New York Regulator Zibelman Has More Questions to Answer about Conflicts of Interest

New York Regulator Zibelman Has More Questions to Answer about Conflicts of Interest

Audrey Zibelman

On Friday, July 31, we emailed a letter to New York State Public Service Commission (PSC) Chairman Audrey Zibelman, asking her a series of questions that revolve primarily around her relationship with Edward Krapels.

Mr. Krapels is the founder of Anbaric Microgrid, a company that has billions of dollars of contracts pending before the PSC. He was also Ms. Zibelman’s founding partner at Viridity Energy, a privately-held, Pennsylvania-based company.

Ms. Zibelman resigned as chief executive officer of Viridity after she was chosen PSC chair by Governor Andrew M. Cuomo in 2013. However, according to Capital (now Politico), Viridity continued work on microgrid control panels for Anbaric. After questions were raised by a Newsday reporter in June, the website reference to the companies’ work together was eliminated, Zibelman cut all remaining ties with Viridity and abandoned her shares in the company.

Anbaric Projects

New York Regulator Zibelman Has More Questions to Answer about Conflicts of InterestIn February 2015, Zibelman met with Krapels about microgrids in New York state. Later, Ziebelman recused herself from a decision about a transmission line being developed by Anbaric, apparently seeking to avoid the appearance of conflict.

But Anbaric has two other, potentially lucrative projects pending before the PSC. So we asked Ms. Zibelman if she will recuse herself from all future decisions affecting Anbaric or any other company she is directly or indirectly affiliated with.

NY Code of Ethics

Because the New York Code of Ethics for public officers so clearly outlines the types of behavior and actions that can lead to improper conflicts, we sent our letter to the commissioner to ensure that she is upholding the highest standards of public integrity. The Code states:

“No officer or employee of a state agency, member of the legislature or legislative employee should disclose confidential information acquired by him in the course of his official duties nor use such information to further his personal interests.”

“. . . state employees should not give reasonable basis for the impression that any person can improperly influence them or be favored in the performance of official duties. Further, state employees should not pursue a course of conduct which could raise suspicion that they are engaged in acts that are a violation of trust.”

We also called upon Ms. Zibelman to disclose whether she received an ethics opinion from the Joint Commission on Public Ethics and, if so, to release that opinion to the public.

Read the entire letter here.

We look forward to Chairman Zibelman’s response.

 

Scott Peterson is executive director of the Checks and Balances Project, a national watchdog that seeks to hold government officials, lobbyists and corporate management accountable to the public. Funding for C&BP comes from pro-clean energy philanthropies and donors.

Letter of Inquiry to PSC Chair Audrey Zibelman

July 31, 2015

 

Chairman Audrey Zibelman

New York State Public Service Commission

90 Church St

New York, NY 10007

Dear Ms. Zibelman:

My name is Scott Peterson, and I am the executive director of the Checks and Balances Project. We’re a pro-clean energy public watchdog blog that examines the influence of corporate management and lobbyists on government officials, think tanks, the media and others.

We’ve read in the online news publication, Capital, that you met in February with Edward Krapels, your former business partner at Viridity Energy, a company that you co-founded. Krapels is also the founder of Anbaric Microgrid, a company that has billions of dollars of contracts pending before the Public Service Commission.

I note that according to New York Code of Ethics for Public Officers:

“No officer or employee of a state agency, member of the legislature or legislative employee should disclose confidential information acquired by him in the course of his official duties nor use such information to further his personal interests.”

After questions were raised by a Newsday reporter in June about Viridity’s business relationship with Anbaric, you reportedly cut all ties with Viridity and abandoned your shares in the company.

Although it was reported that you voluntarily recused yourself from a decision that could affect one of Anbaric’s projects earlier this year, you have voted on issues that involve the company, and you have yet to recuse yourself from future votes that can impact Anbaric.

Again, according to the New York Code of Ethics:

“. . . state employees should not give reasonable basis for the impression that any person can improperly influence them or be favored in the performance of official duties. Further, state employees should not pursue a course of conduct which could raise suspicion that they are engaged in acts that are a violation of trust.”

With that in mind, I hope you are willing to answer a few questions that will bring some clarity and transparency to this situation:

What is the nature of your relationship with your former Viridity partner, Edward Krapels?

  1. Did you discuss Anbaric projects with Mr. Krapels that are pending before your commission?
  2. Will you commit to recusing yourself from any future decisions affecting Viridity, Anbaric or any other company you are directly or tangentially affiliated with?
  3. Was there an ethics opinion from the Joint Commission on Public Ethics prior to or at the time of your appointment as chairman of the New York Public Services Commission?
  4. If so, will you disclose it?

With recent revelations about utility commissions in other states facing ethical scrutiny, I believe that answering these questions will help to assure the public that all potential conflicts of interest have been appropriately addressed, as well as demonstrate that your commission is dedicated to upholding the highest standards of public integrity.

I look forward to your responses.

Sincerely,

 

Scott Peterson

Executive Director, Checks and Balances Project

#NYFrackingScandal Hits Cuomo Administration: Newly Disclosed Documents Show Conflicts of Interest

Photo from NYPost.com

With only two days before the expected release of New York’s Environmental Impact Assessment on fracking (also known by the industry term hydraulic fracturing), Governor Andrew Cuomo’s administration is at the center of a new conflict of interest scandal regarding two of his top aides.  Today, seven groups requested the Albany County District Attorney General David Soares investigate the Cuomo Administration’s conflicts of interest surrounding two staffers that hold “key positions in New York’s decision over whether to allow high-volume hydraulic fracturing.”

There are looming questions on the impartiality of Lawrence Schwartz and Robert Hallman, two top Cuomo Administration officials, who have significant influence on the Governor’s fracking decision. New documents obtained by DeSmogBlog through New York’s Freedom of Information Law (FOIL) show that Mr. Schwartz has significant stock holdings in companies that stand to benefit from fracking in New York state, and that Mr. Hallman failed to make specific financial disclosures, raising questions about his objectivity on the issue.

The two top aides, Lawrence Schwartz, Secretary to Governor Andrew M. Cuomo, and Robert Hallman, Deputy Secretary for Energy and Environment, have significant oversight within the Cuomo Administration on the issue of hydraulic fracturing. According to the groups’ letter, Mr. Schwartz supervises all state deputies and commissioners, including Mr. Hallman and the Commissioner of the New York State Department of Environmental Conservation – the agency that is tasked with studying high-volume hydraulic fracturing and developing the state’s policy regarding this extraction technique. Mr. Hallman is the state’s highest gubernatorial staff member who has oversight over the state Department of Environmental Conservation.

According to financial disclosure documents, Schwartz has substantial holdings in companies engaged in shale gas development, including ConocoPhillips, Occidental Petroleum and ExxonMobil. ExxonMobil alone holds 43,000 acres of leases for fracking in New York under its subsidiary XTO Energy Inc. Schwartz also identified “Williams Co.,” apparently a reference to “The Williams Companies Inc.,” a pipeline company that plans to build a $750 million pipeline through the southern portion of New York.

Mr. Hallman failed to specify his stock holdings in his financial disclosure forms, which seems to violate (at the very least) the spirit of N.Y. Pub. Off. § 73-a. The law states that “Public officials are required to list “EACH SOURCE” of income greater than $1,000 and “the type and market value of securities… from each issuing entity” greater than $1,000,” according to the letter from seven groups to District Attorney General Soares. Instead of disclosing each source, Mr. Hallman listed “various common stock” and “various corporate bonds.” His lack of disclosure should serve as a red flag and calls into question his impartiality on the state’s fracking decision.

Furthermore, records obtained via the FOIL request indicate that fracking companies have recently worked directly with Cuomo Administration officials.  XTO Energy Inc, a subsidiary of ExxonMobil, wrote to Mr. Schwartz and Mr. Hallman requesting changes to the state’s draft regulations on fracking in August 2012. And, The Williams Companies communicated with Mr. Hallman regarding natural gas pipelines twice in the summer of 2012.

New York state law states that public officials should avoid personal investments that could “create substantial conflict between his duty in the public interest and his private interest.” Both Mr. Schwartz and Mr. Hallman may have conflicts of interest that violate this standard.

Today during a press conference in Albany, Alex Beauchamp, Food & Water Watch Northeast Region Director, said, “We are outraged to discover that Governor Cuomo’s top aide is so heavily invested in oil and gas companies. And further, that he made these investments during the very timeframe this administration has been considering whether to allow fracking in New York. Clearly, this administration must not allow fracking to move forward under this cloud of scandal.”

Learn more at NYFrackingScandal.com.

America’s Fracking Concerns

Studies across the nation reveal legitimate worries exist across party lines

Hydraulic fracturing or “fracking,” as it is more commonly known, is a growing concern in the minds of many Americans according to a recent national survey. Fracking is the practice of sticking toxic chemicals into the ground to get to natural gas. And as the practice increases so too have worries surrounding water contamination.

As 2010 wound down a study by the Civil Society Institute revealed that more and more Americans became aware of fracking as a method for natural gas extraction from coast to coast. But the survey didn’t just reveal that Americans had heard of fracking, but it also showed that large numbers of citizens have health concerns about the practice.

The study, “Fracking and Clean Water: a Survey of Americans” showed that 60 percent of respondents had at least some awareness of the fracking issue. Of those who said they were aware of the practice, 40 percent claimed they were “very concerned” about the practice’s affect on drinking water, while another 30 percent said they were “somewhat concerned” about the practice’s affect of drinking water.

The awareness of the fracking issue as well as the concerns about its relation drinking water supplies is noteworthy because the issue was virtually unknown just a few years ago.

“If you asked someone for his or her take on fracking two or three years ago, your question would have likely been greeted with a confused gaze,” wrote Pennsylvania journalist Leah Zerbe. But now, with fracking happening in nearly 40 states, Zerbe says the awareness and concerns surrounding fracking have clearly grown.

Perhaps most interesting about the growing concerns about fracking is that they are bi-partisan in nature: 57 percent of Republicans, 74 percent of self-identified Independents and 86 percent of Democrats were among those claiming they were concerned about the practice. Those are pretty strong numbers at a time in America’s history when it is difficult to get the electorate to agree upon anything.

Moreover, less than a year after 80 percent of Americans said they don’t trust our government, the Civil Society Institute’s study shows that 78 percent of respondents “strongly” support “tighter public disclosure requirements as well as studies of the health and environmental consequences of the chemicals used in natural gas drilling.” However, the same study shows that 56 percent of Americans who are aware of fracking feel that state and federal officials are not doing “as much as they should,” and 49 percent say they aren’t doing “anything at all” to require proper disclosure of the chemicals used in natural gas drilling.

The scope of these feelings is also worth noting. It is not just limited to the heavily fracked parts of Pennsylvania or the politically charged drumlins ??? of central New York. In Wyoming, where fracking was practically invented and is practiced in small towns like Pavillion, a study reveals that residents feel gas drilling has polluted their water wells and that four out of five residents of the Pavillion area have reported headaches, nausea, itchy skin, dizziness and other ailments since production began in their town. In Colorado, where the number of gas wells has grown from 200 to 1,300 over the last ten years, methane levels in nearby water wells are reported to have increased as well.

All of these numbers combine to reveal a clear consensus. Americans are aware of fracking. While it is hard to determine if this concern began with Josh Fox’s “Gasland” movie last year or if the concern is simply the result of growing reports of water contamination near fracked lands, it’s easy to tell that eyebrows have been raised and people are demanding accountability when it comes to what is in their drinking water and under their property.