Attorney General Probe Likely Of Patronage Fiefdoms
If pride comes before the fall is the hallmark of the high and mighty, then special district commissioners -- and the family members who share the pension and benefit pot with them -- are about to come one step closer to taking that tumble off the cliff.
A little push closer to the edge now comes in the form of an anticipated probe by NYS Attorney General Andrew Cuomo, who would like to take a closer look at who's on payroll, who's getting pensions, and how the taxpayers' hard-earned dollars are being squandered -- er, spent -- at Long Island's all too many special districts.
We wonder how many pensions the counsel and former counsel for Town of Hempstead Sanitary District 6 are eligible for?
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Payroll probes expanded to special districts, libraries
BY SANDRA PEDDIE AND EDEN LAIKIN
In a significant expansion of the probes into private consultants improperly getting public benefits, the New York State attorney general and the Nassau County comptroller are asking commissioner-run special districts, as well as some libraries, in Nassau to report any such arrangements.
Meanwhile, earlier this month, the Nassau district attorney's office subpoenaed records from dozens of special districts in the county, according to sources close to the probe. The district attorney requested time sheets, work diaries, reports to the state retirement system and retainer agreements for accountants, architects, attorneys, chiropractors, dentists, insurance brokers and nurses, the sources said.
Eric Phillips, spokesman for the district attorney's office, declined to comment.
The three probes mark the first time the investigation into consultants being placed on public payrolls has moved beyond school districts. Last month, Newsday reported that five school districts falsely reported private, part-time attorney Lawrence Reich as a full-time employee, enabling him to collect a New York State pension of more than $61,000 and health benefits.
After the story, the Federal Bureau of Investigation, the Internal Revenue Service and Attorney General Andrew Cuomo launched probes.
In this week's action, 36 districts and five libraries are being asked to report any individuals carried on their payrolls who are not defined as employees under IRS guidelines. Nassau Comptroller Howard Weitzman said he limited the letters to entities over which his office has audit authority.
"Recent events have shown us that this is much more widespread than we previously realized," Weitzman said. The IRS distinguishes between employees and independent contractors because there are different tax implications for each. It considers factors such as whether the person has set hours, a workplace, time sheets and work that is directly supervised, according to the IRS Web site.
Last week, the New York State comptroller issued an opinion that Reich, of Centerport, had to pay back the pension he has been collecting since September 2006 because the districts improperly classified him as an employee. Weitzman's letter cited several examples, uncovered by his auditors, of districts that improperly classified certain individuals as employees, enabling them to get benefits.
Sanitary District 6 in West Hempstead, for example, carried three attorneys on the payroll while also using five law firms, according to a 2005 comptroller's audit. None of the three had office space or had to document their hours. Currently, only one attorney, John Ragano, remains on the payroll, said district Superintendent Martin Carroll.
Although Ragano has no office, no set hours and no time sheets, he does not "bill for anything extra," Carroll said.Ragano didn't return a call for comment yesterday.
John Milgrim, spokesman for the attorney general, said "We're committed to uncovering the full scope of these problems and putting an end to them."
Special districts examined
April 24, 2007 - Gov. Eliot Spitzer creates a commission to study ways to cut the costs of local government, including special districts. The New York State comptroller's office issues a report on special district taxes.
July - Newsday reports on the most expensive park district on Long Island, the Great Neck Park District.
Dec. 9 - Newsday reports that special districts on Long Island, which collect about $473 million a year to pick up trash, distribute water and maintain parks, spend millions of dollars without close public scrutiny.
Dec. 10 - The Water Authority of Great Neck North votes to give the son of the superintendent a $38,300 raise - to $140,000 - without a promotion. At the same monthly meeting, the authority's board votes to raise water usage rates by up to 50 percent - nearly twice the national average cost of water.
Dec. 16 - Newsday reports on examples of highly paid special district workers, including a meter reader with the Jericho water district making $93,772; laborers in the Oyster Bay sewer district making $101,000 and a recreation aide making $47 an hour in the Fishers Island ferry district.
Jan. 2, 2008 Newsday reports that a select group of public officials in special districts has reaped a bonanza in taxpayer-funded benefits - on top of annual salaries.
Jan. 22 - Gov. Eliot Spitzer recommends that pay and benefits for commissioners of special districts be abolished. In addition, he proposes that towns take over the day-to-day management of independent sanitation districts.
Feb. 8 - Blasting special taxing districts as the "biggest single bane of taxpayers," Spitzer formally calls for overhauling the system.
Copyright © 2008, Newsday Inc.