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

Memo

 To:    Senator George Maziarz and the Senate Energy
             and Telecommunications Committee

Re:     Review of Richie Kessel’s Tenure as CEO of NYPA

A Consumer Advocate or a Consummate Fool?

Since becoming the CEO of NYPA, Richard Kessel has made a score of political hires, many from Long Island and most not having the credentials to do the job in which they were placed.  For example, the Vice President for Emergency Planning and Chief Labor Negotiator, has no Emergency Planning or Labor Relations experience.  The Vice President of Human Resources, was formerly Receiver of Taxes for the Town of North Hempstead.  Many of these positions were created by moving existing approved budgeted positions from other departments to create openings for political hires from Long Island and elsewhere.  In the past year, Kessel has given some of these people promotions and salary increases in excess of 20 percent without informing the Power Authority Board of Trustees or putting out public announcements on the promotions.  This at a time when Governor Cuomo has imposed a wage freeze and may have to lay off thousands of state workers.

Also in less than a year, Kessel’s new assistant, Fran Evans, was promoted to the newly created position of Executive Vice President, Chief Administrative Officer and Chief of Staff and received a $30,000 increase in salary at a time when most employees at the Authority were subject to a salary freeze.

Kessel created an additional position for a Senior Vice President of Government Relations when one already existed.  In addition he has two Vice Presidents, a few staff directors and three outside lobbyists all working on State Government Relations for a state authority.

Kessel also hired a former Power Authority Trustee, four weeks after she stepped down from her position on the Board, to be a part-time employee at $77,500 per year!  Her assignment is to represent the Authority in Buffalo.  It is uncertain what she does or has accomplished.

Kessel has failed to comply in a timely manner with a number of requests for information under the Freedom of Information Law, many of which would confirm the above information as well as reveal expense account filings of his top management.

At Kessel’s direction, the Power Authority has made a number of contributions and grants that did not comply with Attorney General Cuomo’s 2007 Opinion on this subject, were not reported to the Authority’s Trustees and, in many cases, did not follow contributions approval procedures of NYPA.  Many were directed to Long Island organizations having no business relationship with NYPA or state energy issues including thousands to his hometown Chamber of Commerce.

Kessel has pursued the development of a number of new projects that are known by internal staff and external electricity experts to be significant money losers which would threaten the financial viability of the Power Authority and likely result in a significant reduction in the organization’s credit rating.  The following highlights the major projects that NYPA staff is working on developing, with the estimated annual loss in net present value dollars for each one.

Hudson River Transmission Project * $40 to $80 million per year for 20 years
GLOW (Great Lakes Wind) $80 to $120 million per year for 20 years
100- Mw Solar Project $20 to $30 million per year for 20 years

 *This project, as now constituted, bears little resemblance to the one that was selected as part of the winning bid by the Power Authority in 2006 following a competitive Request for Proposals process.

In addition, NYPA resources will be further drained by a contribution of $100 million to New York State this year as well as obligations to make annual payments totaling tens of millions of dollars to local governments and projects in Western and Northern New York.  The existence of these commitments makes Kessel’s blind pursuit of money-losing projects all the more reckless.

Finally, in his first two years at NYPA, Kessel’s management had led to significant underperformance in NYPA operating income including an approximate $150 million plus operating income shortfall in 2010 alone.  NYPA’s lagging income threatens its finances, its ability to afford to pursue Kessel’s grandiose projects and NYPA’s double AA credit rating.

The information stated above has come from a number of sources including current and former employees of the New York Power Authority.  Street Corner encourages all who wish to contribute to this effort to write with additional information to further expose Kessel’s incompetence and his blatant inability or unwillingness to conduct himself as a responsible and prudent public official.

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8 Comments on “The Kessel NYPA Watch, March 13, 2011 – By George J. Marlin”

  1. Hydro Worker Says:

    Mr Marlin – This letter was fantastic. Everything you said was 100% true. It is people like you that can make a difference and clean this act up. Here is some more information.

    The lead negotiator (Frank Ryan) will be in Syracuse for the next couple of weeks negotiating with the IBEW. Kessel has often said that he is a fan of labor. He usually says that while at the same time freezing the salaries of the management employees (outside of the FOKers). Regular management employees have had one raise in four (4) years. Its a disgrace. The union has had four raises in that same time frame.

    The Vice President of Human Resources still has his web site as the receiver of taxes active. Look for yourself (http://www.voteiannarelli.com/). It is incredible how untouchable these people think they are. Wouldn’t you think that since he is busy in his new full time job the receiver of taxes website would go away?

    NYPA has a new chief counsel – Ms McCarthy. The old one left because she was afraid that she could be put in prison for the shady things that were going on. Hopefully Ms. McCarthy will be able to clean up the house.

    Fran Evans likes to throw her weight around. She is a bully and is the hatchet person. Ms Cussack (Niagara office) should be investigated and whoever signed the papers for that job should be fired and put in prison.

    There is another wind farm being installed in the North Country. NYPA wheels the power for the existing wind farms in the area. About two years ago when Duley was coming on line, NYPA workers were forced to fix the issues that were incorrect with the design at an enormous cost. The push came in December. I wonder if NYPA was ever repaid for the efforts. The reason for the help provided by NYPA was traced to Kessel’s association with the owners of the wind farms. The motto was get in there, get it fixed and don’t ask any questions. I wouldn’t doubt if he had investments with the groups. He probably is associated with the new one as well.

    Thank you for everything you do Mr Marlin.

    • Phil Mihine Says:

      Hydro,
      If the new chief counsel Ms. McCarthy is the same Sharon McCarthy that Cuomo used as a special prosecutor for the “Troopergate” fiasco, in which some NYPA personnel had an active role, don’t hold your breath waiting for her to “clean up” NYPA. She had a ton of testimony and evidence and either she brushed it aside or Cuomo, when he was AG,decided to do nothing with it. Its time the State Inspector General looked into this cesspool of corruption, we can only hope that if they begin to interview NYPA employees that we all have the guts to tell the truth about what we know.

  2. Retake The S.S. NYPA Says:

    Maziarz is not a FOKer and Warmath (aka the former chief risk guy that colleague 1.0 has a lovefest with), was a disaster, albeit not a politically connected one. With that said, I think we can all agree that we hope that Dyson sweeps Richie and all of his cronies out the door in the coming months.

  3. DoNotGiveUp Says:

    Morale is at an all time low. People are retiring in droves. The FOKkers are laughing at the hard working NYPA employees who still own a moral compass.

    Only when the last decent person has left, and we turn out the lights, will we realize what a complete waste of time and money the past 3 years have been.

    Our budgets are slashed, but Jabba the Hut continues to give money away to Albany, effectively buying his tenure. This is appalling. How many people are on the NYPA payroll, to keep this idiot in a job? And how many idiots is HE keeping happy? The rot continues to spread.

    I am hoping that Mr Dyson will have the power to clean house, rather than be another Albany Puppet.

    If you’re reading this Mr Dyson – start at the top and don’t stop until the dead wood is gone.

  4. used and abused Says:

    Unfortunately Senator George Maziarz is a FOKer. Richie was specifically hired by Paterson to pander to him and Kessel spared no expense including stealing our variable pay to soothe his “outrage”, setting up a”satellite” NYPA office in his district, giving him his very own “trustee” and of course there is that huge job spinning Yahoo Data Center. I’m afraid we may have Richie Kessel as our leader for at least 8 more years.

    • naysayer Says:

      used and abused, I’m not sure where you get your information, but it is completely off the mark. Frankly, it’s pretty irresponsible to throw such garbage out there.

      Maziarz does not have a satellite NYPA office anywhere in his district. The only satellite that NYPA has is in Erie County and it was set up Elise Cusack after Kessell gave her a $77,500 part-time job to oversee NYPA waterfront development projects – projects, needless to say, that don’t exist.

      Maziarz has also never received “his own trustee”. He has advocated for a NYPA representative from Niagara County, but that has never materialized.

      To say that Kessel was hired by Paterson to pander to Maziarz is delusional at best. Kessel has never pandered to anyone who doesn’t help him keep his job.

      Get your facts straight or take your lies somewhere else.

  5. colleague 1.0 Says:

    Where or what is the new chief risk officer doing…who replaced the decent one we once had. Oh….I forgot….he tried to do his job…complained about the goings on and….guess what …. first under the bus…….Yeah so I guess I know what the new chief risk person is doing.

  6. farandaway Says:

    The best would be for the Moody’sbond credit rating of the Authority to be revised downward as soon as possible to perhaps prevent the disastrous money losing projects Kessel created. He will be the first CEO to achieve this at NYPA, and that will be his legacy.


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