John C Fabio who was Executive Vice President of Nassau OTB.
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Richard Bianculli is leaving to take a position at the Nassau Downs OTB, county officials said. He is joining Joe Cairo, the vice chairman of the Nassau ...
and she works for LIPA
Probe eyes LIPA employees' links to pols
Originally published: November 20, 2012 10:03 PM
Updated: November 20, 2012 10:54 PM
By
GUS GARCIA-ROBERTS, ROBERT LEWIS, SANDRA PEDDIE, ADAM PLAYFORD AND WILL VAN SANT
lidesk@newsday.com
Photo credit: Newsday | Newsday graphic
Nearly a quarter of
Long Island
Power Authority employees in the last decade had connections to
politically powerful people on the Island and in New York State before
working at the utility, a Newsday investigation has found.
They include a former congressman's
wife, the daughter of a former district attorney, a judge's son, a
one-time county legislator, the wife of a former mayor, and several
political party loyalists.
LIPA's politically connected have been
paid better than colleagues without such ties, more frequently earning
upward of $100,000 annually, Newsday found. Some left one government job
for LIPA, stayed a few years, then got another public post -- keeping
them in the state pension system.
EXPLORE: Employee-politician connections |
LIPA salaries
MORE: Report on LIPA's Irene response |
Utility ignored 2006 warnings
PHOTOS: LIPA protest |
Stunning scenes from Sandy
In an extensive review of records and data and dozens
of interviews with political insiders, Newsday examined the professional
history, campaign contributions and family ties of each of the public
authority's 174 employees since 2003 with reported earnings to the state
pension system. At least 41 had clear ties to political power.
Employees with connections had average
compensation in their first full year of service of almost $141,000,
considerably more than the average $95,000 paid to those without
political ties.
LIPA employees are the managers of
Long Island's utility operation. The linemen and other workers are provided by
National Grid, which has a contract with LIPA to manage the electrical system.
National Grid's employees were not included in Newsday's analysis.
Both LIPA and National Grid have been
reeling from public and official criticism after a response to
superstorm Sandy that has been called chaotic and unacceptable. About 90
percent of LIPA's customers lost power in the storm. Thousands did not
regain service for two weeks.
Newsday reported this month that LIPA
officials ignored warnings dating to 2006 that it wasn't prepared to
handle a major storm, partly because utility officials had neglected
tree and pole maintenance for years.
Michael Hervey, LIPA's acting chief executive, announced his resignation last week. Gov. Andrew M.
Cuomo has formed a commission with subpoena power to determine what went wrong. State Attorney General Eric
Schneiderman's office is also investigating. Unlike Cuomo's commission, Schneiderman can prosecute or penalize subjects of investigations.
Investigators could start by
scrutinizing a payroll filled with political insiders and their
relatives who have little energy industry experience, said Matthew
Cordaro, chairman of
Suffolk County's LIPA Oversight Committee. He is also a former executive at three energy companies who has sought top jobs at LIPA.
State Sen.
Kenneth LaValle (R-
Port Jefferson), dean of
Suffolk's
Senate delegation, said customers are justifiably outraged.
"It's kind of obvious that ratepayers
feel that in far too many situations, that LIPA let them down," he said.
"If it looks like an internal patronage system, then the ratepayer has
every right to be ticked off."
LIPA employees with political ties
have ranged from short-term and low-level hires to the authority's top
positions. They received, on average, $27,700 more in their highest
earning years than their colleagues. Sixty-one percent of employees with
links to political power were paid $100,000 or more, compared with 47
percent of those without connections.
Some appear qualified
A number of the employees with political ties appear qualified for the jobs they perform or performed at LIPA.
Diana Taylor, for example, dated New
York City Mayor Michael Bloomberg while she was LIPA's chief financial
officer from 2001 to 2002, collecting a salary of more than $200,000.
Taylor, the mayor's domestic partner,
is a Dartmouth grad and got her MBA at Columbia. She has a background in
finance and served as a vice president of KeySpan Energy. After Taylor
left LIPA, Gov. George Pataki appointed her to be superintendent of the
New York State Banking Department.
LIPA is not the only utility to have
political players in key positions. Con Edison's general counsel,
Elizabeth D. Moore, served 12 years in former Gov.
Mario Cuomo's administration.
Nick Braden, spokesman for the
nonprofit American Public Power Association, which represents more than
2,000 community-owned electric utilities, said in a statement that as
government bodies, public utilities have an inherent political character
and that knowing how to "operate within a political structure" is
useful.
"Having said that," Braden said, "of
course it is important for utility staff to have strong knowledge of
utility industry business, either in operations, engineering or
administration."
Presented with Newsday's findings
about LIPA employees' connections, Hervey insisted those workers were
qualified for their positions. He said political relationships are a
plus for LIPA's government affairs employees.
"Every one of these people, they are
obviously performing the job," Hervey said. "We have evaluation
processes here where we go through on an annual basis and look at their
performance."
Hervey challenged Newsday to list the
qualifications of each employee. The newspaper offered to publish the
resumes of every employee online, but Hervey declined to divulge the
work histories.
"I'm not so sure that's what's best for them," said Hervey, who will stay through the end of the year.
Hervey pointed to Paul DeCotis, LIPA
vice president for power markets, as being unquestionably qualified.
DeCotis, whose reported compensation to the state pension system was
just under $233,700 in 2011, has held several energy-related positions
in state government, including service as New York's deputy secretary
for energy under governors David A. Paterson and Eliot Spitzer.
Cordaro, of the LIPA oversight
committee, said it's a stretch to claim DeCotis has the proper
experience for his current job, which involves negotiating power
purchase contracts with producers. At private utilities, decades of
experience are needed to hold such positions at the VP level, he said.
DeCotis declined to comment.
Family ties, controversy
Before becoming a senior vice president and chief of staff at LIPA in 2000, Ed Grilli was the longtime spokesman for then-
Nassau
County District Attorney Denis Dillon. Grilli went from a public
relations man to being in a position to negotiate power sales agreements
and supervise utility staff, Cordaro said.
"I have had friendly conversations
with Grilli," Cordaro said. "Even he admits that he was challenged by
taking on an entirely new task foreign to his experience."
Grilli was the most highly compensated
LIPA employee in the last 10 years, collecting more than $330,000 in
2007, the year he left the utility. His daughter, Katie Grilli-Robles,
is a spokeswoman for
Nassau County Executive Edward Mangano.
Grilli declined to comment.
Also connected to Dillon is his
daughter, LIPA's compliance officer, Barbara Dillon. She was previously
the utility's human resources director. Barbara Dillon's reported
compensation to the state pension system in the 2012 fiscal year, which
ended in March, was $125,000.
Barbara Dillon's family ties drew her into a controversy in 1993 after Nassau
Republican
chairman Joseph Mondello gave her a $20,000-a-year off-track betting
job at a time when her father was investigating one of Mondello's top
associates, Joseph Cairo.
Two years later, when Barbara Dillon
was 27, Mondello tapped her for what turned out to be an unsuccessful
bid for a seat in the Nassau County Legislature. She joined LIPA in
1998.
Barbara Dillon declined to comment.
A long-standing reputation
LIPA's reputation as a publicly
financed reward center for those with powerful allies has followed the
authority for more than a decade, dating to the tenure of former
chairman
Richard Kessel -- himself a well-connected figure in both Democratic and
Republican state politics.
Kessel
declined to comment for this story. In an interview with Newsday in
2000, he said: "If a prominent person who is important to LIPA's future
asks me to take a look at somebody, I will. But I would never hire an
unqualified person."
Appointed by Democratic Gov.
Mario Cuomo three years after LIPA was created by the State Legislature in 1986,
Kessel led the authority for 18 years. Before running LIPA, Kessel was defeated when he ran for Nassau County executive as a
Democrat.
During his tenure, LIPA's payroll
increased from about 20 employees to its current roster of just over
100. The authority has a board of trustees appointed by the governor and
state legislative leaders and operates with a high degree of
independence.
As an authority, LIPA is exempt from
civil service rules that impose legal limits on political activity and
affiliation being the basis for employment, and is not constrained by
union contracts.
Board chairman Howard Steinberg did not return calls seeking comment.
In 2007, Kessel left LIPA and went on to serve as the chief executive of the New York Power Authority.
Kessel's successor, Kevin Law, also came from politics, having served as Suffolk County's chief deputy county executive under
Steve Levy from 2004 to 2007.
Despite lacking a utility background,
Law told Newsday that he was "not a patronage appointment." He cited his
experience representing energy corporations as a lawyer.
Law acknowledged that before he resigned in 2010, he hired people with government connections but no energy experience.
"I would not call it patronage," Law
said. "Did I hire people who I knew who came out of the government world
who I had trust and confidence in? Yes."
Law insisted that LIPA's culture became less political under his reign.
"I tried to professionalize it," he said. "I put in an ethics code. I hired a compliance officer. I fired three lobbyists."
Newsday's analysis of LIPA's payroll
supports Law's contention.When Kessel left, 34 percent of LIPA employees
had ties to political power, according to Newsday's analysis. That
figure declined in the years after Kessel's departure and was at 23
percent as of March 2012.
Between 2003 and 2007, about 30
percent of all the money LIPA annually paid to employees went to
politically connected people. The amount peaked in 2007, when LIPA was
paying more than $3 million to employees Newsday identified as having
political ties, out of the $7.2 million total spent on compensation.
By this year, the percentage of the
budget paid to connected employees had dropped to 19 percent, with just
under $2 million paid.
Who received paychecks
Connected current and former LIPA employees include:
Sharon Laudisi, who is married to
former Glen Cove Mayor Alan Parente. She rose quickly at the authority,
starting as its clean-energy assistant and eventually overseeing a "$38
million annual budget for LIPA's Clean Energy Initiative," according to
an online biography. Her total compensation jumped from $53,000 to
$76,000 between 2004 and 2007.
Laudisi is now an energy consultant
and an author of a children's book on energy. She didn't respond to a
message left with her husband.
"She didn't get her job through me,"
Parente said. "She got her job because she was friendly with Richie
Kessel. I don't think she would have been hired if Richie didn't think
she was qualified."
Eric Kopp, who made as much as
$130,000 annually as an assistant to LIPA's chief of staff during his
tenure from 2005 to 2007, had served in a similar position under
then-Suffolk County Executive Robert Gaffney. He's now a part-time aide
to Suffolk Executive Steve Bellone.
Reached by Newsday, Kopp defended his
qualifications: "I have a pretty well established record as an
administrator, having worked on the administrations of seven county
executives in both parties."
Tracy Burgess-
Levy, LIPA's director for community and governmental affairs, is married to former Rep.
David Levy, who had been a member of the Hempstead Town Council. Burgess-
Levy
reported more than $97,000 in compensation to state pension system in
the 2012 fiscal year, which ended in March. She declined to comment.
Andrew McCabe, LIPA's assistant
general counsel, is the son of Edward McCabe, a former justice of the
New York State Supreme Court, administrative judge of Nassau County,
county attorney for Nassau County and town attorney for the Town of
North Hempstead. McCabe reported nearly $117,000 in income to the state
pension system in the last fiscal year. He declined to comment.
Lisanne Altmann is a Great Neck
Democrat and in 1999 was a Nassau County legislator hired by Kessel to initiate a clean-energy program and encourage conservation.
"She has done an extraordinary job not
just in putting the program together, but in garnering the support of
the board," Kessel said of Altmann in a May 1999 Newsday article. "I
need her here."
She reported income of more than
$113,000 to the pension system last fiscal year. Nassau Legis. David
Denenberg (D-Merrick) said Altmann "was one of the best resources" after
superstorm Sandy. "I think because she was a legislator in the past,
she certainly understands constituent service."
She declined to comment.
No reply from Cuomo
The governor is responsible for making nine appointments to LIPA's 15-member board. The Assembly speaker and the
Senate majority leader make three appointments each. There are five vacancies.
Cuomo did not respond to Newsday's
questions to his communications staff about whether he had done enough
to root out cronyism at the agency.
The governor's office provided Newsday
with post-Sandy remarks by Cuomo, who described LIPA as "fatally
flawed" and "without function" and "beyond repair, for a long, long
time." Cuomo has said an overhaul is needed, and the state commission he
announced will determine what has compromised the utility.
Peter Schlussler, a former manager at
KeySpan Energy, which had the utility operations contract with LIPA
before National Grid, is now a member of Suffolk's LIPA Oversight
Committee. He said patronage has hurt the utility.
"If we had seasoned, qualified utility folks at LIPA, we would not have ended up in the predicament we were in," he said.
Cuomo's commission must look at the qualifications of LIPA employees, Schlussler said.
"If the commission doesn't look at that, then it's all semantics. Value zero."
LIPA protest
Aerial photos of superstorm Sandy damage
Stunning scenes from Sandy
Interactive: See the connections
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Map: LIPA outages
