Bristol Virginia Utilities Culture of Corruption

by Lewis Loflin


Former CEO of Bristol Virginia Utilities is to serve 33 months in prison. Mr. Rosenbalm will serve two years of supervised release plus pay $150,000 in restitution.

Mr. Rosenbalm pleaded guilty to conspiracy to defraud the IRS and questionable charitable contributions. Controversy raged when he left without notice after the BVU Board awarded him a $200,000 plus golden parachute.

This had led state lawmakers to pass legislation to curb abuses that have so far led to the convictions and/or prison for Mr. Rosenbalm and 8 other BVU officials and contractors.

This includes BVU Attorney Walt Bressler stripped of license by the Virginia Bar after pleading guilty to program fraud charges on April 7. This nonsense involved some junket funded by a BVU vendor and didn't disclose $2500 on his taxes. The same trip included Mr. Rosenbalm, board members Paul Hurley and Jim Clifton, and three other employees.

I'd met Mr. Rosenbalm several times a few years ago warning on this website and letters to the editor about these very problems. This nonsense goes on all the time among Virginia politicians until the Federal Government steps in. One Federal spokesman BVU a "culture of corruption" which is local government in general.

I also know Mr. Hurley a very nice man when I used to speak before the Board meetings when they didn't call closed session and ejected myself and the press while they plotted behind closed doors.

Also convicted was BVU Chief Financial Officer Stacy Pomrenke the only one note pleading guilty and went to trial - she lost convicted on 14 corruption charges. In a community with a median family income a little over $30,000 she was paid a salary of $213,000. These people earned money many times the average citizen and engaged in petty nonsense such a country club memberships worth a hew hundred dollars as bribes?

As usual the corruption centered on contracting and government grants in this case bribes from contractors and extorting bribes in order to get contracts. The OptiNet division that has supplied high-speed fiber optic services to about 14,000 Bristol-Washington County VA residents was touted as "economic development" sucking up over $100 million in public grants. Like most government grants sharks were circling for a bite.

As of May 6 she hasn't been sentenced, but could face 20 years and a $250,000 fine. The investigation has been going on for over 3 years and more indictments might be coming. She was fired from her sweet heart contract by BVU upon her conviction.

While fiber optic is basically another utility (I'm one of their customers), it produced zero jobs which is what the grants were for. Now the City of Bristol Virginia being crushed under millions in debt over corporate welfare in particular for The Falls retail development. The OptiNet division is being sold off to a private company at half its value to a private company for $50 million.

Something called Sunset Digital Communications is buying OptiNet. This company too is a product of government grants and is tangled in other pseudo-government agencies. To quote the local press on April 1, 2016: "A combination of state and federal grants paid for OptiNet...all those granting agencies must approve the sale..."

The $50 million will be used to pay off BVU debt and now the City of Bristol wants the rest.

And who the heck is the Cumberland Plateau District Commission that has sucked up millions in grants for economic development that has produced nothing for the last 20 years? Let's throw in VCEDA, LENOWISCO, and the Virginia Tobacco Commission.

On April 11, 2016 Becky Coleman of Gate City (in Scott County the home of Sunset) who claims the Commission has spent over $1 billion in nearly 2000 grants across Southwest and Southside Virginia, this has produced nothing for the average citizen. Many people refer to it as a political slush fund for the politicians appointed to its board. The funds will soon be exhausted after 20 years of waste, fraud, and abuse.

I like my OptiNet service, but this is public property paid for by public funding being sold off to a private company created by public funding, then the proceeds are pilfered to pay off corporate welfare costs for Bristol Virginia.

Other open abuses by BVU officials was the misuse of rate payers funds to underwrite museums, music concerts, etc. That also included the misuse of TVA economic development funds ($200,000) for another music concert. None of this was proper and while legal I suppose is still theft of ratepayer funds for non-utility use.

In addition they have given away a fortune in electrical equipment, etc. to assist Bristol Virginia government to underwrite their business cronies and friends.

All of this fraud, waste, and abuse and they go to jail over $2500 not reported on their taxes? What a joke.

More on OptiNet

Total nonsense. The Bristol Herald Courier is reporting the reason for the OptiNet sale is because they can't offer cable services outside their electric service area. New CEO Don Bowman says, "We kind of have two separate mandates from Richmond...they supported us growing and expanding to rural areas with these Tobacco commission grants, but these can't sell them cable TV..."

Of the 14,000 customers 9000 have cable TV.

What does cable TV and HBO have to do with economic development? In 2003 BVU became the 1st municipally owned broadband network with promises of new jobs and opportunity. One example was the small business incubator in Abingdon that featured access to high speed fiber optic.

It was another failure and ended up as mainly discount office space to other non-profits milking the system for grants.

Back to BVU this was a "non-solicited" bid and BVU officials claim there's no state law it has to go up for bids even when we have reports of another interested party. So it's back to closed back room dealing. With almost a dozen BVU associates going/in prison the BVU Board voted 8-0 to sell OptiNet. The public was never allowed input into the entire deal - business as usual.