Letter To NYPA President Regarding Financial Contributions

Mr. Richard M. Kessel
President and Chief Executive Officer
New York Power Authority
123 Main Street
White Plains, NY 10601-3170

Dear Mr. Kessel:

This is to advise you that on October 9, 2007, this Office issued a formal opinion at the request of your successor at the Long Island Power Authority, Kevin Law, concerning the payment of financial contributions to local not-for-profit organizations and civic and business entities. The opinion is available at the Office of the Attorney General’s website at the following web address: http://www.ag.ny.gov/sites/default/files/opinion/2007-F4%20pw.pdf. This opinion concluded that whether sponsorships of programs under the auspices of local organizations and charitable contributions are legal depends on the purpose for which the sponsorships or contributions are made. Specifically, we concluded that in the event that a financial contribution did not directly relate to one of LIPA's powers, duties, or purposes, then it fell outside LIPA's authority to give. In the case of several contributions LIPA made under your tenure, this Office found that "increased goodwill is neither necessary nor convenient for complying with the provisions of or achieving the purposes of the LIPA Act."

The enabling act governing the New York Power Authority contains language comparable to the LIPA Act. Therefore our position is that sponsorships and contributions by NYPA of a nature similar to those we found unauthorized in our 2007 opinion to LIPA are likewise prohibited.

It has come to our attention via published press reports that NYPA may be making financial contributions that do not directly relate to NYPA's powers, duties, or purposes. Such reported payments include contributions to chambers of commerce in communities in which NYPA may have no physical or service-related presence. If NYPA is currently making these or similar contributions, please terminate them immediately. If NYPA is making such contributions and believes it has legal authority to do so, please contact our office to explain why you believe such contributions are authorized. You may contact my Public Integrity Bureau at (212) 416-6676.

Thank you.

Sincerely,

signature

Eric T. Schneiderman
Attorney General

 

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