Thursday, January 28, 2016


Please take a moment to read a letter from Croton resident Paul Steinberg from this week's Gazette:

To the editor:

Greg Ball is back! Last week in Croton, a mysterious group of people combed the Village and the train station.

Claiming to have been affiliated with Greg Ball, they sought to get signatures on a petition in support of the Sustainable Westchester electric program.

When asked where they were from and who was paying them, the mystery people refused to answer. One of them even ran the other way when a commuter attempted to snap a photo.

The reliance on Mr. Ball’s reputational halo is telling. Most of us remember Senator Ball as an ethically-challenged politico who spent $23,000 of campaign funds at Brooks Brothers and Banana Republic. He retired from the Senate and decamped for Texas.

Much like Mr. Ball, the Sustainable Westchester program brings to mind Mark Felt’s dictum: “Follow the money.”

We are told that SW is “a consortium of Westchester County local governments.” In truth, SW is a domestic not-for-profit corporation. This is a critical legal distinction.

Governmental bodies such as the MTA are classified as “domestic government” entities and they are bound by various rules. And a municipal employee such as a Village Manager has a legal obligation to comply with ethics laws on penalty of criminal prosecution. By contrast, SW and their employees are not bound by the same ethical, procurement, transparency, and conflict-of-interest laws and regulations.

As a 501(c)(3) entity, SW is under the same “non-profit” rubric as organizations like Planned Parenthood or the National Rifle Association, and can raise unlimited amounts of money from donors whose interests may not correlate with the households who are automatically made customers of SW.

New York corruption is a national disgrace, and much of the scandal involves “not-for-profit” entities set up by government officials. The most egregious was Senator Espada’s 30-year looting of Soundview Health, and of course Senator Silver and Dr. Taub put their unique spin on “non-profit” funding.

In those cases, there was at least a degree of oversight insofar as funding came directly from the government and ultimately Mr. Espada and Mr. Silver were held to account.

It is far more difficult to rein-in abuse when an entity is funded by non-tax levy money, as Richard Grasso and Ken Langone can attest: even outrageous compensation packages will not lead to legal consequences.

SW will derive revenue from several sources, including a surcharge on every unit of energy provided to the taxpayers of Westchester. A surcharge of one mill/KwH by 130,000 customers using 500 KwH/month means that SW gets $780,000 each and every year. That is a conservative estimate, since SW will mandate small business participation and hence the KwH number will be higher. Once SW expands to natural gas sales, the amount is likely to be well over $1,000,000 per year.

If SW was really a group of municipalities, this money would be going to the municipalities and the expenses would reflect the compensation levels of public servants.

The mill surcharge is small potatoes compared with the capture of the spread. When SW was first presented, we were told that SW would follow the practice of programs in other states and that SW would capture a portion of the spread between the contract price and the “retail” (non-contract) price. Ostensibly this would be used to fund programs to reduce energy usage by means such as smart thermostats and the like.

If SW were subject to the procurement and conflict-of-interest rules that a government entity must follow, this would be a matter of routine governance and oversight. But as a non-governmental entity, those rules do not apply to SW.

SW finally got around to adopting a Code of Ethics in March 2015. That is adopted from the Colorado Assn. of Non-Profits, and as applied to SW there is no external oversight or penalty. If the Colorado rules become inconvenient, they can be changed at the whim of the Board of SW.

SW also adopted a policy in March 2015 which permits it to engage in lobbying activities. This being New York, it is understandable that an organization which will be raking in millions of dollars based on the caprice of the PSC and the legislature is going to lobby, and that money is going to be spent to further the goals of SW, including “support or opposition for legislation, regulatory actions, initiatives or other public policy efforts.”

SW has not even provided a single kilowatt of electricity, but it has plans for lobbying with your money.

SW Executive Director Leo Wiegman’s report of August 2015 notes that SW may consider a “Corporate Donation Policy.”

This is another feature of New York politics: spread money around as “donations” to create political allies. It is a favored tactic of NYC politicians facing term limits, who disburse money to charities outside their district to garner support for higher office, and Altria Group used donations to NY charities to fend off anti-smoking legislation when they were headquartered in NY.

If SW was merely a consortium of municipalities banding together for a discount on energy, it would have no need for lobbying and “corporate donations.”

SW operates under the mandate of the Public Service Commission, but it is not a governmental entity. If was a New York State government body, the key persons would have to file financial disclosure and that can be requested online at the NYS JCOPE site. By contrast, the SW conflict-of-interest policy restricts disclosure to SW top management.

How much oversight will be exercised by top management is unknown. Of the 12 Directors, only 5 are listed as being municipal officials and 7 have other affiliations which include entities which are involved in the sector which SW would operate. And those 12 do not include the former Croton mayor who now serves as Executive Director in addition to owning his own energy company. That former mayor submitted incorrect timesheets to Croton in order to obtain public benefits, which gives pause to anyone relying on SW to self-regulate.

It may be that the SW leadership is possessed of the highest integrity. But we do not rely on that assumption when it comes to our governmental officials, and we should not have to rely on that from an entity which uses the power of government to generate multi-million dollar revenue which will not be subject to the oversight required of government bodies.

A key reason that the PSC gave in approving the SW pilot program in February 2015 was that the program ensured the “safeguards, credibility, and accountability that an energy procurement program administered by a local government can provide.”

The SW program as presented to Croton does not provide that local oversight. In fact, even the basic terms of the contract are left up to SW: the choice is for Croton to sign the MoU and after that we are at the mercy of SW: the Village provides the credibility, but we only have the assurances of SW that it will have safeguards and accountability.

It is entirely reasonable to “follow the money” in any enterprise involving NY officials, and the mysterious petition solicitors who refused to disclose their identities and source of funding as they canvassed Croton last week gives me concern.

If the canvassers were paid by SW from tax levy money, the Village should take action to terminate its relationship with SW. If the canvassers were not paid by SW, it raises the question as to who is funding this lobbying effort and why they will not disclose their identity.

Before any more money is paid to SW or contracts entered into with SW, the taxpayers have a right to know where the money is coming from, and where the money is going.

Paul Steinberg


  1. Can't deny that that's a great letter, whether you're for or against Sustainable Westchester.

  2. So glad the board is sticking with what they were elected to do: fix our finances, stop the $ money bleeding, take out the trash, glad they said no. Budget time is coming. This should be the board's only concern. Sorry Ann and Brian.

    1. The questions raised here about oversight for a non-governmental organization are extremely important. Ethics reform must be undertaken in Albany and this plan appears to taking us in the wrong direction. How can Sustainable Westchester be allowed to aggregate demand this way in a deregulated energy marketplace?

    2. Good question. David Goldman had an interesting letter in the paper. Maria can we get this online?

  3. Hi, Jim from pound Ridge, we appreciate all the info.