“Hush Money” Payments Scandal Causes Meltdown at the Southern Company
Updated: Aug 17
By: Donald V. Watkins
Copyrighted and Published on April 27, 2023
An Editorial Opinion
On April 24, 2023, I exposed secret “hush money” payments by Southern Company CEO Thomas A. Fanning to his ex-girlfriend Kimberly Tanaka. The payments were funneled through a Southern Company vendor to Ms. Tanaka, who was the innocent victim of a spying campaign that was hatched by top Southern Company executives in 2017.
Ms. Tanaka was surveilled, along with Fanning’s other girlfriend, Sarah Loudon Novascone, as part of an effort to establish whether Fanning engaged in an alternative lifestyle. If so, the documentation of this lifestyle would be used to force Fanning’s ouster as CEO and orchestrate the selection of former Alabama Power Company CEO Mark Crosswhite as his successor.
James Y. “Jim” Kerr, II, who was Fanning’s good friend, executive vice president, general counsel, chief compliance officer, and chief of staff, greenlighted the spying on Kimberly Tanaka. Kerr was more loyal to Crosswhite than he was to Fanning. It was the ultimate act of betrayal, which Fanning never discovered until we began publishing our most recent articles on the Southern Company this month.
The spying initiative on Ms. Tanaka was documented in the April 6, 2017 “Homewood Notes” of a meeting of Southern Company executives and “dirty tricks” operatives.
Fanning dumped Ms. Tanaka as a girlfriend in late 2017 and subsequently blocked her calls. She moved on with her life. Fanning moved on with his, as well. In 2018, he married Ms. Novascone.
Tanaka first learned about the spying when Bloomberg News reporter Josh Saul called her cell phone in June of 2022 and asked for her reaction while she was having drinks with a planted spy named Kristen Hentschel. The call from Josh Saul was set up by Ms. Hentschel’s handler, who implemented and oversaw the spying operation. Bloomberg News never published a story about the spying, even though this was the stated reason why Saul called Tanaka.
Instead, the call from Josh Saul set off a chain of events that resulted in Kimberly Tanaka urgently contacting Thomas Fanning, via email, at Ms. Hentschel’s encouragement. Fanning unblocked Tanaka’s number and called her repeatedly. She did not accept his calls. Fanning left voice messages on Tanaka’s phone in which he begged her to call him.
Tanaka’s email to Fanning after the call from Josh Saul simply asked Fanning whether he knew about Southern Company operatives spying on her. Fanning acknowledged that he did.
Tanaka felt violated and anxious. She was also mad and devastated.
At the encouragement of Ms. Hentschel, Tanaka sought legal counsel and pursued her legal remedies against the Southern Company.
On September 22, 2022, Kimberly Tanaka filed a police report about the surveillance after a private investigator found a tracking device on her car that day.
Thomas Fanning consulted with Jim Kerr, the man who greenlighted the nefarious spying campaign in the first place, about the sticky situation. It is not known whether Fanning consulted Kerr in Kerr’s capacity as Fanning’s executive vice president, or general counsel, or chief compliance officer, or chief of staff, or trusted friend.
However, it is known that both men had an affirmative duty as top executives of a publicly traded company to report this matter to the Southern Company’s board of directors, which they reportedly failed to do.
Instead, Fanning and Kerr resolved Ms. Tanaka’s legal claims by implementing a “hush money” payment scheme that funneled Southern Company funds through a third-party vendor to Tanaka for “no show” work.
On April 25, 2023, the Roswell Police Department confirmed that Kimberly Tanaka’s case remains “ACTIVE” and has been assigned to Detective C. White (ID #121) for investigation.
The illegal surveillance and “hush money” payments fall squarely within the jurisdiction of Fulton County, Georgia District Attorney Fani T. Willis for a grand jury investigation and prosecution, if warranted.
On April 13, 2023, I filed a criminal complaint with District Attorney Fani Willis against certain executives of the Southern Company and their alleged criminal conduct in running a racketeering enterprise and massive $27 billion accounting fraud scheme.
In the interest of full disclosure, I am one of the many victims of the Southern Company’s decades-long racketeering scheme. In addition to the criminal complaint I filed with District Attorney Willis, my son and I also filed a criminal RICO complaint with the Criminal Division of the U.S. Department of Justice (DOJ) on January 27, 2023.
The Southern Company’s racketeering scheme has corrupted certain public officials in the company’s six-state service area, compromised state and federal regulatory officials in Alabama and Atlanta, and corrupted certain federal prosecutors and judges in Alabama and Atlanta.
The Southern Company’s ongoing racketeering has NOT corrupted District Attorney Fani T. Willis. Her reputation for integrity, honesty, and ethical conduct is pristine.
I will amend my April 13, 2023, criminal complaint with District Attorney Willis to add the facts dealing with Fanning's and Kerr's unlawful “hush money” scheme. The amendment will be submitted to District Attorney Willis not later than May 1, 2023.
After the amendment has been submitted to Ms. Willis, I will publish more details about the “hush money” scheme.
“Hush Money” Prosecutions Must Be Applied Uniformly
On April 4, 2023, Manhattan District Attorney Alvin Bragg indicted former president Donald J. Trump in New York on 34 felony counts arising from a “hush money” payment scheme in which Trump used his private company money to silence porn actress Stephanie Gregory Clifford a/k/a Stormy Daniels from discussing her alleged affair with Trump. The money was funneled through Trump attorney Michael Cohen to Stormy Daniels. Trump’s state court prosecution is ongoing.
As a private company, Trump had no duty to report his “hush money” payments to his board of directors, or anyone else. Unlike Trump, Fanning was required to report the Tanaka payments to his board of directors and his state and federal regulators. This, he did not do.
Jim Kerr also had a duty to report these payments to the Southern Company’s board of directors and the company’s state and federal regulators. This, he did not do.
Whoever runs the Southern Company’s worthless Code of Ethics compliance program also had a duty to report the Tanaka “hush money” payments to the board of directors. This, he/she did not do.
Trump used his private corporation's money for his "hush money" payments. In Kimberly Tanaka's case, the Southern Company, a publicly traded company, reportedly used ratepayer money for its "hush money" payments.
To prosecute Donald Trump and Michael Cohen for their roles in “hush money” payments to Stormy Daniels, but not prosecute Thomas Fanning and Jim Kerr for their roles in the “hush money” payments to Kimberly Tanaka would constitute a glaring example of selective prosecution and would seem to be a grave injustice to Trump in the public’s eye.
The Southern Company has skillfully used former president Bill Clinton’s political influence in Washington to (a) stall and clamp-down on the DOJ’s criminal investigation of the company's long-running, multi-state racketeering activities and (b) totally ignore the company’s massive accounting fraud scheme.
In Washington, money talks and big money talks very loud. This is why Wells Fargo Bank has never been prosecuted for any one of the 230 major violations of laws the Bank has committed since 2000. Wells Fargo simply pays a fine and keeps breaking the law.
The Southern Company has modeled its criminal conduct after Wells Fargo. Both companies share Donald M. James as a longtime board member. James is Jim Kerr’s sidekick.
Meanwhile, there is a complete meltdown in the executive suites of the Southern Company’s headquarters in Atlanta. No one trusts anybody. The leaks are flowing from the office. It’s one hot mess.
Will Thomas Fanning make it out the door on May 24, 2023, with his retirement package that is valued up to $100 million? He WILL leave the company, but NOT with the money.
Like the 14 executives who were indicted and convicted in the HealthSouth fraud scheme (2003 to 2005), Thomas Fanning, Jim Kerr, and other Southern Company executives are in big trouble. They cannot “fix” a case with District Attorney Fani T. Willis. Bill Clinton’s considerable influence peddling skills will NOT make this case go away.
Anyone who aids or abets Thomas Fanning and Jim Kerr in this “hush money” payments scheme will be deemed an accomplice.