The Cost of Energy, The Price of Power--Part II

Investigators were just beginning to sift through the wreckage when the anonymous telephone calls rang into the air traffic control tower at Pensacola Regional Airport and the switchboard at the Escambia County Sheriff's Department about 4:10 p.m. A gravelly voiced male caller said, "Yeah, you can stop investigating Gulf Power now. We took care of that for them today." (From "Abuse of Power" by Elizabeth Wilson Jan. 1990)

The Southern Company vigorously defended itself against the investigations into the company's 'practices' and claimed that the actions of Jake Horton were primarily the only reason they were under investigation. Something had to be done, and done quickly. They were facing some very serious allegations, offices had been raided, records confiscated and the entire company was under intense scrutiny.

And now another top executive was dead under mysterious circumstances.

The media was merciless and it became a PR nightmare:

Southern has been haunted since the 1989 death of Mr. Horton, which came shortly after he learned that he would be fired by the company for his involvement in making illegal campaign contributions.

In a written statement, the president of the Southern Company, Edward L. Addison, and the president of Gulf Power, Douglas L. McCrary, said, “We acknowledge with deep regret that Federal statues were violated." In their statement, Mr. Addison and Mr. McCrary placed the root of the problems squarely on one executive, Jacob F. Horton.

Southern Company's PR man, Mr. Gale Klappa said Mr. Horton "had broken company rules and engaged in financial irregularities that could not be tolerated."

After the accident, Frances Horton filed a lawsuit against the company for negligence by the maintenance personnel and the plane's crew, in addition to filing for Horton's death benefits consisting of a life insurance policy and a company death benefit.

Adding insult to injury for Horton's widow, the company came up with a sensational claim that became the basis for an intense legal battle to deny any payment to Mrs. Horton that wound itself all the way to the the US 11th Circuit Court of Appeals:

Although authorities say they are still investigating the possibility that Mr. Horton was murdered, Southern Co. officials claim that he committed suicide.
Mr. Klappa said the company executive carried an incendiary device onto the plane. A fire started in the cockpit shortly after takeoff and the plane crashed, killing Mr. Horton and two crew members.

If that were true, it would have meant that Horton did this with forethought and knew two other innocent people, the pilots, would have perished with him. The logical implication of that claim, though never spoken, was he was a murderer too.

Things got as mean as it comes during the trial and bombshell number two came out as the pressure to settle with Frances Horton intensified:

In a statement, Southern Company Services said it "did not encourage this settlement, and we remained firmly convinced that the facts in the case support our position that Jake Horton was primarily or solely responsible for the crash."
On Monday, Mr. Daniel told jurors that experts had filtered out extraneous noise on the cockpit recorder and deciphered voices saying, "You're wasting your time," and, "You're under arrest, Jake."
He said the recorder also indicated that there had been a struggle on the plane.
"However, we also recognize that the post-crash fire destroyed virtually all the evidence that could have definitely proven the cause of the crash," the company statement added. "In that light, we understand why [U.S. Aviation Insurance Group] chose to negotiate an out-of-court settlement."

There were three people on that plane, Horton and two pilots. Who was on the plane that would have said "You're wasting your time, you're under arrest Jake?" Were the pilots doing double duty as officers of the law? Or was this just the courtroom trickery of savvy lawyers trying to plant doubt in the mind of the court?

Southern was admonished by the judge for making "sensationalist claims" in an effort to have Horton's death ruled a suicide by the 11th Circuit, nonetheless they held onto it with the tenacity of a pit bull's bite--It was their version of the facts and nothing was going to move them from it no matter how incredible it appeared to many observers. Even after the trial was over, and for all intents and purposes, they had won. Big.

The trial judge-the fact-finder in this case-was not persuaded by defendants' evidence: "All of the speculation about the arson/suicide theory is just that, speculation. Much of the evidence supporting this theory is incredible. All of it, credible or not, yields no conclusive answer." Therefore, the district court's finding of ultimate fact that Mr. Horton's death was accidental must be affirmed.

But were indicators present before the feds swooped in that Horton may have been a problem?

Company officials claim there were, but no investigations were ever ordered. Others surrounding Horton also paid a price, and the firing of one of them, Kyle Croft, seemed to have set this whole crazy train in motion that ended in Horton's death. (More on Croft later.) Those post mortem revelations of 'suspicions' about Horton were arguably a bit too convenient, particularly since it was impossible for Horton refute the allegations.

Did Horton really act completely on his own, without the knowledge of three other vice presidents for Gulf Power and the CEOs of Gulf and Southern for almost a decade before the house of cards came tumbling down and the feds swooped in? Southern Co. convinced the Florida Supreme Court that indeed he did:

In The Supreme Court of Florida Case # 77,153
Answer Brief of the Florida Public Service Commission
The Grand Jury investigation had revealed that Mr. Horton and his subordinates were extensively involved in a scheme to make illegal political contributions and other improper payments through outside vendors. (TR 245-246; 2991; Ex. 413, pp. 13 & sea).  

At the hearing on Gulf's proposed rate increase, Mr. McCrary conceded that these illegal activities would likely have consumed a good deal of the Vice President's time. (TR 246)(pg -4- paragraph 3)  

The illegal activities addressed in the plea agreement occurred over the period 1981 to 1988. No specific investigation of Jake Horton was ever undertaken by Gulf. (TR 234). However, an investigation was conducted by the audit committee of Gulf's board of directors which looked into Horton's activities. (TR 234). Mr. Horton was killed on April 10, 1989, in a plane crash before any further action was taken by the company. (pg. -5- paragraph 1)

At the rate hearing, PSC witness Roberta Bass concluded that Gulf had been ineffective in dealing with its internal problems.
She stated:
Although collusion and management override can circumvent and render ineffective even the strictest internal controls, the criminal activity documented as having occurred at Gulf Power extended over a period of approximately eight years. The inability of Gulf management to discover and correct these overt illegal actions leads me to believe that the corporate culture was such that employees believed these types of illegal actions were, at least, condoned by top management.(ppgs. 5-6) 

“The Commission had before it abundant evidence of Gulf's
mismanagement, both in the conduct of the president, and in the specific unethical and illegal behavior of Vice President Horton and his associates.”
(pg. -9- paragraph 2)

The records indicate that Southern Company was very successful in their defense. It was all Horton's fault, most of it anyway. All that remained to tar the company were the findings of guilt on the illegal campaign contributions. By far, the lesser of all the possible evils.

Questions were raised in the media about the claim by those close to Horton, including Florida Senate President, W.D. Chilers-D, and Horton's neighbor, Frank Patti, who was one of the last people to see Horton alive that Monday:

"I had one friend at Gulf Power Co.," Childers says, "and that was Jake Horton." 'It doesn't seem fair to blame him after he's dead."

"Jake didn't seem upset at all," Patti said of their last meeting. "He damn sure didn't commit suicide. I think Jake's death is directly related to what's been happening at Gulf Power," Patti says. "If it wasn't suicide, who in the hell killed him?" 

There were some events that occurred in the last three days before Jake Horton's untimely death that bear mentioning.

According to interviews with Jack Graff, a former law partner of Horton's attorney, Fred Levin, Horton had asked Graff to "call Ed" meaning Edward L. Addison, Horton's old boss, over the weekend before the Monday flight to see what he knew about Gulf Power's next move on him. Graff finally reached Addison on Monday morning:

"I guess you've heard," Addison said. "No, I haven't," Graff replied. "I've just gotten a call," Addison said. "The audit committee has recommended firing Jake.... I'm sick about it. I just got off the phone, and I'm sick about it."

In addition to speaking with Addison, Graff learned that Gulf Power CEO, Douglas McCrary supported the decision but "wanted to meet with Horton that morning to discuss alternate ways to sever his relationship."

Graff decided it was time for a three-way conference call between Levin, Horton and himself to share the information he'd learned.

Levin and Graff told Horton to "stall for time" with McCrary and Bell in hopes that Horton's flight to Atlanta and meeting with Addison would get him some kind of leverage in an already bad situation that was quickly getting out of his control.

Horton had past bad blood with McCrary, neither man trusted the other and some of that was Edward Addison's doing when, in 1983, he reached up into Alabama Power's ranks and chose "Hatchett Man" Douglas McCrary as his successor at Gulf Power and passed over Jake Horton. Some speculate that forever changed Gulf Power and Jake Horton for the worst.

In Horton's mind, he wasn't going to get any satisfactory resolution with McCrary over this whole affair. He had to go see Addison.

When Horton called the company hangar to arrange for a flight that morning, he was told that Gulf Power's company jet "was not available" but there was the Southern Company jet, a Beechcraft King Air 200, that parked in Biloxi, Mississippi at another company hangar, that could be brought over to Pensacola.

The rest of that part of the story, as they say, is history. Along with Mr. Horton and what he knew.

On the same day as the crash, shortly after the anonymous calls, dead yellow-bellied parakeets with broken necks began showing up on some doorsteps:

Levin, a former attorney for Gulf Power and Horton, found a dead bird outside each of his two homes. He called the birds canaries and interpreted them as warnings "not to sing" about his last conversation with Horton. A third carcass appeared outside his law offices in downtown Pensacola. Another was dropped at the back door of Horton's next door neighbor's home. When Levin flew to Atlanta a month latter to testify before a grand jury about that last meeting with Horton, Levin received a death threat. A few days earlier, an informant had told the FBI that Levin was on a hit list.

("Abuse of Power" Elizabeth Wilson Jan 1990)

The authorities sensing there was more to this than meets the eye reopened their investigation into the untimely death of a former Gulf Power BOD member and his wife, who were murdered execution style in their Florida mansion in January of 1989. The case remains unsolved twenty-two years forward.

Another man, involved with this macabre tale, left Florida and showed up in a Missouri lawyer's office unannounced and signed away his interest to the house he shared with his wife in Pensacola.

After doing so, he left the lawyers office and was never seen again.

(to be continued....)

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