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