Former BVU Chairman pleads guilty to federal conspiracy charge

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ABINGDON, VA  (WJHL)- Former chairman of Bristol Virginia Utilities, Jim Clifton, plead guilty to a conspiracy charge in federal court Wednesday.

Nine months ago Clifton told News Channel 11, “I have not done anything wrong, so if somebody can prove otherwise, obviously I’ll have to be on camera and eat those words,” Clifton said.

Clifton is now the eighth person charged in the ongoing federal corruption investigation at BVU.

“The level of corruption at BVU was overwhelming,” United States Attorney John P. Fishwick Jr. said in a news release Wednesday. “In cooperation with our partners in law enforcement, we continue to dismantle these corrupt individuals and put those who have profited from corruption in federal prison.”CLICK HERE TO READ: U.S. Attorney’s Office news release in regards to Clifton’s case(.pdf)

Clifton stepped down from his position as the board chairman on March 25th citing personal and work related issues. His attorney told us Wednesday they found out he was the target of a criminal investigation around that same time.

Clifton plead guilty to one count of conspiracy to commit program fraud and misprision of a felony.

Wednesday in federal court, before Clifton officially entered his plea,  prosecutors introduced a key piece of evidence in their case, a secretly recorded meeting during an executive session of BVU board members.

Executive sessions are closed meetings, with no media allowed.

We got a copy of that recorded session from September 16th, 2013. The BVU board members involved in that executive session were Faith Esposito, Jim Rector, Paul Hurley, Doug Fleenor, Jim Clifton, Archie Hubbard, Ed Harlow,  and Odell Owens.CLICK HERE TO READ: BVU Board Minutes 9-16-13(.pdf)

During the meeting, board members discussed alleged misconduct by former CEO Wes Rosenbalm, who has since been sentenced in this investigation.

Prosecutors said Clifton and other board members had knowledge of federal felony offenses, and concealed that from law enforcement.

“The board’s knowledge of misconduct by Wes Rosenbalm and others that are talked about during a recorded executive session meeting on September 16th, 2013 and the board’s decision as a whole to in essence pay Wes Rosenbalm off and sweep everything under the rug so that nobody would find out about it,” Lee said.

Rosenbalm received a $269,420 severance package from BVU.

We also talked with Clifton’s attorney Dennis Jones who said they could have litigated this and had legal defenses, but Clifton felt entering a plea was a step in gaining back trust.

“This was a step in a direction and a part of that healing process of getting the public trust back to that agency and that’s really where he wants to see it, he’s very ashamed and embarrassed,” Jones said.

Prosecutors mentioned that after that recorded executive session, one board member went to law enforcement.

Board member Doug Fleenor was the first to publicly speak out about the corruption at BVU.

“I’ll remind everyone he was named chairman by this BVU board that supposedly is making all these changes and transitions… I was a lone standing vote against Mr. Clifton being chairman and I had my reasons for that at the time,” Fleenor said.

Clifton became chairman last year, after the corruption investigation in to the utility started.

The U.S. Attorney’s office said another component of the charge against Clifton involves a trip to Dallas Clifton went on with other board members. Prosecutors say this trip was paid for by a vendor as a condition of BVU entering in to a $4 million dollar contract.

Lee said on that trip the company paid for limos, meals, hotels, and tickets to a Dallas Cowboys game.

Prosecutors say overall that trip cost the vendor more than $10,000, and things of value provided to Clifton totaled about $2,500.

The other part of the charge has to do with his position at Crabtree Buick GMC.

“It also dealt with Mr. Clifton’s relationship as a car salesman to BVU while he was on the board and utilizing his influence as a board member to obtain inside information and influence BVU in the purchasing of vehicles,” Lee said.

“Mr. Clifton had a meeting with Wes Rosenbalm, another one of the employees over there and as a consequence of that meeting, which was influenced by his being a member of the board, they agreed among themselves to alter that RFP and accept those two vehicles,” Jones said.

As a public utility, BVU is required to go through a bidding process known as “request for proposal” or RFP in getting contracts.

Jim Clifton will be sentenced in July. He could face up to five years in prison and a $250,000 fine.

He is currently out on bond.


ABINGDON, VA  (WJHL) – BVU’s former board chairman pleaded guilty to a conspiracy charge in federal court in Abingdon, Va., Wednesday morning.

Jim Clifton abruptly resigned his position with the board last month, and WJHL learned just last week that federal investigators subpoenaed records related to him.

WJHL reporter Allie Hinds was in the Abingdon courtroom this morning and learned Clifton pleaded guilty to one count of conspiracy to commit program fraud.

Prosecutors said the charge stemmed from a Dallas trip paid for by a vendor and Clifton using his position at a car dealership to win bids for BVU.

The ongoing federal corruption investigation in to BVU has resulted in 6 people, including former executives, being sentenced to prison on corruption charges.  A jury found a seventh person, former BVU CFO Stacy Pomerenke, guilty of several charges.  She has not yet been sentenced.

Keep checking WJHL online and on air for more details from today’s hearing.Copyright WJHL 2016. All rights reserved.

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