Kessel Uses Public Money to Buy Long Island Love, Part 2

Richard Kessel, current CEO and President, has a lot of explaining to do.  Here are two issues that challenge even his verbosity.

If the Attorney General in 2007 with respect to public authorities generally and the State Inspector General last year with regard to Battery Park City Authority acted aggressively to halt improper sponsorships and charitable contributions unrelated to the business of the public authority donor, why isn’t what was done with NYPA public funds over the last two years, worse in both dollar amount and lack of business purpose?  Isn’t awarding public money to favored hometown causes when the State is “functionally bankrupt” according to our new Governor and the jobs of thousands of State workers hang in the balance just wrong, and indefensible and possibly criminal?

Next, if Kessel misled his board, the public and the Governor that appointed him and violated board policy and stonewalled a FOIL request for nearly six months because he feared releasing the truth, why would anyone trust him or his senior Long Island staff on the Great Lakes Offshore Wind Project or on the Hudson River Transmission Project or on solar installations?  If he is willing to evade the law and board policy on issues like responsibly using public money, why should anyone believe that far greater amounts of money on projects having impact for decades and decades have been done responsibly and in accordance with law?

Finally, Street Corner Conservative notes the recent surge in reader comments, both those published here and those by readers who have provided information but asked not to be published.  As before, all such requests will be honored in full.  To both sets of readers, Street Corner extends its gratitude.

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

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.