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KeySpan Corp.

New York, NY: (Sep-04-07) Robert Mahony, former KeySpan corporate affairs director, brought a lawsuit against KeySpan Corp. in February of 2004, alleging that Long Island Lighting Co. chief executive William Catacosinos received a much larger severance package than Mahony and that KeySpan had a $250 million accounting discrepancy with the Long Island Power Authority that resulted in a $150 million overstatement on KeySpan's books. Mahony claimed that he was fired for blowing the whistle on accounting irregularities and suspected frauds at the company. KeySpan has long denied the allegations, noting that outside auditors and various state and federal authorities were alerted to and vetted the claims and found them without merit. Court documents filed this summer indicate that Mahony had sought more than $12 million, including back pay and damages to his reputation, and for emotional distress, pain and suffering. He also sought reinstatement to his former post.

In a settlement reached, all claims were dismissed after the matter was handled with an undisclosed payout. The settlement was reached just a month before its late-August buyout by National Grid. National Grid, which took ownership of KeySpan Aug. 24, also declined to comment on it, saying through spokeswoman Karen Young, that it was company policy not to discuss the status and details concerning litigation matters. [NEWSDAY: ACCOUNTING DISCRPEPANCY]


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Published on Sep-6-07

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