Long Island Power Authority Scrutinized Over Consulting Fees

A recent state report has determined that consulting expenses for the firm Navigant by the Long Island Power Authority were “highly questionable” and “exorbitant.” Navigant was found to be deeply involved in the business of the Long Island Power Authority, which has been under intense scrutiny and review since its much criticized response (or lack thereof) to Hurricane Sandy. In particular, Governor Cuomo mentioned that the report raises questions about a contract between the Long Island Power Authority and Navigant which passes unexplainable costs to the power authority’s customers involving large expenditures that had no apparent link to providing power to the residents of Long Island.

The state panel reviewing the Long Island Power Authority, commonly known as a Moreland Commission, was appointed by Governor Cuomo after the hurricane. The panel has chosen to refer its findings on Navigant and the power authority to federal prosecutors in Brooklyn, who will then determine whether criminal charges will be warranted against either. The commission believes that it may be difficult to discover which individuals may be liable because of a “revolving door” between the two companies the commission labeled as “disturbing.” The most notable example can be found in the person of Michael D. Hervey, who was the acting chief executive of the Long Island Power Authority when Hurricane Sandy struck the east coast last fall and is now, as of January, working for Navigant.

Hervey left the power authority after the hurricane while the power authority was highly criticized for its response, where 90% of its 1.1 million customers lost power, many of whom stayed without power for weeks after much of New York City was back on its feet. A New York Times examination showed that the authority had failed to plan for extreme weather despite several urgings by the government and that the approaching hurricane was discussed for less than a minute at a trustee meeting mere days before the hurricane hit.

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