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NYS: Ethical Misconduct at NYPA Under LI's Kessel

NYS: Ethical Misconduct at NYPA Under LI's Kessel

Albany - (WALK) A New York State Inspector General's investigation into New York State Power Authority practices under former C.E.O. Richard Kessel indicates no criminal violations, but cites ethics violations and lax financial controls.

The report, released Friday, covers the years 2009 and 2010 and was compiled during the nearly three years since former LIPA leader Kessel left NYPA in 2011. Kessel has denied any wrongdoing.

According to the report Kessel's time at NYPA was marked by financial mismanagement, irregularities in procurment, and ethical misconduct.  A major point in the report: Kessel, of Merrick, recommended NYPA hire a Uniondale law firm, Ruskin Moscou Faltischek of Uniondale, without disclosing an on-going personal relationship, a failure to report a conflict of interest.

Investigators also found evidence of a $15,000 loan Kessel solicited from a subordinate, a transaction neither reported as required in their annual financial statements.

Investigators also found NYPA charitable and business-related donations increased statewide, but contributions to Long Island-based groups increased by 50 percent during Kessel's term.

Donations to local organizations in 2010 included $25,000 to the Long Island Pine Barrens Society, $5,175 to the Research Foundation at SUNY Stony Brook, $10,000 to Renewable Energy Long Island, and $2,500 to Hofstra University.  The total of $42,675 is 12 percent of NYPA's contributions of $351,395 that year, according to the IG's report.

The Inspector General's report recommended new controls, including:

An audit of managerial polices and organizational structure; greater documentation and record-keeping; greater instruction about policies forbidding borrowing and lending between NYPA superiors and subordinates; and enacting clear policies regarding business-related contributions, including links between a NYPA employee and the recipient.

Photo: Richard Kessel


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