit off of a cooperative.”
I have to apologize to Brian because I put him on the spot during last year’s CWP annual meeting in June. Bruce Kraemer over heard me say to Brian that our CWP Accountability Group (CWPAG), would protect him if he publicly sided with us at the meeting, helping to reveal the truth, and not to protect Bruce Kraemer on the issues that were brought up by the members. Issues such as the firing of Bruce Kraemer and doing a forensic audit. After that meeting I was told by other individuals close to Brian that he was in serious trouble with Bruce Kraemer. Kraemer began to see that Brian may be giving information to me and working with those in our group who were exposing him (Kraemer). The pressure exerted on Brian, by Kraemer and those supporting him, began to affect Brian’s health and emotional well-being. He was caught between helping to expose what was wrong and dealing with Kraemer’s tactics against him. He was two years from retirement at this point and expressed fear of retribution. Brian found himself at the mercy of Bruce Kraemer and his ultimate power to control everything that went on, including Bruce’s over-reach into the credit union. Brian couldn’t take it anymore and finally asked to be removed out from under Bruce Kraemer’s authority and put under board authority.
It was also around this time that our head bank examiner, Marcia Lewis, came to speak to the board because of the way Bruce Kraemer was interfering in Brian Finch’s duties on the credit union side. Marcia suggested that Brian be put under board-control and removed from Bruce Kraemer’s reach of authority. She added that this was also important because of what was happening with CWP in regard to the attorney general’s investigation of the company. The whole board, except Gert Roggenkamp, approved this motion.
Brian finally decided he needed a break and took some vacation time in late October and early November of 2019. It was during this time that he decided to exit the company and retire. Here is where things get even stranger. He contacted the board chairman (of the credit union) Gert Roggenkamp, to inform her of his decision. The board then discussed his retirement and benefit package. During the next board meeting Gert Roggenkamp, came back with two offers. The first one was pretty much what the board had agreed upon, but she also had a separate additional offer that included a substantial amount of money for Brian if he agreed to sign an NDA, preventing him from talking about anything at CWP.
When this retirement package was presented to the board, Paul Koering said that it sounded like a gag order or hush money, and I stated that I agreed. We both wanted to know what employer does such a thing, especially in a cooperative with members /owners. It should be noted that Doris Mezzenga also agreed with us. When I questioned Gert Roggenkamp and Deb Frank of human resources about how this NDA originated, Deb shrugged her shoulders and looked to Gert to explain. Gert’s response was that between her and the labor attorney they had come up with this offer. I asked if Bruce Kraemer had anything to do with this and Gert responded that he did not. What do you think, our members /owners? No other critical discussion followed, so the offers were left in place and there were crickets in the board room. You should know that Brian Finch did not take the substantial amount of hush money, so bravo to him!
Another important point is that Brian wanted to remain with the company until the first of January 2020 to train in his predecessor and then leave at that time. All board persons agreed that he should stay until that point except Gert Roggenkamp. I found out at the next board meeting, in December, that Brian had been locked out of his office shortly after the November meeting and that he was not to return. When I asked Gert Roggenkamp whether Bruce had anything to do with locking Brian out of his office, she stated that he did not. Now remember that Bruce was not Brian’s boss at this time, the board of directors was, and no authority was ever given by the board of directors to do any of these things! And…we were not even asked for our opinion!
Another point about Kraemer’s interference in the credit union came from sources inside the company. I was told that Bruce would frequently come over to the credit union and micromanage when he had no business being over there. The following example of interference with the credit union is literally shocking. It came to the board’s attention that Bob Kangas, Gert Roggenkamp and Bruce Kraemer got together and agreed to give the employees at the credit union pay increases, in the midst of all this controversy. They did this by going over the heads of Brian Finch (the CEO), and the other board directors. It isn’t that these people shouldn’t have been given raises (necessarily), the problem lies in why they were given, the method that was used (going over Brian Finch and the board), and the timing that is in question.
When I brought this up for discussion at a board meeting there was apathy and annoyance that I had the nerve to press any further about it, except from Paul Keoring who agreed with me. I am asking you the members /owners what do you think?
Our main goal at CWPAG is to bring you truth and transparency as well as assist with replacing the directors responsible for allowing these things to go on and in some cases being directly complicit.
I thank all of you involved for your brave efforts and give you the quote from John Wayne that I live by. He said, “courage is being scared to death, but saddling up anyway.”
Please visit our web site and sign up to join us. We really need you. We will keep you informed about what is happening. We need approximately 7,000 members signatures and contact information so that we can have a special meeting to address these issues and affect real change. Also, the ballots will come out during the first and second week in May and we ask that you vote for the selected candidates. These are: District 1 at large Bryan McCulloch (Incumbent), District 2B Gary Bakken and District 3A Loren Beilke. We are determined to represent your best interest. These candidates were hand-picked by the CWPAG for their ability to affect real change. You may not realize this but it doesn’t matter what district you live in, you can vote for all the candidates in all districts, not just the candidate in your district.
I have to give a special thanks to my wife Diane, who has tirelessly worked with me through all of this. I would have been lost without her skills in writing and typing.
Bryan McCulloch, Phone (218) 821-8390
Hello to All Crow Wing Power members!
Are you aware that Crow Wing Power Co-Op management has allowed millions of dollars from the sale of assets to be personally pocketed by management and some board members?
Or that they approved royalty agreements that will pay a few executives millions more in the future?
Or that management has borrowed large sums of money from the federal government that the co-must pay interest on, while paying themselves huge salaries that are higher than any other co-op in the state?
These facts --and more-- have led to ongoing investigations by both the state and federal attorney generals offices.
At the Co-op’s annual meeting last June, members voted for an independent, forensic audit of management actions; they also directed the board to fire CEO Bruce Kraemer.
Eight months later, they have taken no action on either of these member approved motions.
We are a group of concerned Co-op members who think this is wrong!
We understand that:
• Per the Articles of incorporation and by-laws, if you buy your power from the Co-op, you are an owner of the Co-op.
• That Co-Op management must at all times operate on a non-profit basis for the mutual benefit of you and other Co-op owners.
• That any profits above operating cost and expenses must be paid back to you and other owners in the form of capital Credits.
Wouldn’t you like to see lower electricity rates and get some of the money currently going to Co-op Management back?
If so, we’d like to ask for your help. Please visit our website: CWPAccountabilityGroup.com
In the coming weeks, we will be sending information out regarding the upcoming board member election and candidates that we feel deserve your support: candidates who will work to shed light on past management actions, hold those responsible accountable, and manage your Co-op in your best interest!
If you are interested in hearing more about this effort or joining our group, we invite you to reply back to this e-mail. Your reply will not be shared with or seen by other recipients of this e-mail.
For more details on problems with Crow Wing Power Management, we have set up a website that you are welcome to visit: CWPAccountabilityGroup.com. The website is under construction and we will be adding additional specific detail on the website regarding past and ongoing management actions we feel were and are not in your best interest.
Our email address is:
Fraud, corruption and rule breaking - What do we do about Crow Wing Power?
Crow Wing Power’s Management and board are working for their own interests when they were hired to serve us!
What is the fastest way is to restore accountability to management of our co-operative?
Elect co-op board candidates who will look out for YOUR interests and work for change!
An annual election is coming in less than two months, and this year three board member positions are open. Our group is actively engaged with prospective candidates. We plan to support and encourage your vote for candidates who pledge to:
1.) Work to stop the misuse of OUR money for secret payouts, bonuses, questionable expenses and insider deals;
2.) Work to lower electric rates and return money to Crow Wing Power members in the form of capital credits; and
3.) Work to restore the openness, transparency, and accountability that Crow Wing Power members deserve.
One of those candidates is current board member Bryan McCulloch, who is running for re-election. Bryan has been working with our group from its inception. Bryan has worked tirelessly for change and accountability since shortly after he was first elected to the board. We strongly support his candidacy.
Another candidate is Gary Bakken. Gary has been asking Crow Wing Power management questions, demanding answers, promoting investigations, and helping to mobilize members for change for several years now. We also strongly support Gary’s candidacy.
Please visit our website (https://www.CWPAccountabilityGroup.com/) for more detailed information.
We have also updated our website with more information since it was first established. You can now see:
* A link to Brainerd Dispatch Videos Interviewing CEO Kraemer about the Emily Mine and a follow up Dispatch video of a CWP Board Meeting presentation on the Mine;
*Names of individuals who support or are involved with our group; and
*A Frequently Asked Question (FAQ) link where we will provide answers to questions we hear related to mismanagement of our co-op (our first question is an answer to “How Much Money does Crow Wing Power Management Make?)
We welcome new members to our group and are soliciting money to help support our cause. You can find links to join our group, refer others you think would be interested to us, and donate money to our cause there.
Statement by CWP Board Director, Bryan McCulloch
My name is Bryan McCulloch and I have served you, the members of Crow Wing Power Cooperative (CWP) district 1 at large, for the past 8 plus years. I would like to share my observations and experiences from my time serving. First, it is important that you understand that I have a long history of working on boards and structured organizations. I served on the Emily Cooperative Telephone Company (ECTC), board for 29 years, Fifty Lakes City Council, started up Boy Scout Troop 118 of Emily, Outing, Fifty Lakes and Cross Lake and was scout master for 7 years. I also have over 30-plus-years- experience as a general contractor, and served on my church board (Emily Wesleyan Church). The point is that I am not a novice when it comes to running boards and managing business.
The first board meeting I attended, after having been elected, was informative and friendly. We discussed the business of CWP and its subsidiaries, but when it came to the business of the Hunt Technologies/manganese mine, we went into executive session, and were told that nothing discussed in this meeting leaves the room. I thought this was strange because during my 29 years on ECTC we never hid anything from our members, except employee business, for obvious reasons. I questioned this procedure of secrecy at the time. The only response I got come from the board chairman and that was that he had served on other boards which commonly hid information from its members. Beyond that there was complete apathy on the topic. I also repeatedly asked to see a business plan on Cooperative Mineral Resources (the Emily Manganese Mine purchased with the Hunt money), and was repeatedly denied this information. Being a business man myself I knew a business plan was a key to success. Finally, I was taken aside by the lawyer Paul Johnson, who told me that the business plan for the mine was in Don Nelson’s head. Nelson was not even part of the company anymore! Once again, I was shocked and even more amazed that no one else seemed to have a problem with this issue. I know it is hard to believe but this really happened.
After having been on the board for a couple more years I became aware of a royalties agreement that was put in place before I was elected to the board. I was informed about this issue by Steve Carlton (one of the other partners in the mine). This was right after the failed bore hole test for the manganese mine. Steve stated that when the deal for the mine property was set forth to the electric company, the Carlton group offered 5% of the royalties to go back to Hunt Technologies (the part of Hunt that would remain a subsidiary money holding entity) to promote a quick sale. Steve was surprised when the document for the sale came back to them (the Carlton Group), designating 1% personal royalty gains for the following persons: Bruce Kraemer 1%, Doug Harren 1% and Don Nelson 1% as well as 2% for miscellaneous designation. The Carlton Group was surprised but didn’t question this because it had been approved by the board of directors.
The1% each of the of the manganese mine royalties calculates out to be (over a 25 to 30-year span of the mine), potentially, many millions of dollars and would go directly into the pockets of the above-mentioned individuals.
Again, I received very little support for my concerns except from Paul Koering who agreed with me. I was repeatedly told that a director shall not go against the majority of the board when I tried to suggest any action.
I just couldn’t believe it! I didn’t agree with this situation and stated that no one should profit off a cooperative. Again, I was met with disinterest and apathy. Ironically the evidence of this royalty agreement did not come from management or any of the board data offered to me. It was only revealed because one of the co-owners of the mine brought it to my attention.
I finally went to the attorney general’s office (Lori Swanson AG at that time) and spoke with the assistant AG. Without telling him who we were I gave him a scenario of what was literally going on with this royalty agreement and that it had been put in place by the board of directors previous to me being on the board. At that time the assistant AG informed me that this was not how a cooperative is supposed to behave and that no one should profit from a cooperative. He also informed me that the state could remove all of the directors, take the cooperative status away, and there could be financial penalties to the board of directors. I brought this information back to the board meeting where I was asked by Gert Roggenkamp “Why would you do this Bryan?” Another statement came from Bruce Kraemer CEO who stated “Bryan you have brought nothing to this board and if it was in my power, I would fire your ass off this board.” Clearly, he only wants “yes,” men and women on “HIS” board. He then went on to say that maybe I should have you sign a nondisclosure (NDA) on anything regarding the mine?” I responded that I would not sign anything that would help him hide information from the members that they deserve to know. Sure enough, at the next board meeting, he had everyone sign an NDA and everyone went ahead and signed except me; I refused to sign. If the NDA had only to do with proprietary mining secrets, that would have been one thing, but it was a blanket protection for management and board decisions allowing them to not have to be accountable to the members.
Because of the fact that I wouldn’t sign the NDA they made me leave the room when discussing the mine (CRM) and Hunt Technologies (one of the funding resources). The first time this happened, I was sitting alone in a room adjacent to the board room while the mine business was going on. A key management person (from the credit union) saw me, stopped by and asked me what I was doing alone in that room. I told him that I wouldn’t sign the NDA over the mine information. He informed me that during his time with CWP (over 40 years), he had seen a lot of things that did meet cooperative standards and that no board person or employee should ever profit of the members money. I was comforted by his statement because it assured me that I really was seeing things from the right perspective.
Management and the board also kept taking large amounts of money form People’s Security (a subsidiary of CWP), to fund the mine. They stated that they could do this and not inform the members because it was a for profit subsidiary. I asked the board and management how this was not the members money, or the members business, when it was the member’s money, they used to purchase People’s Security in the first place. Again, I got nowhere and was met with a mix of disdain and apathy.
That following September the Star Tribune came out with an article about the royalty agreement regarding the Emily Manganese Mine and how the three above mentioned key management individuals were set to receive 1% royalties. Later in December the Brainerd Dispatch did a follow up article about the status of the royalty agreement and caught Bruce Kraemer in a blatant lie contradicting himself within the same article about the existence of the royalties agreement and where it stood at the moment. The Dispatch contacted the directors about this statement and only myself and Paul Koering confirmed that this was true (that Kraemer had lied), the others hid behind the NDA they had signed stating they could not talk about it.
After all of this, more information surfaced that the board also signed NDAs back when Hunt Technologies was sold. It was revealed that the board had gifted themselves with $70,000. apiece. All but 2 board members took the money, those two did not think it was right, but kept the secret of the others taking the money from the membership (hiding under the guise of not going against the majority). This was only leaked by accident; no one was ever supposed to know this information. After the leak they had to admit they took the money. During a crisis management statement to the press the president and board chairmen Bob Kangas stated that the $70,000 was for work the board had done with Hunt Technologies.
These board members knew that compensation for being on the board at that time was approximately $500./mo. The job description was to oversee all the subsidiaries owned by CWP, yet after the sale of Hunt Technologies they came up with $70,000 a piece which breaks down to $970/month for 6 years on top of the $500/month they agreed to receive when they ran for the board. Furthermore, at that same time, they allowed the general manager (Bruce Kraemer), to make his own deal with the buyer of Hunt Technologies (without disclosing the amount to the board) unbelievable! This information was only leaked just before the members annual meeting in June of 2019. During a meeting Paul Koering told Kraemer that since it had been leaked out, that he had taken a large amount of money, he would likely be asked about it and how much it was during the annual meeting. Koering further asked if he (Kraemer), was prepared to disclose the amount at that time (the board still did not know how much he had taken). Kraemer stated “I’ll have to think about it.” In preparation for the disclosure Kraemer put a one and a half page add in local newspapers justifying the fact that he took 1.9 million dollars on top of his $200,000 (plus) annual salary at the time. This information has already been disclosed so I am not breaking any rules by stating it here.
An important note is that I did send all my information and concerns to the Attorney General’s office over a year ago and they are investigating at this time. I have claimed whistle blower status because I don’t believe the rule of “not going against the majority on a board,” applies when corruption is suspected.
At the members annual meeting in June 2019, the members voted to have the board implement several important things: 1) To actively promote transparency 2) To Make it easier for members to attend regular board meetings 3) To fire Bruce Kraemer 4) To do a forensic audit.
The only thing that the board has accomplished is to make it easier for members to attend a board meeting. We did have a vote to remove Bruce Kraemer and do a forensic audit and both failed to receive a majority. Some of the board has hid behind the fact that there is an investigation by the state attorney general’s office and the federal attorney general’s office. They say they want to wait for their results before they are willing to take any of the actions requested by the members at the last annual meeting.
I say that even the if the things I have stated above end up being beyond the statute of limitations or are not criminal on some technicality, they still break with the ethical and moral expectations of the persons chosen to serve you the members. You should also know that since this story first became public, I have gotten calls from employees of CWP outlining many other issues for which there is not time in this statement to mention.
In regard to the CWP Accountability Group I belong to, I am told by some of the other board persons and management that “the group is nothing but a small group of disgruntled conspiracy theorists who have no facts.” Since spring of the 2019 annual meeting there have been depositions done by some with attorney general’s office, both state and federal. I ask that you the members make it known whether you view our CWP accountability group as a small band of conspiracy theorists. When I first started coming out with this information, I had fears of retribution from management, legal and otherwise, so I was cautious at first but finally decided it all had to come out.
If you ask Bruce Kraemer about the royalty agreement, he will now tell you that he has signed off and will no longer be getting that money. He will talk about all the good he does for the company and so will his cohorts. The question is why did it take having his feet held to the fire to relinquish the money for the royalties or admit that he took 1.9 million dollars of cooperative money from the sale of Hunt Technologies.
The majority of hard questions and suggestions through all of this has come from myself and Paul Koering with a little from other board members. The responses from management and those assisting management are very negative. They do not like to hear any challenging questions and proceed to roll their eyes, sigh, and make faces when the questions are asked.
The CWP Accountability Group is reaching out to you the members in a number of news articles and obtaining contact information from you. Our purpose is to have a special-members-meeting. The by-laws state members who are concerned can get your contact information to this when we are concerned about the welfare of our company.
Yet management is refusing to give contact information to the group because they say that the information could be used wrongly. They know why we want the information and the real reason they won’t give it is because they don’t want you to hear from us. They would rather have the only source of your information to come from them. Please tell your neighbors relatives and friends about our group and send their contact information to us so that we can keep all members in the loop. Everyone that is part of this group has donated their time and money to represent the best interest of you the members. We need you to commit to help change board and management at CWP Cooperative.
I (Bryan McCulloch), stand behind the 5 goals that the CWP Accountability Group has formulated.
1. Work to change the leadership of Crow Wing Power Electric Co-Op.
2. Bring to justice current leadership individuals that have demonstrated fraudulent or criminal behavior.
3. Provide Crow Wing Power members reimbursement of any funds that were meant for members and not individuals.
4. Eliminate the signing of non-disclosure agreements (NDAs), from any past, current or future Crow Wing Power management, Board or members.
5. Nullify all self-enriching Crow Wing Power management and Board of Directors royalty agreements
6. Provide Crow Wing Power members the best electric products and services at a competitive price as compared to other co-ops in the state.
Please call me with any concerns, questions or thoughts (218) 821-8390 or email CWPAcctGroup@gmail.com.
Statement by Gary Bakken, Candidate Running for Crow Wing Power Board of Directors (district 2B):
Theft, Corruption, Cover Up (NDAs), Secrecy, Huge Bonuses, and Malfeasance by CEO Officers and the Majority of CWP Board Members
We at the CWP Accountability Group (CWAG) are holding CWP to its fiduciary responsibility to the cooperative members. There are on-going investigations with the Office of the Attorney General for the state of MN, including federal involvement because CWP, at this time, owes the government over 100 million dollars in federal loans.
At the April 2019 regular board meeting I asked the board if they knew that the co-op, officers and staff were under investigation by the Minnesota Attorney General’s Office. One board member asked the attorney (Paul Johnson), if it was true that they were under investigation. He replied "yes, I have received a letter from the Attorney General.” The CEO (Kraemer) immediately replied “I also have received that letter.” In the recent member newsletter, CWP management stated “We are not aware of any pending litigation”.
I have attached 9 exhibits/requests for your perusal that I have sent to Crow Wing Power CEO, officers, the lawyer (Paul Johnson) and the board, as well as public relations director Char Kinzer and executive secretary Laurie Miller. I encourage you to read these attachments. One of them is my presentation to the Board on 5/16/19. At the end of my presentation to the board that day, I formally requested the acting secretary send me the verbatim minutes of the entire regular meeting. I did not receive the minutes as requested. I am concerned that many board discussions and decisions that should be made available to members are withheld from board meeting minutes.
As I understand it this board frequently goes into executive session to discuss things, which means that anything in those meetings does not have to go into the minutes, which are presented to the public in the Current Connection. This is not typical of a board to have so many things done in executive sessions. Bryan McCulloch (present board director), shared with me about one time in particular when he first confronted the board with the question about the about the $70,000 (which had just been leaked to him), and which the board had taken back during the sale of Hunt. Four board members from that time are still on the board today. McCulloch (board secretary), stated that he wanted that confrontation to be reflected in the minutes. He came back the next month and (no surprise), it was not there. Crow Wing Power’s executive secretary, had left it out. I believe CEO Kraemer and Crow Wing Power’s legal counsel control what makes it into the monthly minutes. These are the kinds of things I want to help stop this rogue board (the majority of them anyway), from doing and bring them back to being accountable to you the members.
I again ask for your votes for all 3 of us, whom are recommended on the CWPAG web site, who are running for the director positions. Bryan McCulloch is the only incumbent we are recommending. You can vote for all Districts no matter which district you live in. If you want more information about the work the CWPAG has been doing and the candidates we are recommending for the board (for this years vote), please go to cwpaccountabilitygroup.com. It will also help if you become a member and sign up to get our emails. You may also email us at CWPacctGroup@gmail.com
Ballots will be in the mail during the first week in May.
Gary A. Bakken.
c/file. Mn. Ag/Fed.AG
EXHIBITS - https://documentcloud.adobe.com/link/track…