By Sophia A. Niarchos
OYSTER BAY, N.Y. — If residents of Astoria are unhappy with the proliferation of polluting power plants in their neighborhoods, it is unlikely that the announcement a week ago that Astoria Energy, Inc., has obtained the funding necessary to continue their industrial project has changed their dispositions. Adding insult to injury, according to government and community leaders affected by a related move, the corporation has also been approved by a New York State agency to receive $400 million from the Liberty Bond program, which was originally designed by the Federal government to help the city recover from the 9/11 attacks.
But if Assemblyman Michael Gianaris and other leaders are successful in their lawsuit against Governor George Pataki for illegal use of Liberty Bond funds to support the Astoria Energy project, the money will be redirected to what Gianaris says are the kind of projects they were intended to support.
“Governor Pataki’s disregard of requests to withdraw his illegal plans to subsidize the Astoria Energy project has made legal action necessary,” said Gianaris of the lawsuit to which he is co-counsel, along with, Michael Zarin, a leading land-use attorney. “Governor Pataki’s improper use of hard-fought 9/11 aid as a slush fund for this project is a disgrace to the efforts of all New Yorkers to rebuild our city after the terrorist attacks,” he added.
The bonds are primarily intended to finance projects south of Canal Street. Outside that area, they are legally restricted to finance the construction of real property – namely, office buildings – in New York City.
Gianaris and the co-plaintiffs in the case, Congresswoman Carolyn Maloney, Congressman Jerrold Nadler, Councilmember Peter Vallone, Jr., Councilmember Alan Gerson, and Jean Grillo of the Duane/Thomas Neighborhood Committee, question not only the illegal use of the funds but also using them to support a project that, Gianaris said, is the least environmentally sound of several such projects planned or in progress.
“There is no doubt that we need to produce more energy for our region,” Gianaris acknowledged, “but several projects both underway and in the planning stages can do this in a more environmentally sound way.”
As examples, he cited the Reliant Energy and Long Island Power Authority plans to repower old generators, noting these projects would each result in a 90 percent reduction in pollution, unlike the Astoria Energy project, which, he said, will add pollutants to the air the people of the area breathe. Gianaris challenges Astoria Energy’s claim that the power plant they propose will be environmentally better.
“Any new project, though environmentally cleaner than the thirty-year-old generators currently in place, will still pollute,” he noted. “But the Reliant and Power Authority projects will actually improve the environment because of the technology they use.”
Gianaris and the other plaintiffs in the case filed in U.S. District Court for the Southern District of New York, also find suspect Astoria Energy’s claim, as reported in Newsday the day after the lawsuit was announced, that the corporation may not even use the Liberty bonds in the event it gets final approval.
“If they don’t need the money, why not withdraw the application?” Gianaris asked. There are many people who seek funding of projects and are legally eligible for Liberty Bonds that the $400 million would help.
“Considering the great majority of the funds they obtained ($700 million of the $983 million total amount) were in debt ($283 million were in equity), it is likely that Astoria Energy will use the Liberty Bonds to repay those loans,” he added. He also remarked that the fact that it took three years from the time Astoria Energy received approval to build the plant before the corporation was able to get private investor funding and that $700 million of that funding is in the form of loans is a sign the project is not a viable one.
The group initiating the lawsuit is also concerned about the connection between the preferential treatment Astoria Energy is receiving from Governor Pataki and the significant contributions the company made to his gubernatorial reelection campaign. The state agency responsible for distributing the Federal Liberty Bond funds is controlled by the governor and by people he appointed to it. They issued preliminary approval of the project, and it is the intent of those initiating the lawsuit to prevent final approval.
Gianaris believes the case is relatively straightforward and is optimistic about the outcome. He suggests, “if citizens want to make an impact on this case, they can communicate with the governor’s office and express their outrage concerning the misuse of funds intended to help the city recover from the devastating attacks of 9/11.”