Questions Arise on a Contract Of State Development Corp.

ALBANY — A state deal that awarded $5 million to General Electric Co. for renovating a turbine factory near Albany is raising questions of a possible conflict of interest involving one of its brokers, the upstate chairman of the Empire State Development Corp., Daniel Gundersen, whose wife is a senior executive at the conglomerate.The development agency approved the contract without seeking an advisory opinion from any outside state ethics and legal bodies about whether his wife’s job at GE could conflict with state ethics codes.Agency officials said Mr. Gundersen disclosed to the authority’s general counsel his personal connection to GE when he began working on the deal, and they said his involvement in the negotiations was limited. Officials said, however, that going forward Mr. Gundersen would recuse himself from voting decisions related to future development of the GE site. “While Chairman Gundersen was involved in preliminary discussions in order to understand the needs of GE Energy with regards to its Schenectady operation, there was no violation of any ethics policy or conflict of interest,” a spokeswoman for the Empire State Development Corp., Stefanie Zakowicz, said in a statement.Governor Spitzer last year appointed Mr. Gundersen, who served previously as a top economic development official in Pennsylvania, as his point man on sparking life in the upstate region. Mr. Gundersen was the first person to serve in the newly created role of upstate chairman, which has oversight over Schenectady. The development agency doles out hundreds of millions of dollars each year in grants, tax abatements, and other incentives intended to add jobs and to lure businesses to New York. His wife, Tamera Stockton Gundersen, who lives in Pennsylvania, is a senior vice president with another GE operating division, GE Commercial Finance, which provides financing services to other companies.On October 31, Messrs. Spitzer and Gundersen announced that the state would provide GE Energy, a unit of GE, a $5 million grant to repair a 200,000-square-foot building on an industrial site that makes turbines and generators. GE promised to invest $39 million and hire 500 new employees, primarily engineers paid an average annual wage of $75,000.In his prepared remarks announcing the deal, Mr. Gundersen did not mention his wife’s work. “This is a company that has a reputation of looking for the best and expecting better,” Mr. Gundersen said. “GE only goes with the best, of course. It only goes with the best case, and that is Schenectady.”Schenectady was the original home of GE when it was founded in the 1890s. In recent decades, the number of GE employees in the city has dwindled to the low thousands.Mr. Gundersen, whose appointment was confirmed on October 22 after a tough battle with the Republican-controlled Senate, has yet to be approved as an official voting member of the authority’s board.He will recuse himself on future votes connected to the GE facility when he becomes a voting officer, officials said.Ms. Zakowicz said Mr. Gundersen, who runs the authority’s upstate headquarters in Buffalo “provided full disclosure to the State prior to his involvement and in addition, provided full disclosure to GE when discussions were initiated.”Downplaying the upstate office’s role in arranging the contract, she said a senior officer at the authority’s New York City headquarters signed the final offer letter to GE. In New York, department and authority officials are required to abide by the state’s public officers law, which governs procedures to follow in cases of conflicts of interest.Officials will often seek the advice of state ethics bodies in close-call situations, but the state does not set any ground rules on requiring an outside opinion, a problem that some ethics watchdog groups say has led to confusion and potential abuse.“More use should be made of the attorney general’s office and the Public Integrity Commission,” the legislative director for the New York Public Interest Research Group, Russ Haven, said. “If there is anything that raises the slightest question, why not get an opinion and get a clean bill of health from someone who is outside your agency?”The state Ethics Commission, which this year merged with the Lobbying Commission to form the Public Integrity Commission, has offered advisory opinions on potential conflicts of interests related to family members but has not weighed in on a situation similar to Mr. Gundersen’s.The public officers law states: “An officer of a state agency … should not by his conduct give reasonable basis for the impression that any person can improperly influence him or unduly enjoy his favor in the performance of his official duties, or that he is affected by the kinship, rank, position or influence of any party or person.”

Questions Arise on a Contract Of State Development Corp.

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