State report criticizes LIPA for consulting fees - Houston weather, traffic, news | FOX 26 | MyFoxHouston

State report criticizes LIPA for consulting fees

Posted: Updated:
Former LIPA COO Michael Hervey Former LIPA COO Michael Hervey
NEW YORK (MYFOXNY) -

The Long Island Power Authority, which was heavily criticized for its poor response to Hurricane Sandy, is facing new scrutiny.

More than 90 percent of LIPA's 1.1 million customers on Long Island lost power after Superstorm Sandy and didn't get it back for weeks. Now a new report criticizes the utility giant for its poor performance.

A scathing report by the Moreland Commission, which is a panel appointed by Gov. Andrew Cuomo, pointed out why LIPA performed so poorly after several major storms.

Among their discoveries, while many LIPA customers were paying some of the highest utility rates in the country, outside consultants were raking in up to $500 an hour in fees totaling $65 million over four years. One even billed $6,800 for a Manhattan hotel room and another for a trip to Puerto Rico, complete with a seaplane ride.

"What stands out here is the absurdity some of the charges these outside contractors charge the utility. Just ridiculous stuff that normally other utilities would be picked up by audit and monitoring – but they were not picked up by LIPA," said Matthew Cordaro, LIPA Watchdog Ph.D.

Determining who was involved and when may prove difficult says the panel. They found what they call a disturbing revolving door between the highly paid consulting company Navigant and LIPA.

One example is LIPA's COO during Sandy was Michael Hervey. Since January, Hervey's been working for Navigant.

"That's not unusual actually," said Cordaro. "Through the country, as execs wind down their careers at utilities, many times they will join outside contractors."  

Those are just some of the alarming revelations in the report but there are others. The panel found that LIPA trustees spent a mere 39 seconds discussing storm preps four days before Sandy and that LIPA ratepayers have been footing the bill for the high, unexplained consultant payments and accounting irregularities to the tune of $15 million in overcharges.

"Well, it's obviously dishonest and as taxpayers that we all are, whether its consumer or real estate taxes, we want the officials that are heading everything to be as honest as possible – so it's very discouraging," said one Long Island resident.  

The commission is turning over its finding to federal prosecutors to see if criminal charges are warranted.  Gov. Cuomo is also calling for prosecutors to take a very close look at what they've uncovered.

Both LIPA and Navigant Consulting have refused to comment on the Moreland Commission report.

  • Long Island NewsLong Island NewsMore>>

  • Fatal skydiving accident on Long Island

    Fatal skydiving accident on Long Island

    Thursday, July 31 2014 8:26 AM EDT2014-07-31 12:26:50 GMT
    Police on Long Island say one person has died and another has been seriously injured in a skydiving accident. Riverhead police say it happened at about 4 p.m. Wednesday at Skydive Long Island in Calverton. Police say the injured person was airlifted to Stony Brook University Hospital in critical condition.
    Police on Long Island say one person has died and another has been seriously injured in a skydiving accident. Riverhead police say it happened at about 4 p.m. Wednesday at Skydive Long Island in Calverton. Police say the injured person was airlifted to Stony Brook University Hospital in critical condition.
  • 8 fined $144,500 in Long Island cheating scandals

    8 fined $144,500 in Long Island cheating scandals

    State records show two administrators and six educators were fined a total of $145,500 in connection with two separate cheating scandals in Glen Cove City schools on Long Island.
    State records show two administrators and six educators were fined a total of $145,500 in connection with two separate cheating scandals in Glen Cove City schools on Long Island.
  • Queens teen pleads guilty in crash that killed 4 friends on Long Island

    Queens teen pleads guilty in crash that killed 4 friends on Long Island

    Tuesday, July 29 2014 2:54 PM EDT2014-07-29 18:54:40 GMT
    A New York teenager has pleaded guilty to aggravated vehicular homicide in a 2012 high-speed crash that killed four of his friends and split his new car in two. Joseph Beer entered the plea Tuesday. He faces five to 15 years in prison, though his attorney is seeking youthful offender status because he was 17 at the time.
    A New York teenager has pleaded guilty to aggravated vehicular homicide in a 2012 high-speed crash that killed four of his friends and split his new car in two. Joseph Beer entered the plea Tuesday. He faces five to 15 years in prison, though his attorney is seeking youthful offender status because he was 17 at the time.
Powered by WorldNow

KRIV FOX 26
4261 Southwest Freeway
Houston, TX 77027

Phone: (713) 479-2801
Fax: (713) 479-2859

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices