The COLLUSION

 Garkane CEO Dan McClendon told us in the summer 2018 Highlights that, “Garkane, along with other electric cooperatives in the state successfully lobbied the legislature a few years ago to expand the opportunities where unclaimed capital credits could be used.”  

To embezzle is to appropriate (as property entrusted to one’s care) fraudulently to one’s own use. 

In 1995 Garkane Energy administrative personnel sought a way to capture and use property awarded to members as capital credits that accrued from margins. This was accomplished when administrators colluded with willing Utah legislators and passed legislation allowing administrations of electrical and telephone cooperatives to retain and use unclaimed property for their own use. (See fact #2 above.) Federal law (IRS code 501-c-12) requires nonprofit businesses to return margins to members and Garkane administrators tell us that “… at the end of any accounting year, if there is money left over after all operational costs have been paid, the excess (labeled a “margin”) is allocated back to the members who were served in that year. The “allocation” (capital credit) is a promise that the co-op will pay back the member’s portion in the future.” (See fact #16 above.) Unclaimed property accrues from a failure to return margins to members.