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The Committee to Frack New York?

New York State governor Andrew Cuomo has gotten a major assist during his first year and a half in office from an outside lobbying group known as the Committee to

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New York State governor Andrew Cuomo has gotten a major assist during his first year and a half in office from an outside lobbying group known as the Committee to Save New York, a coalition of corporate elites that advocates for austerity policies and specializes in taking to the airwaves to heap praise on the governor and his agenda. Despite making a massive lobbying blitz in 2011 and being an extremely powerful political force in New York State, the Committee has refused to disclose its donors and will not be required to disclose its past donors by New York’s ethics commission, raising questions about who, exactly, is backing the group and funding what the New York Times has referred to as Cuomo’s “secret slush fund.” This being the sort of group we love to dig into here at LittleSis/PAI, we have done extensive research and recently published our findings in the report “The Committee to Save 1% NY.”

Cuomo on his Blackberry.
Cuomo on his Blackberry.

At least one controversial policy fight gave a fundraising boost to Cuomo’s Committee in 2011. According to the New York Times, the casino gambling industry donated millions to the Committee at the same time Cuomo was shaping his stance on casino gambling legalization. The Cuomo administration reportedly urged casino industry lobbyists to route large contributions to the Committee, which subsequently ran ads praising the governor. The Cuomo administration and the Committee had long denied coordinating, but reversed this claim in the wake of the Times bombshell, possibly after a blitz of untraceable Blackberry messages.

Has the fracking controversy provided a similar fundraising opportunity for Cuomo and his Committee? New York State enacted a moratorium on fracking in 2010 and is currently in the process of deciding whether to allow the controversial practice. The Cuomo administration has signaled that it will allow fracking in some areas of the state, and at least one fracker’s son is certain that Governor Cuomo has seen through the “smoke and mirrors” of the anti-fracking movement and is set to come down on the side of industry.

Without proper disclosure, it is impossible to know whether gas industry interests are backing the Committee. But there are plenty of signs that the industry has a foot in the door at Cuomo’s “slush fund.” Four Committee backers identified in the press have a stake in the fracking debate, either directly or through businesses they represent: Con Edison, the Partnership for New York City, the Business Council of New York State, and the Buffalo Niagara Partnership. These organizations are major Committee backers, having either donated directly or “bundled” significant contributions to the Committee. And two of these organizations – the Business Council of New York State and the Partnership for New York City – are identified in PAI’s recent report on the “Committee to Save 1% NY” as primary forces behind the coalition.

Cuomo has taken campaign contributions directly from the natural gas industry, of course. The 2011 Common Cause report Deep Drilling, Deep Pockets found that Cuomo had received over $150,000 from the gas industry from 2007 to 2011. And the gas industry contributions continue to flow in – Cuomo received $5,000, for instance, from Spectra Energy subsidiary Texas Eastern Transmission last month (see more below on the Spectra pipeline deal).

The Spectra contribution suggests that Cuomo is raising funds from the natural gas industry. Has he also directed natural gas companies to send large contributions into the Committee’s coffers, in advance of the DEC’s decision on fracking – just as he did with casino gambling interests?

Con Ed’s Dark Money Pipeline

Last month brought the news that Con Ed, which was at the time locking out 8,500 workers in New York City, gave $250,000 last year to the Committee to Save New York. The gas and electric utility has a range of interests before New York State, including a stake in the fracking debate. It has also been a prominent cheerleader for the Spectra pipeline, which will bring fracked gas from the Marcellus Shale into Con Ed’s New York City service territory.

To put Con Ed’s $250,000 contribution in perspective, it is more than the company’s combined New York State campaign contributions from 2007 to October 2011, as documented in Deep Drilling, Deep Pockets, a report from Common Cause (contributions totaled $214,232 during that period). Common Cause noted that Con Ed “has a significant stake in the expansion of fracking in the Marcellus Shale due to its investments in gas transmission infrastructure.”

Con Ed CEO Kevin Burke sits on the boards of both the Partnership for New York City and the Business Council of New York State (where he is vice chair and was chair until last year). As discussed below, both of these organizations played a major role in organizing the Committee. Con Ed also has a significant connection to the Cuomo administration through board member Michael Del Guidice, who was formerly Mario Cuomo’s chief of staff.

The Business Council of New York State Oklahoma City/Calgary

The Business Council of New York State was one of the three key organizers of the Committee to Save New York analyzed in PAI’s report, and press reports recently revealed that it bundled donations for the Committee. It also has extremely strong ties to the natural gas industry through its board and its membership, and it has lobbied extensively for fracking in New York State.

The Business Council’s previous CEO, Ken Adams, played a key role in organizing the Committee before Cuomo rewarded him with a job overseeing Empire State Development Corp, New York’s all-powerful economic development agency. The Business Council reportedly bundled contributions for the Committee, reaching out to members to see if they would be interested in contributing to the Committee in order to “help improve the state’s economy.” CEO Heather Briccetti serves on the Committee’s advisory board. For its part, the Cuomo administration continues to be so close to the Business Council that it has put words in the mouth of Briccetti, writing quotes attributed to her in press releases.

A logo submitted by the IOGANY as part of the Cuomo administration's "I ___ NY" contest.
I Frack NY? A logo submitted by the IOGANY as part of the Cuomo administration's "I ___ NY" contest.

Given the coziness between the Cuomo administration, the Committee, and the Business Council, it is troubling that the gas industry’s influence at the Business Council has increased significantly in recent years. The industry has had a hold on the chairmanship since 2008, when Con Ed CEO Kevin Burke took over. Burke stepped down in 2011, but the gas industry can also claim his successor, National Fuel Gas CEO David F Smith, as one of their own. In addition to being a gas utility, National Fuel’s exploration and production subsidiary, Seneca Resources, is heavily involved in fracking in the Marcellus Shale in Pennsylvania. (PAI released a report in March on National Fuel’s extraordinarily low income tax rates.)

As the fracking debate intensified in New York State over the past several years, the Business Council appears to have added at least two major frackers to its membership list. Chesapeake Energy appears to have joined the Business Council in 2009 (they were listed on the group’s site in October 2009, but not in January 2009). Talisman Energy USA appears to have joined around the same time (it was listed as a member in September 2010, but not in May 2009).

Chesapeake (based in Oklahoma City) and Talisman (based in Calgary) are the top two drillers in Pennsylvania’s Marcellus Shale and the top two leaseholders in New York’s Finger Lakes region, according to a report from the Citizens Campaign for the Environment released last year. Chesapeake and another major fracking company, Anschutz Exploration, both contributed $5,000 to the Business Council PAC in November 2010.

Similarly, the Independent Oil and Gas Association of New York (IOGANY), a gas industry lobbying group, was not listed on the Business Council website as of December 2010, but was added soon after.

If the Business Council’s website is to be believed, Chesapeake and Talisman joined the Business Council’s ranks during the tenure of top Cuomo economic development official and Committee to Save New York organizer Ken Adams. The gas industry’s ascent within the ranks of Business Council members may explain why Adams touted shale drilling in November 2009 testimony to the NYSDEC.

The Business Council has other ties to the natural gas industry through its board and membership:

The gas industry’s growing involvement at the Business Council may explain why the group prioritized fracking in its 2012 legislative agenda, is lobbying heavily for fracking in New York State, and has issued reports (through its policy arm) touting grossly inflated estimates of fracking’s economic impact.

If gas industry interests are a driving, agenda-setting force at the Business Council, are they also a driving force at the Committee to Save New York – and the Cuomo administration? When the Business Council appealed to its membership for funding for the Committee to Save New York, did it reach out to Chesapeake and Talisman – two recent, deep-pocketed additions to its membership? Did National Fuel kick in contributions to the “secret slush fund”?

Without proper disclosure, it is impossible to know whether these companies donated to the Committee – and what kind of influence these companies have bought with the Cuomo administration.

The Partnership for New York City: High Finance is a Gas

The Partnership for New York City was one of the major forces behind the formation of the Committee, as our report details. Its president, Kathy Wylde, was one of the Committee’s main organizers and is one of the group’s three board members. The Partnership gave the group a reported $3 million in 2011. The first seeds for the Partnership appear to have been planted at one of its functions – Cuomo was briefed on plans for the Committee at a Partnership board meeting in the fall of 2010.

The Partnership unites many of New York City’s most powerful businessmen, and its ranks are naturally dominated by Wall Street types like JPMorgan CEO Jamie Dimon and Goldman Sachs CEO Lloyd Blankfein. But it also has strong ties to the gas industry through its board members and “partner companies.” Most of these connections are relatively hard to identify, because they are often secondary affiliations – outside board memberships, company subsidiaries, or investments, as opposed to so-and-so being the CEO of Gas Company X. But some are extremely significant nonetheless:

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Partnership for New York City partner companies also include Hess Corporation, an oil and gas company engaged in fracking, and Mason Capital Management, a hedge fund which is one of BP’s largest shareholders, with nearly $500 million in stock. Mason Capital appears to be a relatively new “partner company” at the Partnership – its name did not appear on the Partnership’s website last year. Mason Capital’s Kenneth Garschina recently joined Partnership CEO and Committee director Wylde on the board of the Manhattan Institute. Last year, the conservative think tank issued a report that touted fracking’s economic benefits and downplayed its environmental risks. The report was authored by Timothy Considine, who was also the lead author of the University at Buffalo report criticized by PAI in May. Considine actually lifted entire passages from his Manhattan Institute report for the UB report.

The ties between the Partnership and the gas industry are likely even more extensive than what is detailed above. The worlds of energy and finance are deeply intertwined, and the gas industry relies heavily on huge amounts of financing from Wall Street for its fracking operations. Fracking may not be on the Partnership’s public agenda, but some of its most prominent directors are clearly heavily invested in the industry. Did they contribute to the Committee? Are they using this influence to push a pro-fracking agenda in Albany?

The Buffalo Niagara Partnership: Unshackling Frackers’ Influence

The Buffalo Niagara Partnership (BNP) bundled nearly $1 million in contributions to the Committee to Save New York, its president holds a seat on its advisory board, and it also has significant ties to natural gas industry interests.

National Fuel Gas has two representatives on the BNP board: utility president Anna Marie Cellino, who was recently elected to the board, and director Robert Brady. National Fuel is also listed as a “major investor” on BNP’s website. National Fuel CEO David Smith chaired the BNP’s sibling organization, Buffalo Niagara Enterprise (BNE), before taking the reins at the Business Council. During his tenure, BNE was the top recipient of ratepayer-funded economic development grants that were administered by National Fuel; that is, National Fuel just happened to dole out ratepayer-funded, regulator-approved economic development dollars to an organization chaired by its CEO.

Gas and electric utility National Grid’s regional executive, Dennis Elsenbeck, also serves on the board of BNP, and National Grid is listed as a “major investor” in the group. Several law firms associated with the Buffalo Niagara Partnership are also involved in natural gas issues. The University at Buffalo, which issued this spring’s controversial fracking report, is a top sponsor as well. Ecology and Environment’s Kevin Neumaier was recently added to the BNP board. (Bonus connections: National Fuel has contracted with Ecology and Environment to help it tout “clean” gas, and Cellino’s father-in-law, Ross Cellino, is on E&E’s board.)

In June, Cuomo appointed the chair of the Buffalo Niagara Partnership, Jaeckle Fleischmann partner Tim Loftis, to the board of the New York Dormitory Authority. Jaeckle has recently issued a series of alerts titled “Marcellus Matters” with information on NYSDEC’s regulation of fracking. The firm also co-presented at a recent gas industry event in Buffalo named “Marcellus: A Growth Story.”

There are other signs that the BNP and the Cuomo administration are close. Just as it did with the Business Council, the Cuomo administration penned a quote for the director of the BNP’s political arm, a group called Unshackle Upstate.

Fracking is also on the BNP’s public agenda. It listed “Approval of lifting the moratorium in New York State on hydraulic fracturing” among its 2011 New York State Advocacy Wins.

Again: BNP bundled contributions for the Committee. Were the natural gas industry interests that play such a big role there among the donors?

And again: it’s impossible to know.

The Friends of Fracking

The gas industry has worked many angles in order to gain a foothold in New York; donations to the Committee to Save New York would be just another tool in their arsenal, a hidden channel through which they can exert influence on the governor’s office. The Committee has strayed far from its avowed purpose of “fiscal responsibility” in taking donations from gambling interests and supporting gambling legalization, so it is not hard to believe that it would work with gas interests involved in another controversial policy fight.

But even if Chesapeake Energy or Talisman Energy haven’t contributed to the Committee, they have friends in the Committee backers that have already been identified in the press. From the Partnership for New York City to the Business Council of New York State to Con Ed, many of the same pro-austerity interests backing the Committee are also invested in the fracking boom, and looking to profit from it. The friends of fracking have a friend in Governor Cuomo, and the Committee to Save New York has a lot to do with that.