Archive for February 13, 2011

The Kessel NYPA Watch, February 13, 2011 – By George J. Marlin

February 13, 2011

Fool Me Once, Shame on You; Fool Me Twice, Shame on Me

When Kevin Law was appointed as CEO of the Long Island Power Authority following Governor Spitzer’s decision to fire Richie Kessel in 2007, one of the first and wisest things he did in surveying the damage and destruction wrought by Kessel was to request an opinion from then-Attorney General Andrew Cuomo about various questionable actions undertaken by Kessel.

Among the actions AG Cuomo was asked to address was whether Kessel’s use of public monies at LIPA to fund various Long Island and other not-for-profits was proper.  As Newsday learned after persevering in its FOIL requests (sounds familiar) Kessel gave away well over $1 million of LIPA public money over the course of his term.

In October 2007, in response to Kevin Law’s request, AG Cuomo wrote that many of Kessel’s contributions were improper.  In a formal written opinion, the Attorney General wrote:

In the event, however, that a financial contribution does not directly relate to one of LIPA’s powers, duties, or purposes, then we believe it would fall outside LIPA’s authority to give. As a creature of statute, LIPA lacks powers not granted to it by express or necessarily implicated legislative delegation. While we recognize that the LIPA Act is to be liberally construed to effect its purposes, Public Authorities Law § 1020-gg, its purposes must in fact be served in order for LIPA’s acts to be authorized.

With respect to the charitable giving program, we find nothing in the powers, duties, or purposes of LIPA that renders improving community goodwill or the well-being of the community unrelated to the provision of electrical service as part of LIPA’s mission. Moreover, while LIPA has “all the powers necessary or convenient to carry out the purposes and provisions” of the LIPA Act, Public Authorities Law § 1020-f, we believe that increased goodwill is neither necessary nor convenient for complying with the provisions of or achieving the purposes of the LIPA Act. “Indeed, the beneficial corporate public relations generated by the largesse made in the name of public utilities essentially advances predominately the private interests of the utility corporations…and are too peripheral to the service interests of the ratepayers.” Furthermore, the charitable contribution program appears to conflict with the “sine qua non objective” of the LIPA Act, “to give LIPA the authority to save ratepayers money by controlling and reducing utility costs.” For these reasons, we are of the opinion that the charitable contribution program is not authorized.

AG Cuomo’s written opinion is available at this link:

 http://www.ag.ny.gov/bureaus/appeals_opinions/opinions/2007/formal/2007-F4.pdf

Street Corner has deleted case citations in the quote above for purposes of readability.

Here’s Street Corner Conservative’s question. Newsday reported extensively on the AG’s opinion at the time and Kessel declined to be quoted (a rarity since he lives to have his name in the paper), so Kessel was fully aware of the position of the AG on donations of public money for purposes unrelated to the mission of a State public authority. Therefore, since Kessel had knowledge of the law and then intentionally and recklessly spent hundreds of thousands of public money on sponsorships in no way related to the mission of NYPA, shouldn’t there be consequences, serious ones?