Report criticizes Power Authority for hiring a board member - The Buffalo News

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Report criticizes Power Authority for hiring a board member

ALBANY – While sitting as a member of the New York Power Authority board, Elise Cusack of Amherst solicited a job for herself at the agency, state investigators said Friday.

Cusack, a former member of the Erie County Legislature, resigned her seat on the board one day before taking a part-time, $77,500-a-year newly created position of community liaison for the Erie Canal Harbor and other special projects, the state Inspector General’s Office said Friday in a scathing report of various acts of wrongdoing at the authority.

Cusack arranged the switch from a board member to agency employee while working with Richard Kessel, who was NYPA president and who reported to her and other board members, Inspector General Catherine Leahy Scott said.

The report concluded that her conduct “created at best an appearance of impropriety.”

Kessel also was accused in the report of several unrelated ethical lapses while heading the nation’s largest public power company.

The Inspector General’s Office, which investigates allegations of illegal and unethical acts in state agencies, turned its findings over the state’s Joint Commission on Public Ethics, which could issue fines or turn cases over to prosecutors.

The report said that Cusack “initially sought and was considered for paid employment with NYPA while simultaneously holding her board position.”

Kessel, who resigned his NYPA position in 2011, told investigators that he sought a legal opinion on Cusack’s request in 2009 or 2010 from NYPA’s legal office.

Cusack, who did not return a call to comment, resigned her NYPA post effective Sept. 7, 2011, NYPA officials said Friday evening.

The Power Authority’s legal department, in a Jan. 31, 2010, memo to Kessel, addressed whether Cusack could simultaneously hold a board post and a paid staff position, saying that “one could imagine” where Cusack would be presented with potential conflicts of interest in such a situation.

“(G)iven the focus on public authority accountability … the concern should not be ignored and the issue may need to be addressed if Ms. Cusack’s situation draws attention,” the memo concluded.

Cusack was appointed to the board in June 2005. She began her NYPA job in the agency’s Buffalo office on March 30, 2010, one day after resigning her NYPA board seat. Six weeks later, the Inspector General’s Office got a tip about the Cusack matter.

The investigation concluded that Cusack in early 2009 contacted both Kessel and then-Chief Operating Officer Gil Quiniones, now the NYPA president, about a possible job. Quiniones said he told her to talk to Kessel and never heard about the matter again until she resigned her board seat.

The report said Cusack had talks with NYPA executives about the new job “while at the same time voting on issues relevant to Western New York and on matters presented to the board by Kessel.”

The IG called Cusack’s actions an apparent violation of the state’s Public Officers Law dealing with potential conflicts of interest or seeking to use an official for “unwarranted privileges,” as well as NYPA’s code of conduct.

The report said Cusack voted more than 85 times as a board member between the time when she began asking about an NYPA job and when she left, including many issues involving Western New York projects.

“As a voting board member, Cusack was in the position to persuade the board to invest in Western New York. Notably, in seeking a paid position with NYPA through Kessel, Cusack was applying for employment to an official whose conduct she oversaw as a NYPA board member,” the report said. “Cusack never formally notified the board of her employment negotiations or recused herself from any vote pending before the board.”

Investigators asked Cusack about recusing herself from any board votes during the period. “The thought never crossed my mind,” Cusack told investigators, according to the report.

The investigation’s report was aimed mostly at Kessel’s reign as NYPA president. The report said he recommended NYPA hire a Long Island law firm without revealing his “ongoing legal relationship” with the firm involving estate law. It also criticized how other legal contracts and charitable donations were awarded at NYPA during Kessel’s tenure.

The report also said Kessel, a Long Island resident, received a $15,000 loan that he solicited from a “subordinate” at the agency; the loan was not reported, as required, on Kessel’s annual disclosure filing with the state ethics agency.

The report said the agency has since put in place a number of internal practices to prevent such alleged problems in the future.

“Public officials have a responsibility to conduct themselves in an ethical manner consistent with New York State Public Officers Law, and each of our agencies and authorities has a responsibility to the taxpayer to ensure it conducts business in an effective, ethical, and lawful manner,” the inspector general said in a written statement. “My investigation revealed serious misconduct and ethical lapses, and in response, NYPA has taken substantial and meaningful steps to address these findings and improve its operations.”

NYPA runs 16 generating facilities, including the Niagara Power Project, which is the biggest electricity producer in the state, and controls more than 1,400 miles of transmission lines and is a major supplier of low-cost electricity for dozens of companies in Western New York.


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