AT&T refund case undecided, Commission considers arguments

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OKLAHOMA CITY -- The Oklahoma Corporation Commission will need more time to decide whether the state's former Southwestern Bell customers are entitled to a $16 billion refund, or whether it has the jurisdiction to rule on that refund in the first place.

The three-member commission listened to arguments from lawyers from all parties involved Tuesday, before deciding to adjourn and consider each side's points privately.

"I would like to take it under advisement and take the time to review the documents we received yesterday," said Commissioner Todd Hiett, before the meeting was adjourned.

This case stems back to 1987 when feds lowered income tax rates for corporations like Southwestern Bell, resulting in a $30 million surplus.

Southwestern Bell asked the state corporation to allow it to reinvest the money in infrastructure, rather than returning it to customers.

The Commission voted 2-1 to allow the reinvestment, but one of those commissioners was found guilty of accepting a $15,000 bribe from the attorney for the phone company.

"I'm not saying Southwestern Bell's conduct here was as bad as Enron, Tyco International, Bernie Madoff, or WorldCom," said Andrew Waldron, an attorney for the applicants seeking payment. "It was worse. I'm here telling you that if Southwestern Bell's fraud and corruption had run any deeper, it would take a donkey ride to get to the bottom of it."

With the help of a puzzle-piece poster, Waldron compared the Southwestern Bell bribery to an attack on justice, especially considering the people who he feels are due a $17,000 refund.  Waldron called the bribe a "treasonous plot."

"It is a betrayal of the people, of the public trust and of society as a whole," he said.

Attorneys for AT&T argued that the case had no place in front of the Commission, saying courts had heard arguments five times in the past and the Corporation Commission itself had heard the case twice.

"The 1986 Bell Rate case is closed," attorney Curtis Long told the three-member panel. "It has been closed for 20 years. You have no jurisdiction to reopen. You have no jurisdiction to vacate. And today, years later the notion that there are billions of dollars to be paid to ratepayers is simply delusional."

Long says he's worried about the precedent the case could set if the Commission agrees to hear and/or reverses its ruling.  He says it would mean "no end to judgement" in similar cases and that past judicial mistakes cannot always be corrected.

"There's only one response," he said. "There's only one correct remedy here and that's to dismiss this case with prejudice because you don't have jurisdiction to hear it."

The state attorney general's office agreed, saying the Commission lacks jurisdiction because the case went to the Supreme Court.

Reopening the case opens the door to anyone unhappy with a rate decision, attorney Abby Dillsaver said. She says doing so would not only ignore the Supreme Court, but throw the process into chaos.

The Attorney General's office and AT&T's lawyers tried to argue that the Commission's role was not judicial, but legislative.  Therefore, attorney Curtis Long argued, though the bribery was reprehensible, it does not invalidate a legislative vote the way it would in a court of law.

Even though at least two dozen people showed up for the meeting, public comment was not allowed out of fear for the legal repercussions for interference in a judicial matter.

"I don't know that there's a topic so dangerous that you can't have a discussion about it, and that's my bigger problem with this whole thing," said Melodie Garneau, who supports the refund.

She planned to speak in favor of it to argue this case was not just about the $17,000 she feels she is owed.

"Not that I would turn it down like anybody else, but the point is these people were bribed and you're saying the bribed [Commission ruling] is still a good rule even though people were bribed," she said. "That's a ridiculous rule and the Income Tax Department wouldn't let me get away with that so I don't think I should let the Corporation Commission or the state of Oklahoma get away or Southwestern Bell."

Sody Clements, an applicant who has filed for the refund, said the entire meeting was frustrating because there was too much talk about technicalities.

"This case should be heard again and perhaps it would discourage some of the bribery that might go on in the future," she said. "But if nothing else, we're talking about $17,000 every ratepayer in the state could use right now and that's the amount of money and I think if the people knew about that they'd be picketing downstairs."

In a statement, an AT&T spokesperson tells NewsChannel 4:

“We thank the Oklahoma Corporation Commission for the chance to be heard, and we are confident they will agree that the Commission does not have jurisdiction to re-open this case and remains bound by previous rulings of the Supreme Court.”

“As we’ve said, this filing concerns a Commission order that was entered over 25 years ago.  Since then, the Commission and the Oklahoma Supreme Court have considered – and rejected – the same arguments on at least five occasions.  In fact, the Commission itself has repeatedly determined that the order served the best interests of consumers, including a unanimous decision in 2003. This is a closed issue. As the Oklahoman’s recent editorial correctly noted — it's time to drive a stake through the heart of this case once and for all.”

There is no word on when the Commission may revisit the case.