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

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:

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.

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