NY wind “code of conduct”: backdoor attempt to regulate municipal officials?

Prof. Patty Salkin of the Albany Law School (and Law of the Land blogger) has published a thought piece entitled, “New Code of Ethics for Wind Energy Companies Doing Business in New York: A Back-Door Approach to Regulating Municipal Ethics,” available at the Law School’s Governmental Law Center (which Prof. Salkin directs.).

The piece offers a critical review of the so-called Code of Conduct promulgated by New York State Attorney General Andrew Cuomo in late 2008. The Code of Conduct was a response to allegations of misconduct in the siting process by developers First Wind and Noble Environmental Power and municipal officials. While receiving considerable attention at the time of its release, the code has not been widely accepted by the wind development community, perhaps because it reads more like an enforcement order than a code of conduct; according to this blogger’s information, to date only First Wind and Noble have signed on.

Prof. Salkin writes:

While on its face, the Code is aimed at the conduct of wind energy companies and their employees (and in fact, only the wind energy companies are signatories to the voluntary Code), the reality is that this Code impacts not only the conduct of corporate employees, but through controlling corporate conduct it also impacts municipal officials in terms of their conduct, required disclosure and similar requirements on their family members. It is likely that the Attorney General recognized gaps in the manner in which municipal ethics are addressed at the state level and saw an opportunity to begin to fill in where the statutes fall short. In some areas covered in the Code, it is possible that the State Legislature has preempted the field of regulation. Further, in some instances there are inconsistencies between the new Code and existing statutes that could lead to confusion. Lastly, provisions in locally adopted codes of ethics enacted pursuant to the General Municipal Law may also address some of the items covered in the new Code.

The full article is here at the Government Law Center.

Town of Howard wind court case: Local official not removed from office

While New York Attorney General Andrew Cuomo considers allegations of impropriety in the context of wind farm siting, the courts are addressing the issue as well.

In an appeals court decision, a member of the Town Board of the Town of Howard (Steuben County) was not removed from office after a resident alleged improper behavior in the approval of an Everpower wind project.

The case, In The Matter of Gerald S. Hedman, et al. v Town Board of Town of Howard, Howard Wind, LLC, Everpower Global Corporation, Town Planning Board of Town of Howard and William O. Hatch (1393 Tp 08-00986, Nov. 21, 2008), was decided by the Supreme Court of New York, Appellate Division, Fourth Department.

Petitioners in the case commenced an Article 78 proceeding seeking, among other things, removal of William O. Hatch as a member of respondent Town Board of Town of Howard (Town Board) pursuant to Public Officers Law § 36. According to petitioners, Hatch had attempted to conceal his relationship with respondent Everpower Global Corporation (Everpower) and disregarded a conflict of interest that arose when he voted to approve a wind energy facility proposed by Everpower that included a wind turbine on Hatch’s property.

The Supreme (trial) Court transferred to the Appellate Division that part of the petition seeking Hatch’s removal from the Town Board and dismissed the remainder of the petition. The lower court’s dismissal was not before the appeals court.

The appeals court noted that

removal of an official from office under Public Officers Law § 36 “generally will not be granted absent allegations of self-dealing, corrupt activities, conflict of interest, moral turpitude, intentional wrongdoing or violation of a public trust[,] . . . [and a]llegations of minor neglect of duties, administrative oversights, or violations of law . . . do not, in general, warrant removal.”

The court determined that the sole remaining petitioner, Gerald S. Hedman, failed to establish that Hatch had an actual conflict of interest that would warrant his removal as a Town Board member.

Hedman’s evidence had consisted solely of Everpower’s proposal for a wind energy facility identifying Hatch as a proposed participating landowner on whose property a wind turbine would be located. Hatch, in contrast, established that he had not entered into any agreement with Everpower with respect to the wind turbine at the time of his vote on the proposal, and petitioner presented no evidence to the contrary. The court found, then that on the record before the court it cannot be said that Hatch was affected by a conflict of interest by virtue of his vote in favor of Everpower’s proposal for a wind energy facility.

The court also concluded that petitioner’s allegation that Hatch intentionally concealed his relationship with Everpower was based on pure speculation and so entitled to no evidentiary weight.

Lastly, the court found that the alleged impropriety of Hatch in failing to make a public disclosure of the potential conflict of interest did not warrant his removal as a Town Board member (see Public Officers Law § 36).

Towns’ regulation of wind in New York

From recent press reports:

Oneida-based Empire State Wind Energy discusses potential wind energy project in Town of Alfred (Allegany County). Evening Tribune, 11/18

The Town of Berne (Albany County) is considering a wind development moratorium. Albany Times Union 11/19

Town of Farmersville (Cattaraugus County) updates wind regulations, eliminates moratorium. The Town has reportedly been approached by Noble Environmental Power to site a 67-turbine facility. Buffalo News, 11/18 But Noble’s projects in the towns of Farmersville and Freedom (Cattaraugus County) may be delayed by economic climate. Buffalo News, 11/20

At a community forum in Irondequoit, Attorney General Andrew Cuomo indicated that his office was looking into concerns regarding the manner in which a local wind law in the Town of Hamlin was passed. Rochester City Paper, 11/19

Herkimer County Legislature defines what it wants from PILOT (payment in lieu of taxes) agreements from wind developers. Utica Observer-Dispatch, 11/18; Herkimer Telegram, 11/18

New New York Power Authority (NYPA) President and CEO Richard Kessel met with Buffalo area leaders to discuss plans to bolster the upstate economy:

To do so, NYPA President and Chief Executive Officer Richard Kessel said, would include use of renewable energy, energy efficiency, and transmitting hydropower from Canada, which then would be redistributed. ‘Nothing is more important than transmission, it’s the name of the game,’ Kessel said, adding, ‘New York state is like a human body with arteries and veins, with nothing connected to the heart.’ Buffalo News, 11/17.

See also Lockport Journal, 11/20

Attorney General establishes wind company code of conduct

The following press release was issued today by the New York State Office of the Attorney General. It is a response to Attorney General Cuomo’s investigation, launched this past summer, into allegations of improper behavior with respect to Noble Environmental Power’s and First Wind’s efforts to site projects in the state.

The code itself was not available at the time of posting. At a press conference today, the Attorney General made clear that this does not conclude the Attorney General’s investigation. [Update: To clarify, subscription to the code is voluntary, not mandatory.]

The code and creation of a Task Force highlight, however, the degree of care both towns and developer alike must place on a transparent, ethical siting process.


Noble Environmental Power and First Wind first to sign Wind Industry Ethics Code

New Task Force to monitor and ensure compliance includes: District Attorneys Gerald Stout, Michael Green, and Derek Champagne, Executive Director of the NYS Association of Counties Stephen Acquario, Executive Director of the NYS Association of Towns G. Jeffrey Haber, and NYPIRG’s Legislative Director Blair Horner

ALBANY, N.Y. (October 30, 2008) – Attorney General Andrew M. Cuomo today announced a new Wind Industry Ethics Code that establishes guidelines to facilitate the development of alternative energy in New York while assuring the public the wind power industry is acting properly and within the law. The Code calls for new oversight through a multi-agency Task Force, and establishes unprecedented transparency that will deter any improper relationships between wind development companies and local government officials.

The first companies to sign the Attorney General’s Wind Industry Ethics Code are Essex, Connecticut-based Noble Environmental Power, LLC and Newton, Massachusetts-based First Wind (formerly known as UPC Wind). Both companies currently operate wind farms in New York and have several others in development.

“Wind power is an exciting industry for the state that will be a cornerstone of our energy future. But it is important to make sure that this alternative energy sector develops in a way that maintains the public’s confidence, and that is what this new Code of Conduct does,” said Attorney General Cuomo. “I commend Noble and First Wind for taking the lead by adopting this Code, and we fully expect other companies that want to develop wind farms in New York to follow suit.”

The Wind Industry Ethics Code is a result of the Attorney General’s investigation into, among other things, whether companies developing wind farms improperly sought land-use agreements with citizens and public officials, and whether improper benefits were given to public officials to influence their official actions relating to wind farm development. Both Noble and First Wind fully cooperated in the inquiry and their assistance was instrumental in developing the Code of Conduct that is being announced today.

The Attorney General’s Wind Industry Ethics Code prohibits conflicts of interest between municipal officials and wind companies and establishes vast new public disclosure requirements. The Code:

  • Bans wind companies from hiring municipal employees or their relatives, giving gifts of more than $10 during a one-year period, or providing any other form of compensation that is contingent on any action before a municipal agency
  • Prevents wind companies from soliciting, using, or knowingly receiving confidential information acquired by a municipal officer in the course of his or her officials duties
  • Requires wind companies to establish and maintain a public Web site to disclose the names of all municipal officers or their relatives who have a financial stake in wind farm development
  • Requires wind companies to submit in writing to the municipal clerk for public inspection and to publish in the local newspaper the nature and scope of the municipal officer’s financial interest
  • Mandates that all wind easements and leases be in writing and filed with the County Clerk
  • Dictates that within thirty days of signing the Wind Industry Ethics Code, companies must conduct a seminar for employees about identifying and preventing conflicts of interest when working with municipal employees

Attorney General Cuomo is also establishing a new Task Force that will monitor wind companies to ensure they are in compliance with the Code of Conduct. Members of the Task Force will include: a representative from the Office of the Attorney General, Franklin County District Attorney Derek P. Champagne, Monroe County District Attorney Michael C. Green, Wyoming County District Attorney Gerald Stout, Executive Director of the New York State Association of Counties Stephen Acquario, Executive Director of the New York State Association of Towns G. Jeffrey Haber, and New York Public Interest Research Group Legislative Director Blair Horner.

The New York State Energy Research Development Authority (NYSERDA) estimates that wind power has the potential to provide 20 percent of the state’s electricity demand and a 2005 report by the state Comptroller’s Office estimates the alternative energy industry could add 43,000 jobs in New York by 2013.

Noble Environmental Power, LLC, has three active wind farms in New York; the Noble Clinton Windpark and Noble Ellenberg Windpark in Clinton County, and the Noble Bliss Windpark in Wyoming County. Other possible future locations include Allegany, Chautauqua, Clinton, Franklin, and Wyoming Counties.

First Wind has one operational wind farm in New York, the Steel Winds wind farm in Erie County. Possible future locations include Steuben and Chautauqua Counties.

Franklin County District Attorney Derek P. Champagne said, “This common sense approach by Attorney General Cuomo will help ensure the promise of clean, renewable energy is not tainted by shady deals and improper relationships between wind power companies and local government officials. I look forward to taking part in the new task force and applaud the Attorney General for his leadership on this important issue.”

Wyoming County District Attorney Gerald Stout said, “Wind power not only provides us with clean, renewable energy, it can also serve as an economic engine for New York. Attorney General Cuomo’s Code of Conduct and the introduction of the new task force are both important steps in making sure corrupt influences do not put this growing industry in peril.”

Monroe County District Attorney Michael C. Green said, “I commend Attorney General Cuomo for establishing this new Code of Conduct for the wind-power industry. When properly developed, wind power can and should play a vital role in our state’s energy future, but it cannot happen in a way that erodes public confidence with allegations of self-dealing and corruption. The Attorney General’s new code of conduct and task force will ensure that wind companies stay in compliance without unduly burdening the companies’ ability to do business in New York.”

Senator George Maziarz, Chair of the Senate Energy and Telecommunications Committee said, “Attorney General Cuomo has again proven that the best way to tackle challenging issues is through cooperation at all levels of government. By working together we can ensure that this promising industry will continue to flourish in New York.”

Assemblyman Kevin Cahill, Chair of the Assembly Energy Committee said, “Wind power will play an important role in achieving energy independence through a growing reliance on clean, renewable resources. In order to reach that goal effectively, it is essential that all parties involved play by the rules and adhere to the highest standards of ethics. I applaud Attorney General Cuomo for his efforts on this issue.”

New York State Association of Counties Executive Director Stephen J. Acquario said, “Local governments have taken the lead in siting wind energy generating facilities, which provide essential renewable energy into the electrical grid. Simultaneously, county ethics boards continue to take their role in policing conflicts of interest pertaining to the siting of wind power very seriously. Attorney General Cuomo’s Code of Conduct is an important step in helping make sure public confidence remains strong as this burgeoning industry develops across our counties.”

Executive Director of the New York State Association of Towns G. Jeffrey Haber said, “This is a new rapidly growing industry with exciting potential – as well as new challenges – for all of us. Attorney General Cuomo, working with all interested parties, has taken a strong leadership role in developing guidelines to help us all as the industry develops and evolves across New York state.”

Blair Horner, Legislative Director of the New York Public Interest Research Group said, “Good ethics requirements helps build a better business climate. Companies that play by the rules should never be put at a competitive disadvantage. And the public should know that private-public deals are made in the public’s best interest. This Code will help ensure that this important industry grows and prospers in New York.”

Walter Q. Howard, President and Chief Executive Officer of Noble Environmental Power said, “Noble has always been fully committed to the ethical and transparent development of renewable resources, and has supported the work of the Attorney General and his staff in the development of the new Wind Industry Ethics Code. We are gratified that going forward there will be clear guidelines with respect to ethical behavior and conflict of interest, and are committed to continuing to operate in conformity with the principles laid out today in this Code.”

Paul Gaynor, President and Chief Executive Officer of First Wind said, “We are pleased to have cooperated with the Office of the New York Attorney General in its efforts to bring clarity to the wind industry in New York State. We have always held ourselves to high standards, and we hope that other firms will join us in signing on to this Code of Conduct. We believe it is good for us, good for the industry and good for New York.”

Any complaints about wind development companies should be sent to the newly created Task Force by e-mailing them to WindTaskForce@oag.state.ny.us. Complaints about other industries or local officials should be made to the Office of the Attorney General by e-mailing them to public.integrity@oag.state.ny.us or by calling 1-800-428-9072.

The matter is being handled by Special Deputy Attorney General Ellen Nachtigall Biben, who oversees the Attorney General’s Public Integrity Bureau, Deputy Bureau Chief Monica Stamm, Assistant Attorneys General Andrew Heffner and Robert Vawter, and Executive Deputy Attorney General for Criminal Justice Robin L. Baker.

[Added 10/31] New reports (and an editorial) on the new wind ethics code include: