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Probe eyes LIPA employees' links to pols

Newsday graphic

Newsday graphic Credit: Newsday

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.

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."

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