Report: Kessel Could Accept Salary As LIPA Chair
Posted on Thursday, 17 of July , 2008 at 5:33 pm
ALBANY—The state Inspector General has concluded that Richard Kessel did not act improperly by accepting a salary for serving as chairman of the Long Island Power Authority in 2006.
However, by requesting that Kessel stay as chair and also continue to run LIPA, the Governor’s office of George Pataki created a situation in which Kessel exercised both managerial and oversight roles at LIPA throughout 2006. This was not the intent of the Public Authorities Accountability Act, the Inspector General said in a report released Thursday.
LIPA, which distributes power in Long Island, is overseen by a board of 15 unpaid trustees, one of whom is selected by the Governor to serve as chairman. The board also hires and pays employees needed to accomplish its mission.
Kessel served as chairman and chief executive officer/president from 1997 to January 2006. On Jan. 18, 2006, he stepped down from his CEO/president posts while remaining as chairman to comply with the new Public Authorities Accountability Act, which requires state public authorities to separate their oversight and operational roles. However, Kessel continued to fulfill the same duties he had prior to his resignation.
The Inspector General focused on whether Kessel acted properly by accepting a salary for his chairmanship position, for which he worked full time throughout 2006, earning $204,932 in salary and bonuses.
The Inspector General’s report found that:
In late 2005, when Kessel informed then-Governor George Pataki that under the Public Authorities Accountability Act, he would have to resign either his position as CEO or chairman. Pataki directed Kessel to stay on as chairman through 2006, the last year of Pataki’s term.
Kessel informed the Governor’s office that some believed the Public Authorities Law prohibited the LIPA chairman from receiving a salary. In response, then-Secretary to the Governor John Cahill told Kessel that he could continue to receive a salary as a full-time chairman.
It was the view of the Governor’s office that Kessel, acting as full-time LIPA chairman, was not just another trustee.
Two written legal opinions and another informal one assured Kessel that a full-time chairman could be compensated.
The LIPA board was satisfied with Kessel’s performance, regarded him as very important in the day-to-day operation of LIPA, and continued to remunerate Kessel as chairman after he resigned as chief executive.
Kessel received clear signals from those in authority, as well as legal opinions, that he could continue to receive a salary.
The Inspector General’s Office began its investigation last year, several months after Kessel was replaced as chairman. Gov. Eliot Spitzer appointed Kevin Law as chairman. At the time, Kessel told Law that Law could be paid as chairman, as he himself had been advised he could. This conversation prompted Law to contact then-Governor Spitzer’s office, which, in turn, asked the Inspector General to investigate.
Investigation_of_Compensationfor_LIPA_Chair.pdf
Inside sources have told The North Country Gazette that Gov. David Paterson is poised to appoint Democrat Richard M. Kessel of Suffolk County to the post of president and chief executive officer of the New York Power Authority, a post being vacated Aug. 1 by Roger B. Kelley.
Kessel was fired from the LIPA in January, 2007, less than a month after Eliot Spitzer became Governor and after the agency came under fire as being “bloated with patronage jobs”. Kessel had been criticized for changes in job titles at the LIPA, high fuel surcharges and a higher-than-expected cost of a proposed wind power project.
Kessel had served at chairman of the LIPA from 1989 to 1995 as an appointee of Gov. Mario M. Cuomo. After a two-year hiatus during which he served as a LIPA trustee, Democrat Kessel was appointed chairman again in 1997 by Republican governor George E. Pataki and he remained chairman until dethroned by Spitzer.
http://www.northcountrygazette.org/2008/06/22/nypa_power_grab/
http://www.northcountrygazette.org/2008/06/14/kessel_nypa_chief/ 7-17-08
Category: Government, New York State, Politics
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