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IID's Barbera linked to hedging, may be new energy manager


Wednesday, January 16, 2008 11:15 PM PST

A high-ranking supervisor at the Imperial Irrigation District during the failed energy hedging strategy could be the utility’s new energy manager, an anonymous source within the district said Wednesday.

Frank Barbera, assistant manager of business and regulatory strategy, is one of the few people associated with the hedging who still works at the district.

Policies violated during that time cost the ratepayers an estimated $34 million and perpetuated turnover at the highest levels in its aftermath.

The IID board voted 3-2 Tuesday to negotiate a contract for the vacant energy manager position. Directors Anthony Sanchez and John Pierre Menvielle dissented. Directors Mike Abatti, Stella Mendoza and James Hanks voted to proceed with negotiations.

District officials and members of the board refused to confirm whether that candidate is Barbera.

“I’ve got confidence in the committee that they brought us the person they thought was the best person for the job,” Hanks said.

If Barbera becomes energy manager, the board will have promoted the supervisor of natural gas purchases during the hedging debacle.

Though references to current employees are blacked out in an investigation into the failed hedging strategy completed by the Baker Street Group last year, Barbera’s position is designated as one of the supervisors of hedging.

He was the supervisor of Kevin Wright, the superintendent of supply and trading at the time.

To see Kevin Wright's signature document: http://www.ivpressonline.com/docs/IID_Risk_Policy.pdf

Wright has since left the district.

According to an IID staffing timeline compiled by the Baker Street Group, Barbera was employed in his supervisory position before, during and after the hedging.

Tp see the staffing timeline:

http://www.ivpressonline.com/docs/IID_Staffing_Timeline.pdf


The timeline notes Barbera’s title, not his name.

But in an IID press release issued Oct. 5, 2004, Barbera is announced as the new assistant manager of business and regulatory strategies.

“Barbera’s role in managing IID Energy’s supply and trading unit will continue,” the press release states.

To see the press release:

http://www.ivpressonline.com/docs/IID01.pdf


BARBERA’S ROLE

District officials declined to say whether Barbera has been disciplined for his role in the energy hedging program.

As part of his duties, Barbera was part of the Risk Oversight Committee that was supposed to ensure the rules were being adhered to.

To see the bylaws of the Risk Oversight Committee:

http://www.ivpressonline.com/docs/IID_Bylaws.pdf


According to the organizational structure of the ROC, energy purchasing and selling was under Barbera’s watch.

To see the organizational structure:

http://www.ivpressonline.com/docs/IID_Structure_Responsibilities.pdf


According to ROC minutes when questions were raised about the policies, Barbera is noted as stating, “They are doing what the policy dictates.”

An investigation by a consulting firm, KPMG, revealed months later that was not the case.

KPMG found controls were not in place and violations of the policy were widespread.

Barbera was among a number of other people who knew there were problems with the hedging strategy and did not inform the board.

When questioned about Barbera’s role in the hedging, Hanks said, “You may be partially right but you’re not totally right.”

Hanks went on to say that some of the information in the Baker Street Group report is incorrect.

Hanks declined to elaborate on how the report is wrong other than to say there were some organizational changes that are not noted as part of the report and Barbera was not responsible for bringing information to the board.

COMMITTEE RECOMMENDATION

If Barbera is the recommended candidate, his application was evaluated by a three-person committee that could be biased, according to Legal Counsel Jeff Garber.

The committee is comprised of two consultants, Dick Ferreira and Jack Allen, and IID Energy legal counsel Steve Keene.

Ferreira and Allen, IID spokesman Kevin Kelley said, work with Barbera and other supervisors on various issues within the district.

A confidential letter to the board last month from Garber warns the board Allen and Ferreira could be biased.

The letter was provided to the Press on the condition of anonymity.

Garber would not comment on advice given to the board.

Hanks said information given to the Press has constituted a breach of confidentiality and is a possible Brown Act violation.

When asked if the committee could be biased, Hanks refuted that possibility.

“I don’t think they have any reason to be biased unless someone put pressure on them and I don’t think that happened,” Hanks said.

Abatti said he stands behind his decision.

“I look for the best interest of the ratepayer and the district. There’s a lot the board members have to take into consideration,” Abatti said.

To read the full Baker Street Group report, visit:

http://www.ivpressonline.com/docs/hedging_report.pdf

To read the supplemental Baker Street Group report, visit:

http://www.ivpressonline.com/docs/baker_report.pdf

For related stories, visit: http://ivpressonline.com/articles/2008/01/16/local_news/news03.txt

http://ivpressonline.com/arti-cles/2007/12/07/local_news/news03.txt

http://ivpressonline.com/arti-cles/2007/12/25/local_news/news03.txt


>> Staff Writer Brianna Lusk can be reached at blusk@ivpressonline.com or 337-3439.


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Comments:

localmotion13 wrote on Jan 17, 2008 7:48 PM:

" does this mean if barbera screws up will the the people who hired him and recommended him be held accountable?
WILL OUR IID RATES INCREASE IN ORDER TO MAKE UP FOR ANY LOST OR MISMANAGED FUNDS if he starts another hedging plan .
"

holtville1 wrote on Jan 17, 2008 6:00 PM:

" I think the IID should have released the information, although it potentially could have before officially hiring Barbera. If this had slipped through, the public's perception of the IID Board would have plummeted (as opposed to the great image it has now). "

ricocafe99 wrote on Jan 17, 2008 4:50 PM:

" dunebug...all you can bring to the discussion is to tell me to shut up? thats it? no opinions? no interpretations? no suggestions? no nothing? how can I get a debate going with someone whose only defense is to be offensive? "

blusk wrote on Jan 17, 2008 3:21 PM:

" My sentence should have read, "As soon as I had the documents, I made the connection..."
Even writers make typos.
Staff Writer Brianna Lusk "

blusk wrote on Jan 17, 2008 2:33 PM:

" Holtville1: I came across this information, about Barbera's connection to the hedging, while working on an in-depth piece for Sunday's paper. As soon as I the documents I had made the connection, we published the story.
Staff Writer Brianna Lusk "

holtville1 wrote on Jan 17, 2008 1:58 PM:

" me2, A better question would be: why wasn't this information released earlier? I t certainly seems important. A cheap shot? No. "

leneeg wrote on Jan 17, 2008 12:48 PM:

" All is normal around the IV. Certain things don't vary much around here, as usual. "

abelito wrote on Jan 17, 2008 10:46 AM:

" Perhaps retraining this guy to "trim the hedges" instead,would be good for the ratepayers. "

0207 wrote on Jan 17, 2008 10:45 AM:

" Let me get this straight: the IID board and general manager allowed a rogue group in the IID to violate its guidelines (where were the energy lawyers and the oversight committee? Oh, the guy in line to get the job was the oversight committee big cheese!), people inside and outside the IID told board members the energy traders were gambling on the energy market and they did nothing (including Menville, and that is a fact), there are still people involved in this disaster still working at the IID!, consultants involved with the energy department are screening applicants, general manager is not involved in the hiring process, legal counsel says its all a conflict of interest. Is this the fact pattern? All 5 IID board members need to be recalled and a new board elected and that board needs to hire a professional general manager to clean this mess up. "

joaby1202 wrote on Jan 17, 2008 9:58 AM:

" Are there any openings at IID. Come on people, it's the best place to work in. You are involved in a messy situation and as a result you get promoted, who cares the rate payers pick up the tab anyways. They make so much money that an increase in their energy bill is the least of their worries. What we should really be worried about is the California cuts in education that could potentially lead to more incompetent people running such energy programs and districts. "

me2 wrote on Jan 17, 2008 9:21 AM:

" I totally agree with you 'aesco1', all the ones that messed up should be held accountable for their actions. Rate payers are getting tired...gosh! I am getting tired of paying for someone else's ineptitude, while they laugh all the way to the bank to cash in their large salary checks. "

aesco1 wrote on Jan 17, 2008 9:12 AM:

" It doesn't matter as to who could be deeply affected by this persons promotion. I know one thing, the only one's affected by this hedging mess were the rate payer's. So if this person was involved he should not be promoted to energy manager. "

me2 wrote on Jan 17, 2008 8:44 AM:

" The way I see it is that someone is really afraid of Mr. Barbera being hired as the new Energy Manager. In deep desperation this anonymous source pulled a cheap shot. This information was not released until the decision seemed imminent. I would recommend Brianna Lusk to delve deeper and investigate who would be deeply affected by his promotion (perhaps someone ineffective and inefficient?). Who would have or would be his reporting supervisors? How many more will keep hurting this organization and will not be held accountable? Everyone is so focused on the “Manager”, but what about the “Micro-Managers”? They have also contributed to the detriment of this utility. "

DuneBug wrote on Jan 17, 2008 8:19 AM:

" ricocafe99..........Shut up! "

ricocafe99 wrote on Jan 17, 2008 7:43 AM:

" To play the devil's advocate here there is something to be said for someone who has made a mistake and was intelligent enough to learn from it so a mistake of this magnitude and its consequences are not repeated. It is noteworthy that he stuck around and took the punishment rather than running like the others did. Someoene once said "That which does not kill me makes me stronger"...so maybe he is a good candidate for the job. "

aesco1 wrote on Jan 17, 2008 6:45 AM:

" Great, that's all we need is a person that was involved in this hedging mess appointed to the energy manager position. What little confidence I had left in this board is going right out the window. "


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