Criminal Complaint Against Southern Company Execs Submitted to Fulton County District Attorney
Updated: Aug 17
By: Donald V. Watkins
Copyrighted and Published on April 15, 2023
An Editorial Opinion
On April 13, 2023, I submitted a formal criminal complaint to Fulton County, Georgia District Attorney Fani T. Willis regarding what I believe are criminal offenses under Georgia state laws that were committed within her jurisdiction by several top corporate officers of the Southern Company in Atlanta. Because it is a criminal complaint, I am only publishing the fact that my complaint has been submitted to Ms. Willis and not the complaint itself.
Summary of the Allegations
Since January of 2023, I have been investigating accounting fraud and other forms of criminal activity at the Southern Company, which is a publicly traded company headquartered in Atlanta. During the course of my investigation, I discovered that certain senior management executives at the Southern Company have not only “cooked” the company’s financial books and records (from 2013 to the present), but they have also authorized, condoned, sponsored (using corporate funds), and/or ratified numerous acts of racketeering, including extortion, bribery, abuse of the legal process, obstruction of justice, witness tampering, and coverups of criminal activity sanctioned by the corporation.
My criminal complaint is limited to those criminal acts that violated Georgia state criminal laws and that were birthed, nurtured, financed, and/or ratified by top executives and other corporate officers at the Southern Company’s headquarters in Atlanta.
The crime spree alleged in the complaint grew and flourish because state and federal regulatory and law enforcement officials presumed that the Southern Company was a respectable, financially profitable, New York Stock Exchange/Fortune 500 company when, in fact, it was not.
Furthermore, systemic racism by the Southern Company against its black customers in a six-state service area has infected many of the underlying acts within the labyrinth of criminal activities operated by the criminal enterprise, as alleged in the complaint.
The Alleged Criminal Fraud Scheme
From 2013 to the present, the Southern Company has engaged in various acts of creative accounting, a/k/a accounting fraud, to create and perpetuate a mirage of profitability. This fraudulent criminal conduct induced the Georgia Public Service Commission to approve rate increases and a litany of construction-related actions pertaining to $21 billion in cost overruns at Units 3 and 4 at the Vogtle Nuclear Power Plant (“Vogtle”) in Waynesboro, Georgia.
This fraud scheme also induced the Southern Company’s Georgia-based business partners like the Municipal Electric Authority of Georgia, the City of Dalton (acting by and through its Board of Water, Light, and Sinking Fund Commissioners), and Oglethorpe Power Corporation (an Electric Municipal Cooperative), all of whom co-owned Vogtle, to pay more than their fair share of $21 billion in construction cost overruns at Vogtle. These three co-owners are also unwitting “victims” of the Southern Company’s alleged criminal fraud scheme.
The fraud scheme hoodwinked existing shareholders into retaining their shares in the Southern Company by paying regular dividends from borrowed money, rather than retained earnings (as is customary for New York Stock Exchange companies). The fraud also induced (a) accredited investors to buy shares in the company, and (b) certain financial institutions that are licensed to do business in Georgia to lend money in the form of fixed long-term debt and credit lines to the company and its affiliates, including Georgia Power Company.
The fraud scheme was documented by corporate “insiders” as early as April 6, 2017. These notes and related documents were reportedly withheld from the Southern Company’s auditors at Deloitte & Touche, LLP.
The fraud scheme in this complaint was birthed at Southern Company headquarters in Atlanta, implemented across multiple company subsidiaries, and closely coordinated and monitored by the key Atlanta participants in the schemes.
Certain Southern Company executives, including one in Atlanta, reportedly sanctioned, financially sponsored, and ratified acts of intimidation and violence against innocent third parties.
Scamming Black Southern Company Customers
What is worse, in 2022 alone, the Southern Company received approximately $15 billion of its $59 billion in gross operating revenues from its black customers in a six-state service area (i.e., Mississippi, Alabama, Georgia, Virginia, Tennessee, and Illinois). The company’s black customers account for 25% to 30% of its customer base in this six-state service area. Once this $15 billion was taken into the company’s financial coffers, a portion of it was then used by the Southern Company, acting in a venture capitalist role, to invest in over 125 white-owned businesses (in 2022, alone).
Between 2017 and the present, acts of taking money from black customers and investing a portion of it in white-owned businesses, exclusively, evolved into a custom and practice of the company. This race-based investment preference for investing in only white owned third-party companies has never been properly disclosed to the Southern Company’s black customers or to the Georgia Public Service Commission. While the investments are listed in the Southern Company’s annual 10-K filing for 2022 (and prior years) with the U.S. Securities and Exchange Commission (SEC), the company’s documented use of a race-based preference for investing in white-owned companies, exclusively, is not disclosed.
What is worse, the amount of dollars the Southern Company and its affiliates paid to black-owned businesses for goods and services was so limited, insignificant, and immaterial to its overall operating expenses that it did not even warrant being mentioned in the company’s 10-Ks for 2017 through 2022.
James Y. Kerr is the Ringleader of the Criminal Enterprise
The complaint identifies James Y. “Jim” Kerr, II, as the ringleader of the Southern Company’s fraudulent conduct and racketeering-related activities. From 2014 to March 31, 2023, Jim Kerr served as an executive vice president, general counsel, chief compliance officer, and chief of staff to Southern Company CEO Thomas Fanning (who will be retiring on May 24, 2023).
Kerr’s simultaneous assumption of all four jobs effectively eliminated any meaningful “checks and balances” needed to detect, prevent, or report the alleged criminal activity cited in the complaint. It also enabled Kerr to conceal his own role in the criminal activity alleged in the complaint. These multiple executive capacities also permitted Jim Kerr to function as the “de facto” CEO of the Southern Company for many years.
For the record, Jim Kerr, acting in his capacity as the Southern Company's General Counsel and Chief Compliance Officer, has never contacted us and asked for any documentation or other evidence supporting the matters we exposed in our investigative reports so that he could assure the Southern Company's board of directors that all corporate officers had complied with the company's published Code of Ethics.
A secret audiotape of a telephone conversation between Kevin Forbes and Jim Kerr in 2018 regarding the Southern Company’s disregard for the health, safety, and welfare of the company’s customers in a North Birmingham, Alabama heavily polluted black neighborhood confirms that Jim Kerr is an “Old School” unreformed racist who did not care whether the black residents in this neighborhood lived or died from the dangerous toxins in the air, ground, and water in and around this neighborhood. The audio recording speaks for itself.
On March 31, 2023, Jim Kerr was promoted to the position of CEO of Southern Gas Company, a SEC-registered affiliate of the Southern Company. Despite this promotion, Kerr retains operational control over the alleged ongoing criminal enterprise.
The Fraud Scheme was Aided and Abetted by Certain Board Members
Jim Kerr was aided and abetted in operating the Southern Company’s alleged fraud scheme and corporate racketeering activities by three members of the company’s board of directors – Donald M. James, David J. Grain, and Kristine L. Svinicki.
Donald M. James has been a Southern Company director since 1999. He also served on the board’s Audit Committee during the fraud period. He is a Birmingham, Alabama businessman who also served on the board of directors for Wells Fargo during its 230 major violations of criminal and civil laws since 2000. Donald M. James is a chief ally of Jim Kerr who reportedly enables and supports a culture of corruption within the Southern Company and Wells Fargo.
Kristine L. Svinicki joined the Southern Company board of directors in October of 2021. She resigned as Chairwoman of the U.S. Nuclear Regulatory Commission (NRC) the day before Joe Biden assumed the presidency on January 21, 2021.
Svinicki became the NRC’s chairperson after then-U.S. Senator Jeff Sessions, who was denied a federal judgeship in 1986 because of his documented history of racism against blacks in Alabama, threatened to shut down the Senate if President Barack Obama did not reappoint her to the RNC. A reluctant Obama complied with Sessions’ demand.
To this day, Kristine Svinicki is dripping with conflicts of interest. Despite her conflicts of interest, Jim Kerr cleared Svinicki's appointment to serve on the board. She supported the massive accounting fraud embedded in the 10-K for 2022.
David J. Grain is the Lead Independent member of the board of directors. He has been a board member since 2012. Instead of fully and faithfully discharging his fiduciary responsibilities as a Southern Company director, particularly as Lead Independent Director, the company’s long-running, multi-state, racketeering enterprise, and massive $27 billion accounting fraud schemes at Kemper, Mississippi and Vogtle flourished under Grain’s leadership.
Meanwhile, Grain used his seat on the board for professional grifting to grow his private asset management firm from $359 million in assets under management in 2012 to $8 billion in assets today.
The Fraud Scheme and Racketeering Activities Are Ongoing
Despite the publication of my investigative articles, there has been no cessation of the alleged fraud schemes or racketeering activities operated by the Southern Company executives named in this complaint.
They have funneled money to various news organizations to isolate and minimize public exposure of their alleged criminal activities.
They continue to withhold, suppress, and/or destroy incriminating evidence that documents the fraud and racketeering activities.
CEO Thomas Fanning plans to exit the company on May 24, 2023, with a retirement package of up to $100 million that is based on financial benefits and incentives tainted by the accounting fraud. This money needs to be frozen by the board of directors or the District Attorney's Office pending a disposition of the investigation into my criminal complaint. It is a whole lot easier to freeze the tainted funds before Fanning leaves the Southern Company on May 24th than it is to claw the money back after he leaves the company.
Newly discovered evidence points to Jim Kerr as the behind-the-scenes "shot-caller" at the Southern Company who secretly betrayed Thomas Fanning in a failed attempt to dethrone him in 2017 and install former Alabama Power Company CEO Mark Crosswhite as the new Chairman and CEO of the Southern Company. The failed coup d'etat attempt was first reported by us on August 3, 2022. We also reported that one or more executives inside the Southern Company greenlighted the coup d'tat, but we did not name Jim Kerr as the "shot-caller" at that time. We do now.
Three months after our August 3rd article was published, Crosswhite was forced out of his Alabama Power CEO position. On February 16, 2023, Fanning told Wall Street analysts that Crosswhite "he had some issues he wanted to deal with. It was reasonably clear that he wasn't a contender as a successor here, and I think he decided to retire."
Finally, the financial abuse of the Southern Company’s black customers rages on, unabated. This abuse is masked by the Southern Company's token annual donations to black organizations from the charitable foundations affiliated with the company and its affiliates. These donations are mere crumbs compared to what the Southern Company's other customer groups receive each year. No other Southern Company customer group generated $15 billion for the company in 2022 and received mere crumbs in return.
From a personal standpoint, the Southern Company's pattern and practice of scamming its black customers galls me the most. It is inexcusable, disrespectful, and insulting corporate conduct in the post-Jim Crow era. What is worse, many black elected officials, educational institutions, and business leaders in the Southern Company's six-state service area have tolerated this kind of despicable corporate conduct towards their own. I DO NOT!
Related Complaints Pending Against the Southern Company
On January 27, 2023, I was one of several victims who filed a criminal RICO complaint with the DOJ’s Criminal Division against the Southern Company and those persons and entities that acted in concert with them. I invoked my rights as a RICO “crime victim” within the meaning of the Crime Victims’ Rights Act, 18 U.S.C. § 3771, the Victims’ Rights and Restitution Act, 34 U.S.C. § 20141 (“VRRA”), and the Attorney General Guidelines for Victim and Witness Assistance.
On February 3, 2023, I was also one of several persons who filed a formal complaint with the NRC challenging the Southern Company’s “fitness” to own and operate the Vogtle Nuclear Plant. What is worse, the company's documented shoddy work on Vogtle Units 3 and 4 could turn the project into another Three Mile Island nuclear disaster.
Next week, I will publish a series of articles regarding the company’s "unfitness" to own and operate any nuclear power facilities – anywhere.
In reporting the alleged criminal activities referenced in this complaint, I expressly invoked my “whistleblower” protection rights under Georgia’s Anti-SLAPP Statute, OCGA § 9-11-11.1. I will report any act of retaliation against me and members of my investigative news team to District Attorney Fani Willis.