Richard Kessel, new NIFA chair, brings 'unique' history to latest role

A former gadfly who needled politicians over nuclear energy and other issues, Richard Kessel was again in their crosshairs after Democratic Gov. Mario Cuomo lost his 1994 reelection bid to George Pataki, who as governor removed him as chairman of the Long Island Power Authority. 

Days later, Kessel was back on LIPA's board, thanks to State Assembly Speaker Sheldon Silver, and became a thorn in the governor's plan for LIPA to take over the embattled Long Island Lighting Co.  

“Richie was awful at the beginning. Richie was the most outspoken, obnoxious critic of our proposal,” Pataki recalled. New LIPA chairman Frank Zarb brokered a truce with Kessel over breakfast that resulted in Kessel persuading lawmakers and Long Islanders to accept the takeover, said Pataki, who eventually reappointed him as LIPA chairman.

"What started as a horrendous, contentious relationship ended up as a productive partnership for the people of Long Island," Pataki said.

Three decades later, Kessel remains a go-to for politicians who have appointed him to key positions, including the head of the New York Power Authority and, in more recent years, the Nassau County Industrial Development Agency. Gov. Kathy Hochul on Oct. 13 named him chair of the Nassau Interim Finance Authority, the state control board that oversees the finances of the county and its public hospital. Kessel succeeds Adam Barsky, who held the unpaid position for seven years.

Politicians credit Kessel, a lifelong Democrat, as a deal-maker and relationship-builder, skills he honed over decades leading political boards and governmental agencies and making friends on both sides of the aisle. Hochul, a Democrat, said, "He has the background and experience, which makes him the best candidate" for the NIFA role.

His appointments have come despite significant political scandals, including criticism that he misused funds at LIPA and NYPA, prompting his resignation from the latter in 2011.

State Comptroller Thomas DiNapoli, a Democrat who helped create NIFA in 2000, said he understood why Kessel continues to receive high-profile assignments. "If he is nothing else, he is resilient — no doubt about it," DiNapoli said.

“I think he’s willing to take on certain positions that others would shy away from," DiNapoli said. “He is certainly one of the more unique public figures Nassau County has ever produced."

At NIFA, Kessel faces decisions on what level of oversight is appropriate for a county whose finances have vastly improved, and how to prevent the possible failure of NuHealth, the deficit-riddled public benefit corporation that runs Nassau University Medical Center. 

Some wonder if Kessel, who started NIFA as an original board member, has come back to end it.

“I don’t think we ever discussed [whether] NIFA should end, but I think there was a general sense when it was created that at some point, NIFA would expire,” Kessel said. “And ironically, it’s still here 23 years later.”

Monitoring Nassau and NuHealth

Kessel's first priority is to steer NuHealth out of trouble. The hospital must make a roughly $40 million pension payment in February. Kessel said he's speaking with Hochul's staff to figure it out.

“I'm not sure they're going to be able to make that payment and survive," Kessel said. "I think between December and February, it could run out of cash." Though short-term relief is possible, Kessel said, "you don't want a hospital lurching from luck to luck." 

Kessel says he sees no reason to end oversight of the county's finances anytime soon, either. He worries about possible large deficits beginning in 2025, and of plummeting sales tax collections if there is a recession.

"NIFA right now still needs to have a role," he said. "I think we have to wait and see what happens to the hospital and see what happens to the economy over the next couple of years."

Nassau's finances have vastly improved since 2011, when NIFA imposed a "control period" because the county had failed to balance its budget. In a control period — imposed when the county's deficit is at least 1% of its overall budget — NIFA can reject or approve county budgets, contracts and labor deals. 

The county is on track to record its fifth annual surplus and has more than $1 billion in reserves. Credit agencies have upgraded its bonds, the State Comptroller's Office has removed fiscal stress warnings, and Republicans question whether stringent oversight is still necessary.

“I think by every metric, we are out of the control period. We are probably the most fiscally sound of every large county in New York State,” said Nassau County Executive Bruce Blakeman, a Republican. “We have significant cash reserves for any rainy day that’s foreseeable." 

Frank Zarb, the first chairman of NIFA and the former chief executive of Nasdaq, said NIFA plays a convenient role politically but wasn't meant to last forever.

"Any county executive, Republican or Democratic, doesn’t want to get rid of NIFA. It makes their budgeting easier,” he said. None have “pushed to wind down NIFA, and that’s what they should do in the next three or four years."

"I think Richie can do that," Zarb said. "I think he understands that with the state’s backing, they can figure out a formula where there can be a soft landing."

Otherwise, he said, NIFA “becomes Linus' blanket. If you’ve got this in place, it’s addictive.” 

From 'pain' to political appointee

Raised in Merrick, where he still resides, Kessel graduated from Sanford H. Calhoun High School. After enrolling at Colgate University upstate, he transferred to New York University to be closer to his ailing mother. He earned a master’s degree from Columbia University's School of International and Public Affairs.

His two bids for elected office were unsuccessful. In 1974, Kessel lost a state Senate race to Republican Norman Levy. In 1993, he lost the Democratic primary for county executive to North Hempstead Supervisor Ben Zwirn.

Kessel, 73, said his “best friend in life” was Joe Mondello, chairman of the Nassau Republican Committee who died in 2022. He was best man at Kessel's wedding and godfather to his son.

Kessel recalled being a "pain" during a meeting decades ago of the Hempstead Town Board, where Mondello was a member. Other board members walked out during his diatribe.  

“Joe Mondello stayed and sat and listened to the whole thing,” he said. “And afterward, he came up to me and he said, 'I thought it was rude that the town board walked out on you. I want you to know I would never do that. I think some of the things that you say are good, and we ought to listen to that.' ”

Kessel was executive director of the New York State Consumer Protection Board when he was appointed by Cuomo as chairman of LIPA in 1989. His tenure included the decommissioning of the Shoreham Nuclear Power Plant, the first in the country to be fully dismantled. Kessel, a former consumer advocate who had opposed the plant, found himself in charge of shutting it down safely.

In 1997, reappointed as head of LIPA, he managed its takeover of LILCO and convinced Suffolk and Nassau lawmakers to agree to assume the company’s debt and pay off LILCO shareholders. The deal reduced residents' electric bills — at the time some of the most expensive in the country. 

Kessel's LIPA chairmanship attracted attention and criticism.

Opponents of the plan to shutter the Shoreham Power Plant feared the loss of tax revenue to the Shoreham-Wading River school district and Suffolk County. Critics of the LILCO takeover said it would increase energy prices over the long term.

Former Suffolk County Legis. David Bishop, a Democrat, recalled tense public hearings. Kessel "had a big personality and he became a big target," Bishop said.

"He had to sell it, that this was great," Bishop said. "This was having our cake and eating it, too. We were going to get rid of LILCO and have lower rates, but of course there is no way to get around who is going to pay the debt on the plant.”

“There was definitely the people rising against the big utility, and he had to represent the big utility," Bishop recalled.

Kessel left LIPA in 2007 shortly after then-Gov. Eliot Spitzer, a Democrat, asked the State Office of the Inspector General to investigate Kessel's acceptance of dual salaries as both chairman and president. In 2008, the office cleared Kessel.

Later that year, Gov. David Paterson, a Democrat, named Kessel president and CEO of the New York Power Authority, where he remained until 2011.

In 2018, Nassau County Executive Laura Curran, a Democrat, named him chairman of Nassau County Industrial Development Agency, a position he stepped down from in April.

'I'm not perfect'

Kessel resigned from NYPA amid a state investigation into ethical violations and financial issues, including whether he made improper donations through the agency largely to Long Island groups, including chambers of commerce in Bellmore and Merrick.  

The state Inspector General's 2011 report "did not find any undue influence with regard to the contributions made to Long Island organizations" but said NYPA should reform its practices, noting "the documentation did not always reveal the purpose and scope of the business-related contribution, and often did not detail the nexus to NYPA’s mission statement as an authority." 

The report accused Kessel of "apparent conflicts of interest that he failed to reveal." It said Kessel had recommended NYPA hire a firm for legal services but did not disclose his "ongoing personal legal relationship with the same firm.”

The report also said Kessel solicited and accepted a $15,000 loan from a NYPA subordinate that was not reported on financial disclosure statements. 

Also in 2011, the State Comptroller’s Office criticized NYPA for spending $160,000 on 21 holiday parties and picnics over a two-year period, $21,000 for retired employees’ AARP memberships and $10,000 in sympathy gifts for employees and other individuals.

Kessel said some of the investigations at NYPA were part of a "hit job." 

But he acknowledged: "I probably should have done things a little bit differently, like giving sponsorships to groups. I'm not perfect." 

By Scott Eidler

scott.eidler@newsday.com@ScottEidler

Scott Eidler covers Nassau County government and politics for Newsday. Scott has worked at Newsday since 2012 and previously covered municipal government and education.