Archive for January 2011

The Kessel NYPA Watch, January 30, 2011 – By George J. Marlin

January 30, 2011

Kessel Uses Public Money to Buy Long Island Love.

A public authority such as NYPA is required to spend and account for public money in a responsible manner.   That obligation applies to sponsorships and contributions to chambers of commerce and not-for-profits, too, regardless of how worthy their mission.   NYPA officers and board members have an obligation, a legal mandate, to spend every dollar wisely.

Thus, the CEO of a state authority that spends tens of thousands of dollars hundreds of miles far from the authority’s facilities and business with no business relationship with NYPA other than feathering his hometown has broken his obligation to be a prudent fiduciary and, perhaps, State law.

Street Corner has analyzed the sponsorships and contributions of NYPA under Richie Kessel’s leadership and is appalled.  The issue is whether there was some business reason for Kessel to give to the Merrick or Bellmore chambers of commerce and other Long Island entities beyond the fact they’re located in his hometown.

Here’s what NYPA’s own records reveal.

First, some context is required.  Long Island accounts for 2-3% of NYPA load.  There is a small NYPA facility in Holtsville in Suffolk County, far from Richie Kessel’s affluent South Shore hometown.  But the bulk of NYPA’s facilities, personnel and, as Senator George Maziarz points out, profits, is located upstate.  So, one would expect that 99% of NYPA’s sponsorships would be directed to the upstate communities that suffer the burdens of large facilities in their towns.  Street Corner has no issue with donations to the Massena Fire Department or to the Bassett Hospital in Schoharie County.

But surprisingly, an outsize percentage of NYPA sponsorships go to Long Island entities located in Kessel’s hometown or associated with him, often those that “honor” him for his “service.”  In the first half of 2010 (NYPA delayed its response so long that when the request was made the second half of 2010 was already underway) alone, over 10% of NYPA’s sponsorships in those six months went to Long Island entities with whom Kessel has a relationship.  Over $24,000 NYPA dollars went to those Long Island chambers of commerce and environmental groups in just six months.  That’s about 6.7% of the NYPA dollars for that period.  So, NYPA under Richie Kessel sent to affluent Long Island towns and chambers and similar groups at a rate 3 times to 5 times what Long Island might have received if sponsorships were made on a pro rata basis based on load.  Even there, one would expect that Holtsville in Suffolk County to receive some Kessel love.  But alas, since Richie doesn’t live and shop there, no sponsorship-payola for Holtsville. 

Finally, as a sign of the disciplined spender that Kessel is the rate of giving to Long Island in 2010 increased nearly 100% on an annualized basis.

Here is the NYPA 2009 and 2010 Contributions Report

Gov. Alfred E. Smith was a model for our times – By George J. Marlin

January 27, 2011

The following appears in the January 28-February 3, 2011 issue of the Long Island Business News:

Gov. Andrew Cuomo made a powerful statement his first day in office when he took down the portrait of Theodore Roosevelt in the Capitol’s famous Red Room and replaced it with one of Alfred E. Smith. Unlike Gov. Roosevelt, who was a patrician from Manhattan’s Silk Stocking district, Gov. Smith was a street-smart guy from the Lower East Side.

Decades before the birth of the “poverty industry” and public policy specialists, neighborhood pols like Smith realized that the job of local government was to provide basic services. Ideology did not enter the picture. The need to forge alliances did. The system worked because, as more than one historian pointed out, immigrants trying to gain a foothold in their new country received a helping hand, not a handout.

It was Smith who, as governor of New York, managed to implement a state government agenda based on the neighborhood principles. Unlike the progressives, he was not embarrassed to deal with local politicians and to bargain for programs that enhanced the quality of life in neighborhoods. His record proves it, featuring as it does the construction of hospitals for the indigent and mentally ill, a state teachers’ college, a network of parks and 5,000 miles of roads, as well as social legislation that eliminated sweat shops, regulated child and female labor, established a 48-hour work week, created workmen’s compensation and widow’s pensions, instituted a primary system and restructured the state’s government and tax code.

Smith was born in the shadow of the Brooklyn Bridge on Dec. 30, 1873. Upon the death of his father, a manual laborer, 13-year-old Al dropped out of the Lower East Side’s St. James Parish grammar school to take on various menial jobs to support his penniless family. After spending years rolling fish barrels at the Fulton Fish Market (in later years he would boast that his alma mater was F.F.M.), Smith was hired by the clubhouse as a county process server. He advanced to municipal court clerk, state representative, speaker of the Assembly, Manhattan sheriff, president of New York City’s board of aldermen and, in 1918, election to the first of four terms as governor.

Described in Franklin Roosevelt’s 1928 nominating speech as the “Happy Warrior,” Smith went on to be the first Roman Catholic nominated for the presidency by a major party.

Throughout his career Al Smith had felt the back of the hand of New York’s Knickerbocker crowd, which was repulsed by the waves of Irish, Italians, Jews and Eastern Europeans that had invaded New York’s shores. But not even Smith anticipated the viciousness and hatred unleashed by the dark powers of prejudice in the ‘28 campaign. Anti-Catholics and anti-urban bigots portrayed Smith as a captive of the Tammany Hall brothel and the “whore of Babylon” – Pope Pius XI. Smith lost badly to Herbert Hoover, receiving 40.7 percent of the votes cast.

In January 1929, Smith turned over the keys to New York’s executive mansion to his hand-picked successor, Franklin D. Roosevelt. After 32 years of public service, Citizen Smith became president of the Empire State Building Corp.

In 1936, Al Smith, disgusted with the excesses of the New Deal, “took a walk” from the National Democratic Party. “The regulars were out on a limb holding the bag, driven out of the party,” he declared, “because some new bunch that nobody ever heard of in their life before came and took charge and started planning everything.” The party of the neighborhoods was becoming the party of the social engineers.

This “new bunch” has dominated Albany for over a half-century and is responsible for the state’s fiscal plight.

When the Albany budget battle begins in February, one can only hope that elected officials reflect on the virtues of this legendary figure whose plain talk and common-sense actions made government responsible, affordable and accessible to his beloved common man.

R. Sargent Shriver (1915-2011) – By George J. Marlin

January 26, 2011

This article I wrote appears on The Catholic Thing web site on January 26, 2011.

The Kessel NYPA Watch, January 23, 2011 – By George J. Marlin

January 23, 2011

Charity Begins at (Long Island) Home; Merrick, LI gets more than Massena.  Why?

On August 22, 2010, over five months ago, Street Corner Conservative delivered FOIL requests to NYPA.  The request letter was a mere page and a half and covered few issues: community sponsorships, use of NYPA cars, health insurance provided to NYPA trustees and the like.

The request was short, reasonable and focused.  For instance, the request about health insurance was made because of the work of Attorney General Cuomo to stamp out health insurance provided to authority board members in violation of State law.  Ditto the request about this public authority’s community sponsorships.

During the last five months, NYPA functionaries, at the direction of President and CEO Kessel, have time and again stonewalled Street Corner’s proper FOIL requests and have written several times that the matter is under review.  Well, a few days ago, NYPA spit up a response to the community sponsorships and charitable contribution FOIL request, the contents of which are discussed below.

But why does NYPA intentionally delay responding to citizen requests for information?   Well, Street Corner, like many of its readers, fears for the worst, namely, that Kessel and his minions are possibly stonewalling and denying the public access to information required to be disclosed under State law to hide wrongdoing.  Or perhaps, the answer is that the Kessel-led NYPA is so dysfunctional that this once great agency is unable to comply with the minimum requirements of State law.  We shall see.

Now, for the community sponsorship question.  While NYPA is primarily an upstate agency whose operations are financed from the profits of two huge upstate hydropower plants, Kessel’s charitable largesse begins and ends on Long Island.  Tens of thousands of dollars have gone to Long Island organizations in support of the Kessel PR machine.  A few in particular stick out.  NYPA was one of the biggest contributors to the Merrick Chamber of Commerce in his first full year at NYPA.  Merrick on the South shore of Long Island is served by LIPA and is not a core NYPA territory.  But Richie lives in the hamlet of Merrick.  Mystery solved.

Another questionable sponsorship went to the Chamber of Commerce of the Bellmores.  Bellmore is an affluent South Shore hamlet on Long Island, right next door to Kessel’s hometown.  No NYPA business reason for this.  But the Bellmores were graced with nearly $5,000, what is believed to be far and away the Bellmore Chamber’s largest donation. The Bellmore Chamber has one utility member—not LIPA which serves the area, but NYPA which generates its power hundreds of miles away.

By the way, the Massena Chamber of Commerce received $1,700 from NPYA in 2010.  Street Corner suspects Massena would have done better had Richie lived there.  Here’s the scoreboard:

  Merrick/Bellmore Cougars Massena Red Raiders
NYPA Power Facilities 0 1
Sponsorship Points 9,550 5,824
Average Home Price in 2009 500,000 94,556

Finally, why should Massena subsidize Merrick? Street Corner doesn’t see it. In 2009, the average price of a home in Massena was approximately $94,556 as compared to about $306,000 across the State and about $500,000 in Kessel’s Nassau County.  So, this is a case of the Long Islander taking from the less well off to reward his local community.  Kessel is the Reverse Robin Hood.

Here’s more: in 2009, Kessel directed NYPA to give $6,500 to the Fair Media Council, a media watchdog group based on Long Island.  As a result, Kessel was invited as a guest of honor to the Council’s annual “Connection Day” at the Long Island Hilton in Huntington, Long Island and spoke before lots of media people.  In 2009, believe it or not, Kessel was on a panel about twittering.  A year later at the Long Island Hilton in Huntington, Long Island, he moderated a panel on a topic on which he is a true expert– How To Create a Buzz (Without a Budget).  At least when he was a consumer gadfly without portfolio, Kessel spoke to the press without spending taxpayer money  for the opportunity.  (Street Corner will for a moment hold its comment on the CEO of the largest public power utility in the State, a successor to Robert Moses and John Dyson, spending his day orating about twitter and creating buzz for free.)

And another: Kessel had NYPA pay $3,500 so he could be honored on Long Island by a Long Island environmental group in 2009.

In total, Kessel directed at least 16 contributions totaling just under $50,000 of NYPA money to Long Island groups with no known benefit to NYPA.  Street Corner believes that NYPA had never given public money to any of these Long Island groups before Kessel was placed at NYPA by then Governor Paterson.

Here’s why NYPA’s board, regulators and State taxpayers should care. Authority CEOs can’t use public money as their piggybank to make them big men in their communities.  State law requires that there be some clear public purpose to charitable contributions.  Then-Attorney General Cuomo made stamping out wasteful public authority donations a priority.

Compare this with the actions of Kevin Law who succeeded Kessel at LIPA and was charged with cleaning up the Augean mess left by Kessel. In 2007, Law sought a formal opinion from Attorney General Cuomo concerning LIPA’s former (read: Kessel’s) practice of charitable giving and community sponsorships.  The AG determined that the practice of charitable giving of ratepayer funds was not permissible and that community sponsorships with no nexus to the core mission of LIPA should be ended.  Law did exactly that and stopped most LIPA contributions.  Good for him.

What is the nexus of contributions to Richie Kessel’s hometown chambers of commerce with public money? Let’s assume that the people at the Merrick Chamber of Commerce and Bellmore Chamber are good folks, doing good work to beautify the lovely hamlets of Merrick and Bellmore.  Why exactly should the hard-pressed good people of Massena, Niagara and Buffalo subsidize that work? Why should they pay for Kessel to speak to a ballroom full of Long Island reporters on Long Island—something he has done countless times gratis? How did NYPA benefit when NYPA paid Citizens Campaign for the Environment $3,500 so Kessel could be “honored” on Long Island in May 2009? Street Corner has the same questions about each of these Long Island sponsorships. Proving that this is not about NYPA business, the NYPA sponsorship disclosure shows no donation to Holbrook in Suffolk County where NYPA has a small facility.

Street Corner will have more on the charitable contribution scandal as it continues to review this shocking data.  In any event, Street Corner now understands why Kessel and his enablers dreaded releasing this evidence of improper, perhaps illegal, donations and embarrassing material.  The full list of NYPA’s 2009 and 2010 sponsorships will be posted here shortly.

The Kessel NYPA Watch, January 15, 2011 – By George J. Marlin

January 15, 2011

I, Kessel

Last year, Richie Kessel travelled on the NYPA jet to Watertown and appeared before the County Legislature to push his offshore wind project on the people of the North Country.  His performance, part of his desperate attempt to retain his NYPA patronage job was notable for two reasons.  First, during his presentation the good people of Watertown booed Kessel.  Kessel seemed genuinely surprised by the result (why, Street Corner is not sure) but readers can see and hear the booing at around the 9:00 minute mark.  (A link to the video of Kessel’s filibuster is below.)

Just as important, Street Corner Conservative has done its darned best to count the number of times Kessel used the words “I”, “me” and “my”. Our research indicates that Kessel used these terms a staggering 60 times or once every 9 seconds.

In a comical moment, Kessel asserted that the gigantic wind turbines would be a North Country tourist attraction.  That specious and laughable assertion was greeted with guffaws laughs and boos.

Finally, Kessel resorted to the last refuge of the bureaucratic scoundrel by invoking the reliable canard that the public and legislators didn’t know enough about the project because it was preliminary and, as a result, the public should wait till more was known.  The problem with this bogus assertion is that Kessel and NYPA know lots about the project that they are not disclosing and that waiting is what the crafty bureaucrat wants so that when the people awake to an abusive project, it is too late and the project is a fait accompli. Street Corner Conservative believes that Kessel has met his match in the North Country.

Here’s the link: http://www.youtube.com/watch?v=xQABDy2P7IU&feature=email

Asides

Street Corner Conservative thanks its correspondents for their comments and suggestions and leads.  Now, Street Corner requests that you send along questions for Kessel to be asked by NYPA Board members and Senate Energy Committee Chair Senator George Maziarz.  Street Corner intends to compile those and send them along.

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NYPA has not had a major issuance of debt since October 2007 except for issuances of tax exempt commercial paper.  Street Corner has heard from its contacts in public finance expressing concern that NYPA’s AA rating may suffer stresses from the Great Lakes Offshore Wind project and the Hudson River transmission project, both of which involve huge capital expenditures. This is especially of concern for an authority run by someone as innumerate as Richie Kessel.

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Long-time observers of Kessel and LIPA will remember that his white elephant Jones Beach off-shore wind project was terminated by Governor Spitzer, who fired Kessel,  and Kessel’s successor at LIPA, Kevin Law, when they realized the huge increases in LIPA’s already sky-high rates that would occur were Kessel’s folly built.

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Word in the government marketplace downstate is that Kessel has guaranteed the City of New York and the MTA that NYPA will absorb any and all cost overruns from the Hudson River transmission project. Three things are certain.  First, there will be cost overruns.  Second, with NYPA’s balance sheet absorbing the full cost, the City and MTA will be indifferent to the costs of the project.  Finally, Kessel’s drive to cut ribbons and hold press conferences will override any fiscal discipline, tough negotiating lines and business judgment.  Having watched Kessel for a long time, he is now at his most dangerous as he throws prudence to the wind to keep his public sinecure.

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Kessel’s save-his-job strategy seems to be to latch onto new Lieutnant Governor Duffy and to bring him to as many Kessel press conferences as possible.  Word is that this down-to-earth former police officer isn’t buying this bologna.

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Street Corner notes that it has been 145 days since its reasonable and limited FOIL requests.  There is no earthly reasons why a responsible agency could not long ago have fully responded to Street Corner’s FOIL.  Except one, namely that Kessel and his army of Long Island hacks fear public disclosure of the matters raised in the FOIL.  We will soon know.

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Lastly, where is the NYPA board as all this unfolds?  John Dyson cannot return to the NYPA board soon enough.

NIFA – Time to set the record straight – By George J. Marlin

January 14, 2011

The following appears in the January 14-20, 2011 issue of the Long Island Business News:

The Nassau Interim Finance Authority has been much in the news of late due to the county’s fiscal crisis. Because there has been considerable misinformation circulating about NIFA as well as claims that it is only a “so-called watchdog agency,” as a NIFA board member I believe it is appropriate to devote my LIBN column this week to setting the historical record straight.

Back in 2000, to help restore the county’s fiscal health, which had been suffering for years due to mismanagement and corruption, the Nassau County Legislature unanimously approved a home-rule message requesting Albany to create a state oversight panel with the power to guide the county’s budget policies. Both Nassau Legislator Peter Schmitt and then-Legislator Ed Mangano voted for the measure.

Responding to this request, then-Assemblyman Tom DiNapoli, D-Great Neck, and state Sen. Dean Skelos, R-Rockville Centre, crafted NIFA legislation that was intended to fix Nassau’s financial mess and to protect taxpayers from future irresponsible political behavior.

The state Legislature adopted the act to fulfill its constitutional duty “to restrict the power of taxation, assessment, borrowing money, contracting indebtedness and loaning the credit of municipalities so as to prevent abuses in taxation and assessments and in the contracting and loaning of credit by the county.” This visionary bipartisan bill was signed into law by Republican Gov. George Pataki on June 23, 2000.

Modeled on New York City’s Emergency Financial Control Board and the Municipal Assistance Corp. (which were created in the 1970s to address the city’s fiscal nightmare), NIFA is an independent public authority that has had budgetary oversight responsibilities and the power to provide the county with budgetary relief, to transmit state assistance grants and to issue NIFA bonds.

The authority’s governing body consists of seven members who serve without compensation and are appointed by the governor, Senate majority leader, Assembly speaker and the state comptroller. At the present time there is one vacancy.

Most of the public’s attention has been focused on NIFA’s power to declare a “control period” over county finances. Section 3669 of NIFA’s authorizing legislation states NIFA “shall impose a control period upon its determination at any time…. that there is a substantial likelihood and imminence [that] … the county shall have incurred a major operating funds deficit of 1 percent or more in the aggregate results of operations of such funds during its fiscal year assuming all revenues and expenditures are reported in accordance with generally accepted accounting principles.”

The phrase “substantial likelihood and imminence” means that NIFA has the authority to impose a control period based on the county’s budget not only when an operating deficit is incurred. In other words, NIFA must declare a control period if it concludes that the county’s budget does not meet the standards to project a balanced budget due to the degree of risk in various projected revenue sources and expects the deficit to be greater than 1 percent, or about $26 million on a budget of $2.6 billion.

If this were ever to occur, NIFA would work with the county in the preparation and implementation of a balanced financial plan. The county’s elected officials would continue to make all policy decisions and maintain direct responsibility for the day-to-day operations of county services. And when it is determined that the budget imbalance has been eliminated, NIFA would lift the control period.

Contrary to all the bombastic rhetoric heard in the public square, NIFA was created at the request of local elected officials in order to provide Nassau County with the opportunity to meet its obligations and to continue to function independently as a municipal entity.

Poland: Crucified Between Two Thieves – By George J. Marlin

January 12, 2011

This article I wrote appears on The Catholic Thing web site on January 12, 2011.