Welcome To All,
As I continue to blog "My Story" of the inner workings of the privatization of our water supply
( Aqua America ) and the Pennsylvania Public Utility Commission and the conspiracy cover up perpetrated against me I realized some details were not reported on. My contention is that Aqua America and the Pa. PUC conspired to cover up the whistleblowing on my part in bringing documents to Mr. John Clista and Mr. Dennis Hoesler which clearly showed fraud in the reporting of capital expenditures as expensed items thus giving Aqua America the ability to write off in one year the full cost of a capital project rather than spread out over 100 years ( The lifetime of a water pipeline ) as required under IRS law.
Mr. Bill Miller, Manager Springfield Operations and Mr. Michael Fili, Construction Superintendent of the Springfield Operations Department in Springfield, Pa. were the two Aqua America employees I discovered reporting the use of expensed accounting numbers instead of using capital project accounting numbers in billing invoices.
Two of the vendors in which this practice was used on were Delmont Construction Company and Trec Drafting Services. These were the examples of billing invoice documents I turned over to the Pa. PUC.
As I mentioned I was fired by Aqua America on Jan. 4, 2006 two months after I gave these documents to Mr. Clista and Mr. Hoesler of the Pa. PUC.
I immediately filed a wrongful termination lawsuit against Aqua America, hiring attorney Mr. David L. Deratzian. Although no mention of me turning over drawings or documents to the Pa. PUC are mentioned in my termination letter, my attorney knew of the documents because I told him so. Supposedly Aqua America never saw these documents as per Mr. Clista, I believe they did. Why would their stock price drop 6% in 2 days in March 2006 unless they were aware I had leaked them to the PUC, stopping this accounting practice I believe deflated Aqua America's stock price to its proper value, eventually bottoming out at $12 bucks a share in 2009.
Also of note here is a Pa. PUC allowance for a water utility not to have to fund their pension fund if they maintained a certain high stock price. I need to mention that I am a member of that pension plan and wonder how much bigger my current monthly pension checks would be had Aqua America properly funded their pension plan all those years of inflated stock prices.
As I mentioned Mr. Clista who said,( "I Would Not Want To Be In Your Shoes Mike") in referencing the fraudulent documents I turned over to him, told my attorney that there was nothing found in the documents after all. Thus believing this, my attorney advised me to settle the lawsuit which I did. As I write this I have reservations about my own attorney telling me the truth. I went to my attorney in January 2006 to file a wrongful termination lawsuit which I recently found out he did not officially file it until July 2007, that's like 19 months after I hired him. This matter I am currently investigating as a new wrinkle in "My Story".
Anyway I agreed to settle my lawsuit, not realizing at the time how important it was for the Aqua America attorneys to document through my deposition every document I turned over during discovery. If there was no fraud why would they have me sign an agreement not to disclose those items. I have decided that the conspiracy cover up trumps any agreement I signed with Aqua America. I settled my lawsuit against Aqua America in March 2008, not realizing I was never afforded my rights under the Pa. stature in whistleblowing cases. Where a employee of the Commonwealth (Mr. Clista) was to direct me to seek a whistleblower attorney and contact the FBI for immediate investigation.
I know I started to write about the political connections at Aqua America, I needed to include the details in my lawsuit. Not to get to far out of ourselves, but I need to also write about when it was I fully realized Aqua America was reporting capital expenditures as expensed items in 2005.
Fast forward to February 2013. I'm reading the Philly Inquirer and Aqua America reports fantastic news, for fiscal year 2012 they literally exploded in revenue's, stock price was back up over $30 bucks a share ( First time in 6 Years) there was a 5 for 4 stock split, ( First One in 6 Years) all due to a tax loop hole discovered by the Pa. PUC. It was a ruling won by FEDEX Corp. in 2003, vs. the IRS. In it FEDEX contended that the repair parts they purchased to repair their jet engines should be expensed and not itemized as a capital expenditure, thus allowing FEDEX to write off in the year the parts were purchased thus reducing their tax bill.
Aqua America used this same logic in filing their 2012 income taxes. The result was an immediate savings to Aqua America in their federal taxes owed by $33 million bucks. They actually expensed capital project expenditures, same as I discovered and blew the whistle on in 2005. Only this time it appears to be legal, I disagree. I'll prove it right here. My position at Aqua America in 2005 was "Construction/Maintenance Analyst". I was supposed to be analyzing capital projects, their costs vs. projected costs, etc... In my job title it has "Construction" - capital expenditures, "Maintenance"- expense costs. Construction meant NEW material. Maintenance meant REPAIR material. These two distinctively different items are as explained, DIFFERENT FROM EACH OTHER.
I will tell you I can support my synopsis by telling you in detail at a later writing of the loss in Aqua America stock value from March 2006 until 2011. The loss amounted to a 40% drop. Market Capitalization dropped from 3.5 billion dollars to 2.3 billion dollars. That totals 1 billion 200 million dollars, thats BIG COIN! Why Jim Cramer of "Mad Money" tried to figure out what happened to Aqua America in those years (2006 - 2011) and had Nick DeBenedicitis on to explain only to say I still don't know what that man said, and dropped Aqua America from his charitable stock portfolio, you can GOOGLE it.
OK, enough for one writing. My next blog I will revert back to the beginning days of the Nick DeBenedicitis rein at Aqua America, back to 1996 and how Wall Street crowned old Nicky boy, King of water privatization. Stay tuned.
Thank you and good night.
Later, Peace.
Michael Duffy
"americaduff"
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