Shadow Operations: Uncovering the Alleged Misuse of Funds at Pendleton Water

Executive Summary - For years, the member-owned Pendleton Water Association (PWA) has quietly suffered from a systemic breakdown of operational oversight and financial controls. A deep dive into the association's recent history reveals a concerning pattern of alleged self-dealing, bypassed financial protocols, and outright secrecy orchestrated by the former Plant Manager.

This article details the specific mechanisms through which funds were reportedly diverted, the timeline of how these irregularities were discovered, and the extreme lengths taken to keep the association’s records hidden from public view.

Self-Dealing and Contractor Favoritism -The warning signs of compromised ethics began while the former Plant Manager was still a part-time employee with the title of water plant operator. The documents indicate that he frequently contracted his own private company, Toledo Bend Services, to perform distribution repairs for the water association. This arrangement was overseen by his father who was the Plant Manager of record at the time, leaving the door open for alleged overbilling and unnecessary charges without any unbiased oversight.

Upon being promoted to full-time status on August 1, 2022, and soon thereafter promoted to Plant Manager, he shifted his approach, exclusively using a single contractor, L&L, for all distribution repairs. Utilizing only one contractor gave the appearance of favoritism and collusion, especially when alternative contractors were available. Even after PWA was hit with a staggering $13,000 bill for road repairs in 2023, the Plant Manager actively refused the Board’s explicit instructions to utilize other available vendors.

The Meter Reading Double-Dip -The financial red flags extended directly into the association’s daily billing practices. In September 2017, an agreement was reached to provide the water plant operator with health insurance in lieu of paying him a separate fee for meter reading. However, following the resignation of the former Board President who brokered the insurance for meter reading fee, the water plant operator allegedly began billing the association for meter reading once again in 2019—while continuing to receive the health insurance benefits.

This alleged double-dipping practice continued until a newly seated board discontinued the billing in March 2024, instructing him not to bill for work that fell under his full-time employment. The board did not uncover the true nature of this prior 2017 agreement until after August 2025.

Unauthorized Equipment Rental and Bypassed Controls - Furthermore, the documents indicate that the Plant Manager actively billed the association for "equipment rental,"

specifically charging PWA to use his personal trucks and non-running heavy equipment. PWA already owned a dedicated truck that should have been used for this exact purpose. It was discovered in August 2025 through a review of old meeting minutes and conversations with former board members that this billing was never formally authorized.

Perhaps most alarming to the Board Treasurer were the check-signing practices. Standard accounting rules require two independent signatures, but the Plant Manager was co-signing PWA checks alongside his father. According to the evidence presented, the father would sign blank checks, which son would later fill out and sign himself, bypassing necessary financial controls. This highly irregular practice would not pass an accounting audit, and in February 2024, when the board switched banks they ensured that relatives could no longer co-sign checks together.

Secrecy and Regulatory Sabotage - The Former Plant Manager demonstrated a profound resistance to transparency. He repeatedly ignored direct orders from the Board to hire necessary staff to meet state headcount requirements, resulting in a formal reprimand on April 14, 2025. When questioned, he shockingly stated that if temporary operators were brought in, he would set up portable toilets outside so they could not enter the office and "look at his records". Additionally, his insistence on negotiating land purchases alone without licensed real estate agents ultimately caused PWA to lose a crucial state grant because he failed to follow the proper conditions that had been set forth in the grant requirements.

Call to Action - These documented actions represent an alleged coordinated pattern of unethical behavior and financial irregularities that threaten the stability of our community's water supply. We urge all Pendleton Water Association members to review these facts, demand full transparency, and attend the next board meeting to ask what further steps are being taken to recover these funds and protect our co-op.

This article is episode 2 of our series. In Part 3, we will dive deeper into the specific discovery of the hard evidence that confirmed these troubling suspicions, followed by Part 4, which will detail the Board's actions to report these financial irregularities to the proper authorities.