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July 7, 2003 


LIPA Spent $45,000 on Inappropriate Political Polling,
Did Not Follow Its Own Contract Procedures In Selecting Polling Firm

The political consultant paid $45,000 by the Long Island Power Authority (LIPA) to conduct polls that included many inappropriate questions about politicians was selected without using required competitive bidding and paid without a contract, according to a report issued today by State Comptroller Alan G. Hevesi. The consultant, Strategic Planning Systems, was working for the Lazio for Senate campaign at the same time that it conducted a poll for LIPA that asked questions about that race. Also, LIPA could not provide complete information about its spending on polling, which totaled at least $1.2 million in 2001 and 2002.

“A government agency should not be doing political polling. We found no 'smoking gun' proving that LIPA did the polls to aid candidates for public office, but the facts certainly create that appearance. It is critical that LIPA keep its new promise to stop this type of polling,” Hevesi said. “I am also disturbed that LIPA did not follow its own contract procedures in hiring the political consulting firm and that the Authority was unable to provide my staff with complete information about its spending. Therefore, we will begin an in-depth review of LIPA’s spending and contracting practices.”

The Comptroller’s Office study found that:

  • LIPA spent at least $1.2 million on polling during 2001 and 2002. Because of the poor state of the agency’s records, the Comptroller’s Office was not able to determine if that is the total spent for those years.
  • LIPA spent more than $45,000 for four polls conducted by Strategic Planning Systems from 1999 through 2002. Strategic Planning Systems was selected without the competitive process LIPA’s own contracting guidelines require for all contracts valued at more than $5,000.
  • LIPA did not, as required, document why it bypassed contracting guidelines. Officials claim it was because the firm has unique qualifications, but Strategic Planning System’s only unique qualification is political experience. It is unclear why LIPA could not have used other firms already under contract to conduct polls.
  • The poll conducted by Strategic Planning for LIPA in May 2000 during the race for U.S. Senate in New York was the most political of the four. More than 40 percent of the questions were political in nature, including LIPA’s asking for whom Long Islanders would vote in the U.S. Senate race and whom they thought would win.
  • Because there was no contract or written agreement with Strategic Planning regarding the scope of the project, standards of conduct, or a confidentiality agreement, nothing prevented the firm from sharing results of the polls with candidates. Strategic Planning was also working for the Lazio for Senate campaign at that time. Further, according to Newsday, the Lazio campaign had no other polling operation.
  • LIPA claims the polls asked about a list of political figures because it might use them in promotional activities or to have something against which to compare its own popularity. But LIPA was unlikely to use in its advertising the Nassau County Republican Party Chairman and several other figures ratepayers were asked about. In fact, only two of the 20 people included in the polls have been used in Authority promotions. And for comparison purposes, there are many public sources for polling data on the Governor, New York’s U.S. Senators and other major figures included in the polls.
  • Other utilities do not do political polling. Six investor-owned utilities in New York, including Orange Rockland Utilities, Niagara Mohawk and Central Hudson Gas & Electric, all stated that they do not include any political questions in their polling. The Long Island Lighting Corporation (LILCO) was involved in intense political fights over its future and a possible government takeover. Even so, seven polls conducted for LILCO, a private company, never asked respondents to pick between candidates for the same office and only 14 percent of the questions were of a political nature.

The Authority conducts a significant amount of market research every year in conjunction with KeySpan, the private firm that acquired the LILCO assets, including its electrical generation facilities. Some of the contracts for conducting market research are done directly by LIPA and some are done for LIPA by KeySpan. LIPA is required by law to submit proposed contracts of more than $15,000 to the Office of the State Comptroller for review. It appears LIPA may have recently used KeySpan to procure services to measure or influence public opinion in an attempt to avoid scrutiny of contracts by the Comptroller's office. Hevesi will implement a procedure for requiring review of contracts when KeySpan Electric Services' role is primarily that of procurement agent for LIPA.

Hevesi recommended that LIPA improve its public reporting and internal oversight of polling and efforts to influence public opinion. The Comptroller also announced that he is beginning a review of the budgets of all LIPA departments.

Hevesi initiated his review at the request of the State Assembly and the Suffolk County Legislature.

Other findings of the report included the following:

  • LIPA plans to spend $1 million on the first year of a multi-year branding campaign. Apparently the purpose is to separate LIPA from KeySpan, which operates the electric system for LIPA. It is unclear how this will benefit ratepayers.
  • LIPA has three units involved in efforts to measure or influence public opinion: Communications, Government Relations and Retail Services. They have a total budget of $14 million for 2003, including $1.3 million for market surveys and $1.3 million for consultants. Together, these units also plan to spend more than $20,000 annually for three car leases, $80,000 for travel, $11,500 for catering, and more than $1 million for advertising, promotion, sponsorships and special events.

Click here for a copy of the report.



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