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NYPA Aid Nixed by AG Cuomo Reinstated by Governor Cuomo

By James Hufnagel

Richard Kessell has something to say. Mayor Paul Dyster listens reverently.

Six years ago this month, Eliot Spitzer was governor of New York, Paul Dyster had just won a landslide election for mayor of Niagara Falls over Candra Thomason and Barack Obama, not yet a household name, was starting his uphill battle against the Hillary Clinton campaign juggernaut. The future chairman of the New York Power Authority, a gentleman by the name of Richard "Richie" Kessel, was in charge at the Long Island Power Authority (LIPA). And an ambitious young rising political star by the name of Andrew Cuomo was New York's attorney general.

Mr. Kessel, it turned out, was something of a naughty boy while at the helm of LIPA, gifting millions of dollars of funds, often by means of no-bid contracts, to political cronies and favored local business and non-profit organizations. Gov. Spitzer fired him, and Kessel's replacement at LIPA, Kevin S. Law, soon requested a "clarification" from Attorney General Cuomo as to the propriety of doling out public authority money to private interests, in an apparent attempt to redress Kessel's excesses.

"We are technically state employees," Law was quoted as saying in the Albany Times-Union, "We receive all of our money from ratepayers; it's like taxpayer's money. It's easy to be charitable with other people's monies."

"These were never charitable, these were highly political," declared respected Assemblyman Richard Brodsky in the same story.

Attorney General Cuomo quickly issued a legal opinion in response to Law's request for guidance, and in so doing effectively brought an end to the role of public authorities like LIPA and NYPA acting as philanthropies.

In his writ, Cuomo stated: "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, 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. For these reasons, we are of the opinion that the charitable contribution program is not authorized."

Although the handwriting was on the wall with the issuance of Cuomo's Oct. 9, 2007 opinion, it took more than a month for its ramifications to fully sink in. "We're taking the attorney general's ruling very seriously," NYPA spokesperson Brian Vattimo finally admitted in late November. "It's going to have a dramatic impact on our corporate support policy."

Impact felt locally

That policy impact, as Vattimo put it, resulted in considerable pain for regions that played host to NYPA operations and therefore were the logical beneficiaries of the authority's thinly-masked influence buying, with the brunt of the cuts falling on Western New York.

The Lewiston Jazz Festival, arguably the premiere outdoor music event of the summer, was stripped of over $110,000 ($70,000 cash, $40,000 in-kind services annually). Other local non-profits that lost NYPA funding included the Artpark summer children's activities program (which had received $27,500 from 2005-2007), Niagara USA Chamber of Commerce ($20,000), the Niagara Tourism and Convention Corporation (NTCC) ($35,000), the Greater Niagara Fishing Fish Odyssey Derby ($5,000), the Wellness Institute ($10,000), the children's Center for Joy ($25,000), the arrival of the Lois McClure canal ship ($10,000), Buffalo Zoo ($10,000) and Buffalo Niagara Riverkeeper ($10,000).

Incidentally, the Riverkeeper grant arrived at the same time the Buffalo-based non-profit was sitting down at the table to "negotiate" the environmental and Greenway portions of the Niagara Power Project 50-year relicensing agreement.

UB Law School Dean Barry Boyer and his sidekick, Riverkeeper director Julie Barrett O'Neill, were completely out of their league as negotiators. In fact, not only did they not win a single dime of compensation over and above NYPA's initial offer, but as far as anyone knows, they didn't even ask. An NYPA logo appearing on the home page of Riverkeeper's website was quickly dropped after local Niagara County concerned citizens started making inquiries. The environmental package terms were rushed through, and funding for the Greenway allocated after two separate public hearings on the proposal were summarily canceled by NYPA.

As a further note, the Niagara Falls Bridge Commission, a public authority and New York State public benefit corporation, is inexplicably listed on the Lewiston Jazz Festival's website as a funder through 2014.

The state political scene soon after devolved into a game of musical chairs. Spitzer, after a sex scandal, found himself following Kessel out the door. David Paterson stepped in as governor, and brought Kessel back on board, promoting him to NYPA chairman. The unaccomplished Paterson's popularity quickly faded and Andrew Cuomo, waiting in the wings, probably could not believe his unfolding good fortune.

A couple of years later, it was Paterson out and Cuomo in. Eric T. Schneiderman was elected Attorney General and Richie Kessel found himself facing his second Lifetime Achievement Award in almost as many years.

But before rejoining the ranks of the unemployed, Kessel received a final admonishment from Attorney General Schneiderman: "Dear Richie, even though the practice of handing out ratepayers' money was banned a couple of years ago by my friend and predecessor Andy, we just wanted to tag you with this on your way out."

Actually, the text of Attorney General Schneiderman's March 22, 2011 letter read, in part, "Dear Mr. Kessel: This is to advise you that on October 9, 2007, this Office issued a formal opinion at the request of your successor at the Long Island Power Authority, Kevin Law, concerning the payment of financial contributions to local not-for-profit organizations and civic and business entities... It has come to our attention via published press reports that NYPA may be making financial contributions that do not directly relate to NYPA's powers, duties, or purposes... If NYPA is currently making these or similar contributions, please terminate them immediately ”

Cuomo changes mind

With this history in place, you'd think our ratepayer dollars would have been forever protected from NYPA's misguided and presumptuous charity. Think again.

Last year, Gov. Andrew Cuomo signed into law the Western New York Power Proceeds Allocation Board Act, and on Sept. 10, 2013, the Power Proceeds Allocation Board authorized $5.7 million in funding for, you guessed it, various business and non-profit entities located in the vicinity of the Niagara Power Project.

The Aquarium of Niagara got $1.75 million, the Michigan Street African American Heritage Corridor Commission, grabbed $250,000, something called Field & Fork Network received $166,912, Global Outreach Mission, Inc. took away $154,500, Visit Buffalo Niagara got $250,000, Niagara University received $250,000 and the Forest Lawn Heritage Foundation bagged $150,000.

It's the old NYPA charitable giving program on steroids, only this time it's perfectly legal.

Cuomo, no longer the crusading attorney general, reinstated NYPA'S largesse after having killed it six years ago, much as he killed a previous $100 million NYPA aid package for Niagara County and reincarnated it two months ago as a five-year $40 million economic development aid package with his name on it.

The Cuomo giveth, the Cuomo taketh away.



Niagara Falls Reporter - Publisher Frank Parlato Jr. www.niagarafallsreporter.com

Dec 03, 2013