Perhaps The Inspector General Is Interested In Concerns About Alpine; Local, Vocal Opponent Sends Inquiry To IG Kendall (Updated Audio And Court Documents)

Dr. Eddie Donoghue, a vocal opponent of the Alpine Energy Group, has filed a letter of complaint with US Inspector General Mary Kendall outlining what he calls “fraudulent conduct and perjury revealed in testimony” from the principals in the Alpine deal last week before the Legislature.

The letter, printed here in its entirety, addresses three areas Donoghue is asking the IG to pay particular attention to: 1.)  Founding, Incorporation, Registration, and Licensing of Alpine; 2.) Perjury before the legislature and the public,  and; 3.) Ongoing litigation between R.W. Beck and E3 Consulting 2007-2010.

The letter is printed below in its entirety. Audio clips have been added by CIF from the testimony before the Legislature last week.

January 16, 2012

Inspector General Mary Kendall                                                                                                  

United States Department of the Interior

Office of Inspector General

Washington, DC 20240

Subject:  Fraudulent conduct and perjury revealed in testimony regarding contractual agreement between Alpine Energy Group, Virgin Islands Water and Power Authority and Virgin Islands Waste Management Authority

Dear Inspector General:

In accordance with your request to be informed of wasteful practices, fraud and abuse related to the Department of Insular Affairs, documentary and testimonial evidence reveals that Alpine Energy Group, LLC (AEG), the Virgin Islands Water and Power Authority, along with other V.I. government agencies, and individuals outside the government have embarked on fraud, collusion and perjury with respect to the contracts entered into between the Virgin Islands Water and Power Authority, the Virgin Islands Waste Management  Authority and Alpine Energy Group. Below, I will present a number of dubious transactions, which were seemingly fraudulent, then allude to court documents to demonstrate the fraudulent conduct and perjury of Donald Hurd, now president of Alpine, and Hugo Hodge, executive director of WAPA. These matters will be delineated in separate sections below and the documentary evidence attached where necessary.

Founding, Incorporation, Registration, and Licensing of Alpine

Regarding the qualifications of Alpine to be considered and even awarded a contract with WAPA, as early as 2009, in a letter to U.S Attorney Ronald W. Sharpe, I brought to his attention the fact that the Request for Proposals (RFP) issued by WAPA was intended to suit Alpine Energy Group, which was subsequently registered in Denver, Colorado, to take advantage of what was basically a “sweetheart deal.” In fact , it was brought to light by Noel Loftus, a member of the WAPA Board of Directors on the Roger Morgan radio talk show on St. Croix, USVI that the agency started negotiating with Alpine before the RFP was even formulated (tape and transcripts available). There is documentary evidence attached to support the testimony of the WAPA board member and to explain in part the reason for the negotiation, which occurred prior to the formulation of the RFP that was eventually issued in December 2007.

At an early stage of the proceedings, the apparent fraudulent conduct of a number of the people involved was noted by my pro bono legal counsel, who advised that Alpine was seemingly not qualified to participate in the process for a number of reasons, including but not limited to, not been in business for the requisite three years or having the requisite experience.

(In testimony last week, Water and Power Authority Executive Director Hugo Hodge gave this response to the question concerning Alpine’s eligibility to participate in the RFP process.)

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In an attempt to qualify in accordance with the requirements of the RFP, the principals of Alpine, along with officials of WAPA embarked on a scheme to deceive the public, the Legislature, the Public Services Commission (PSC), the EDC and later federal officials to obtain grants. This latter step was apparently in violation of Title 18 of the U.S. Code.

For example, before the PSC on October 5 and 6, 2008, the representative of Alpine purported: “Alpine Energy Group LLC, formed in 2005, is principally engaged in the business of developing and owning independent, alternative energy electric power generation facilities. AEG is headquartered in Englewood, Colorado, and its 25-person staff performs all critical roles related to alternative energy power project development, including design and  engineering, financing, construction  management, environmental permitting transmissions, and fuel procurement.”

However, in testimony before the Legislature, Donald Hurd, then vice-president of AEG and now president of the entity, testified on November 3, 2009 that Alpine was formed and registered in Colorado on September 25, 2007. Significantly, our exhibit “f” which consists of an affidavit, subscribed and sworn by Denise Johannes, director of Corporations and Trademarks, Office of the Lieutenant Governor indicates:

“That after a careful search of our records, it was determined that the limited liability company, Alpine Energy Group, LLC, is not registered in any manner with our office.”

The affidavit was dated 2nd day of January 2010. Thus, at the time Alpine was doing business in the Virgin Islands, based on January 2, 2010 affidavit, it was doing so illegally, that is without, the requisite registration with the Office of the Lieutenant Governor.  Interestingly, despite the fact that in her 2nd January 2010 affidavit, the director of the Office of Corporations and Trademarks with the Office of the Lieutenant Governor had subscribed and sworn that “Alpine Energy Group is not registered in any manner with our office,” the matter having received publicity, seemed to have been partially but illegally fixed. A “Certificate of Existence” attested that AEG Bovoni Power LLC had filed Articles of Incorporation with the Office of the Lieutenant Governor on February 18, 2009. This document was “witnessed” and signed by the lieutenant governor on “24th of August, A.D. 2011.” Yet, a business license #1-3854-21 had been issued to AEG Bovoni Power, LLC, on August 16, 2011? Thus, the license was made valid some 2 months? prior to the Certificate of Existence being signed by the lieutenant  governor, stating that AEG Bovoni Power had filed “Articles of Organization” with his office on February 18, 2009. That claim, however, contradicted the affidavit of the director of the Office of Corporations and Trademarks.

Another troubling issue with respect to the registration of the corporation concerns the Articles of Organization, which would have been submitted to the Corporations and Trademarks division of the Office of the Lieutenant Governor. Two issues stand out with respect to this document.

One: On page 4, the spaces designated for the insertion of date and month over the signature of the person who organized the corporation have been left blank. Therefore, there is no indication of date and month when the document was duly signed.

Two: Although there is a space and text provided on the document for its notarization, the document has not been notarized.

Thus, in its incomplete form, the document could not have been the basis for registration of the corporation. 

Perjury before the legislature and the public

On at least two on instances before the Legislature of the United States Virgin Islands, both Donald Hurd, now president of Alpine, and Hugo Hodge Jr., executive director of the Virgin Islands Water and Power Authority, gave false testimony intended to conceal the close relationship between R.W. Beck, Inc., and Donald Hurd, as well as the relationship between the two with the V.I. Water and Power Authority. Also, when appearing before the public, Hodge repeated the false information.

Significantly, the RFP issued by the V.I. Water and Power Authority was formulated by R.W. Beck, which also had a role in evaluating the responses to the RFP, which resulted in the signing of a contractual agreement between the V.I. Water and Power Authority with Alpine, a corporation in which, at the time, Donald Hurd, who is now president of Alpine, was vice- president. Cognizant of the fact that Donald Hurd had previously been employed by R.W. Beck, senators wanted to be assured that there did not exist a conflict of interest between Alpine and Beck. Hurd assured senators, and Mr. Hodge backed him up, that his relationship with Beck ended 16 years ago and he had had no relationship with the corporation since that time.

At the Committee of the Whole meeting held in St. Croix on Wednesday, January 11, 2012, Senator Neville James inquired as to the relationship between Beck and Alpine. Executive Director Hugo Hodge first responded:

Senator James: Who wrote the specs for the RFP?

Executive Director Hodge: It was before my time.

Next Senator James questioned Mr. Hurd.

Senator James: Did you work for R.W. Beck? Did they write the specs for the RFP?

Mr. Hurd: I left Beck in 1996. Alpine was born in 2007.

(Here is the full clip of that interchange with Hurd and Sen. Neville James. Please note Hurd’s comments relative tot he formation of E3 Consulting, a relevant player in the litigation information later in this article.)

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First, note that on January 13, 2010 in testimony before the legislative Committee on Economic Development, Energy and Technology, the executive director had detailed the involvement of R.W. Beck as follows: “WAPA secured services of R.W. Beck, Inc., to perform a detailed technical review of the project technology and other related technical aspects.”

In addition, on Wednesday, January 11, 2012, in answer to a question from Senator James, the executive director Hugo Hodge Jr., purported that he had nothing to do with the RFP since it was sent out in December 2007, three days before he began in his present position. However, he must have been involved during a period of transition.

Moreover, throughout 2009 on various occasions Donald Hurd and other representatives of Alpine denied any relationship with R.W. Beck.

Ongoing litigation between R.W. Beck and E3 Consulting 2007-2010

Donald Hurd, now president of Alpine, left R.W. Beck in 1996 and formed a consulting firm called E3 Consulting, a fact attested to by Donald Hurd before the Legislature and documented, for example, on the internet. However, in testimony before the Legislature, Donald Hurd falsely claimed that since 1996 he had severed his relationship with R.W. Beck.

This claim by Hurd was not only false but was intended to cover-up the ongoing relationship between R.W. Beck and E3 Consulting, as well as between R.W. Beck and Alpine, as a result of Donald Hurd’s involvement in both Alpine and E3 Consulting.

At the time Hurd was denying the relations with R.W. Beck, a civil lawsuit was ongoing between Beck and E3 Consulting.

The lawsuit in question was Civil Action No. 07-CV-1378-RPM, R.W. Beck, Plaintiff v. E3 Consulting, Defendant. The case was filed 6/29/2007 in USDC, Colorado. At that time, R.W. Beck was already working on the RFP for the V.I. Water and Power Authority.

The complaint by R.W. Beck against E3 Consulting was summarized briefly by their legal representative: “The evidence will show multiple expressions covering the same ideas, thus defeating E3’s argument that R.W. Beck’s ideas have “merged” with its expressions of the same ideas.”

There were at least 30 filings with the court in the lawsuit between 2007-2009, and being the president of the defendant E3 Consulting, Donald Hurd was aware of these filings when he presented testimony before the Legislature and before the public. Yet, he chose not to admit the extent of the relationship between E3 Consulting and R.W. Beck, which was working on the RFP and selection of bid winner for WAPA.

Significantly, after the WAPA contract was signed at a Government House August 2009 ceremony, the lawsuit was settled and dismissed on October 20, 2009, after E3 Consulting had held R.W. Beck in a bind by filing motion for attorney fees.

The attempt of Donald Hurd and others to conceal a relationship between R.W. Beck and one of the principals of Alpine is cause for concern, especially given the question regarding the time Alpine was founded, its lack of qualification, licensing and registration, plus the fact that Sections 13.2-13.3 of the Power Purchase Agreements appear to set a foundation for the eventual takeover of WAPA by Alpine. These factors and others make this issue in need of investigation by your office.

Please do not hesitate to contact me if I can be of further assistance in this matter.

Respectfully submitted,

Eddie Donoghue

St. Thomas, US Virgin Islands

cc: Honorable Eric Holder, U.S. Attorney General

RW Beck v. E3 Consulting

RW Beck v. E3 Consulting – Stipulation of Dismissal

Background on Alpine Formation – Colorado Secretary of State

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