Minnesota regulators say they botched investigation of electrician

State regulators admit they botched a past investigation of a troubled electrical contractor, prompting an outcry from customers who wonder if they could have avoided financial losses if the state had disciplined the contractor a few years ago.

Officials said they could have penalized Michael J. Harvey and his company, M8 Electric Solutions, for multiple violations related to unlicensed activity and shoddy work, but state records show no action was taken because the investigative file was misplaced for a year and a half.

"Clearly, that is not something we are proud of," said Charlie Durenberger, director of licensing and enforcement for the state Department of Labor and Industry, which handled the case.

Now the department is moving to revoke the license of Harvey and his new company, Able Energy, in the wake of dozens of complaints from customers who have spent thousands of dollars for solar systems that have yet to be installed. Some customers have waited as long as two years.

Altogether, Able Energy has failed to complete work on 120 systems in Minnesota and Wisconsin after collecting an estimated $1 million or so in upfront deposits.

"It sure seems like the state dropped the ball," said Duluth resident Judy Gibbs, who spent $8,000 for a solar system that has yet to be installed. "We could have all been protected from this."

Harvey and his attorney, James Johnson, did not respond to requests for comment.

Peterman said he discovered the problem in 2010, as Bachman's was finishing the job. He said he kept trying to schedule a final inspection to make sure everything was up to code and got nothing but excuses. His worries mounted when he received a notification from the state warning about unlicensed electrical work at his home.

Peterman was stunned to discover that James Harvey, Michael's father, lost his license in 2005. Peterman also found out that nobody from M8 had obtained an electrical permit for his project.

Peterman said he told Bachman's that he wouldn't pay his final bill until the company straightened out the situation. Instead of offering help, however, the company demanded its $4,000, Peterman said.

Dale Bachman, who recently stepped down as Bachman's CEO, personally intervened, coming to Peterman's house to discuss the problem. Peterman said Bachman defended James Harvey, who had been doing electrical work for the company for about 15 years.

"Shame on Bachman's for not stepping up," Peterman said. "That's what bugged me the most.''

"I certainly regret that Mr. Peterman feels that way," Bachman said. "We worked very closely with Mr. Peterman to try and resolve issues that we were aware of at the time."

In 2010, Peterman filed a complaint with the state. He also spent $7,000 to hire another electrician to dig up his patio and redo a large part of the electrical work M8 had done.

In response to questions from the state, Mike Harvey said he was unaware that his father had lost his license. He acknowledged that the permit for Peterman's project was "overlooked," but he blamed the problem on the "confusion of running a small business." He said he temporarily closed M8 because of "financial difficulties."

State officials tried to find out how much work James Harvey performed with an expired license. But in a 2011 letter, Mike Harvey said he couldn't provide requested addresses of customers dating to 2008 because key account information was "lost in a computer when it failed," state records show.

Peterman wasn't Mike Harvey's only unhappy customer. Kambiz Farbakhsh, a doctor with a home in Lake Elmo, won a $429 judgment against the company in 2008 over an outdoor lighting project.

"We won, but he did not care," said Farbakhsh, noting that the check he received from M8 to cover the court judgment bounced. He said he has yet to collect.

Durenberger said state investigators should have collected information on Farbakhsh's judgment and another $14,000 judgment against the company, but he said that information was somehow overlooked. He said the problems with Farbakhsh's project raise questions about Mike Harvey's competence, trustworthiness and financial responsibility.

Durenberger said it is hard to tell what kind of penalty Harvey should have received because the investigation was never completed. But he said it is unlikely that the facts would have allowed the state to revoke M8's license or deny a contractor's license to Mike Harvey's new company, Able Energy. Altogether, the state has revoked the licenses of 20 electrical contractors since 2014.

"We've come a long way since then [2011] in the quality of investigations we are doing, and this sort of thing is not going to happen again," Durenberger said.

Peterman said Mike Harvey should have been permanently barred from working as an electrical contractor in Minnesota.