National Grid knew of allegations related to bribery case years before charges filed, reports says

National Grid was alerted to allegations of "inappropriate relationships" between employees and outside vendors up to six years before charges were filed that led to federal bribery and kickback convictions of five former employees in 2022, but it failed to act to head them off, according to a company report.

The report was filed with the Public Service Commission last month as part of a $42 million settlement with National Grid and unnamed contractors related to the case.

In the report, London-based National Grid acknowledged that its U.S. ethics team was contacted "on several occasions" between 2015 and 2020 about allegations of "inappropriate relationships between [its] facilities employees and vendors" in the downstate region, but a more thorough review of the claims "did not happen."

National Grid, in a statement, said: “Our top priority has been ensuring that customers were not harmed by these illegal actions. We take these matters seriously and immediately terminated individuals employed at the time who were involved and severed relationships with vendors.”

Newsday first reported in 2021 that the former employees, including four from Long Island, were charged with soliciting and accepting bribes and kickbacks, including cash, college tuition payments, international travel, home renovations and an RV, for handing out millions of dollars in no-bid contracts to outside vendors. The men "made corrupt demands for bribes and kickbacks to line their own pockets and upgrade their lifestyles, while putting the contractors at risk of losing business if they did not comply," former acting U.S. Attorney Mark Lesko said at the time.

All the men have since pleaded guilty and two, Patrick McCrann, of Selden, and Richard Zavada, of Hicksville, received sentences of a year and a day in prison, while forfeiting nearly $1 million of the ill-gotten gains. Both men were released from prison last March, records show.

National Grid’s internal probe, required by the state, revealed that "while some steps were taken" when allegations first surfaced, a "more skilled and thorough review could have potentially identified information to corroborate certain of the allegations" that led to the criminal charges.

"The frequency of the ethics complaints clearly warranted escalation and retention of additional resources to conduct a more comprehensive review — but that did not happen," National Grid’s report said.

"This finding underscores the need for and importance of a robust ethics and whistleblower program to complement and backup National Grid’s controls and procedures, which necessarily have limits in the context of criminal collusion, even when they are fully compliant with industry standards," the report concluded.

In the settlement with the state, the PSC said the companies’ shareholders "will be responsible for $42 million associated with the case," including $20 million that will be returned to customers through a rate adjustment clause, and an agreement not to seek to recover the more than $22 million spent on internal investigations and reforms.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.