New York State Agency Investigating Tappan Zee Bridge Funding

A low-profile state board has embarked on one of its highest-profile cases as it examines how federal clean water funds were earmarked by the Cuomo administration for construction of the new $3.9 billion Tappan Zee Bridge.

The state Authorities Budget Office has begun interviews with officials from the state Environmental Facilities Corp. over its June approval of $511 million in loans from the federally supported Clean Water State Revolving Loan Fund to help finance the bridge project.

This week, the U.S. Environmental Protection Agency issued a stinging rebuke to the state when regional EPA officials blocked about $481.8 million as an improper use of the money, which is meant to make loans to help local governments pay for water and sewer projects.

?This is an active investigation and we are taking it seriously,? said David Kidera, Authorities Budget Office director on Thursday. “This is not an investigation of whether the loan is right or wrong but rather one into whether the (EFC) board acted appropriately in making its decision.?

His 11-person office is responsible for keeping tabs on 568 state and local authorities, with much of its past work focusing on local Industrial Development Agencies.

“We are fully cooperating with the review,” said EFC spokesman Jon Sorenson. In a statement, he said that bond rating agency Moody’s Investors Service had reported that applying clean water funds to the bridge project would not harm the credit rating of the program.

The Environmental Facilities Corp. , which was projected to have about $775 million in revenue this year, is the largest agency to be investigated by the Authorities Budget Office since its creation in 2009. Up to this point, the biggest state agency to be probed was the New York State Theater Institute, which came after the Attorney General had found evidence of financial irregularities.

Kidera, a 64-year-old longtime former Budget Division staffer who was appointed to head the office by former Gov. David Paterson, was asked in July by a coalition of environmental groups to probe the EFC vote to award loan funds to the state Thruway Authority, which is responsible for building the new bridge.

Critics complained that Gov. Andrew Cuomo was pushing the decision by issuing a June 16 news release announcing the funding, even though the EFC vote was still 10 days away. That calls into question whether EFC board members were acting independently of Cuomo and had fully considered all project ramifications, including the possibility that EPA could yank improper funding, said Peter Iwanowicz, director of Environmental Advocates of New York.

That group was among a dozen environmental organizations that asked Kidera to investigate. ?We are pleased that they are conducting a full investigation as to what level of independent fiduciary responsibility EFC members took before their vote,? said Iwanowicz. He said EFC members should have been aware that EPA had raised doubts about the eligibility of the bridge project and delayed action until EPA formally ruled on that issue.

?We found it highly improper for the governor to presuppose the outcome of the EFC meeting ten days in advance, and three days before EFC board members had received their information packets on it,? said Iwanowicz.

Cuomo’s June 16 release was entitled ?Governor Cuomo announces $500 million in EFC Loans to NEW NY Bridge Project.? In its first sentence, the governor said EFC ?will make? the loans. In the release, EFC president and CEO Matthew Driscoll said the agency was ?delighted? to use the loan fund.
EFC board members include Environmental Conservation Commissioner Joe Martens, who is chairman; acting Health Commissioner Howard A. Zucker and Secretary of State Cesar A. Perales.

Cuomo appointed directors including Francis R. Corcoran, president and CEO of National Stock Exchange; Charles Kruzansky, director of government relations at Cornell University ; and Vita DeMarchi, a managing partner of Syracuse-based Synapse Partners, an insurance brokerage and risk management firm. In general, he said, such investigations involve determining what level of information board members availed themselves of prior to making a decision.

?We look at things like that board members acted for no personal gain, acted with integrity, and formed an independent judgment and came to an independent conclusion,? he said.

Seeking advice on an issue from outside sources, up to and including a governor, can be a normal part of an authority’s decision-making process, he said, as long as no coercion is employed to influence a decision.
His office has the power to issue subpoenas, but none have been issued in this case, he said. His office cannot lodge charges, but it can censure authorities and recommend the removal of individual members.

Some information contained in this news piece was first reported by the Times Union (Albany, NY).

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