The Cuomo administration asked the New York State Energy Research and Development Authority to help pay for a new investigative unit in the Inspector General‘s Office as the state budget was being put together in the fall.

Although NYSERDA ultimately was not tapped for the funding, the request — detailed in a confidential internal NYSERDA email exchange obtained by the Times Union — shows the blurring lines between independent state authorities and the executive branch controlled by Gov. Andrew Cuomo. For instance, NYSERDA currently pays the salaries of five employees in the executive branch, using funds collected through utility bills.

While denying that the use of authority money helps the governor keep taxes down, administration officials said that sharing resources makes state government more efficient and allows state policy set by the executive branch to be implemented more quickly. For instance, Cuomo’s energy czar and Cabinet member Richard Kauffman also serves as chairman of NYSERDA.

“Agencies periodically have employees doing agency policy and budget work at the (executive) chamber,” Cuomo spokesman Richard Azzopardi said, although he did not know how many executive branch employees are paid for by other state authorities.

E.J. McMahon, president of the Empire Center for New York State Policy in Albany, said that governors for at least 30 years have used state agencies to fund staff in the executive chamber as a way to conceal the true size of the governor’s staff.

But having state authorities like NYSERDA, which is funded by utility fees, pay for the governor’s staff, is taking that a step further.

“I think it’s another degree of inappropriateness,” McMahon said. “It’s just another way of using an authority as a cash cow.”

NYSERDA did not respond to several requests for comment.

NYSERDA collects most of the $700 million it spends annually on energy efficiency and renewable energy subsidies from fees levied on utility bills. In general, the state Public Service Commission must approve how the funds are spent, although in the past year the commission has approved new uses for unspent collections.

In December the PSC allowed NYSERDA to use $165.5 million in ratepayer fees as “seed” money for Cuomo’s $1 billion Green Bank designed to funnel more private sector money into the state’s renewable energy sector.

The potential use of NYSERDA money for the inspector general would have no apparent direct energy policy use. In a Nov. 13 email obtained by the Times Union, NYSERDA Treasurer Jeff Pitkin told NYSERDA President John Rhodes that he had received a call from Mike Novakowski of the Division of Budget asking if NYSERDA would pay for three positions at the Inspector General’s Office.

“He explained that (the governor’s secretary) Larry Schwartz and the Governor want to create a special unit in the State Inspector General Office to focus on preventing fraud, waste and abuse in state government… but they want to keep the unit positions/funding off State Budget,” Pitkin wrote to Rhodes. “So they are asking various public authorities for assistance in funding certain positions for the unit on each authority’s payroll.”

Pitkin also said that “adding additional positions” to the NYSERDA payroll “will create fiscal challenges for us,” and said that the money would have to come out of existing clean energy programs “further diluting… funding for these programs.”

A high-ranking Cuomo administration official who spoke on condition of anonymity said the request was just one funding alternative that was being considered at the time by the Division of Budget. But the funding mechanism was never used.

“They did not go that route,” the official said.

The same official called “inaccurate” an assertion in the email that NYSERDA was being asked to fund the inspector general jobs as a way to keep the expense out of the state budget.

The official said that banks regulated by the Department of Financial Services pay for the audit staff the department needs for its bank investigations.

“It’s totally appropriate,” the official said.

© 2014, Albany Times Union

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The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.