Power authority leader under investigation

ALBANY -- The state inspector general's office is investigating a series of charitable donations by New York Power Authority chief executive Richard Kessel, according to people familiar with the probe.

State officials, who declined to be identified, confirmed the probe and said its scope could widen. Inspector General Ellen Biben declined through a spokesman to comment.

At least one recipient of donations, the Merrick Chamber of Commerce, confirmed it had been contacted by the inspector general's office. The group in 2009 received $4,750 from the power authority at Kessel's behest, according to records of the authority's donations. Attorney General Eric Schneiderman told the agency last month to halt all such payments.

Kessel is a Merrick native and the former chief of the Long Island Power Authority.

Randy Shotland, president of the Merrick Chamber of Commerce, said he received subpoenas last month from the inspector general. He said he turned over materials but declined to specify them.

Shotland said the state authority was a sponsor of a festival that drew people from areas that do receive power from NYPA, including Rockville Centre and Freeport. The authority donated about $4,700 for the festival.

"There was nothing inappropriate about it, and certainly nothing inappropriate about what the chamber did," Shotland said.

Officials with the Chambers of Commerce of the Bellmores, which received $4,800, could not be reached Monday.

Kessel was unavailable Monday. NYPA spokesman Bert Cunningham issued a short statement: "The power authority is fully cooperating."

Asked if the agency still believed the donations were proper, Cunningham referred to his statement.

Kessel's corporate charitable donations while LIPA chief also sparked criticism, including a 2007 opinion from then-Attorney General Andrew M. Cuomo telling the agency it could not make contributions unrelated to its "powers, duties or purposes."

NYPA trustee John Dyson vowed to investigate after his appointment last month.

Sen. George Maziarz (R-Niagara County), chairman of the Energy and Telecommunications Committee, said the Long Island donations "don't make sense" and said Dyson was appointed as a check on Kessel.

A Cuomo spokesman declined to comment.

Meanwhile at the Capitol Monday, the Senate passed a bill allowing the Public Service Commission to review LIPA rate increases of 2.5 percent or more in a year. The bill passed the Senate and the Assembly last year but was vetoed by Gov. David A. Paterson.