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May 26, 2019

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Allegations of harassment, hush payments probed at utility

Updated Friday, Feb. 22, 2019 | 5:01 p.m.

The Nye County Sheriff’s Office says it is investigating allegations that a former CEO of the county’s electric utility sexually harassed an employee and paid top managers “substantial” amounts of money to keep it secret.

The former CEO, Thomas Husted, stepped down as Valley Electric Association’s top executive last year.

Nye County detectives and deputies this morning served a search warrant at the utility’s administrative offices in Pahrump, where they searched for administrative and financial records related to an investigation, Sgt. Adam Tippetts said.

Nobody has been arrested or charged in the investigation.

Tippetts said the alleged payouts, reportedly taken from the company’s coffers, may have contributed to rate hikes announced earlier this year. The hikes are scheduled to take effect March 1.

Authorities are probing allegations that Husted paid current and former “key management” employees, who were directed to sign nondisclosure agreements, Tippetts said.

Earlier this month, the utility announced cost-cutting efforts that included a 9 percent rate hike for residential customers and a $5 monthly increase to its basic service charge, according to the company, which also cut 18 employees.

This followed a forensic audit that examined “internal controls, cash activity and expenditures” from Jan. 1, 2016 to July 31, 2018, which was employed by the company’s board of directors when it appointed interim Angela Evans as interim CEO, the company said.

The company, in September 2016, approved the sale of a transmission line for about $200 million, which also was evaluated.

The firm did not find “wrongdoing” or “mismanagement” of funds, the company said.

“We only considered a rate adjustment after exhausting all possibilities for internal cost control,” Evans, the CEO, said at the time in a news release. “A decade is a long time for a cooperative to hold firm on its rate structure, especially when the cost of providing service continues to increase.”

Husted, who was hired as CEO of the company in 2006, has more than 30 years of experience in the utility business, according to a profile of him on bloomberg.com.

Valley Electric could not be reached for comment on the investigation.