Conflict of Interest? Powerful Manhattan Pol Puts Frivolous Lawsuits, Personal Financial Gain Before NY’s Struggling Economy

In a scathing New York Post analysis today, Brendan Scott – the paper’s Albany correspondent – uncovers a remarkable and equally questionable connection between one of the state’s most powerful legislative leaders, and his personal financial interest in undercutting responsible natural gas development in the region. Under the headline “Shelly’s $hale game: His law firm pushes gas-drill ‘frack’ suits”, Mr. Scott reports this:

Assembly Speaker Sheldon Silver leads the fight to block a type of natural-gas drilling in New York, his private law firm is in other states trying to drum up multimillion-dollar lawsuits against the practice, The Post has found.

The speaker’s massive Manhattan-based personal-injury law firm, Weitz & Luxenberg, plans a pair of public forums this week in Pennsylvania and West Virginia to “listen to the concerns of the community, share information and discuss legal options” about the gas-exploration phenomenon known as “hydrofracking” or “fracking.”

Silver (D-Manhattan) … has emerged as a leading foe to expanded natural-gas drilling, which proponents argue could improve New York’s energy independence and revive upstate’s long-stagnant economy.

Drilling advocates, government watchdog groups and even some Democrats say Weitz & Luxenberg’s anti-drilling push, which follows a similar forum last month in Pennsylvania, raises questions about the powerful speaker’s independence on the high-stakes issue.

“You have the speaker highlighting the alleged danger of hydrofracturing at the same time the law firm that’s paying him is out looking for clients interested in suing over the issue,” said a prominent Democrat who has frequent contact with Silver. “It’s further proof that we need a genuine ethics law in New York,” the Democrat said.

At the same time, Marcellus Shale Coalition (MSC) president took to the pages of several New York papers today to underscoring the enormous opportunity presented by the environmentally proven development of clean-burning shale gas for the Empire State. In her column, “Delaying drilling will hurt NY,” MSC chief Katyrn Klaber writes this in the Ithaca Journal, the Press & Sun Bulletin, and the Elmira Star-Gazette:

In Pennsylvania, Marcellus exploration created more than 88,000 new jobs over the past two years, with researchers from Penn State predicting that number will climb past 110,000 new jobs over the next 12 months. Some of these jobs go to the folks who drill the wells, naturally — but the vast majority are along the supply chain. Certainly there will be thousands of jobs created if New York decides to develop the Marcellus. Less certain is how many of those jobs will follow if Albany continues to delay.

We’re talking about the people who forge steel, manufacture pipe, produce sand, do environmental work, research deeds and operate hotels. Faced with the prospect of indefinite delay in New York, these folks have decided to move ahead in Pennsylvania instead — building facilities and opening offices less than a half-hour’s drive from New York’s border. Those jobs will remain in Pennsylvania, and the longer the delay, the better the chances they’ll be held by Pennsylvanians.

The short-term economic case for harvesting clean energy resources from the Marcellus is no less compelling — especially with 900,000 New Yorkers out of work, and the state dealing with a $9 billion gap in its budget. New taxes, pay freezes for state workers, consolidation of public schools — these are some of the tools that Gov. Andrew Cuomo has indicated he’ll use to get the state back on a path toward fiscal sustainability. Why not one more? Has there ever been a more important time to take advantage of these opportunities? Has there ever been a more obvious one?

And as New York continues to slow-walk the responsible development of the Marcellus Shale’s clean-burning, job-creating natural gas reserves, here’s what they’re saying about the overwhelmingly positive economic and energy security benefits associated with American oil and natural gas production across the nation, enabled by hydrofracturing:

  • U.S. Ingenuity Recasts Energy Landscape”: As horizontal drilling technologies advanced throughout the 1990s and over the past decade, this technique — coupled with hydraulic fracturing, a 60-year-old oil and natural gas stimulation process — has unlocked enormous amounts of job-creating energy reserves here at home that were previously out of reach. This was accomplished by the oil and gas industry without any new tax subsidies, unlike most green energy. … And while the national unemployment rate continues to lag, and hundreds of thousands of Americans who want a job still can’t find one, this environmentally proven production has been a blessing. … Unworkable and far-reaching, Washington-knows-best hydrofracturing regulations would also dramatically undercut the overwhelming progress that our nation continues to make. (Investor’s Business Daily Op-Ed, 1/14/11)
  • Oil companies flock to Greeley area”: [Colorado Oil and Gas Association’s Tisha Conoly-Schuller] played down concerns that have come from critics of hydraulic fracturing, noting that the wells bore several thousand feet below the groundwater aquifer. “Every phase of drilling and hydraulic fracturing is regulated,” she said. “This is a highly regulated and very well-monitored process in Colorado.” (Pueblo Chieftain, 1/15/11)
  • Congress holds half a million jobs hostage”: In the midst of a fledging federal government’s attempts to stimulate the economy, the oil and natural gas industry transformed sleepy North Dakota and Pennsylvania communities into bustling commercial regions. Almost entirely due to oil and natural gas companies’ investment in the state, North Dakota has the lowest employment rate in the country at 3.8 percent. In western North Dakota, there are currently 19,000 workers directly employed by oil producers. This number is expected to rise 8 percent in 2011 as companies look to extract the 3.0-4.3 billion barrels of oil in the Bakken Formation. Similarly, the discovery of the Marcellus Shale natural gas reserve has proved to be a boon for Pennsylvania and parts of West Virginia. Natural Gas producers have already invested $4 billion in Pennsylvania creating 44,000 thousand jobs in 2009 and an estimated 89,000 jobs in 2010. (Washington Examiner Op-Ed, 1/11/11)
  • Weld’s economy gets energized”: From the growing exurbs of Frederick and Dacono to the wind-swept prairie along the Wyoming border, Weld County has established itself as an energy hotbed. The oil and gas industry has been a big player here for decades, accounting for 40 percent or more of Weld’s assessed valuation for at least 17 years, said Barbara Kirkmeyer, a Weld County commissioner. The industry accounts for about 4,000 jobs in Weld and supplies the county just shy of $50 million in property tax revenue annually. (Greeley Tribune, 1/15/11)
  • There’s a lot of energy behind area’s wage growth stats”: It’s safe to assume that the energy industry was responsible for much of the wage gain in both counties. … In Washington County, which began billing itself as the “Energy Capital of the East” last year, the growth of companies involved with the exploration and drilling of the Marcellus Shale for natural gas has created thousands of new jobs in the area. Southpointe alone now counts more than 50 energy-related companies, while other smaller drilling and supply companies have taken up residence in various locations within the county. (Washington Observer-Reporter Op-Ed, 1/17/11)
  • Groups work together to bring more jobs to the area”: Six years ago, local economic development groups were working on about 16 projects in Caddo and Bossier parishes. Today, there are 44, according to the North Louisiana Economic Partnership. The boom has been fueled in part by the discovery of the Haynesville Shale natural gas deposit, but also a concerted effort by the NLEP and the Greater Bossier Economic Development Foundation, or GBEDF, as well as local governments and chambers of commerce, to market Northwest Louisiana to companies all over the country. (Shreveport Times, 1/16/11)
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