Letter To The Editor Regarding LIPA/NatGrid Tax Case, With Criminal Implications
July 20, 2020
When the Long Island Power Authority (LIPA) was created, the New York State Legislature laid out clear “rules of the road” in the Public Authorities Law, that LIPA would be required to follow. It stated that “projects” would require Public Authorities Control Board (PACB) review and approval, before going forward. LIPA ignored those requirements, when filing the Long Island Power Authority / National Grid tax certiorari lawsuit on the property known as the Northport Power Plant, to initiate an illegal program of extortion and intimidation of Huntington residents. By skirting the Public Authorities Control Board, mandated review and approval process was avoided, allowing LIPA to undertake illegal and corrupt activity by bringing illegal tax challenges. In filing the tax challenges without PACB review and approval, LIPA shed its legitimacy, to conduct a campaign to intimidate elected officials, property owners and the news media with fears of a tax Armageddon, brought about by LIPA’s misconduct. Once the criminal activity was disclosed, in the declaratory judgment action I filed recently, the court can make a determination as to whether the defendants’ criminal behavior is acceptable to the court, a court which has been misled throughout the litigation as to the supposed ratification of the power supply agreements.
Here is why I believe LIPA has misled us all and that LIPA’s actions are not legal or acceptable. LIPA created a bond issue in 2013 to pay expenses of the 2013 Power Supply Agreement. Under Public Authorities Law, “An action taken by (LIPA) that causes (LIPA) to issue bonds, notes or other obligations is a “project”, (Public Authorities Law 1020-b (12-a) (i)). There was no PACB review or approval of the 2013 Power Supply Agreement, an action taken by LIPA that caused LIPA to issue bonds, notes or other obligations. The 2013 Power Supply Agreement is a “project” under the Public Authorities Law definition because it was “an action taken by LIPA that causes LIPA to issue bonds”.
In addition, the obligation to purchase billions of dollars of power from National Grid Generation LLC independently qualified as a “project” under the “obligations” language of that section of Public Authorities Law. Public Authorities Law 1020-f (aa) and Public Authorities Law 1020-b (12-a) (i) requires PACB review and approval, (1020-b (12-a) (i) for an action undertaken that (i) causes (LIPA)…to issue bonds, notes or other obligations).
Further, any LIPA action which significantly modifies the use of an asset (such as using it as a basis for a tax challenge) comes under the definition of “project” in Public Authorities Law 1020-f (aa) (ii).
Finally, as a separate definition of “project”, any LIPA action which commits LIPA to a contract or an agreement with consideration of more than one million dollars and does not involve “day to day operations” comes under the definition of “project” (Public Authorities Law 1020-b (12-a)(iii).
The Comprehensive Management and Operations Audit of Long Island Power Authority submitted to the New York Public Service Commission Department of Public Service in 2013 stated: “LIPA is unlike any typical utility, it has to operate its utility business …within the confines and constraints of its enabling statute. Core functions that are normally central to a utility, such as operations, maintenance and construction work, are executed by National Grid and LIPA has minimal direct involvement in the day to day operations.” (Executive Summary: page 1-2). This pattern has continued with LIPA outsourcing day to day activities to PSEG-LI.
PACB review must be requested by LIPA, and PACB approval must be granted prior to issuing obligations to pay for the billions of dollars of power supply (Public Authorities Law subdivision 1020-b (12-a) (i), prior to using the agreement as the basis for filing tax challenges (Public Authorities Law subdivision 1020-b (12-a) (ii) and prior to entering into an agreement or contract with a consideration of greater than a million dollars which does not involve day to day operations (Public Authorities Law Subdivision 1020-b (12-a iii). These requirements, exist every time LIPA and/or National Grid Generation LLC filed any tax challenges, and every day they continue those tax challenges, are in violation of clearly established law.
Neither LIPA nor National Grid Generation LLC obtained review or approval from PACB, for the 2007 and 2013 agreements, which served as the alleged basis, for their challenge to the assessed taxes for the Northport Power Plant. The 2007 and 2013 agreements are a legal nullity, under each of the three separate categories defining projects requiring review and approval. The 2007 and 2013 agreements are purported obligations never properly submitted for review and approval by the only state entity which could ratify the agreements and create a legally binding contract, PACB.
I have asked the court to recognize this fraud and dismiss the real property tax challenges, based on contracts which only now have been disclosed to be unratified and no basis for the LIPA and National Grid court filings.
Councilman Eugene Cook
Town of Huntington