Rep. Tom Suozzi (N.Y.), a two-term centrist Democrat from Long Island, is reportedly shortlisted for a seat on the powerful Ways and Means Committee. He is competing with Rep.-elect Alexandria Ocasio-Cortez (D-N.Y.) and other progressive members for a seat on Ways and Means, prompting scrutiny of his record of pro-Wall Street votes.
Back in his district, he is locked in another battle, in which he has declined to side with constituents in their fight to stop a public utility giant from bankrupting a local school district.
Suozzi’s inaction in the high-stakes tax fight involving one his district’s largest towns ― and comments suggesting sympathy with the utility monopoly ― raises additional questions about his fitness for a panel devoted to crafting tax and domestic spending policy.
The Long Island Power Authority, a state entity that controls electricity transmission from the Northport power plant in the town of Huntington, is suing to reduce its property tax contribution to the town by 90 percent.
If LIPA gets its way, the Northport school district would be especially hard hit. District officials project that they would need at least a 50 percent property tax increase to fill the gap ― a tax hike that they fear could spark an economic death spiral.
The roughly 200,000 residents of Huntington make up more than one-quarter of the population of New York’s 3rd Congressional District.
But Suozzi, the district’s congressman, has not been vocal about the matter, let alone used his influence to get LIPA to back down.
To the extent that Suozzi has commented on the fight, he has expressed sympathy for LIPA’s position. He argued in an October debate with Republican challenger Dan DeBono that LIPA’s steep property taxes are to blame for the high utility rates it charges Long Island residents. (A spokesman for Suozzi referred HuffPost to the debate exchange.)
“Quite frankly, the ratepayers for all of Long Island are paying for [the high property taxes] through their LIPA rates,” Suozzi said.
Suozzi counseled the town to settle with LIPA for a gradual phase-in of a property tax reduction.
Local activists suspect that Suozzi is compromised by his connections to top officials at LIPA and National Grid, the U.K.-based multinational that owns the Northport plant.
Ralph Suozzi, a cousin of the congressman’s, serves as chairman of LIPA’s board of trustees. And Robert Catell, a former chairman of National Grid’s U.S. operation, donated $1,000 to Tom Suozzi’s 2018 re-election bid, and $2,000 to his first run in 2016. (Catell has been retired since 2009.)
He should completely distance himself from his cousin … and be the loudest voice in the room in defense of the residents of Suffolk County.
Michael Marcantonio, community activist
“Regardless of whether or not that influences his decision on this issue, it creates the perception of corruption in the public’s mind,” said Michael Marcantonio, a Huntington Democrat who has knocked on doors for Tom Suozzi and ran for the state Assembly on a platform of taking on LIPA.
Eugene Cook, a Huntington town councilman and conservative-leaning independent, said he knew about Suozzi’s connections and therefore “didn’t bother” asking him for help.
DeBono, who lost to Suozzi by 18 percentage points on Election Day, was far more explicit in his criticism. He made the potential conflict of interest a prominent theme during the campaign, fashioning himself a fiercer opponent of corporate monopolies than Suozzi.
Referring to Suozzi’s inaction on the issue, DeBono told HuffPost, “It’s not illegal, but it’s more of the same crony corporate capitalism.”
In the October debate, Suozzi denied that his cousin’s status as chairman of LIPA’s board had influenced his stance.
“I have never discussed this issue with him. It is not an issue that I have ever been involved in,” he said.
For Marcantonio, who makes a living as a corporate lawyer, the remarks were not enough.
“He should completely distance himself from his cousin … and be the loudest voice in the room in defense of the residents of Suffolk County,” Marcantonio said.
A Utility Bailout Funded By The Ratepayers
LIPA’s conflict with Huntington is rooted in decades of controversial policy decisions that began with LIPA’s creation. In 1986, the Long Island Lighting Company, or LILCO, faced the prospect of collapse after public opposition pushed it to shutter a nuclear energy plant that it spent $6 billion building.
Rather than allow LILCO to fail, the state government created the quasi-public LIPA to effectively bail out LILCO without saddling Long Island residents with higher utility rates to pay off LILCO’s debts.
That didn’t happen. LIPA finalized a $7.3 billion takeover of LILCO in 1998, leaving ratepayers to pick up the tab for a state bailout. LILCO Chairman William Catacosinos walked away with a $42 million severance payout; then–LIPA Chairman Richard Kessel said nothing could be done about it.
Under the terms of the bailout, LIPA would take ownership of the electric transmission lines from the Northport power plant, collect utility rate money and reimburse the power plant’s owner for property taxes to Huntington based on the value of the plant.
One thing Huntington and other towns that hosted the former LILCO power plants thought they could count on was that LIPA would not challenge its property tax obligations to the towns. Kessel promised in a 1997 letter that LIPA would not challenge its property tax contributions to any towns with its plants, “unless a municipality abusively increases its assessment rate.” (Kessel, incidentally, contributed $500 each cycle to Suozzi’s 2016 and 2018 campaigns.)
LIPA customers have some of the highest utility rates in the Northeast — which many residents attribute to the legacy cost of bailing out LILCO.
It’s important that there be people who have a track record of listening to the people and not special interests, especially on this committee.
Alex Lawson, Social Security Works
But LIPA has encouraged its 1.1 million ratepayers to blame towns like Huntington for overcharging LIPA on property taxes at the expense of ratepayers outside the town.
Trade groups representing Long Island construction and real estate companies bought the talking point. They urged LIPA to sue for a lower tax bill instead of demanding tougher regulation of LIPA’s rates or reforms to its board, which is appointed by the governor and state legislative leaders.
In 2010, LIPA took them up on it. The state entity sued Huntington and several other towns in Long Island, claiming the Northport plant was worth less than $200 million ― down from its 1998 valuation of $3.8 billion.
Local officials and activists have cried foul, noting that the plant’s 250-acre property on the shore of Long Island Sound includes an international fiber optic cable and a natural gas pipeline from Canada. The plant is also capable of running on either natural gas or fuel oil, giving it a resiliency in the event of catastrophe rare among regional plants.
Most of all, they tried to stop the litigation on the grounds that Kessel had promised there would be no legal challenges to LIPA’s burden. But judges have repeatedly sided with LIPA on that argument.
For the time being, it looks as though Huntington has taken Suozzi’s advice and is headed back to the bargaining table. The town’s attorneys are in mediation talks with LIPA in the hopes of reaching an agreement.
Meanwhile, at least one LIPA official has already warned that a victory in the fight against Huntington would not generate lower utility rates.
Critics worry that Suozzi’s stance on the local tax dispute reflects a bias toward the powerful that would color his work on the House Ways and Means Committee.
“The congressman’s support for LIPA and his insistence on repeating their talking points did our community serious damage,” Marcantonio said. “Our community felt abandoned ― like he was abandoning the little guy in support of those with power.”
Criticism of Suozzi comes amid a broader effort by progressive groups to shape the makeup of the House Ways and Means Committee, as well as the other influential, so-called money committees: Energy and Commerce, Financial Services, and Appropriations. The co-chairs of the Congressional Progressive Caucus secured a promise from House Speaker–designate Nancy Pelosi (D-Calif.) that caucus members would have representation on those four committees, as well as the Intelligence Committee, consistent with the 40 percent share of the larger House Democratic Caucus that the CPC represents.
With that goal in mind, Alex Lawson, the executive director of Social Security Works, which is active in a coalition pressing for more progressive representation on top committees, echoed Marcantonio’s sentiments. Lawson and his fellow activists want the House Steering and Policy Committee, led by Pelosi, to tap Reps. Pramila Jayapal (Wash.), Ro Khanna (Calif.) and Rep.-elect Alexandria Ocasio-Cortez (N.Y.) for the powerful Ways and Means Committee.
“It’s important that there be people who have a track record of listening to the people and not special interests, especially on this committee,” Lawson said.
Ways and Means, the oldest congressional decision-making panel, has jurisdiction over all three major social insurance programs (Social Security, Medicare and Medicaid), a host of other means-tested social programs, tax policy of all kinds and international trade agreements.
The committee is sure to play a major role in the next Congress. It has jurisdiction over legislation empowering Medicare to negotiate prescription drug prices, which Democrats plan to make a top priority.
That’s a key reason progressive activists have launched a major push to land left-leaning members on Ways and Means and other influential committees where they have traditionally been underrepresented.
What’s more, of the eight open Democratic seats on the powerful panel, Democratic leaders have already settled on filling five of the slots with white men ― Suozzi and Reps. Don Beyer (Va.), Brad Schneider (Ill.), Brendan Boyle (Pa.) and Jimmy Panetta (Calif.) ― according to two congressional aides with knowledge of the matter.
That leaves four women of color ― Ocasio-Cortez and Jayapal, as well as Reps. Gwen Moore (Wis.) and Stephanie Murphy (Fla.) ― competing for the three remaining spots. Khanna and Rep. Dan Kildee (Mich.) have also applied for seats on the panel.
Asked for comment on the veracity of the alleged makeup of the committee, a House Democratic leadership aide said, “This is complete and utter bullshit.”
“Whomever is speculating is merely guessing and trying to stir things up,” the aide said. “Diversity is a factor in Steering [Committee] decisions, of course.”
Nonetheless, for congressional aides and activists concerned about racial and gender diversity on such an important committee, the possibility of Moore’s exclusion is especially galling.
Moore, who became the first black member of Congress from Wisconsin in 2005, put herself through college with the help of means-tested assistance programs as a young single mother. She has since become an outspoken progressive advocate for social assistance who nonetheless has a reputation for bipartisan legislating. A survivor of domestic violence, she was the lead sponsor of the latest iteration of the Violence Against Women Act, which Congress renewed in 2013, even as Republicans controlled the House.
Giving five of the eight seats on Ways and Means to white men “would send the wrong message to the House Democratic caucus,” said a House Democratic aide who does not work for any of the members in question. “We won based on increased turnout among people of color and especially African-American women.”