Long Island Power Authority 'ostracized' top executive who filed ethics complaint, filing alleges

Leadership of the Long Island Power Authority "immediately ostracized" a former senior official after he filed an ethics complaint against the authority in July, alleging irregularities in its bidding process, according to previously undisclosed legal filings.

The allegations filed as part of a notice of claim against LIPA show the official, who Newsday has previously identified as former senior vice president Billy Raley, "was excluded from key meetings" and his planned presentations to the LIPA board were "summarily canceled" after he reported he was "repeatedly pressured" to alter bidding scores in a LIPA request for proposals for a new grid manager last year.

The notice, which is filed in advance of a lawsuit called an Article 78 proceeding, seeks unspecified damages, alleging "unlawful retaliatory termination," defamation and violations of state labor law. 

The filing said Raley and another official, whom Newsday has previously identified as former acting chief operating officer Werner Schweiger, "refused" to change the bidding scores "to favor PSEG" under pressure from an official whose name is redacted. Newsday received the document from LIPA under the state Freedom of Information Law.

LIPA has said it does not comment on pending or potential litigation. Steve Cohen, a lawyer for Raley cited in the documents, did not return a message seeking comment.

The procurement was ultimately canceled and a contract extension valued at $493 million was awarded to PSEG Long Island. Quanta Services, which scored highest in a LIPA review committee’s recommendation, was rejected by most LIPA trustees and has since sued the authority.

The notice of claim notes he was and Schweiger were interviewed by the state Inspector General in July. A spokesman for the IG’s office on Wednesday declined to comment.

As LIPA was finalizing terms of the contract extension with PSEG, the notice said, Raley "raised serious concerns" that the newly proposed metrics in PSEG’s contract would "dilute safety and performance standards, effectively enabling [PSEG] to receive larger bonuses while performing worse."

Raley "explained repeatedly over approximately three months that the revised contract was improper and that, as a senior LIPA executive, he had a fiduciary duty to Long Island taxpayers to ensure they received the best deal possible, the notice said. "He was "pressured to acquiesce" by two officials whose names are redacted, but Raley "refused," the notice said.

On Sept. 24, according to the notice, days after his latest discussion about the metrics, an official Newsday has previously identified as then-newly named chief executive Carrie Meek Gallagher "told him that he was being fired because of his conversations" with unnamed officials in which he "opposed the lower performance metrics and the problematic bonus structure" in the proposed PSEG contract.

The notice cited a Sept. 26 email to all LIPA employees in which Raley alleges a LIPA official denied that Raley was fired for rejecting lower performance metrics and "made statements clearly implying" he was fired "due to poor performance and unprofessional conduct."

That memo stressed "accountability for performance," said "professional conduct matters," and "referenced ‘standards of respect, integrity and fairness’" in explaining Raley’s termination, the notice said.

"These statements were false and defamatory," the notice charges, noting that Raley had previously received high performance evaluations and was "well-liked and respected throughout his tenure at LIPA."

Raley’s notice claims unspecified lost salary and other compensation from the date of his September firing, along with the loss of retirement and health insurance benefits. It also seeks compensatory damages for emotional distress, mental anguish, humiliation and damage to his reputation.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.