Quanta gets court setback; ex-LIPA official tells of efforts to change bidding scores

As Quanta Services' legal challenge to PSEG’s recent contract award to manage the electric grid was dealt a setback in court Monday, a recently fired senior LIPA official said he told state investigators he was asked on five occasions to lower Quanta’s score in the bidding and was warned he was "in the crosshairs" of losing his job for refusing to do so.

Quanta, the Houston-based energy infrastructure company that was favored by an internal LIPA committee to win the contract, had filed papers in state Supreme Court last week requesting a hearing Monday to make its case for a temporary restraining order to delay a scheduled awarding of the contract to PSEG. Despite that request, LIPA’s board voted 7-0 Thursday to award the $493 million pact to PSEG.

In Mineola on Monday, acting Supreme Court Justice Philippe Solages declined to hear oral arguments that Quanta’s team of lawyers had prepared.

Solages, an appointee to the Court of Claims by former Democratic Gov. Andrew M. Cuomo, told Quanta’s lawyers they could request a hearing in the future — after sending notice to LIPA. He suggested they read the rules of the court.

Solages "said that we could have a hearing, we just have to coordinate a time," said Evan Glassman, a lawyer for Quanta. "Obviously there was some confusion in the court because there was a sign-up sheet for us to be here."

The temporary setback comes amid new allegations of attempts by top officials at Long Island Power Authority to persuade an internal committee of officials to reduce Quanta’s score in bidding documents while increasing PSEG’s, according to Billy Raley, a former senior vice president of LIPA who was fired last week.

His firing came amid an internal ethics investigation into his allegations by LIPA and a monthslong state inspector general’s investigation of the authority and pressure brought to bear on its operations. A spokesman for the inspector general's office didn’t immediately return a message seeking comment.

Raley, who said he was fired for declining to sign off on lower performance metrics for PSEG in the extended contract, said he has given sworn testimony to state investigators and internal ethics lawyers that a top former LIPA executive approached him and  another procurement team member to change their scores on five occasions. Both men resisted, and Raley said he was told by the former official on June 11 that he was "in the crosshairs" to be fired because of his resistance.

"It’s all been provided to the inspector general," Raley said. "The inspector general has all the information from my interview with them" during the summer.

LIPA did not immediately respond to a request for comment. LIPA chief executive Carrie Meek Gallagher declined an interview request.

Raley said the bidding scores for Quanta were "extremely good" by the review committee, and "extremely low for PSEG." The intent by the senior LIPA official to pressure the committee, Raley said, was to "get them [the scores] closer."

Raley said there are digital records of when the scoring information was submitted.

"We had a tool we were putting these [scores] into," he said. "We have every date" in records.

Raley said he is discussing with his lawyers about whether to bring his evidence to the U.S. Attorney’s Office after hearing that former LIPA trustees had previously alerted them to concerns about LIPA.

Mark Fischl, a former vice chairman of LIPA, confirmed he and two other LIPA trustees met with lawyers for the office late in the spring to express concerns about the LIPA bidding process.

Fischl said the former board members met over the phone with John J. Durham, chief of the U.S. Attorney’s Office’s Long Island division and of its Long Island criminal section, and with three lawyers from the office.

John Marzulli, a spokesman for the U.S. Attorney’s Office in Brooklyn, said, "I can’t confirm or deny the existence of any investigation."

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.