MALONE -- The complaints last year were at first sporadic to Franklin County District Attorney Derek Champagne's office in this small North Country town.
Then the outcry grew. Residents were alleging undue influence was being put on local leaders to approve multi-million-dollar wind farms, with turbines 200 feet or taller, in their rural communities near the Canadian border.
To Champagne's dismay, he believed some of the public officials approving the contracts were also leasing their own land to the wind developers. Champagne found as many as seven town-board members in Franklin County who allegedly had conflicts of interest.
"These elected officials (who had lease agreements with wind developers) were the same ones who would have to pass the appropriate local legislation to allow them to be constructed," Champagne said in his office this week. "And they would do it."
As New York seeks to produce 25 percent of its energy through renewable sources by 2013, the push by developers and the state to expand wind farms is creating unintended results: bitterly divided communities, accusations of corruption and complaints of poor state oversight over a new type of energy.
Champagne calls it New York's version of the "gold rush" and said it's the next Enron scandal in the making. He sent out a memo to every town board in the county urging them to adopt stronger ethical codes.
Some critics question whether the wind farms will produce adequate wind energy, or are being built to tap into public aid and to sell wind-energy credits in the open market to help offset pollution from other industries.
Michael Lawrence, supervisor of Brandon in Franklin County, said the battle over whether to have a wind farm "has created devastation in the community." Champagne has turned over his cardboard box of documents on cases across the state to Attorney General Andrew Cuomo. Last week, Cuomo issued subpoenas to two of New York's major wind-farm developers, saying "if dirty tricks are used to facilitate even clean-energy projects, my office will put a stop to it."
The investigation comes as wind-farm companies are lining up at small towns' doors with deep pockets and with the promise of economic development for governments starved for new revenue to fund schools, fix roads and pay for emergency services.
There are roughly 65 wind projects in development in New York and about eight already operating, mainly in the Southern Tier, Finger Lakes and North Country regions. The state plans to have online about 1,000 megawatts of wind power - enough to potentially power about 800,000 homes - by year's end.
Advocates and land owners under contract with wind companies say the projects come at an opportune time because of skyrocketing fuel costs.
Paul Wolcott, a farmer from Cohocton, Steuben County, said he expects to have 13 wind turbines operated by First Wind, based in Newton, Mass., on his property later this year. He will get a percentage of the revenue from the energy sold to suppliers.
"What a waste of taxpayers' dollars for the attorney general to be investigating this," Wolcott said. "Here we are talking about getting an alternative source of energy, a renewable source that's local."
First Wind and Noble Environmental Power LLC., based in Essex, Conn., are being investigated by Cuomo's office. A First Wind spokesman could not be reached for comment Wednesday, and a Noble spokeswoman declined comment. Both companies said last week that they are cooperating with the investigation.
Opponents said their issue is not over whether wind is a viable alternative energy source. They are concerned that wind companies are running roughshod over ill-prepared town boards, which are the final arbiters for the projects, and allege that companies are specifically entering agreements with town officials to grease the process.
In Prattsburgh, Steuben County, Supervisor Harold McConnell has come under fire for voting on wind-farm issues and also reportedly having a contract with a wind developer, according to the Naples Record.
In Monroe County, Hamlin residents have questioned the role of town board member Paul Rath, who said he has a land lease with a developer but has been abstaining from votes pertaining to wind energy. He did, however, vote to start a Wind Advisory Committee and voted to put on board members.
Groups allege other instances in which public officials negotiate agreements with wind companies, then leave office and go to work for them.
"We need a consistent, thorough, comprehensive regulatory process that oversees the development of all these projects," said James Hall, a founder of the Cohocton Wind Watch group.
Hall and others contend that the state plays a minimal role in the oversight of wind farms. Lawmakers have been trying to get the situation under a more unified state system, but have spent years debating a new power plant siting plan.
"It puts a lot of pressure on municipalities who have to make tough decisions," said Carol Murphy, executive director of the Alliance for Clean Energy New York, which represents wind companies and wind-energy supporters.
Murphy said "we expect our members to uphold the highest, strictest standards of developing projects," and said groups opposing the wind farms often make baseless claims.
She and some state regulatory officials said the state provides adequate oversight and only provides aid and incentives to properly vetted projects.
"They can't sell any credits without producing energy," said John Saintcross, senior project manager for the state Energy Research and Development Authority.
Some of the groups' protests have made their way to court. In the town of Howard, Steuben County, Gerald Hedman is suing to have town-board member William Hatch, who is also the county Republican chairman, thrown off the board for alleged conflicts of interest. The case is to be heard in October in state appellate court in Rochester.
The lawsuit contends that Hatch spent years negotiating with a wind company and has voted on local laws that impact wind development, according to Hedman's attorney, Arthur Giacalone. This year Hatch officially entered an agreement with EverPower Renewables to potentially put turbines on his property, but he said has since recused himself when the board is dealing with wind-farm issues.
"They have been suing us for every reason they can and this appears to be the last one them can up with, I guess," Hatch said of the wind-farm opponents. He said he only has a land-lease option with the company and won't receive any money unless they build on his land.
Meanwhile, if the town gets the 25 wind towers proposed, it could mean a 40 percent reduction in town taxes through payments in lieu of taxes the company makes to the local government, Hatch said.
"For the community, it's a great thing," he said.