The Spying Scandal Inside One of America’s Biggest Power Companies

On a late spring day in 2017, a private investigator parked outside a fitness center in an Atlanta strip mall and covertly recorded video of a personal trainer as she entered her business.

The following day, while parked in Fanning’s neighborhood, the investigator photographed the executive running up a hill near his house. The investigator compiled the innocuous findings from his four days of surveillance into an eight-page report and billed his client more than $6,800 for the work.

Atlanta-based Southern, one of the largest utility companies in the U.S. and one of the most prominent corporate brands across the Southeast, has been bedeviled for much of the past year by the peculiar espionage effort, which led to an internal investigation but no public explanation.

Word of the surveillance surfaced last summer in a lawsuit between consultants in a firm that for decades has done work for Alabama Power, a Southern subsidiary. One of them alleged that, at the direction of Alabama Power officials, the other consultant had ordered surveillance of Southern executives in order to possibly gain internal leverage.

When Fanning learned of the effort last summer, he was incensed, according to people familiar with the matter. He hired outside law firms to probe the allegation that someone within Alabama Power was behind it.

Now, nearly a year after the spying became public, the investigation is largely complete—and the company says it has no idea who ordered the operation or why.

Fanning, 66, retired last month after more than a decade atop the massive utility company. He remains Southern’s executive chairman. Last winter, the CEO of Alabama Power stepped down.

The episode marks a bizarre coda to Fanning’s career, and has contributed to turmoil within Southern, which operates utilities in Mississippi and Georgia as well as Alabama.

The company’s board of directors, which has been briefed on the results of the investigation, has discussed how to implement better oversight of Southern’s operating units and the consultants they engage, according to people familiar with the matter.

“We conducted a thorough internal investigation of this matter and were unable to substantiate the allegation that the highly inappropriate surveillance of Tom Fanning was authorized by any employee of the company,” a Southern spokesman said in a statement. “We have moved on.”

Through the spokesman, Fanning declined to comment.

In November, about three months after the start of the investigation, Mark Crosswhite, then CEO of Alabama Power, abruptly announced plans to retire at the end of the year. The 60-year-old told employees he wanted to spend more time with his family.

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