Frequently Asked Questions

 

The following are questions by Crow Wing Power members and answers
from our Director, Tim Quincer.
We wanted to share with everyone!

 

QUESTION:
I thought my husband and I would both get to vote but we only got one ballet. Can we both vote?
 
ANSWER:
Co-op membership is assigned to a service location, not to each member who lives at that service location. 
Therefore, only one ballot is sent to each service location and only one vote can be taken by those that live at that location--this applies to board elections or votes taken at the annual meeting (which is postponed this year). 
The by-laws (see 
https://www.cwpower.com/files/CWP_Board/ArticlesofIncorporationandBylaws.pdf) allow for joint membership for a husband and wife(see pages 3 and 4 of the by-laws) but that still only allows for one vote between them....as the by-laws say, "  Joint owners of a membership shall jointly be entitled to one (1) vote and no more upon each matter submitted to a vote of the members;"

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QUESTION:
I just spoke to the Attorney Generals office for a status update on their investigation into CWP and they could not help.  Can you?
 
ANSWER:
What we understand about the MN Attorney General's investigation is this:

 

  • It is still active, we are aware of their taking new deposition(s) in the last few months;
  • They told members of our group from the start--and again recently--that their normal protocol is to say nothing about progress/findings or outcomes publicly until they take action;
  • Through other sources (indirectly--not from the AG's office themselves) we have been told to believe that they will take some action--what or when we just don't know. 

We also know that the State Attorney General's office is very focused on Covid-19 legal actions and have been for a few months--we suspect that has delayed progress of their CWP investigation. 
We have less knowledge about the federal Attorney General's investigation.  We have a US representatives aid looking into that for us but haven't heard back from him yet. 
There is potential at the federal level as well, because CWP has borrowed huge sums of Federal funds through the RUS (used to be called REA) program and we believe they have been using that money in a prohibited manner--for subsidiary work not directly related to the Co-op's core electric power functions. 

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QUESTION:
I received my ballot and have concerns on it. In the pamphlet included it says to put your name and address on the back of the yellow envelope but on the ballot itself it only says to put your name on the back of the yellow envelope. Hmmm! Also I am questioning the "campaign" pages in the pamphlet. I have been involved in union elections for many years and campaign literature could not be included with the ballot? Just some concerns.
 
ANSWER:
I'll address your 2nd question first.  For as long as we can recall, Co-op's typically send out a pamphlet with bio information and statements from each candidate to all voters.  That is used to help inform voters of the candidate qualifications and help them to make a voting decision.  Candidates are all given the same limitations in that information.  So--Crow Wing Power is not doing anything out of the ordinary with that information, at least none that we can see. 
One of the challenges of a group trying to affect major change--such as our group-- is that the board election"campaign" is very short and there typically aren't debates or newspaper endorsements etc. like there are in a political race.  The deadline to apply is the middle of April and Ballots are sent out 2-4 weeks later.   The information sent in the ballot is often all that people have regarding candidates to inform their choice to vote. 
That's why our group has spent so much time trying to get out the word regarding current management problems and encourage people to vote for Bryan McCulloch, Loren Beilke and Gary Bakken--we know they will work for change! 
Re: your ballot questions, I think the instructions aren't very clear.  What they want you to do is tear the stub off the yellow envelope that has your name and address on it.  You don't need to sign anything on that envelope--it's pre-addressed and postage paid to arrive at the company handling the election. 
Make sure you color in the ballot choices rather than just putting an X on them; slide the ballot in the secrecy envelope and seal it; and place that sealed secrecy envelope in the yellow envelope with the name/address torn off, seal it and mail it off....that's all that's needed. 

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QUESTION:
My main concern is with the instructions to remove the yellow stub with your name and address on it. On the ballot secrecy envelope it states, "To keep your ballot secret, this envelope will be separated from the envelope bearing your name." How is it going to be separated from the envelope bearing a person's name when the instructions tell everyone to "remove and discard this stub before mailing"? How is voting by the membership going to be tracked as to who voted and who is eligible to cast a vote without this information? Your vote is in a separate envelope which is separated from the yellow envelope so it's secret but what prevents ballot stuffing if there is no tracking of who has voted? I would think the stub with the person's name and address would be removed and put into the yellow envelope along with the ballot envelope containing the person's vote so you know who has voted. Again without tracking who has voted ballot stuffing is possible. Without knowing who has voted this is an illegitimate vote. One vote per member with a secret ballot but with tracking as to who has voted is what it should be. There's no verification has to who has voted with this vote. Are the powers trying to keep the status quo with an illegitimate election? This needs to be fixed!
 
ANSWER:
You raise some good questions, we've had a number of questions regarding the voting process and I think the company handling it (CWP has contracted with an outside company to run the election) could do a better job with instructions. 
 
I believe there's information about you in the bar code on the back of the yellow envelope.  So even if you tear off the stub, the company's equipment knows the ballot came from an eligible voter for CWP's election.  I beleive they separate the two envelopes after verifying they have a "legitimate" ballot envelope so that when ballots are fed into the counting machine--or recorded manually if the machine can't read it--there's no written name or address for their staff to see. 
 
My assumption would be that their system does NOT keep track of who has voted by name or address--I could see that being abused by management if they had that information.  I think they use the combination of the tear off slip and the bar coded envelopes to insure they are recording a legimitate ballot. 
 
You can try to talk to the contract voting company directly if you want, that's the best I can do.  They handle elections for all kinds of entities--many other Co-ops--across the country, and my assumption would be they take their role in insuring ballot stuffing can't occur seriously. 
 
Their web link is 
https://www.surveyandballotsystems.com/contact-us/
 
Phone #'s 952-974-2300, or 1-800-974-8099.

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QUESTION:

In the CWP newsletters months back I read comments from the CEO trying to explain the issue with the meter company for which he received a substantial bonus, along with certain board members. How was that bonus determined by the board?  
  
ANSWER:
I don't know that we can answer that for certain.  The sale occurred back in 2006.  We have some information suggesting it was orchestrated by management at the time before the board had a chance to discuss it, but unless the attorney general comes out with something we aren't sure that can be proven with certainty. 
What CWP executives have said publicly was that a bonus % of the sale price was agreed to before the sale occurred --before it was known what the sale price would be.  They tell us that when the final sale price was substantially higher than their initial expectations (this matches some inside info we have heard) they didn't re-adjust the bonus downward.  I believe if you watch the video on our website of CEO Bruce Kraemer at the annual meeting last year admits that maybe in hindsight that wasn't a good idea.  To us that speaks to a problem--he had an agreement for a substantial bonus that wasn't ran past members in the first place, and then they compound that by not changing anything when that bonus approaches 2 million dollars? 
 
QUESTION:
I also read where a few board members declined the bonus. Are they still on the board? I hope so for it was the right thing to do.  
 
ANSWER:
Only two declined the $70,000 board member bonus and they are both still on the board--Gordon Martin and Dwight Thiesse.  We agree it was the right thing to do.  We don't agree that keeping it a secret for 13 years was the right thing to do!  If not for current board member and candidate Bryan McCulloch, we never would have heard of the bonuses .  He started asking about them in 2018 after hearing discussion of them.  The timing of the public acknowledgement of the bonuses was something we feel was no accident.  The board member bonuses occurred after most of the votes were in on the 2019 board member election--the acknowledgement of CEO Kraemers huge bonus came on the day before the annual meeting, the last day of voting.  

 

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QUESTION:
Which of the current incumbents received the bonus?
 
ANSWER:
Gert Roggenkamp (she's up for election now), and Bob Kangas--currently the board chairman.  The others are no longer serving on the board, but one of the former board members who took the bonus was current board member Dorris Mezzenga's mother, Bette Mezzenga.   

 

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QUESTION:
What is the CWP Accountability Groups position on the other candidates? 
 
ANSWER:
It's a very meek board from what we understand.  CWP has it's hands in so many different ventures, some of them quite complex--that the board requires people who either have broad based complex business or corporate experience or are willing to ask questions on behalf of the members they serve.  We think many of the board members are good people, but perhaps naive and definitely too trusting for the role they need to provide. The only board member who has shown a propensity to question actions and ask questions other than Bryan McCulloch has been Paul Koering.  Bryan started on the board with experience on the board of another electric co-op--and started wondering about how and why things were kept so secret, why more information wasn't shared with the board, why legal counsel is at every board meeting, and more. Each year three of the nine members of the board face election, and we are supporting one incumbent (Bryan McCulloch) and two challengers, Gary Bakken and Loren Beilke (running against Gert Roggenkamp and Dwight Thiesse, respectively). 

 

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QUESTION:
Is there an incentive / bonus agreement with the CEO and CWP Board on the Emily manganese project? (If so perhaps there should be a “clawback” option)  
 
ANSWER:
There are royalty agreements in place with CEO Bruce Kraemer and several now retired or deceased past executives.  Should the mine be developed there's the potential for each of them to make millions.  There are no agreements with the board that we know of.  As can be seen on the video on our website, CEO Kraemer publicly told the Brainerd dispatch that those royalties are no longer in effect, while CWP's legal counsel refutes that.  Our understanding comes from a co-owner of the mine--he has said the royalties are still in place, he'd need to be involved if they were revoked and he has not been. 

 

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QUESTION:
How is the CWP CEO compensation compared to other similar sized utilities? (Perhaps he is doing a good job – I do not know) 
 
ANSWER:
We believe the board is fairly and normally compensated.  All management though is very highly paid.  Here's a link to a discussion of what we know about that on our website. 
https://www.cwpaccountabilitygroup.com/faq
We understand there are a few other co-ops in the state that have compensation levels that have been an issue for their members, but believe CWP is the highest in the state. 
 

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QUESTION:
I noticed the newsletter highlights savings in such items as postage for mailing etc. I would venture to say that they are pretty minor when compared to what could be saved by good management of assets such as equipment and labor. How is the management doing on these?  
 
ANSWER:
 
We are concerned with the high amount of federal debt that CWP is carrying--as can be seen in the annual report that was just mailed to members, that has risen to 122 million dollars!  Total debt is listed as 140 million dollars.  On the others side, members equity in the co-op is listed as 87 million, and revenue last year was 74 million.  We think there is something very wrong there.  Are we in real trouble?  Is the federal money being siphoned away from power needs to the mine or other non-electric utility business?  Are there bonuses on the for-profit side we are not aware of?  We would like to see the board approve what members voted for them to do at least summer's annual meeting--conduct a forensic audit. 
 
What is by know clear is how CWP management looks at things--the business strictly related to power distribution is being treated as a non--profit.  Everything else--Hunt Technologies, the Emily Mine, People's security, The co-op credit union--is being treated as a for-profit enterprise, and they are sharing next to nothing about the details of them.  There's no accountability or sharing of info on the for-profit side--I've often said that corporations have to share a lot more with shareholders and have the SEC to oversee that they do--Crow Wing Power operates under no oversight other than what we members provide.  No state agency regulates them since the law was changed decades ago. 

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QUESTION:
I have served on a couple of mid sized company boards as well as volunteer boards so I understand the responsibility that comes with being a board member.  

ANSWER:
It's an important role as you know--until we hear that an attorney general may step in, our primary ability to change things is to elect more board members who will start asking hard questions and demanding more be shared with members!

                                               

                          Frequently Asked Questions #1


“How much money is Crow Wing Power Management Making?”
 
Despite the fact that Crow Wing Power is a non-profit co-operative with requirements to share that information with members, that question can’t be answered completely.  This is one of the reasons why we support a forensic audit. 

What we  know:

Reported compensation information
Based on information reported on required non-profit tax forms: 
https://www.cwpaccountabilitygroup.com/links

CEO Bruce Kraemer was paid $343, 318, with benefits adding another $29,917 for a total compensation amount of $373,235. 
  • CFO Steve Smolke was paid $203, 974, with benefits adding another $28, 186 for a total compensation amount of $232,160.
  • COO Eric Quale was paid $153,099, with benefits adding another $35,201 for a total compensation amount of $188,300. 
  • Public Relations Manager Char Kinzer was paid $168, 854, with benefits adding another $18,732 for a total compensation amount of $187,586. 
  • Board Member pay varied, with a maximum of $15,640 (Gert Roggenkamp).
We believe that CWP executive pay is 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. 

Board member pay varies by member from year to year, but we believe it is reasonable and in line with other non-profit board compensation.

Unreported concerns:
  • The 1.9 million dollars CWP finally acknowledged that Bruce Kraemer took from the Hunt Technologies sale is NOT listed on the following year non-profit tax return.  In fact in that year CWP did not file a non-profit tax return.  They filed a standard corporate tax return that year and have NOT made that return public. 
     
  • The $70,000 that 7 out of 9 board members took from the Hunt Sale is not noted on tax returns either.  
  • Last year we became aware that CEO Kramer and two other executives have a royalty agreement in place regarding the Emily Mine in place.  If the mine is developed, we estimate that agreement will pay each of them millions more over the years.  CEO Kraemer has publically stated that royalty agreement is not in effect.  Other signers of the contract involved have disputed that—that agreement has NOT been officially revoked.  
  • It appears that CWP executives have deliberately attempted to separate out business they declare “for-profit” from the business specific to electric utility work which they declare as non-profit. 
 
Despite publically telling members it all is being managed for our benefit, the “for-profit” side is enriching executives with money that should be used to reduce our energy costs or be returned to us in the form of capitol credits.
 
We believe a forensic audit would expose this abuse, but so far CWP executives and the board have refused to approve such an audit.

Check out our Links page for more details: 

https://www.cwpaccountabilitygroup.com/links?utm_source=mailchimp&utm_campaign=03005393e1f0&utm_medium=page
 
Frequently Asked Questions #2


Crow Wing Power & Hunt Technologies
 

The current public position by Crow Wing Power management regarding what happened in their role with Hunt Technologies is a simple one that gives great credit to CWP management.  
 

The reality is more complex and less flattering; it involves personal enrichment of CWP executives and most CWP board members--and there are still many unanswered questions!  
 

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. 
 

CWP executives were not able to raise money as was required by their agreement with Hunt.  Due to this failure, the Hunt Family began efforts to sever their agreement with CWP unless CWP provided the money they had agreed to raise for Hunt.  
 

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. 
 

Details:

  • The announced price for the sale of Hunt was $129 million dollars; our group has obtained credible insider 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.  Was more money given to Crow Wing Power than publicly announced?  
  • 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 Hunt had been split into two companies before the sale; one for meters and the other for processing of data.  We understand both were sold but have not seen a breakdown of price or 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: 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: https://www.cwpower.com/letter-our-members  acknowledging that CEO Bruce Kraemer personally pocketed 1.9 million dollars in the Hunt sale.  Link: 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 publicly 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.  























































Contact Us/ Send Donations


CWP Accountability Group
13021 Evergreen Drive
Baxter, MN 56425

Email: CWPAcctGroup@gmail.com