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Conn. lobbyist snagged in N.Y. corruption scandal

November 24, 2016 GMT

The privileged, ethically challenged son of a longtime Democratic insider is now facing 20 years in prison.

Known for behind-the-scenes work as a utility lobbyist, Peter Galbraith Kelly Jr., 53, of Canterbury in eastern Connecticut, has been charged with bribery and fraud felonies over his alleged role in an upstate New York scandal that has ensnared two former top aides to Gov. Andrew Cuomo, along with six others.

Kelly, observers say, is an occasionally condescending political schmoozer, who may have gotten in over his head amid the ethical loopholes that the Cuomo confidantes tried to exploit during the governor’s effort to kick-start the sputtering economy of New York’s northern tier.

Kelly allegedly funneled about $300,000 in payoffs aimed at reaping $100 million toward the completion of a gas-fired power plant in Orange County, N.Y., for his employer, Maryland-based Competitive Power Ventures Holdings, LLC., federal prosecutors say.

The 79-page criminal complaint in September that led to Kelly’s arrest, and his formal indictment on Tuesday, charge that Kelly even lied to his company executives, allegedly claiming that he obtained an ethics ruling in New York that allowed CPV to hire the wife of Joseph Percoco, Cuomo’s former close adviser who is at the center of the scandal.

A Hearst Connecticut Media investigation shows that while Kelly — known as “Braith” in a shortening of his middle name — aggressively pursued Connecticut regulators for meetings with CPV Towantic — a similar electric-generating facility now under construction in Oxford.

Ethics lapses

Kelly, senior vice president of external affairs for CPV, ran afoul of Connecticut ethics regulators and paid a multi-thousand-dollar fine after the Democratic National Convention that nominated President Barack Obama for a second term.

Records released under Connecticut’s Freedom of Information Act show that Kelly was persistent in seeking meetings with Katie Dykes, then-deputy commissioner of the state Department of Energy and Environmental Protection.

“Braith Kelly from CPV Towantic had planned to be on vacation but would like to meet with Katie ASAP,” said a July 9, 2015, email from fellow lobbyist John C. Larkin to DEEP staff. “Braith would like to give an over-status report.”

Dykes, now chairman of the Public Utilities Regulatory Authority, and DEEP Commissioner Robert Klee, in a joint interview, said recently that the meetings and phone calls with Kelly were strictly routine.

“From time to time, developers who are looking to build new power plants for the state ask to come in and talk with our energy team about their plans,” Dykes said at a table in Klee’s third-floor office overlooking Bushnell Park in Hartford. “It’s of interest to us, tracking how much power generation we will have potentially built-out in our state as it relates to a policy we have focused on over the last couple of years, particularly for gas power plants.”

Klee said that the last meeting with Kelly and CPV Towantic officials occurred in February.

“From the environment side, we have developers of all types, not just in the energy space but who are doing waste facilities, folks who are looking at landfills, folks who are doing large commercial developments or whatnot,” Klee said. “Particularly large products that hit multiple pieces of our agency are encouraged to come in early and often in order to figure out how to navigate through our permit system.”

Klee and Dykes said that since Connecticut’s restructuring of the electric market in 1998, traditional utilities are no longer building power plants and there is no ratepayer or taxpayer money available for developing these projects, which depend on an annual New England regional energy auction.

Larkin, whose lobbying clients include environmental advocates, insurers, firearms manufacturers and energy companies, agreed last week that the conferences with Klee and Dykes were pro forma.

“They were routine meetings where we talked about where we saw the project going; where it would fit into the energy needs of Connecticut,” Larkin said.

Kelly’s father, Peter G. Kelly, is a founding partner of the Hartford law firm of Updike, Kelly & Spellacy. The elder Kelly was a member of the Democratic National Committee from 1976 to 1992, Kelly also served as the party’s national treasurer and national finance chairman. He has contributed more than $35,000 to Democrats since 2001, including $3,000 to the Connecticut Democratic State Central Committee, according to federal and state finance records.

Competitive Power Ventures, which fired Braith Kelly, disavowed his actions.

“We are extremely disappointed in the alleged conduct, which is in direct contradiction to CPV’s core values and expectations of our staff,” said Tom Ramsey, the company’s vice president for external affairs, in a statement.

Kelly is out on $50,000 bond and his travel is restricted, although he has been allowed to travel within the United States, particularly to North Carolina, where he owns a charter-fishing boat.

Kelly on Wednesday, during a brief phone conversation, declined comment. “Mr. Kelly is innocent and will be exonerated,” said his attorney, Daniel Gitner.

Also arrested in the wide-ranging probe was Louis P. Ciminelli, a Buffalo builder who had been involved in the consortium picked by the Connecticut Department of Transportation in 2013 to create a half-billion-dollar mixed-use development around the Stamford train station that recently fell apart in protracted negotiations.

Quiet Corner connection

State and local officials and friends describe Kelly, a lawyer, as working in support of CPV’s engineers, environmental experts and planners, who eventually amended the Oxford plan to use a lot less water as a coolant than originally proposed.

Still, some remember him as arrogant and sarcastic. Others said they thought that New York’s relatively few ethics rules, which have resulted in the arrest of major political figures in recent years, might have created a false sense of legality for Kelly as he got sucked further and further into alleged bribes, conspiracy and fraud in Cuomo’s “Buffalo Billion” development.

Back in 2012, Kelly was fined $5,230 by Connecticut’s Office of State Ethics for failing to report that he hosted a breakfast for Connecticut delegates during the 2012 Democratic National Convention in a Charlotte.

According to OSE records, reviewed under the FOI Act, the breakfast bill was $2,976.81, for a spread that included muffins, Danish, “fluffy scrambled eggs with fresh chives & sour cream,” bacon and turkey sausage.

The meal, a daily convention event sponsored by different corporations, was attended by 86 Connecticut delegates and guests, including Secretary of the State Denise Merrill, Middletown Mayor Dan Drew and Ted Kennedy Jr., who was elected to the state Senate in 2014.

The keynote speaker was Benjamin Todd Jealous, then-president of the NAACP. Kelly co-hosted the breakfast event with a group called Quiet Corner Democrats, which was started by fellow Canterbury resident Christopher Pitts.

New York scam

While Pitts was not among those named in the criminal complaint that led to the September arrests, the Wall Street Journal this year named Pitts as “Consultant 1” who acted as a conduit for payments from CPV to Lisa Toscano-Percoco. Pitts did not return requests for comment this week.

In October, 2012, Kelly told CPV executives who were skeptical of hiring the wife of a senior Cuomo staffer that he had obtained an ethics opinion from Cuomo’s office approving it.

“I learned that no such ethics opinion was ever provided to the Energy Company and there is no evidence to suggest that one was ever sought or prepared,” wrote Deleassa Penland, criminal investigator for the U.S. Attorney’s Office for the Southern District of New York.

Kelly’s alleged creation of a $90,000-a-year “low-show” job for Toscano-Percoco was part of an effort to gain $100 million in state support to build a $900-million plant under construction near Interstate-84 in Orange County. Percoco allegedly strung Kelly along and the $100 million deal for CPV never came through.

Kelly also was the front man and the public face of CPV Towantic, LLC, which overcame extensive local opposition for approval for a 785-megawatt gas-fired power plant, which is now being built in Oxford and is nearly identical to the 650-megawatt unit in Wawayanda, N.Y.

According to the charges filed by Preet Bharara, U.S. attorney for the Southern District of New York, Kelly “orchestrated” more than $287,000 in payments to Percoco and his wife, who live in an $800,000 house in Westchester County’s Lewisboro.

The payoffs began in 2010 and included, federal prosecutors say, the contribution of a private jet that flew Cuomo and his staff to campaign events that fall, just before Cuomo’s first gubernatorial win.

kdixon@ctpost.com;