Fatal Subtraction

By James Carney/Pensacola

The case did not seem to add up to a big-league corporate scandal. For more than three years, the IRS and the FBI investigated kickback schemes at Gulf Power, an electric utility based in Pensacola, Fla., and all they produced were the convictions of two former managers. But last month the affair took a sudden, dramatic turn. Moments after taking off from Pensacola, a company plane caught fire and crashed, killing its two-man crew and the only passenger.

The passenger was Jacob F. (Jake) Horton, 57, a Gulf Power vice president who had hastily arranged to fly to Atlanta, headquarters of Southern Co., the utility's corporate parent. Since last year a federal grand jury in Atlanta has been looking into suspicious accounting practices in the spare-parts department at Southern Co., but the inquiry has grown into a broad investigation of alleged tax fraud and graft at the utility and its subsidiaries, including Gulf Power. On the day of the crash, Horton was told by Gulf Power officials that an internal auditing group had recommended his dismissal after 33 years with the company because of possible violations of company policies. On the same morning, Horton informed his lawyer, Fredric Levin, that he believed he had become the focus of the grand jury investigation.

The National Transportation Safety Board and the FBI say it will take months to determine what caused the crash. But that has not stopped a rash of rumors from circulating in Pensacola, a town of 60,000 where Gulf Power is one of the biggest employers. Many thought the crash was caused by either suicide or sabotage and is linked to the investigation. The speculation was fueled by a telephone call made to the local sheriff's office three hours after the plane went down. "You can stop investigating Gulf Power now," said an anonymous caller. "We took care of that for them this afternoon."

Horton's death was only one of a series of unsolved mysteries that have embroiled Gulf Power. Last December Ray Howell, a Pensacola graphic artist who worked for Gulf, traveled to Atlanta but disappeared prior to a scheduled appearance before the grand jury. A month later, former Gulf Power director Robert McRae and his wife were found shot to death at their home in Graceville, Fla. In the weeks since the crash, three dead yellow birds -- which Levin believes are Mafia-style warnings not to divulge the substance of his last conversation with Horton -- have been deposited outside the attorney's home and office, and there have been threats on his life. Last week, in the company of five security guards, Levin traveled to Atlanta and appeared before the grand jury.

Levin has accused Gulf Power of "trying to make the public believe Jake set the plane on fire" by telling only their side of the story behind Horton's imminent dismissal. Executives of Gulf Power and Southern have clammed up, refusing to give more information until authorities determine the cause of the mishap. One thing is sure: no matter what the investigation turns up, many people in Pensacola will insist that the crash that killed Jake Horton was no accident.