Show 4 A Sunday June FROM PAGE ONE 4 1995 Standard-Examine- r Phone From 2A stashing away company money m private bank accounts usmg it to buy personal equipment and properly and other companies that then lease their services to Beehive Their complaints also involve: More than a million dollars in a special bank account from a phone sex contract not reported on income statements Money used to support a Russian woman Brothers brought into the country and married in last year before Nevada his existing wife in Utah had filed for divorce All this while Beehive drew heavily on state and federal phone service subsidies paid by the companies major and every Utahn who has ever toll call paid for an “There is a legal duty on the part of the directors" Ken Brothers said “It's not something that can just be ignored” The allegations have spurred an investigation by the Utah Division of Public Utilities which administers the subsidy fund and makes recommendations to the Public Service Commission the state's utility regulators Once the division files its report on the investigation to the PSC it’s up to commissioners to decide what if anything to do about the allegations Members of both agencies have described themselves as admirers of Brothers’ spunk and ability to provide quality phone service to rural areas “I have been a supporter of his for many years assuming that what he was giving us was supportable information” said the division Larry Fuller technical consultant conducting the investigation 7 “I think that there has been a general admiration for Art Brothers for what he has been able to do in areas where others were either not willing or able to go” PSC Chairman Stephen Mecham said “From all that I can gather his technical skills or his engineering skills are exceptional I can’t address the running of Beehive because I don’t know the long-distan- 'e long-tim- e facts” But if allegations of financial mismanagement or fraudulent reports to the state are proven Brothers and Beehive could be fined disciplined or barred from operating in Utah plus required to reimburse the state for subsidies awarded due to false information Fuller said The Federal Communications Commission also has ordered Beehive to provide updated information about its income and expenses No criminal or other charges have been filed by any state or federal agency Brothers said it’s all a smear job and a lot of fuss about 1 If nothing anything the investigations will show he is a poor record keeper and relied too much on his staff he said ’ “I’m really ticked off when you have a state agency out there poisoning the well They’re around running playing gumshoe” Art Brothers said “I’m a builder not an administrator I'm an old Westerner” he said “Sure I’m a maverick I do things differently” But regulated utility companies are not run like ordinary private businesses - Because telephones are considered an essential service the PSC sets customer rates and standards quality for all authorized providers r In return the companies are Entitled to yearly profits - in this Case 1125 percent on equity Because the cost of providing phone service to rural areas is more than customers are charged (mail independents like Beehive get yearly subsidies to ensure they cover their costs and make a per profit Utahns pay a half-ceminute into the subsidy fund for nt toll call they make The annual reports filed by the Companies are “used as a bible” every te jo set rates and the bonus payments Fuller said Beehive received S677372 from the fund last year and was to receive $760508 more by this September before the state cut off payments p March he said A list provided fli the court also shows 51 Beehive tockholders like Harvey Carter though the vast majority of are held by Brothers and fiares ‘ But Brothers said the apparent Inconsistencies in his annual Reports and mistakes he claimed in court are minor details “It doesn’t mean anything - so hat?” he said “AH it is is a report to the commission - if it’s irong big deal You just write a letter” I There’s no denying Brothers jias emerged from scrupcs in the past and flourished Despite at least four marriages Ind his current bitter divorce Rattle he answers a question about what he studied at the University of Utah with the joke was girls” ill He stayed in business when the revoked several of his telecommunications licenses in Beehive Telephone serves customers like rancher Harvey Carter who lives a long way from mainstream phone lines the late 1970s and now operates mainly under Utah and Nevada oversight When the Federal Aviation Administration revoked his pilot’s license after he crashed into a small truck while landing on a road in Grouse Creek he found a loophole that still allows him to fly as an air ambulance When he was excommunicated by the LDS Church he bought a former ward house in Lake Point and converted it to his home “They wouldn’t let you in so you went and bought the church” he said a friend joked at the time “He sees himself as a renegade and he has absolutely no respect for authority” said Patricia O’Rorke the lawyer representing Fran Brothers in the divorce “What’s different here is that someone voted against him” TT Family feud Brothers’ current troubles began when his wife of 12 years Filed for divorce in August citing irreconcilable differences But when O’Rorke began to outline Fran Brothers’ claims she said personal and business funds were so intermingled she couldn’t tell them apart She said more information was requested but was denied by Art Brothers despite his wife’s position as a shareholder and n member of the board of directors “Fran had devoted herself to the company night and day” O’Rorke said claiming Brothers tried to drive his wife out of the company “It’s been his practice over the years to keep all the records under his control” she said “He’s never observed any rules that apply to the rest of us It’s really quite amazing” She said they feared large amounts of money were being shuttled to other bank accounts Fran Brothers outlined her charges of financial misconduct in three-perso- I’m a builder not an SUSAN fences are remnants of Park Valley’s system to Beehive Telephone’s arrival to the rural community But the Old lines strung on and his children on the other Neither has made eye contact or spoken to one another On May 25 Roth ruled that the board acted correctly and that the children’s combined respect” “They have not been warm and loving conversations but then I don’t think I have had a warm and loving conversation with my father” he said I’m an administrator old Westerner Sure I’m a maverick I do Innovator The position things differently’ --Art Brothers letter to her husband and stepdaughter the other two members of the board Ken a Brothers a I lrge stockholder said his sister Ravonne asked for his help with the problem He said he was worried about what could happen if the board knew of the charges and failed to investigate He also said the three grown children were sympathetic to Fran Brothers who had established a relationship between her husband und his children following the years their mother his first wife raised them in Huntsville Fran Brothers has moved to Florida to live near her stepdaughter In April Art Brothers Sr refused to uttend a board meeting culled by his wife She and Ravonne Brothers Ross elected Ken Brothers as board chairman and fired Art Brothers as president A restraining order has since kept Brothers uway from the property and a court battle has followed In court Art Brothers has sat on one side of the aisle stock outweighs that of their father giving them control Since then Ken Brothers said he and his father have had “frank” discussions based on “mutual of president the company are operations continuing with Art Jr as a consultant although employees are confused and tense “My father is not a man who can be replaced He’s run a telephone company for 30 years” Ken Brothers said “He is an innovator in providing telephone service to rural areas He is a true pioneer in what he has done” On Tuesday Sen Bob Bennett presented Brothers with a service award from the National Association of Radio and Telecommunications Engineers for his contributions to rural phone service “Technically he’s a wizard He’s probably done things that other people would not endeavor to do” investigator Fuller said “But he has not done it for free he has not done it without knowing that he’d be fully compensated for it” now Day-to-da- open is at y Money trail fuller said the division was surprised by the allegations against Brothers by his family and AT&T its long-distanc- which pays Beehive when e customers call Beehive’s service areas He said he also was surprised when Brothers testified in court that reports to the commission contained numerous errors over the years Brothers blamed accountant Kim Anderson saying it was his responsibility to ensure the information was correct But Fuller said reports were often late because Brothers “went through those with a comb” and made changes in his own handwriting “I’m not going to get into the middle of that” Anderson said of “The Brothers’ accusations financial statements - and it says right in the financial report - are fine-toot- h the representations of management” Brothers also accused his estranged wife of misuse of funds which her attorney denied Brothers said the state's investigation is moot because the problems are resolved He said he no longer needs the use subsidy because has soared thanks to his contruct with Joy Communications an adult party line He said he brought the matter to Fuller’s attention and asked that the subsidy payments be stopped Fuller said the mutter was reported by AT&T that Brothers originally objected to Information requests and then agreed to have the payments stopped until he provides a new cost study Brothers also agrees he put $615000 in a personal bank account when he sold Beehive’s cellular phone rights to another company The money has not been repaid to Beehive but he said he now knows better “I kept it for myself paid the long-distanc- e taxes on it und stuck it in the bank unJ there it sat” he said “That's un old issue” LATHAMStandard-Examine- r company’s dealings are coming under fire for questionable nances a phone sex service and other areas of concern $1 He said he put the more than million in long distance fees generated Communications by users Joy in a separate account to hide it from his wife’s lawyers during the divorce proceedings Phone sex The popularity of the national Joy Communications party line is the reason Beehive is no longer receiving special subsidies The new income should also result in lower rates for AT&T MCI and other companies that must pay Beehive Brothers describes how the service works: "Groups of eight talk dirty to each other" He said it’s his contribution to safe sex In October 1993 AT&T paid Beehive $4805 for its customers’ minutes of use on the service By this February they owed $396559 And business has continued to boom Brothers said “We’re keeping America safe from AIDS" he joked long-distanc- e Russian bride Brothers said he is worried that telephone service negotiations on the Sakhalin Island of Russia will fall through if he is kept removed from the company He has been trying to set up a new phone service there That operation also was one of the big shocks to Fran Brothers attorney O’Rorke said O'Rorke also alleges that Brothers has used company funds to bring a Russian woman Tatyana Kochcvuia to the United States and to support her Brothers said the money was his but was a legitimate business expense because she is the wile of a Russian military instrumental to the project But a Nevada officer marriage ccitificate shows Brothets married Kochevaia on Jan 29 1994 several months before Fran Brothers filed for divorce A Nevada newspaper announcement indicated Brothers and Kochevaia i were divorced this April Brothers declined to comment on the specifics of the marriage or the divorce and on O’Rorke’s claims that he used the death certificate of a Salt Lake woman to establish bank accounts and a new identity for Kochevaia when she arrived here “There’s no valid marriage I’ve had lawyers in two states advise me of that” he said “I don’t have any problems” Legal problems Ken Brothers said he doesn’t want to see his father end up with any legal problems as a result of the family lawsuits The children will not volunteer any information about their father’s activities but will cooperate with any official investigations he said He said he plans to make sure his father is paid any money owed him by Beehive and that he has a comfortable pension and lifestyle “The last thing that I want is to be vindictive or spiteful or to personally cause harm to my father I do not want that and I will do everything in my power to prevent it from happening” he said “That being said I will not close my eyes to any improprieties that have been discovered" But Art Brothers said he still is convinced that his family's actions are motivated by greed and that he hus nothing to fear from investigations "I don't try to defend or justify anything Days pass time passes ’I he point is provide business und phones to ureas that otherwise wouldn't have (hem 1 “I don’t pretend to be a saint I don’t pretend to be a sinner either" |