Feds arrest 11 boro Con Ed workers in kickback scheme

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Law enforcement officials arrested 11 current and former Con Edison employees from Queens and two other boroughs last week after they allegedly received more than $1 million in kickbacks from a contractor in connection with construction projects during the past four years in the city and Westchester County, the U.S. attorney for New York’s Eastern District said.

The arrests included 10 current supervisors for the utility as well as one retired employee, U.S. Attorney Benton Campbell said. The defendants live in Queens, the Bronx, Manhattan and Westchester County, he said.

According to the criminal complaints, the defendants are alleged to have solicited more than $1,000 in kickback payments from the president and co−owner of a city−based construction company that performed gas line and electrical work for the utility on city construction projects, Campbell said. The scheme began in 2004, he said.

The U.S. attorney said the Con Ed supervisors proved payments to the contractor for work that was never performed in exchange for the kickbacks. The contractor and two Con Ed employees wore recording devices during the dealings, recording more than 60 hours of undercover recordings and $80,000 worth of bribe payments, Campbell said.

“These defendants used their positions at Con Ed to line their own pockets at the expense of utility customers and the residents of the New York City metropolitan area,” the U.S. attorney said.

In a statement, Con Ed said it was cooperating with the investigation.

“The company takes these allegations seriously and sets high standards for its employees,” the statement read.

Last week, two administrative law judges from the state Public Service Commission recommended a one−year rate hike totaling $632 million for the utility, as opposed to Con Ed’s original request last fall for an $819 million hike for 2009 that would have raised customer bills by 7.8 percent and bills for businesses by 5.1 percent. Western Queens elected officials said they were opposed to the hike because city customers already pay the highest rates in the nation.

They said they believed the alleged scheme of the 11 utility workers arrested last week was further proof that Con Ed should not be asking for a rate increase at this time.

“Con Ed needs to get its own house in order before they ask for yet another rate hike,” City Councilman Eric Gioia (D−Sunnyside) said. “It is outrageous to hear that supervisors who knew better were accepting kickbacks from a contractor. This is what happens when you have a bloated monopoly that’s poorly managed.”

The PSC will hold hearings on Con Ed’s proposed rate hike and make a decision on it in April, a spokeswoman for the agency said.

Reach reporter Nathan Duke by e−mail at or by phone at 718−229−0300, Ext. 156.

Updated 6:35 pm, October 10, 2011
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