A practice that brought scrutiny to the Anson-Madison Water District seen as common elsewhere

A Maine water district was thrown into disarray recently when two top managers were charged with theft and ousted from their jobs over accusations the men were pocketing money from the illegal sale of water lines owned by the district.

Trustees for the Anson-Madison Water District chose to dismiss the district’s entire staff, about a half-dozen people, and contract with an outside agency to manage district operations.

But within weeks of the announcement of felony theft charges against Michael Corson and Michael Jordan, prosecutors decided not to move forward with the case, saying only that new evidence came to light last week.

State water officials say they were surprised to hear about the charges being brought in the first place, explaining that part of what the two men are accused of — selling old water lines to a scrap dealer and divvying up the proceeds among district employees — is a common practice for many water districts in Maine.

Trustees overseeing the Anson-Madison district fired Corson, who was the district superintendent, on Dec. 7 and said in a statement the decision was made “due to concerns about his management.” Jordan, who was the foreman, also was terminated.

A week later, on Dec. 14, trustees announced they had contracted with the Maine Rural Water Association to manage all district operations.

Corson’s attorney, Darrick Banda, said this week that he was prepared to show that the sale of discontinued water lines and splitting that money among workers is done elsewhere in the state.

Banda said he also could show “that the water district was not the owner of the material in question.” He declined to elaborate.

Somerset County District Attorney Maeghan Maloney declined to comment. Somerset County Sheriff Dale Lancaster said the case remains under review and he wouldn’t discuss details, because the investigation is still active.

Neither Maloney or Lancaster would say whether the practice of district employees selling old utility lines and pocketing the money was taken into consideration when it was decided to file charges against the men.

“This is a very common practice done all around the state,” said Bruce Berger, executive director of the Maine Water Utilities Association.

The association advocates for water groups through education, legislation, policy and networking. Members of the association span the state, including the Anson-Madison Water District.

There are different ways in how the practice is done, Berger said. He said districts have done it at least since 1983, when he joined the field and witnessed it at a western Maine district and learned from colleagues that it was common. In many cases, the employees are the ones removing the lines and arranging sales with junkyards, he said.

Some districts have written policies while others take a more informal approach. In light of the events at Anson-Madison’s district, he believes more districts will establish policies in writing.

Berger declined to cite specific districts that do it but referred to one in York County that does and said its trustees approved the practice. In the case of that district, the money is turned over to human resources and the proceeds are taxed and applied as an end-of-year bonus for workers.

“This is a decades-old practice. In my opinion, no laws were broken. Maybe there were internal things that were ignored,” Berger said. “Theft (implies) that it was happening unknowingly (by trustees). This practice had been going on knowingly.”

For years, scrap had been worth about half a penny on a pound, Berger said, and in recent years the value has gone up dramatically. But even with the rise in value, money from such sales wouldn’t greatly benefit customers if that money went back into operations.

“In the last three years or so (metals) have gone up in value, but even if you did turn it in, there is not enough to make a significant impact that would offset any service costs for ratepayers,” Berger said.

The Anson-Madison investigation began in October when a trustee heard from a concerned customer that old water lines were being illegally sold. The information was forwarded to the sheriff’s office.

Investigators learned of 21 transactions from March to October in which old water lines had been sold to a scrap dealer and the proceeds were divided among district employees.

A copy of the search warrant acquired by the Morning Sentinel in December indicated that $12,291 had been made through the sales. Of that, $500 was deposited into a water district account.

Corson had been told in 2012 by trustees that any money collected from sales of discontinued lines belongs to the district and must be deposited into its account, according to the warrant.

Since the events unfolded and the change in leadership at the district, all positions have been restaffed, with at least one former employee hired back.