New York Attorney General Andrew Cuomo establishes Wind Industry Ethics Code

*Article updated on 11/18/2009.

On July 15, 2008, New York Attorney General Andrew Cuomo announced an “investigation into two companies developing and operating wind farms across New York state amid allegations of improper dealings with public officials and anti-competitive practices.”  While the investigation appears to remain underway, Mr. Cuomo announced on October 30, 2008 that the two wind-farm companies under investigation — Noble Environmental Power, LLC (majority-owned by JPMorgan Partners Fund) and First Wind (formerly known as UPC Wind) — have signed the Attorney General’s new Wind Industry Ethics Code.  Mr. Cuomo’s office characterized the Wind Industry Ethics Code as

a result of the Attorney General’s investigation into, among other things, whether companies developing wind farms improperly sought land-use agreements with citizens and public officials, and whether improper benefits were given to public officials to influence their official actions relating to wind farm development.  Both Noble and First Wind fully cooperated in the inquiry and their assistance was instrumental in developing the Code of Conduct that is being announced today.

Mr. Cuomo is also establishing an Advisory Task Force to monitor wind companies to ensure that they comply with the Code of Conduct embodied in the Wind Industry Ethics Code.

The generation of electricity from wind has received increasing attention in recent years, boosted by the public profile of T. Boone Pickens and his “Pickens Plan”.  The State of New York has been at the forefront of the development of wind power plants, tracing the roots of that effort at least as far back as then-Governor George E. Pataki’s January 8, 2003 announcement that within ten years, the state would draw 25% of its electricity supply from wind power and other nonpolluting sources. The state’s experience with wind power, however, has not been without controversy, including reports of corruption and intimidation.

In addition to fleshing out the enforcement and compliance role of the new Task Force, the Wind Industry Ethics Code prohibits conflicts of interest between municipal officials and wind companies and establishes a number of public disclosure, education and training requirements.  Among other things, the Code 

  • Bans a wide range of employment, compensation, gift-giving and other benefit-transfer arrangements between wind companies and municipal employees or their relatives
     
  • Prohibits wind companies from soliciting, using, or knowingly receiving confidential information acquired by a municipal officer in the course of his or her official duties
     
  • Requires wind companies to display on a Web site, disclose to the municipal clerk and publish in a local newspaper the names of all municipal officers or their relatives who have a financial interest in wind farm development
     
  • Obligates wind companies to conduct a seminar for officers and employees about identifying and preventing conflicts of interest when working with municipal employees

For the time being, Noble Environmental Power, LLC and First Wind are the only two signatories to the Wind Industry Ethics Code.  Mr. Cuomo, however, expects additional companies to sign on as wind farm development continues: as he observed in his October 30 press release, “I commend Noble and First Wind for taking the lead by adopting this Code, and we fully expect other companies that want to develop wind farms in New York to follow suit.” 

 

The effect of recent economic developments on the wind farm industry’s plans — in New York and across the country — remains to be seen.  According to a November 11, 2008 Reuters report, Mr. Pickens has ordered $2 billion worth of wind turbines, which are due to be delivered starting in 2010.  In a November 12, 2008 article, The Arizona Republic reported that Mr. Pickens “said that his Texas wind farm is on hold because natural-gas prices have dropped but that his plan for wind power and natural-gas vehicles is still viable to reduce foreign oil imports.” 

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