THE "PORK" IN NEW YORK, Thoughts of an older American on Constitutional Government in the USA Options

[Livyjr]

"Paterson shrugs off Spitzer scandal to bring consensus"

By MICHAEL GORMLEY, Associated Press

Last updated: 2:52 p.m., Friday, March 28, 2008

ALBANY -- Shrugging off scandal that has gripped New York's Capitol, Gov. David Paterson has against the odds come close to capturing Albany's biggest prize: An on-time state budget agreement with the Legislature.

"He's rising to the occasion," said Senate Republican leader Joseph Bruno of the new Democratic governor.

"Many times, the job makes the person."

"Look at Harry Truman," he said, referring to the vice president rose to power after President Franklin D. Roosevelt died.

"He became one of our best presidents."

Paterson, who is legally blind, has been on the job not quite two weeks after his combative former boss, Gov. Eliot Spitzer, resigned amid a prostitution investigation.

Paterson had a rocky start as he tried to negotiate a state budget in dire fiscal times by Tuesday's start of the fiscal year.

He has been dogged by questions about his private life and public spending after an extraordinary news conference on March 18 in which he acknowledged past extramarital affairs.

He denied additional affairs and said no public funds were used for a romantic rendezvous, and no record or official has proved him wrong.

Paterson had to rework Spitzer's January executive budget proposal to the Legislature as critical Wall Street and mortgage revenues plummeted.

Then he negotiated reduced spending with legislative leaders.

Bruno noted that neither Spitzer, the former attorney general, nor Paterson, the former Senate minority leader, had much experience in budgeting before becoming governor.

But where Spitzer threatened and bullied, Paterson sought compromise with respect, and humor, Bruno said.

"And David has a partner, a colleague, in me," added Bruno, who was in heated conflict with Spitzer for months.

"This is a Herculean effort by the governor," said Assembly Minority Leader James Tedisco, a Republican from Schenectady.

"I think we've done something close to a miracle."

The 2008-09 budget, if adopted by Tuesday's start of the fiscal year, is expected to increase spending 4.5 percent over the current budget and fill a nearly $5 billion deficit.

That's half of the spending increase in some recent years.

The Legislature rejected Paterson's goal of 3.7 percent growth, drawing criticism.

"They haven't even begun to tighten their belt," said E.J. McMahon of the Empire Center for New York State Policy, part of the fiscally conservative Manhattan Institute.

He said state spending has increased 43 percent in the last five years, while school districts have agreed to labor contracts unaffordable to taxpayers that require record increases in state aid each year.

Nationally, states are projected to increase spending an average 4.7 percent, according to the National Association of State Budget Officers.

New York has rarely been below the national average.

However, especially in a legislative election year, the proposed growth for the 2008-09 budget is less than Albany's usual appetite.

And the political upheaval was expected to delay the process.

"I think with the tumult of what's been going on the past few weeks, all of you and the public would understand if we took a little extra time to get the budget done," Paterson told reporters Friday.

Then he added:

"I think that the constitutional deadline is very important."

"I think it sets the standard for really what our ethics are in this process," Paterson said.

"Because you've had a bad year, because you've had a change in government, it doesn't actually mean that you get to forget about that deadline."

Paterson began the budget process in earnest Wednesday night, with uncommon one-on-one meetings with legislative leaders.

He said he wanted to meet "eyeball to eyeball" because he has found that when you tell a group of people about the need for sacrifice, they understand the concept but "they never think you're talking to them."

If the Legislature agrees to budget bills this weekend and passes them by midnight Monday night, Paterson in a drastically short time will have accomplished an on-time budget.

Spitzer didn't do that a year ago -- missing the deadline by hours while insisting it was on time.

Governors George Pataki and Mario Cuomo and their legislatures missed the deadline for 20 straight years.

The leaders agreed Thursday night to a "framework" for a $124 billion state budget that includes a $1.8 billion increase in state school aid.

That will mean school aid will be well over $20 billion and among the highest totals in the nation.

In January, Spitzer proposed a $1.4 billion increase.

"I think they are all feeling pressure to get a budget done on time," said Blair Horner of the New York Public Interest Research Group.

"It's been a terrible month, arguably the worst in New York state government history ... to some extent, it is a chance for all of them to turn the page."

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AP Writer Michael Virtanen contributed to this report from Albany.

[Livyjr]

"STEAMROLLER" SPITZER FOR PRESIDENT!

"STEAMROLLER" SPITZER FOR PRESIDENT!

That was the DRUMBEAT once again this morning ....

On the Dr. Alan Chartock Show ( http://www.alanchartock.com/ ) on WBKK FM up here ( http://www.wmht.org/radio/wbkk.php ) ....

And this time ...

The DRUM was being beaten by New York State Senator Neil Breslin ( http://www.congress.org/congressorg/bio/?i...L&chamber=S ) .....

A New York State Senator from Albany County in the State of New York ....

Who made the prediction ....

That the "STEAMROLLER" ....

Was only going to be in Albany for a short while ....

Before moving on to the White House down there in Washington, D.C. ...

"Prosecutor: Spitzer ordered travel records probe on Bruno"

By MICHAEL GORMLEY, Associated Press

Last updated: 6:52 p.m., Friday, March 28, 2008

ALBANY -- A criminal prosecutor said Friday that former Gov. Eliot Spitzer ordered the dirty tricks travel records scandal to discredit Senate Republican leader Joseph Bruno despite the former governor's public denials.

Albany County District Attorney P. David Soares said his second investigation of the scandal finds former Spitzer aide Darren Dopp was directly ordered by Spitzer in a profanity laced exchange to release records that could embarrass Bruno and perhaps lead him deeper into a federal investigation.

The report paints a picture of Spitzer as "spitting mad" at Bruno.

Dopp's testimony claims that Spitzer not only timed the release of the records for political advantage, but reviewed them personally at least twice and repeated called Dopp at home to check on progress of the news stories about the documents.

Dopp said Spitzer had also told him that the governor arranged for a former state police official to talk to a New York Times reporter to show there had been a long time concern over Bruno's use of state aircraft.

Afterward, Dopp recounted a conversation with a top administration lawyer in which Dopp claimed the lawyer said the administration wouldn't defend Dopp out of fear of being charged with perjury.

Soares called for no action against Spitzer or any aides.

He specifically found that Dopp didn't commit perjury.

Soares said Spitzer's denials to investigators last year conflict with Dopp's account, but Spitzer can't be charged with a crime under Soares' jurisdiction because Spitzer is no longer a public employee, according to the report.

Spitzer resigned two weeks ago after he was implicated in an investigation of a prostitution ring.

In September, Soares issued a report saying no one in the Spitzer administration acted improperly and that there was no evidence of a plot to discredit Bruno.

Two aides argued they were following orders to fulfill media requests seeking records.

Spitzer disciplined them both.

But Attorney General Andrew Cuomo found two top Spitzer aides misused state police to compile records of Bruno's use of state aircraft on days he attended Republican fundraisers and released them to a reporter.

Soares recently returned to the case, however, and further investigated Dopp's role after a statement provided for him by Spitzer administration lawyers seemed to conflict with Dopp's testimony to the state Public Integrity Commission, which is also investigating.

Dopp was questioned by Soares during the second investigation.

Friday's report said that at first, in May 2007, Spitzer just wanted to "monitor the situation" after Dopp said a reporter asked for Bruno's flight records.

Spitzer didn't want "anything to interfere with the possible ... conclusion of the legislative session," Dopp was quoted as saying in Soares' report.

But in June, when Bruno was blocking Spitzer's initiatives in the Legislature, top Spitzer aides discussed providing the flight records to "the feds" after they read in the newspaper that Bruno was being investigated by the FBI for business dealings.

Dopp said that on June 25 or June 26, governor's Secretary Rich Baum told him, "Eliot wants you to release the records."

Dopp said he went into Spitzer's office to make sure.

Dopp told investigators that he told Spitzer:

"Boss, you're OK with the release of the plane records?"

"According to Dopp, the governor replied, 'Yeah, do it,'" the Soares report said.

"Dopp asked Spitzer: 'Are you sure?'" noting Bruno would be angry.

Dopp said Spitzer then used vulgarities to describe Bruno and ordered Dopp to "shove it up his (expletive) with a red-hot poker."

"He was drinking a cup of coffee," Dopp told investigators, "as he was saying it, he was like spitting a little bit."

"He was spitting mad."

The report stated: "When asked whether he considered the governor telling him to release the records was a directive, Dopp stated that, `You couldn't mistake that based upon the words that were used.'"

After the story ran in the Albany Times Union, Spitzer sent an e-mail to Dopp:

"Will other media pick up on bruno (sic) story?"

In early July, Dopp said Spitzer told him that he had his press secretary, Christine Anderson, arrange for a former state police official to "talk to a reporter from the New York Times ... (to) confirm that (the state police) had long held concerns about Mr. Bruno's use of the aircraft."

Spitzer had suspended Dopp by this time and transferred the other aide involved, William Howard, out of the executive chamber.

Dopp would eventually leave the governor's office, after serving Spitzer for eight years as attorney general and a year as governor.

Publicly, Spitzer said he had only cursory knowledge of the reporter's request for travel records and that his aides were overzealous.

Spitzer apologized to Bruno for the aides' behavior.

Dopp's personal journal carried an August entry in which he recounted a conversation with Spitzer administration attorney David Nocenti.

Dopp said he asked Nocenti, a friend, why the administration didn't disagree with state Attorney General Cuomo's investigative report that found Dopp and Howard committed misconduct.

"We didn't want to be ambushed," Dopp recalled Nocenti telling him.

Then Dopp said Nocenti added: "He would have charged us with perjury."

The scandal led to gridlock in Albany and destroyed Spitzer's once record-high popularity.

There was no immediate comment from Spitzer's spokeswoman, Anna Cordasco.

The report reveals Spitzer's testimony last year to Soares.

Spitzer flatly denied that he directed the gathering of any documents concerning Bruno's flights and didn't order the release of any documents to the news media.

"If Dopp's testimony is credited," the report states, "then former Governor Spitzer's answers were not truthful."

"Accordingly, we intended to present these conflicting accounts to a grand jury."

That, however, was before Spitzer resigned in the prostitution scandal, eliminating Soares' jurisdiction in the case.

"Let us be clear," the report concluded, "political plotting and games are not in the best interest of New York State."

Some testimony and records still haven't been released, protected by Spitzer's executive privilege.

Cuomo told Gov. David Paterson, Spitzer's former lieutenant governor, that only a court or Spitzer can remove Spitzer's executive privilege.

Cuomo said Spitzer should relinquish his privilege "for the sake of the public's right to full disclosure and transparency."

Open government and "transparency" were Spitzer's watchwords as attorney general and candidate for governor in 2006.

"A political plot involving state police by senior state officials is a toxic brew," Cuomo said in a statement.

"In government, even a legitimate goal does not justify unscrupulous means."

"This situation also proves the old adage, 'The cover-up is worse than the crime.'"

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http://www.albanycountyda.com

[Livyjr]

"Counties warn of tax hikes, cuts in services - Leaders blast plan to reduce state aid, say property levies are already too high"

By KENNETH C. CROWE II, Staff writer, Albany, New York Times Union

First published: Saturday, March 29, 2008

ALBANY -- The state's county executives see cuts in services followed by higher county property taxes in 2009 as they confront a proposed state budget that reduces their state aid.

"Shift to local government and shaft the taxpayer," Chemung County Executive Tom Santulli termed the state's solution for balancing its 2008-09 budget.

Santulli and other county executives held a bipartisan statewide news conference call sponsored by the New York State County Executives Association on Friday to get out their message about the impact of increasing state mandated expenses combined with decreasing state financial support.

"Instead of tightening their belts at the state level and reducing their spending, they're passing it on to the local level,"' Rensselaer County Executive Kathleen Jimino said.

Jimino said Rensselaer County could see a loss of $3 million in anticipated state funding.

The county will have to look at where it can save money.

She predicted a potential 10 percent increase in county property taxes in 2009.

Albany County Executive Michael Breslin said he's looking at a lost of $3.5 million to $4 million in state support.

That, Breslin said, equates to a 4 percent to 5 percent tax hike in 2009.

Breslin said the county will have to consider cutting programs that keep the elderly out of more expensive nursing homes and support people in their efforts to get housing.

The reductions, Breslin said, will harm "the people who desperately are going to need more assistance."

While the Legislature and Gov. David Paterson negotiate a new budget, the county executives are upset that shifting costs is crushing their constituents under growing property taxes.

"We're number one for property taxes in the nation," Nassau County Executive Tom Suozzi said.

Westchester County Executive Andrew Spano labeled Wednesday's news conference in Schenectady held by Paterson and Mayor Brian U. Stratton about accepting a 2 percent reduction in state aid as a "charade."

He said the cities are still getting a 7 percent increase in aid while the counties are being squeezed financially.

Suffolk County Executive Steve Levy, president of the county executives association, said the executives would take their case to the public and warned that further actions would occur.

He wouldn't elaborate on what to expect except to say, "stay tuned."

Kenneth C. Crowe II can be reached at 454-5084 or by e-mail at kcrowe@timesunion.com.

[Livyjr]

"Spitzer targeted Bruno, DA says - In second report on Troopergate, Soares says former governor was active in release of travel records"

By RICK KARLIN, Capitol bureau, Albany, New York Times Union

First published: Saturday, March 29, 2008

ALBANY -- Albany County District Attorney David Soares released a report late Friday concluding that former Gov. Eliot Spitzer, despite earlier denials, emphatically told subordinates to release state travel records on Senate Republican Majority Leader Joseph L. Bruno, kicking off what became known as the Troopergate scandal.

The report quotes Spitzer as telling Soares' office, when asked if he directed the release of documents concerning Bruno's travels, "If you asked me did I specifically ever address this issue, the answer is no."

But Spitzer's former communications director, Darren Dopp, said the governor told him, "yeah, do it" in an obscenity-laced conversation in which Spitzer was "spitting mad."

"If Dopp's testimony is credited, then former Gov. Spitzer's answers were not truthful," Soares said.

Bruno, saying the report shows Spitzer "was obsessed with conducting a political 'hit job' to damage me personally and politically," said Soares should have prosecuted in the case.

"This scandal was a blatant abuse of government power," Bruno said in a prepared statement.

Bruno, who is defending his party's narrow Senate majority this election year, said, "these abuses should present a concern to all New Yorkers."

"It also illustrates the importance of having checks and balances in State government and avoiding one-party rule and power."

Bruno said Soares should have prosecuted those involved.

He urged Gov. David Paterson to "take appropriate action against those involved in the plot and cover-up, and who should not continue to represent him and the Executive Chamber."

Paterson said he will review the report, known in Soares' office as "Investigation D."

Sen. George Winner, R-Elmira, who has been spearheading a Senate Investigations Committee probe of Troopergate, said Soares should have conducted a better investigation from the start, rather than having to reopen it.

"Soares had ample opportunity to conduct a thorough investigation into the Troopergate scandal, and this is the best he can do?," asked Winner, who added that there are still plenty of "unanswered questions."

Soares said he "intended to present these conflicting accounts to a grand jury."

But now that Spitzer is no longer governor, having resigned earlier this month after being implicated as a customer of a high-priced prostitution ring, a grand jury would not have the opportunity to hear arguments to remove him from an office he no longer holds, Soares said.

Soares cited other possible illegalities by Spitzer staffers but said he doubts prosecution would have been successful.

He said he granted Dopp immunity in order to get to the bottom of the matter in the public's interest.

The report is the second Soares has issued on the scandal.

The first one cleared the governor.

Soares reopened his inquiry after Herbert Teitelbaum, executive director of the state Commission on Public Integrity, told him he believed Dopp may have perjured himself.

While Dopp's testimony to the commission hasn't been made public, sources close to the investigation told the Times Union that Teitelbaum referred Dopp after he told commission members that Spitzer had ordered the release of Bruno's travel records.

The travel records scandal began unfolding last May when the Times Union and other media started asking about the use of state aircraft by top state officials.

Initially, Soares's report notes that Spitzer was concerned that releasing the information might be harmful since both the governor and Bruno had used state aircraft on trips that combined fundraising events and official business.

Spitzer initially declined Dopp's suggestions to publicize Bruno's trips, saying it would be a distraction to negotiations he had with Bruno, including a failed effort to enact sweeping campaign finance reform.

But Spitzer later changed his mind and cleared the documents for release, according to Dopp.

The Times Union, which had asked for the documents through the Freedom of Information Law, published a story July 1 that questioned Bruno's use of state helicopters and State Police escorts on several days when he had major fundraisers in New York City.

Days later, Bruno accused the governor of using police to spy on him.

On July 23, Attorney General Andrew Cuomo issued a report that found no illegality, but concluded Spitzer's inner circle had wrongly involved State Police in a political matter.

He also said it was improper for State Police to re-create Bruno's itineraries from memory.

Though Dopp was initially investigated for possible perjury and other related offenses, Soares concluded that, at worst, Dopp may have been guilty of a misdemeanor for submitting a false written statement to Cuomo.

Soares granted Dopp immunity because the public interest "would be better served by uncovering the truth."

Cuomo said most of the key figures in the Troopergate scandal have moved on, and suggested it was time to leave the matter behind.

"Let us close this ugly chapter and move forward," he said.

However, a host of loose ends remain.

Among them:

Friday's report is not a "complete analysis," according to Soares, because numerous supporting documents from the Spitzer administration are still shielded from release by executive privilege and grand jury secrecy.

Cuomo on Friday said it is up to Spitzer, not his successor, Gov. David Paterson, and the courts to unseal those documents.

Teitelbaum's referral of Dopp to Soares has left some questioning whether Teitelbaum was trying to protect the ex-governor.

"I don't know why the commission referred Darren over to the district attorney when it did, but it certainly is an interesting question that should best be addressed to the Commission," said Dopp's lawyer Michael Koenig.

Many of Spitzer's key aides who were involved in the Troopergate affair have resigned, including Policy Advisor Peter Pope, Counsel David Nocenti and Secretary Richard Baum.

William Howard, a former homeland security advisor, was transferred out of the executive chamber.

Pope, according to the report, sought to turn the matter of Bruno's use of state resources over to the state inspector general, but Nocenti and Baum dismissed the idea, even though Pope warned that not reporting it could be illegal.

Pope also asked if they should refer it to federal authorities who have been investigating Bruno's business interests, but Nocenti, Baum, and Spitzer "reacted in a more dismissive way than the previous suggestion," the report says.

The report initially says that "evidence developed which indicated that David Nocenti might have committed a crime" related to his acting as a notary, but later states "there was no viable prosecution."

Rick Karlin can be reached at 454-5758 or by e-mail at rkarlin@timesunion.com.

[Livyjr]

"Analysis: Here's the pain in New York's budget crunch"

By MICHAEL GORMLEY, Associated Press

Last updated: 4:42 p.m., Saturday, March 29, 2008

ALBANY -- The 2008-09 state budget, we're told, will contain hard choices.

But the choices will be harder for some.

The reason for difficult decisions is clear:

A national recession that's all but declared, layoffs and losses on Wall Street that provide 20 percent of state revenues, and declining revenue from income, sales and other taxes tied to the economy.

Yet the proposed state budget, due Tuesday and being detailed this weekend, calls for about a 4.5 percent increase in spending, perhaps even a bit higher.

And one of the biggest pieces -- state school aid -- will still be a whopper:

A record $1.8 billion increase for state school aid already at about $20 billion, which includes among the highest per-pupil funding in the nation.

And in Albany, a "cut" almost always refers to a reduction in the planned increased in spending.

In this case, many of the cuts are Gov. David Paterson's revisions to the spending plan presented in February by former Gov. Eliot Spitzer, who resigned earlier this month when he was named in a prostitution investigation.

So, as one reporter asked of budget aides to Paterson, "Where's the pain?"

Here it is:

Smokers face up to a $1.50 per pack increase in the cigarette tax.

The state tax is already $1.50 per pack and, in New York City because of an additional local tax, it's $4.50 a pack.

That's quite a monkey on the back of a pack of cigarettes, which average $5.82 a pack.

It could add up to $200 million to $500 million for the state.

And in New York City, there's talk of adding another 50-cent tax on each pack in coming months.

For some of New York's businesses, the cost of hard times in Albany could be measured in the millions.

That's because "loophole closers" were still on the table Saturday.

Supporters say it closes corporate loopholes that have allowed big businesses to avoid some taxes.

Opponents, including the Republican-led Senate, say it's a tax, pure and simple.

But there's more pain on track.

Riders of New York City's subways and users of its tunnels and bridges could eventually see a fare increase because of Paterson's proposed trimming of the Metropolitan Transportation Authority's budget.

Paterson's 2 percent cut of many agencies across the board would take $60 million in operating aid away from the MTA.

And cities, particularly those already crushed for years under a slumping upstate economy, will see 2 percent cuts in their municipal aid.

For a city like Schenectady, a rust belt relic getting back on its feet a half-century after it was a global industrial address, the cut means $220,000.

That, however, is still a 7 percent increase over current aid.

Add to that other "revenue raisers" still on the table surrounded by lawmakers desperate for cash: Expanding the hours of the Quick Draw lottery game sometimes called "video crack"; redefining some malt beverages to light liquor and little cigars into cigarettes to snag higher tax rates; and countless other increases to user fees.

"All of this stuff is in the process," said Jeffrey Gordon, spokesman for Paterson's budget office.

"The Legislature is deliberating and determining the next steps for all of those issues."

Which is included and which isn't probably won't be known for sure until at least Sunday, when lawmakers report back to their leaders on spending and revenues for different areas of the budget proposal.

"It's part of an overall decision to introduce a series of fees and service cuts that mostly affect middle-class people," objected Assemblyman Richard Brodsky, a Westchester Democrat.

"We're prepared to act responsibly in a difficult time, but a number of us are not satisfied to single out middle-class families."

Spared an unkind cut, at this point, are New York's richest.

The Senate's Republican majority and the Democratic governor appear to have beaten back a proposal by the Assembly's Democratic majority to increase the tax temporarily on New Yorkers making over $1 million dollars.

But Assembly Speaker Sheldon Silver, a Manhattan Democrat, and some colleagues hold out for trying again, if not this weekend then later in the year when revenue forecasts are expected to be even bleaker.

But the Republican Senate might also balk at the MTA funding cut.

"We do not want to do anything that will jeopardize raising any fares for riders of the system," said Senate Transportation Committee Chairman Thomas Libous, a Broome County Republican.

No similar stand is being publicly made against the cigarette tax proposal, being fought behind the scenes by lobbyists for Philip Morris USA.

In this, the company faces the Center for a Tobacco Free New York, a coalition of health groups that has spent $200,000 on radio advertisements and print ads to support doubling the $1.50 cigarette tax for a total $3 per-pack tax.

"We're in the mix," said Russell Sciandra, of the Center for a Tobacco Free New York.

Lawmakers are considering compromises of lower tax increases.

"The impact is going to be very bad," said Dan Shanahan, chief fiscal officer of Wilson Farms Inc. with 200 convenience stores in the Buffalo, Rochester and Syracuse areas.

"There will be stores that go out of business," said the former smoker.

He argues that most smokers will still smoke, but they will evade state taxes altogether by turning to Internet purchases and untaxed sales by stores run by Indian tribes.

He said cigarette sales dropped 10 percent when the state tax last increased in 2002.

"It's a technical balance of the budget that won't produce the revenue," he said.

"I think it's easy to get away with it in Albany and downstate, but we're taking it on the chin here in central and western New York."

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Michael Gormley is the Albany, N.Y., Capitol editor for The Associated Press. He can be reached by e-mail at mgormley(at)ap.org.

[Livyjr]

"Testimony shows Spitzer ordered travel records probe on Bruno"

By MICHAEL GORMLEY, Associated Press

Last updated: 8:53 p.m., Friday, March 28, 2008

ALBANY -- A prosecutor said Friday that former Gov. Eliot Spitzer may have lied when he told investigators he wasn't involved in a plot that used a Republican rival's travel records in an effort to embarrass him, and that Spitzer could have been indicted had he not resigned in disgrace in a prostitution scandal.

Former Spitzer Communications Director Darren Dopp recounted conversations and e-mails that indicated he was directly ordered by Spitzer in a profanity laced exchange to release records that could embarrass Senate Republican leader Bruno and perhaps lead him deeper into a federal investigation, according to Albany County District Attorney P. David Soares' report.

Dopp was provided immunity for his testimony in Soares' second investigation of the 2007 scandal.

Dopp had faced a possible perjury charge because a statement released by the Spitzer administration about the scandal differed from his own testimony.

The report paints a picture of the former Democratic governor as "spitting mad" at Bruno.

Dopp's testimony claims that Spitzer not only timed the release of the records for political advantage, but reviewed them personally at least twice and repeatedly called Dopp at home to check on progress of the news stories about the documents.

Dopp said Spitzer had also told him that the governor arranged for a former state police official to talk to a New York Times reporter to show there had been a long time concern over Bruno's use of state aircraft.

Afterward, Dopp recounted a conversation with a top administration lawyer in which Dopp claimed the lawyer said the administration wouldn't defend Dopp out of fear of being charged with perjury.

Bruno calls the report proof that Spitzer lied to the public and was obsessed with a "political hit job" on the Republican leader.

"The scandal was a blatant abuse of government power."

Soares, a Democrat, called for no action against Spitzer or any aides.

He specifically found that Dopp didn't commit perjury.

Soares said Spitzer's denials to investigators last year conflict with Dopp's account, but Spitzer can't be charged with a crime under Soares' jurisdiction because Spitzer is no longer a public employee, according to the report.

Soares didn't require Spitzer or his aides to testify to a grand jury or under sworn oath, but in interviews to Soares and his investigators.

When questioned by reporters in September, when his first report found no plot or misconduct, Soares defended the choice.

He said then that if statements made in the case were later found to have been false, the public officials could face charges of obstructing justice.

Spitzer resigned two weeks ago after he was implicated in an investigation of a prostitution ring.

In September, Soares issued a report saying no one in the Spitzer administration acted improperly and that there was no evidence of a plot to discredit Bruno.

Two aides argued they were following orders to fulfill media requests seeking records.

Spitzer disciplined them both.

But Democratic Attorney General Andrew Cuomo found two top Spitzer aides misused state police to compile records of Bruno's use of state aircraft on days he attended Republican fundraisers and released them to a reporter.

Soares recently returned to the case, however, and further investigated Dopp's role after a statement provided for him by Spitzer administration lawyers seemed to conflict with Dopp's testimony to the state Public Integrity Commission, which is also investigating.

Dopp was questioned by Soares during the second investigation.

Friday's report said that at first, in May 2007, Spitzer just wanted to "monitor the situation" after Dopp said a reporter asked for Bruno's flight records.

Spitzer didn't want "anything to interfere with the possible ... conclusion of the legislative session," Dopp was quoted as saying in Soares' report.

But in June, when Bruno was blocking Spitzer's initiatives in the Legislature, top Spitzer aides discussed providing the flight records to "the feds" after they read in the newspaper that Bruno was being investigated by the FBI for business dealings.

Dopp said that on June 25 or June 26, governor's Secretary Rich Baum told him, "Eliot wants you to release the records."

Dopp said he went into Spitzer's office to make sure.

Dopp told investigators that he told Spitzer: "Boss, you're OK with the release of the plane records?"

"According to Dopp, the governor replied, `Yeah, do it,'" the Soares report said.

"Dopp asked Spitzer: 'Are you sure?'" noting Bruno would be angry.

Dopp said Spitzer then used vulgarities to describe Bruno and ordered Dopp to "shove it up his (expletive) with a red-hot poker."

"He was drinking a cup of coffee," Dopp told investigators, "as he was saying it, he was like spitting a little bit."

"He was spitting mad."

The report stated: "When asked whether he considered the governor telling him to release the records was a directive, Dopp stated that, `You couldn't mistake that based upon the words that were used.'"

After the story ran in the Albany Times Union, Spitzer sent an e-mail to Dopp: "Will other media pick up on bruno (sic) story?"

In early July, Dopp said Spitzer told him that he had his press secretary, Christine Anderson, arrange for a former state police official to "talk to a reporter from the New York Times ... (to) confirm that (the state police) had long held concerns about Mr. Bruno's use of the aircraft."

Spitzer had suspended Dopp by this time and transferred the other aide involved, William Howard, out of the executive chamber.

Dopp would eventually leave the governor's office, after serving Spitzer for eight years as attorney general and a year as governor.

Dopp had been an Associated Press reporter from 1985 to 1987.

Publicly, Spitzer said he had only cursory knowledge of the reporter's request for travel records and that his aides were overzealous.

Spitzer apologized to Bruno for the aides' behavior.

Dopp's personal journal carried an August entry in which he recounted a conversation with Spitzer administration attorney David Nocenti.

Dopp said he asked Nocenti, a friend who still works in the executive chamber, why the administration didn't disagree with state Attorney General Cuomo's investigative report that found Dopp and Howard committed misconduct.

"We didn't want to be ambushed," Dopp recalled Nocenti telling him.

Then Dopp said Nocenti added: "He would have charged us with perjury."

The scandal led to gridlock in Albany and destroyed Spitzer's once record-high popularity.

Spitzer's spokeswoman declined comment.

The report reveals Spitzer's testimony last year to Soares.

Spitzer flatly denied that he directed the gathering of any documents concerning Bruno's flights and didn't order the release of any documents to the news media.

"If Dopp's testimony is credited," the report states, "then former Governor Spitzer's answers were not truthful."

"Accordingly, we intended to present these conflicting accounts to a grand jury."

That, however, was before Spitzer resigned in the prostitution scandal, eliminating Soares' jurisdiction in the case.

"Let us be clear," the report concluded, "political plotting and games are not in the best interest of New York State. "

Some testimony and records still haven't been released, protected by Spitzer's executive privilege.

Cuomo told Gov. David Paterson, Spitzer's former lieutenant governor, that only a court or Spitzer can remove Spitzer's executive privilege.

Cuomo said Spitzer should relinquish his privilege "for the sake of the public's right to full disclosure and transparency."

Open government and "transparency" were Spitzer's watchwords as attorney general and candidate for governor in 2006.

"A political plot involving state police by senior state officials is a toxic brew," Cuomo said in a statement.

"In government, even a legitimate goal does not justify unscrupulous means."

"This situation also proves the old adage, 'The cover-up is worse than the crime.'"

------

http://www.albanycountyda.com

[Livyjr]

"Hard times, hard choices threaten on-time budget"

By MICHAEL GORMLEY, Associated Press

Last updated: 7:12 p.m., Sunday, March 30, 2008

ALBANY -- Lawmakers and Gov. David Paterson, all trying to put a month of scandal behind them, are finding out just how hard the fiscal times are.

Closed-door negotiations to pass a state budget due by midnight Monday night fell dangerously behind on Sunday.

But in an effort to put talks back on track, Paterson and legislative leaders met Sunday evening and announced that they have agreement on all spending areas.

The leaders said the thousands of pages of budget bills will be printed overnight and voted on Monday, potentially in time to be completed by the midnight deadline.

"It's a mechanical problem, you're always racing against the clock in budget negotiations, but this time we're racing together against the clock," Paterson said.

Passing a difficult budget on time despite an historically tumultuous month in New York state government was seen as a prize that would draw Democrats and Republicans together for a fresh start.

They sought to craft a budget that would deal with a severe economic downturn and put behind them the scandal in which Democratic Gov. Eliot Spitzer -- who proposed the budget in January -- resigned from office two weeks ago after he was implicated in a prostitution ring.

Paterson, a well-respected and well-liked lieutenant governor and former senator, had hoped to end the rancor of the Spitzer regime and usher in bipartisan cooperation and a more open government.

A timely budget was to be the test case.

Paterson, Assembly Speaker Sheldon Silver and Senate Majority Leader Joseph Bruno wouldn't immediately release details of their agreement struck behind closed doors, despite their promises for a more open, transparent process.

They were to present details to rank-and-file lawmakers first.

In order for the measures to avoid the legally required "aging" of bills for three days to allow lawmakers and the public to review them, the governor will have to issue a "message of necessity."

That allows even complex budget bills to be voted on shortly after they land on their desks, often while they are still warm from the printer.

"We were somewhat sympathetic because of the transition in government," said Barbara Bartoletti of the League of Women Voters.

"Secrecy is not in the best interest of rank-and-file legislators or to the general public, who need to restore all kinds of faith in government and secrecy is not the way to do it."

The leaders said Sunday that spending would be $500 million less than the $124 billion budget proposal crafted by former Gov. Eliot Spitzer in February, resulting in an increase in spending of slightly less than 4.4 percent.

On Thursday night, the leaders announced a framework for a budget that would reduce spending by the same dollar amount, but they estimated then that overall spending would grow between about 4.5 percent and 4.8 percent.

Paterson, however, revealed that there would be no increase in the income tax for the New Yorkers who make $1 million a year or more.

The Legislature and Gov. Eliot Spitzer missed an on-time budget by hours last year, after a budget was passed on time the previous two years.

Before that, the budget was late 20 straight years.

A late budget creates a problem for lawmakers.

They all face re-election in the fall by a constituency that has considered a timely budget to be a minimal job requirement.

"These are very, very difficult, challenging, distressing times," said Bruno on Sunday, after a closed door meeting with Paterson and other legislative leaders.

"The choices that have to be made are very, very hard choices."

"The problem is, revenue is declining," Bruno said.

"Every day there is some new information that revenue is declining."

Still in the mix Sunday were major but controversial revenue sources of doubling of the cigarette tax to $3 per pack worth $200 million to $500 million, requiring Internet giants such as Amazon.com to collect state sales tax worth $47 million to the state, closing corporate "loopholes" for millions of dollars more in tax revenue, and myriad other increases to user fees and narrow taxes.

But despite Paterson's statement that timely budget is an ethical and a fiscal responsibility, there was more talk at the Capitol of working beyond the deadline of the start of fiscal year.

It might even be the responsible thing to do, said some.

"There's a lot at stake," said Elizabeth Lynam of the Citizens Budget Commission, an independent fiscal watchdog.

"A rush job isn't necessarily the best message."

[Livyjr]

"Officials: State budget will be late"

By MICHAEL GORMLEY, Associated Press

Last updated: 5:02 p.m., Monday, March 31, 2008

ALBANY -- A $124 billion state budget proposal due at midnight Monday won't be passed until later this week, creating the latest state budget in three years, according to Assembly and Senate officials.

The Assembly wasn't expected to vote on its first budget bills until late Monday night and all the bills won't likely be done until Wednesday, said two officials in the Democrat-controlled Assembly.

In the Republican-controlled Senate, budget bills, many of which must be approved by the Assembly first, aren't expected to be passed until Thursday or Friday, according to a Senate official.

The officials spoke on the condition of anonymity because their leaders hadn't conceded that the 2008-09 budget will be late.

However, a measure to continue paying the state work force into the new fiscal year was expected to be approved Monday night by the Legislature, a signal that the budget would be late.

The measure wouldn't have been required until Thursday.

But unlike past years when partisan disputes made budgets weeks and even months late, this year has some special circumstances.

Chief among them is that the governor who drafted the proposal in January, Eliot Spitzer, resigned March 17 after he was implicated in a prostitution investigation.

His lieutenant governor, David Paterson took over.

But he then revealed some past extramarital affairs, saying he didn't want to be blackmailed into decisions as governor.

The result was at least five days in critical budget crafting and negotiations was lost while the transition to a new administration, usually two months in the making, was reduced to days.

"I think that under the circumstances, they have been working hard to comply with the constitutional deadline," said Elizabeth Lynam of the independent Citizens Budget Commission.

"A few days isn't going to make that much difference."

There was no immediate comment from Republican Senate Majority Leader Joseph Bruno or Democratic Assembly Speaker Sheldon Silver.

If the budget is late by just a few days, there is little harm to school districts, nonprofit agencies and the many businesses that rely on state funding or services.

But the longer the budget remains open to negotiations, the worse the forecasts for revenues become and the less that can be spent.

The budget proposal being negotiated would increase spending 4.4 percent by raising some narrow taxes and fees.

Some of the possible items in the 2008-09 spending plan include a doubling of the cigarette tax to $3 a pack, no pay raise for legislators or judges, and a requirement that Internet retailers such as Amazon.com collect state sales taxes on purchases made in New York.

An on-time budget had become a kind of brass ring for Paterson and lawmakers.

They hoped agreement on a budget in dire economic times with a nearly $5 billion deficit would help put a month of unprecedented scandal behind them.

"We have a conceptual agreement, as you know, and we're just trying to keep that intact," Bruno told reporters Monday, a day of frustration and uncertainty in Albany.

He referred to the general agreement announced Sunday with Paterson and Silver, but which failed to gain quick approval by the rank-and-file.

Despite promises to make budget talks more open and transparent, legislative leaders and the new governor kept details of the 2008-09 budget secret Monday.

In Albany, such secrecy has been common when leaders feared lobbyists could unravel the vote in the Senate and Assembly.

Lobbyists, meanwhile, continued their last-ditch pitches.

On Monday, in a driving freezing rain, hundreds of prison guards rallied loudly at the Capitol steps to stop a measure that would close a medium security prison and three minimum security prisons, threatening their jobs.

The proposal by former Gov. Spitzer would save taxpayers $33.5 million a year and avoid $30 million in capital costs while the prison population drops.

The New York State Correctional Officers and Police Benevolent Association union rallied and attracted several supportive Republican senators and assemblymen who blamed the closing proposal on Spitzer, who resigned this month when he was implicated in a prostitution scandal.

"Client No. 9!" some prison guards shouted when Republicans' mentioned Spitzer, to the Republicans' delight.

It was a reference to how the former Democratic governor was identified in the federal investigation leading to his resignation this month.

The union members would find out after the television news cameras left that the proposed budget deal had already spared their jobs.

Bruno issued a press release saying the proposal excludes the closing of Camp Pharsalia in Chenango County, Camp McGregor in Saratoga County, Camp Gabriels in Franklin County and Hudson Correctional Facility in Columbia County.

The three camps are about half full, while Hudson is near capacity.

In all, 584 full- and part-time workers watch 939 inmates.

Other lobbyists seeking more school aid or the higher cigarette tax also continued to work the Capitol's halls, seeking information through the secrecy of the budget process.

Others, like Philip Morris USA, offered reporters surrogates such as convenience store chains that employ hundreds of workers to warn a cigarette tax would cut business by 10 percent.

Bruno confirmed a cigarette tax increase was proposed, but how much was secret and possibly still part of negotiations Monday afternoon.

The original proposal doubled the cigarette tax to $3 per pack.

The lack of funds for judges' raises drew fresh criticism and a threat from the state's highest judge, Chief Judge Judith Kaye.

"We will, if necessary, bring a lawsuit to resolve this crisis."

"It pains me beyond any words I can think of," Kaye said.

The last raise for state judges was in 1999.

"I don't make nearly as much today as I made 25 years ago," Kaye said.

"I'm not looking for millions of dollars in compensation."

"I know where to go if I want to earn big bucks, but I don't."

"I want to be a judge, I want to be in public service."

Her $156,000 salary is about the same as a first-year attorney gets after passing the bar exam.

Legislative officials said the following fees and taxes were also part of the proposal as of Monday:

--Some closing of corporate tax loopholes, which could cost banks and, eventually, consumers.

--$245 million in additional funding to nursing homes and hospitals that Spitzer had cut.

--A capital program that had been expected to be about $1 billion.

--A requirement that Amazon.com and other Internet retailers collect sales taxes when items are purchased.

Currently, New Yorkers are on a kind of honor system that is hard to enforce.

The difficulty of the negotiations, held behind closed doors throughout the weekend, was clear by the frustration among rank-and-file lawmakers who thought they had shed the criticism that they couldn't pass a budget on time.

It's an image that has haunted incumbents in election years, like this one.

The Legislature and Gov. Eliot Spitzer missed an on-time budget by hours last year, after a budget was passed on time the previous two years.

Before that, the budget was late 20 straight years.

------

AP Writer Valerie Bauman contributed to this reporter from Albany.

[Livyjr]

"NY commission investigates probes into Spitzer scandal"

By VALERIE BAUMAN, Associated Press

Last updated: 5:33 p.m., Tuesday, April 1, 2008

ALBANY -- The state Commission of Investigation will examine previous and current probes into whether two of former Gov. Eliot Spitzer's aides tried to sabotage a political opponent with the help of the state police, agency Chairman Alfred Lerner said Tuesday.

Meanwhile, Democratic Gov. David Paterson -- who replaced Spitzer after he was connected to a prostitution ring and resigned in disgrace -- has asked Attorney General Andrew Cuomo to investigate the state police to determine whether politics has inappropriately interfered with their work.

State statute gives the Commission of Investigation broad authority to look into potential corruption, fraud and mismanagement in government.

The commission won't evaluate whether the Democratic Spitzer administration acted illegally or unethically when state police were asked to collect Senate Republican Majority Leader Joseph Bruno's travel records.

Instead, it will review investigations by Albany County District Attorney P. David Soares, state Inspector General Kristine Hamann and the state Commission on Public Integrity.

The commission's investigation could eventually branch out to other agencies that probed the scandal, including the attorney general's office.

"We are concerned that the multiplicity of investigations has been somewhat dysfunctional," said Lerner, who was appointed by former Gov. George Pataki, a Republican.

"As a result of that, we thought it would be appropriate for us to determine whether these processes could be improved."

"It's no secret that many people in this state have lost confidence in these investigations."

Spitzer has denied he directed the gathering of any documents concerning Bruno's flights and said he didn't order the release of any documents to the news media.

Last week, Soares issued a report saying Spitzer may have lied when he told investigators he wasn't involved and that Spitzer could have been indicted had he not resigned.

Darren Dopp, Spitzer's former communications director and one of the aides implicated in the plot, told Soares that Spitzer was directly involved with the release of the records.

Those new revelations seem to contradict a report Soares issued in September, saying no one in the Spitzer administration acted improperly and he found no evidence of a plot to discredit Bruno.

Hamann was also criticized for not conducting a full investigation into the matter, relying instead on information from Cuomo's office and reaching the same conclusion as the attorney general: there was misconduct, but no violation of laws.

At the time, Hamann, who was appointed by Spitzer, said going further with the investigation would create a potential conflict of interest.

The Public Integrity Commission still hasn't completed its now nine-month old investigation.

Spitzer appointed the commission's chairman, executive director and a majority of its members.

Separately, Paterson officials would not be more specific Tuesday about why the governor sought the investigation by Cuomo into the state police, first reported Tuesday by the New York Post.

"There have been complaints and anecdotal evidence of political interference into the state police," Cuomo said.

"The governor wants a state police force that is beyond reproach and is totally free of any political interference, and that's why he asked me to undertake the investigation."

Cuomo said his office will talk to people in every troop and won't limit the investigation to state police employees.

He wouldn't say who else he might interview.

"We will fully cooperate with any inquiry the attorney general may conduct into these matters," said spokesman Lt. Glenn Miner.

The State Trooper's Police Benevolent Association released a statement Tuesday discounting the likelihood that state police have been influenced politically -- a complaint Cuomo said he has heard from state lawmakers.

The PBA also rejected the notion that troopers on Spitzer's security detail were involved in the prostitution scandal that ended his political career.

------

On the Net: http://www.sic.state.ny.us.

[Livyjr]

"NY judges applaud lawyer planning to sue for their raises"

By MICHAEL VIRTANEN, Associated Press

Last updated: 5:13 p.m., Tuesday, April 1, 2008

ALBANY -- Shortly after a new state budget is adopted -- for the 10th straight year without pay raises for New York judges -- a top Manhattan litigator plans to sue, claiming lawmakers and the governor have failed their constitutional obligation to preserve an independent judiciary.

Bernard Nussbaum's clients are Chief Judge Judith Kaye, et al.

At a gathering Monday of about 100 judges and others at New York State Bar Association headquarters in Albany, he got an ovation.

Seven judges have already sued.

Nussbaum, a litigation partner at Wachtell Lipton Rosen & Katz and former counsel in the Clinton White House who will handle the judges' case for free, promised to bring Democratic Assembly Speaker Sheldon Silver, Republican Senate Majority Leader Joseph Bruno and Gov. David Paterson to the witness stand.

"Let them explain the hostage-taking," he said.

Raises for judges have been tied by lawmakers to politically sensitive raises for the legislators themselves, while other state employees have had at least cost-of-living bumps.

Kaye said the judges have been "jollied along" with promises since they started pushing in 2005.

Compensation for New York's 1,250 state-level judges now ranks 49th among states, which Kaye said is "shameful" considering the enormity and complexity of their case dockets.

Most come to the bench with about 18 years of experience.

"Our state and federal constitutions provide for the critical independence of the judiciary by making clear that judicial compensation must be adequate and specifically that it cannot be diminished during a judge's term of office," Kaye told the judges.

Those salaries haven't budged in nine-and-a-half years, while inflation rose 26 percent, she said.

Pay ranges from $108,800 for full-time city court judges to Kaye's $156,000, court spokesman Gary Spencer said.

They propose raising the benchmark salary for state Supreme Court justices from $136,700 to the current level of federal trial judges at $169,300, with others rising proportionately.

That would cost about $39 million in the $124 billion proposed 2008 state budget.

It would cost roughly $145 million including retroactive pay raises to 2005, which Kaye proposed.

She held out some hope Monday lawmakers would still add funding, but that didn't immediately happen.

"So I'm not going to sue today and I'm not going to sue tomorrow, but I'm going to sue real soon."

"Everything is all ready to go."

"The complaint is ready to go," Kaye said, probably in April, adding it can go straight to trial without discovery, interrogatories or depositions.

"Nobody is going to be immune when the judiciary sues the executive and the legislature," she said.

Dan Weiller, a spokesman for Silver, said Tuesday budget negotiations were continuing, but declined further comment.

Nussbaum plans to sue in state Supreme Court in Manhattan.

In 1935, state judges had pay parity with senior partners in New York City law firms, and now they don't have pay parity with freshman associates there, he said.

Two other suits were filed by four judges in Manhattan and three in Albany earlier in state Supreme Court.

Both survived initial state challenges to dismiss claims the governor and lawmakers breached separation of powers doctrine by tying judicial raises to other issues.

Claims that their pay was illegally cut were dismissed.

Appeals from both sides are pending before courts in the Appellate Division.

Nussbaum said Tuesday he's simply waiting for word from Judge Kaye to file.

Their new argument is the judges have been discriminated against, treated unlike all other state employees.

Even the legislators get per diem payments and have outside incomes to help them keep up with the cost of living, and judges don't, he said.

[Livyjr]

And being an older American myself ....

Although far from the oldest in here .....

Where at least two members are in their eighties ...

I have a lot of thoughts ....

ON WHERE OUR AMERICA is going ....

And by that, I don't mean with respect to how people look or dress or talk ....

Since those things are always changing, anyway ....

Rather, my concerns have to do with that thing called CONSTITUTIONAL GOVERNMENT ....

Here in OUR America .....

Which I do not believe ....

From my interactions with my fellow Americans over time ....

Is very well understood ....

And here ....

I mean the fact ....

(OR IS IT, REALLY?)

That OUR state and federal CONSTITUTIONS ....

ARE ACTUALLY LAWS .....

ORGANIC LAWS .....

That bind OUR governments .....

State and federal, as well as local ....

To certain STANDARDS OF CONDUCT .....

ON BEHALF OF US ....

The PEOPLE of OUR America .....

Today ....

If you went up to someone ....

And you said to them ....

"You know, we really are the government here in OUR America ..."

Many of them would immediately make warding gestures .....

As if you were the devil out to tempt them ....

And they would likely say, "LEAVE ME OUT OF THAT ..."

"I DON'T WANT TO BE INVOLVED ..."

And that would be that .....

Literally ....

End of the conversation ....

AND PERHAPS ....

As a result ....

THE END OF CONSTITUTIONAL GOVERNMENT ....

Here in OUR America ...

And perhaps, America .....

IT REALLY IS TIME FOR THAT, I SUPPOSE ......

PERHAPS THERE REALLY ARE TOO MANY OF US ....

FOR ANY OF US TO HAVE A SAY, ANYMORE ....

AND PERHAPS, AMERICA ....

WE REALLY DO NEED TO BE RULED ....

BY RULERS WITHOUT CONSTITUTIONAL CONSTRAINTS PLACED ON THEM ....

BY THE PEOPLE ...

SINCE WE JUST MAY BE TOO IGNORANT .....

TO PLAY ANY ROLE IN SELF-GOVERNMENT, ANYMORE ....

And so .....

That is the THEME of this particular thead .....

In this thread ....

I am going to be taking news items from the State of New York ....

Where I reside ....

On the subject of GOVERNMENTAL REFORM ....

Which is THE SUBJECT today in the State of New York .....

WHICH IS ONE OF THE LEAST DEMOCRATIC STATES IN THE UNITED STATES TODAY ....

MORE RESEMBLING SOME EASTERN EUROPEAN NATION DURING THE 1930's and early-1940's ....

Romania or Hungary, perhaps ....

Than a MODERN AMERICAN STATE ....

WITH A CONSTITUTION ....

Intended to secure the BLESSINGS OF LIBERTY ...

To the people of the State ....

And so ....

"NY state spending grows in secret for powerful lobbyists"

By MICHAEL GORMLEY, Associated Press

Last updated: 4:42 p.m., Tuesday, April 1, 2008

ALBANY -- Lawmakers and Gov. David Paterson are deciding how to spend $124 billion behind closed doors this week in what good-government advocates said is a level of secrecy unmatched in years.

Lawmakers this election year are voting on bills inches thick, still warm from the printer and passed mostly unread.

Privately, legislative leaders are meeting with powerful lobbyists to restore some spending Paterson sought to curb.

And chunks of the budget may be unaffordable in a few months as revenue growth continues to plummet.

But New Yorkers who pay the tab won't know about most of the decisions until they are final.

Such secrecy is not uncommon in Albany.

It's used to keep powerful lobbyists, who double as major campaign contributors, from unraveling deals and heading off votes promised in the Senate and Assembly.

"Open government is an oxymoron in Albany," said Blair Horner of the New York Public Interest Research Group.

But he said it's hard to blame Paterson.

The Democratic governor has been on the job just two weeks since Gov. Eliot Spitzer resigned after being implicated in a prostitution scandal.

Nonetheless, he tried to reduce spending by $800 million, only to see the Legislature restore about $500 million of that in private negotiations.

"It's hard for the public to have informed opinions on legislative deliberations if virtually all of the important decisions are made behind closed doors," Horner said.

"In a democracy, process matters."

"Oh, my," exclaimed Barbara Bartoletti of the League of Women Voters when asked about the secrecy of this week's budget process.

"I haven't seen this in probably over 10 or 12 years or so."

For example, health care lobbyists issued a press release Monday night praising the health budget bill after it was passed.

But the first public briefing on the bill wasn't until Tuesday afternoon.

And the Senate-Assembly subcommittee on health whispered among themselves away from microphones for 15 minutes before announcing Monday there was too much disagreement to meet publicly.

Bartoletti said the talks and decisions are staying behind closed doors, away from the public and reporters, for a reason: Lawmakers are making promises to powerful special interests that quickly declining revenues will soon make unaffordable.

"It's all about the election year," Bartoletti said.

"They decided these are bad economic times and they are going to make their decisions ... and it is likely to fall apart in December."

This week, as the Legislature took control of the final budget process, elements of the 2008-09 spending plan that have become public include keeping some medium- and minimum-security prisons open at a cost of $30 million a year, restoring $273 million in health care funding and a record increase of $1.8 billion in school aid, all to the delight of the prison guard union, the hospital lobby and the powerful teachers' union and allied lobbyists.

Meanwhile, a proposed temporary tax on New Yorkers making $1 million a year was dropped despite the desperate need for revenue.

It also appeared on Tuesday that one proposal was determined unaffordable: It would have increased the $291 basic monthly welfare grant by $29 for a family of three.

"We're trying to get a budget done under the most difficult circumstances that I've ever experienced here as a leader or as a senator," Senate leader Joseph Bruno said.

Spokesmen for the Senate's Republican majority, the Assembly Democratic majority, and Paterson's budget office didn't respond to requests for comment on the process, which leaders promised last Thursday would be more open.

That was when Bruno and Assembly Speaker Sheldon Silver emerged from a closed-door meeting with Paterson to announce the "framework" of a $124 billion budget that increased spending about 4.5 percent -- half of some recent years' increases.

But Tuesday's deadline for adoption came and went and furtive negotiations among lawmakers continued.

"Certainly an amount of private negotiations is necessary," said E.J. McMahon of the Empire Center for New York State Policy, part of the fiscally conservative Manhattan Institute.

"But I don't think we've seen this level of secrecy at this point in the process for quite a few years."

"They live in their own world of 8 to 10 percent spending increases," McMahon said.

"So when they ratchet it down to 5 percent, they see it as a big success."

"They are on the road to failure again."

------

Associated Press Writer Valerie Bauman contributed to this report from Albany.

[Livyjr]

"Budget: NYers to get discount drug card, reform of detox system"

By MICHAEL GORMLEY, Associated Press

Last updated: 6:52 p.m., Tuesday, April 1, 2008

ALBANY -- Hundreds of thousands of older New Yorkers will be eligible for a discount pharmacy card, a program to fight alcoholism will be revamped, and the cigarette tax will rise as part of the state budget being completed this week.

The new pharmacy cards will provide discounts of 30 percent off brand-name drugs and 60 percent off generic drugs.

New Yorkers who meet income qualifications and who are 50 to 64 years old, or without insurance or disabled could qualify.

The program will achieve the savings by leveraging mass buying power to get rebates and discounts for the eligible group estimated at 400,000 people.

New Yorkers whose moderate incomes qualify for the EPIC pharmaceutical program for the elderly will qualify for the new program, expected to begin this year.

"Today we took an important step forward in transforming our health care system to lower costs, increase access and invest in primary and preventive care," Gov. David Paterson said.

"I thank the Legislature for partnering with me to move the budget process forward."

The Paterson administration contests a claim of victory by hospitals and other powerful health care interests.

The hospital lobbyists say they were able to temporarily derail a multiyear effort to drive more government funding to outpatient care instead of institutions as a way to save money and improve care.

"This budget begins in earnest that essential shift, and we look forward to future policy discussions concerning how health care providers and state leaders can work together to drive the reforms necessary to effectively and efficiently provide the very best patient and resident care," said Daniel Sisto of the Healthcare Association of New York State, which represents hospitals.

Paterson administration officials say the first year of their planned transition to save Medicaid dollars by redirecting more patients away from hospital care remains intact.

The next three years of the plan, however, will be subject to review by an advisory group that will include officials from hospitals critical of the plan.

The future changes will also have to go through the Legislature, which has worked closely with the power hospital lobbyists.

"This legislation restores much-needed funding for hospitals, nursing homes, and home care and at the same time makes important reforms to make our health care system more cost-efficient and effective," said Senate Republican leader Joseph Bruno.

The health care budget also includes:

--$25 million to expand the State Children's Health Insurance Program to insure children in moderate income families.

This will help provide preventive and primary medical care to more of the 400,000 uninsured children statewide.

--Beefing up Medicaid fraud investigations to recover misappropriated funds.

--$15.6 million worth of grants and student loan forgiveness to place more physicians in needy rural and urban areas under the Doctors Across New York program.

--Shifting $170 million from hospital inpatient care to less expensive outpatient programs.

--Revenues from an increase in the tobacco tax, although the size of the increase hasn't yet been released.

The original proposal calls for a doubling of the state cigarette tax to $3 per pack, which would raise $200 million to $500 million.

--Revamping the detoxification program to help alcoholics avoid a cycle of failing in one program after another, sometimes spending as much as 150 days a year in the short-term programs.

The reforms will include more outpatient treatment, better referrals to follow-up programs, and more "observational beds" in treatment facilities that could determine what outpatient care is best.

In all, the Legislature's health care spending will restore $273 million of the reduced growth in spending that Paterson sought to deal with a $5 billion deficit and declining revenues.

That's about 75 percent of Paterson's plan.

[Livyjr]

"New investigations launched - Complexity of probes grows as State Police, watchdogs are targeted"

By RICK KARLIN, Capitol bureau, Albany, New York Times Union

First published: Wednesday, April 2, 2008

ALBANY -- The Capitol was hit Tuesday with two new investigations of the State Police and several public integrity watchdogs.

Attorney General Andrew Cuomo, at the request of Gov. David Paterson, will investigate allegations that members of the State Police have been involved in spying on elected officials in what the governor termed "political interference."

Paterson gave Cuomo subpoena powers in probing the approximately 5,000-member force.

"Recent reported events raise questions of possible political interference with the State Police and I am determined to not only ascertain the veracity of such reports but to do everything within my power to protect and strengthen the reputation of the State Police," Paterson wrote in requesting that Cuomo conduct the probe.

"Combining politics and police work is a toxic brew," Cuomo said.

"Any questions about political interference within the State Police are a serious concern."

"Our investigation will determine whether or not this has occurred within the State Police, and if so to what extent."

At the same time, the State Commission of Investigation is probing three organizations that investigated the travel records scandal that erupted last summer when Eliot Spitzer was governor.

Targets include the state inspector general, the Commission on Public Integrity, and Albany County District Attorney David Soares' office.

"The commission is investigating the investigations."

"We are seeking to determine the efficacy of the various investigatory efforts," said SIC Chairman Alfred Lerner.

"We are concerned that the multiplicity of investigations has been somewhat dysfunctional."

In a prepared statement, Lt. Glenn Miner, a State Police spokesman, said, "We will fully cooperate with any inquiry Attorney General Andrew Cuomo may conduct into these matters."

The union representing State Police officers welcomed the inquiry, noting it has been calling for a probe of the force's top brass since 2006.

Daniel De Federicis, president of the Police Benevolent Association of New York State Troopers, said the State Police rank and file have long complained about what he termed the leadership's "entrenched culture."

They detailed concerns in a 2006 letter that contended State Police leadership botched a five-month manhunt for fugitive cop-killer Bucky Phillips.

"The PBA has absolutely no confidence in the State Police's ability to investigate itself," said the letter, which said leadership was rife with "internal turf wars."

State Police leadership got another black eye last summer when Cuomo, in his July probe of the travel records scandal, found it had gone along with requests to re-create Senate Majority Leader Joseph L. Bruno's travel records for Spitzer aides.

Spitzer last month resigned in a scandal involving a prostitution ring.

Soon after, acting State Police Superintendent Preston Felton, who was named in Cuomo's July report, also resigned.

In addition to ongoing concerns about the State Police's role in the travel records affair, Paterson said his office has received numerous complaints from political leaders that State Police improperly delved into their backgrounds or interfered in political campaigns.

By requesting that Cuomo investigate, Paterson appears to be trying to deal quickly with the complaints, similar to the way he admitted to extramarital affairs right after taking office to dispel rumors.

"The longer he stays governor and doesn't address it, the longer it's his problem," said Blair Horner, legislative director at NYPIRG.

The SIC, meanwhile, said it is looking into at least three investigatory efforts in the travel records scandal, and whether they were effective.

Each of the agencies involved has faced some degree of criticism.

Soares, for example, issued a report Friday that found Spitzer may have lied when he said he didn't know about the plan to release Bruno's travel records to the press, despite Soares' September report that found no wrongdoing by the ex-governor.

Bruno faults Soares for not prosecuting Spitzer and others involved in the case.

Sen. George Winner, R-Elmira, who heads the Senate Investigations Committee, said of Soares, "this is best he can do?"

Additionally, Inspector General Kristine Hamann drew fire last summer from Winner's committee for what it termed her failure to aggressively investigate Spitzer, whose office oversees the IG.

And the Commission on Public Integrity was privately blasted by Soares who complained that its executive director, Herbert Teitelbaum, had tried to get the district attorney to hand over testimony from former Spitzer spokesman Darren Dopp, a key witness and player in the travel records issue.

The commission is still investigating the travel records scandal.

Soares has completed his probe.

Hamann dropped hers because of a perceived conflict of interest -- she reported to a top aide involved in the scandal, Richard Baum.

The six-member SIC was created in 1952 to help root out organized crime's influence in government.

It is controlled by Republican appointees, while the Commission on Public Integrity is predominantly Democratic.

Horner said he hopes the efforts would eventually improve the way in which decision-makers are policed in New York.

"The fact that people are starting to look at this, we view as a good thing," he said.

Karlin can be reached at 454-5758 or by e-mail at rkarlin@timesunion.com.

Gannett News Service contributed to this report.

PLETHORA OF PROBES

Albany County District Attorney David Soares

Investigated Spitzer administration/travel records scandal

Attorney General Andrew Cuomo

Investigated Spitzer administration/travel records scandal

Investigating state police political intelligence gathering allegations

Commission on Public Integrity

Investigating Spitzer administration/travel records scandal

FBI

Investigating Senate Majority Leader Joseph Bruno/private business interests

Inspector General

Investigated Spitzer administration/travel records scandal (passed off to Cuomo)

Senate Committee on Investigations and Government Operations

Investigating Spitzer administration/travel records scandal

State Investigation Commission

Investigating investigations by Soares, Commission on Public Integrity, and Inspector General

[Livyjr]

"Top Spitzer aides leave jobs after governor's sudden fall"

By MICHAEL GORMLEY, Associated Press

Last updated: 1:46 p.m., Wednesday, April 2, 2008

ALBANY -- Several top officials in the Spitzer administration, some of whom were connected to political scandals that crippled the governor's agenda, are calling it quits, an official familiar with the internal moves said Wednesday.

William Howard, Spitzer's former public security adviser who was accused of helping orchestrate a plot to discredit Senate Republican leader Joseph Bruno, has announced his resignation.

The other officials who are leaving the executive chamber but were not criticized in investigative reports include:

Lloyd Constantine, senior adviser;

Rich Baum, the high-level adviser job titled secretary to the governor;

Marlene Turner, Spitzer's chief of staff;

Peter Pope, policy adviser;

Marty Mack, director of intergovernmental affairs;

counsel David Nocenti; and

Christine Anderson, Spitzer's former press secretary who was promoted to communications director when Darren Dopp was suspended and then resigned.

The official spoke to The Associated Press on condition of anonymity because the personnel changes have not been formally announced.

Spitzer had blamed Howard and former Communications Director Dopp for the scandal that involved using the state police to gather travel records on Bruno.

Spitzer suspended Dopp, who eventually left the state payroll to work for a powerful lobbyist.

Spitzer demoted Howard to the State Emergency Management Office, which was one of the areas he had overseen along with state police.

The staff departures come soon after Spitzer resigned last month when reports identified him as a client of a high priced prostitution ring.

Spitzer, elected in a landslide in 2006, was in office barely 14 months.

An investigative report by Albany County District Attorney P. David Soares released Friday named Nocenti, Spitzer's top lawyer, as being involved in discussions of the Bruno plot.

Bruno had accused Dopp and Howard of misusing the state police to compile records of the state's most powerful Republican's use of state aircraft on days he mixed meetings with lobbyists with attending Republican fundraisers.

Soares' report, citing Dopp's testimony, said Spitzer had a direct role in compiling and releasing the travel records, in contrast to Spitzer's oft-repeated public claims that he had no knowledge of the plot.

Spitzer's lieutenant governor, David Paterson, succeeded Spitzer on March 17.

Howard had also worked in the Republican administration of Gov. George Pataki.

His departure was first reported Wednesday by the New York Daily News.

[Livyjr]

IN NEW YORK STATE, THE "LAW" IS A GREAT BIG JOKE ....

"Investigator says NYRA violated law by hiring firm"

By MICHAEL GORMLEY, Associated Press

Last updated: 12:12 p.m., Wednesday, April 2, 2008

ALBANY -- The New York Racing Association violated state law when it hired the law firm that had served as a court-appointed monitor to help NYRA avoid a federal indictment, according to the State Investigations Commission.

The powerful commission said NYRA illegally hired the Getnick & Getnick law firm in Manhattan to a $125,000-a-month contract in 2007 without allowing competitors to bid.

The five-year contract was to help NYRA uphold business integrity standards.

"We appreciate the SIC's review of this matter," said NYRA spokesman John Lee.

He said the Getnick & Getnick contract will continue.

He also said NYRA's new franchise provides for an oversight board that would consider contracts such as this one and guide NYRA to better competitive bidding practices.

There was no immediate comment from Getnick & Getnick.

The SIC didn't call for sanctions against NYRA or the law firm.

NYRA, despite being the subject of numerous state and federal investigations into its prior management, will continue to operate the Aqueduct, Belmont and Saratoga thoroughbred tracks under a new state racing franchise.

NYRA beat out several competitors to a large degree because it threatened to sue if it lost the franchise it first won in 1955.

NYRA contended it owned the tracks.

Under the new franchise, NYRA acknowledges that the state owns the tracks.

The SIC found that other companies were qualified to handle the work given to the Getnick firm, but were shut out when NYRA awarded the contract without seeking competitive bids.

"The irony here is that had NYRA used the bidding process and concluded that Getnick & Getnick was the most qualified firm, NYRA would have had a reasonable basis for hiring the firm," Commission Chairman Alfred D. Lerner said.

"By violating state law and not having a competitive bidding process, NYRA needlessly invited doubt about the contract award's legitimacy," he said.

The contract violated state breeders' law, but state regulators weren't authorized to stop it, Lerner said.

The SIC recommends a change in the law or a change in the authority of the state Racing and Wagering Board or racing oversight board.

Under law, NYRA must submit contracts worth $250,000 or more to competitive bids to ensure the best price.

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"Study touts impact of chip fab - State investment similar to one offered to AMD would be beneficial, analysis shows"

By LARRY RULISON, Business writer, Albany, New York Times Union

First published: Wednesday, April 2, 2008

COLONIE -- An Arizona company revealed a study Tuesday that shows New York's billion-dollar incentive package for Advanced Micro Devices Inc. could pay hefty dividends in new jobs, economic growth and tax revenue.

The company, Semico Research Corp., did an economic analysis of the impact that a $650 million investment by the state in a computer chip factory would have on the upstate economy.

The analysis found that the $650 million, paid out over six years, would help create 5,514 jobs, for a cost of about $117,800 per job.

When new tax revenue and goods and services created both directly and indirectly are measured, the return on the state's investment would be a whopping 466 percent after five years, the study claimed.

In the first year alone, the impact on the economy would be $377 million.

That's more than the $200 million the state would pay out in the first year.

"When you attract a manufacturing facility to your region, you bring a lot of other businesses, and you bring enterprises that spawn other businesses so it's much more than a semiconductor fab," said Sherry Gerber, a senior vice president with Semico.

AMD is planning to build a $3.2 billion computer chip factory, or chip fab, at Luther Forest Technology Campus in Saratoga County.

But Semico officials said the study did not use AMD's project as an example, although it's similar.

Instead, a generic fab with 1,160 workers was used.

AMD is planning to employ 1,465 people at Luther Forest.

National Grid, upstate New York's dominant electric and natural gas utility, paid for the study, along with the Center for Economic Growth, an economic development group based in Albany, and Mohawk Valley EDGE, a similar group in Oneida County.

National Grid would benefit greatly from the construction of a chip fab because the buildings use a tremendous amount of electricity and natural gas.

EDGE is marketing its own site in Marcy, outside Utica, for a chip fab.

AMD says the Marcy site, an undeveloped property known as the Marcy NanoCenter, came in a close second to Luther Forest for its new fab.

The Semico study was presented Tuesday afternoon at The Desmond Hotel & Conference Center in Colonie.

Semico found that construction of the fab over the first year and a half would create 1,500 laborer jobs.

Supporting businesses, such as warehousing, delivery, chemical disposal and security, would spring up to employ 435 people.

The need for more schoolteachers, police officers, restaurant workers and hotel staff would create 2,419 more jobs.

F. Michael Tucker, chief executive of CEG, said the study was done to get "verification and validation" that further investment by the state in the semiconductor industry would pay off in upstate New York.

The study also rebuts media reports that the state's $1.2 billion incentive package for AMD equals $1 million per job created.

AMD initially said the fab would employ 1,200 people, but the figure was later revised.

Semico said the average fab wafer operator -- an entry-level job -- would earn $40,000 a year, with engineers getting $75,000 and managers getting $110,000.

While 70 percent of the wafer operators would be hired from the local work force, up to 80 percent of the engineers and 70 percent of the managers initially hired would have to be recruited from outside the region, the study found.

Semico officials also said a chip fab in upstate New York would have other benefits, such as lifting real estate prices 15 percent over two to three years.

"It's a boost to the local real estate market," said Semico President Jim Feldhan.

"It's certainly good for the local homeowner."

Larry Rulison can be reached at 454-5504 or by e-mail at lrulison@timesunion.com.

Future jobs

Semico Research Corp. estimates $650 million in state aid for an upstate computer chip factory will help create 5,514 jobs.

Here is the breakdown:

Construction staff: 1,500

Fab workers: 1,160

Outside fab support: 435

Support industry and local business jobs: 2,419

Cost per job: About $117,800

Source: Semico Research Corp.

[Livyjr]

"Port aims for ethanol project - Alternative energy plant is commission's pick for site; plan faces hurdles"

By ERIC ANDERSON, Deputy business editor, Albany, New York Times Union

First published: Tuesday, April 1, 2008

ALBANY -- An ethanol production plant costing up to $350 million and capable of producing 165 million gallons of the corn-based fuel annually is planned for 18 mostly vacant acres at the Port of Albany.

The project was selected from among four submitted to the Albany Port District Commission, which has been seeking proposals for the land that would also make use of port facilities.

The developer, Albany Renewable Energy LLC, would bring in 60 million bushels of corn annually -- about what is produced in all of New York state -- from regional and Midwest farmers.

At the port, it would be turned into the ethanol and 500,000 tons of distillers grain, a byproduct that could then be used for cattle feed.

The plant also might produce cellulosic ethanol from such plant matter as switchgrass and wood chips.

The plant faces two hurdles.

Financing could be a challenge, given the tightening of credit and the rising cost of corn, said Ed Stahl, president and founding partner of Huntersville, N.C.-based BioPro Resources, which is the project's developer.

But he said ethanol more closely tracks the price of oil, which has also climbed sharply.

And Stahl said obtaining the necessary permits could take six to 12 months.

The project could be built in phases, he said, and the first phase could produce as little as 55 million gallons annually and cost $120 million.

Expanding to the full 165 million gallons would take somewhat more land than the 18 acres the port is leasing, but Port District Commission Chairman Robert Cross said adjacent land has been identified for expansion.

The land would be leased for at least $20,000 per acre per year, with a minimum term of 20 years, yielding at least $7.2 million in revenue, Cross said.

The agreement hasn't been finalized.

The project is in an Empire Zone, which provides tax breaks and other incentives.

Monday's decision by the commission allows the developer to line up financing and permits.

Construction would create up to 400 jobs, Cross said, while the plant would employ 50 to 60 full-time workers making an average of $60,000 annually.

The plant's ethanol output would fill up to 350 barges a year.

The port also expects to collect dockage and wharfage fees, while loading and unloading would create demand for additional port workers, Cross said.

And the plant could consume as much as 900 million gallons of water annually, producing additional revenue for the city of Albany, said Cross, who is also the city's water commissioner.

The proposal selected Monday was one of two for ethanol facilities.

Albany Biofuels Inc. submitted a competing proposal for a plant that would have produced 50 million gallons of corn-based ethanol and another 5 million gallons of cellulosic ethanol, using plant material.

"I wish those guys a lot of luck."

"We came late to the party," said Christian King, a partner in the Albany Biofuels effort.

That project would have cost an estimated $80 million to $120 million.

King, who also owns Colonie-based KNC Holdings, which distributes ethanol-blended fuels and operates service stations, said Albany Biofuels would seek to build its project elsewhere in the Albany area.

Stahl, the developer of the successful proposal, said the presence of a deep water port and rail lines owned by CSX Transportation and CP Rail proved attractive.

The ethanol could be loaded onto barges for shipment to East Coast fuel terminals, where it would be blended with gasoline.

Ethanol produced inland must be loaded onto rail cars for shipment to terminals, or transferred from rail cars to barges, something that's now done at the port.

"The ability to avoid some of the transportation expense, (with) the proximity to your end user" was an another attraction Albany offered, Stahl said.

Anderson can be reached at 454-5323 or by e-mail at eanderson@timesunion.com.

Corn on the Hudson

Here's a look at the proposed Port of Albany ethanol production plant:

COST: Up to $350 million

OUTPUT: 165 million gallons of ethanol a year, when fully built

EMPLOYMENT: 50 to 60 full-time workers

CORN CONSUMPTION: 60 million bushels per year

WATER CONSUMPTION: Up to 900 million gallons per year

BYPRODUCT: 500,000 tons of distillers grain for cattle feed annually

Source: Albany Port District Commission

[Livyjr]

"Port aims for ethanol project - Alternative energy plant is commission's pick for site; plan faces hurdles"

By ERIC ANDERSON, Deputy business editor, Albany, New York Times Union

First published: Tuesday, April 1, 2008

ALBANY -- An ethanol production plant costing up to $350 million and capable of producing 165 million gallons of the corn-based fuel annually is planned for 18 mostly vacant acres at the Port of Albany.

The plant faces two hurdles.

Financing could be a challenge, given the tightening of credit and the rising cost of corn, said Ed Stahl, president and founding partner of Huntersville, N.C.-based BioPro Resources, which is the project's developer.

"Public funds fuel for ethanol plant - Empire Zone aid, tax breaks, other incentives likely to boost facility"

By ERIC ANDERSON, Deputy business editor, Albany, New York Times Union

First published: Wednesday, April 2, 2008

COLONIE -- The ethanol production plant to be built by Albany Renewable Energy LLC at the Port of Albany likely will receive public support from a number of sources.

The project, which could cost up to $350 million when fully built, would be eligible for tax credits of 8 percent to 10 percent on building and equipment costs because of its location in an Empire Zone.

It also could receive tax credits for each employee it hires, said Megan Daly, deputy planning commissioner for the city of Albany and a member of the Albany Port District Commission.

The commission on Monday selected the project for development on 18 acres available for lease at the port.

The developer, BioPro Resources of Huntersville, N.C., which will build the plant for Albany Renewable of Elkhorn, Neb., also could get a break on sales tax when purchasing construction materials for the plant.

And the plant could receive a break on utility costs.

It would need 8 to 12 megawatts of electric capacity to operate at a production rate of 110 million gallons of ethanol annually.

Other incentives also might be available from state agencies.

The New York State Energy Research and Development Authority has funding for innovative biomass projects, said spokeswoman Colleen Ryan.

And Empire State Development Corp. would "welcome the opportunity to work with this company to bring the project to fruition," said spokeswoman Pat Pitts.

Ed Stahl, president of BioPro, said Tuesday afternoon that he didn't yet know how much of the $350 million investment might come from grants and other public assistance.

"We will certainly be exploring every opportunity to enhance the long-term viability, including state incentives, absolutely," he said.

Meanwhile, the group that proposed a competing ethanol project for the site said it will now focus on developing the nation's first commercial-scale cellulosic ethanol plant elsewhere in the Capital Region.

Christian King, a partner in Albany Biofuels, and owner of Colonie-based KNC Holdings, which distributes ethanol-blended fuels and operates service stations, said his group is looking at three sites for a plant that would make ethanol from wood chips, switchgrass or other plant material.

Two of the sites are on the Albany side of the Hudson River; the other is on the Rensselaer side.

The plant would be capable of producing 5 million gallons of cellulosic ethanol a year, and would use technology that's now being successfully used in a 1.5 million-gallon plant in Wyoming, he said.

Albany Biofuels wants to have a site chosen by May 1, with necessary permits in hand by Sept. 1.

"The quickest, best-case scenario" would have the plant in operation by August 2009, King said.

The partners would need state and federal assistance to cover about half the estimated $20 million to $25 million cost of the project, King said.

Stahl, the developer for Albany Renewables, estimates it will take six to 12 months to secure necessary permits, and 12 to 18 months for plant construction, putting the earliest possible completion date for that plant at September 2009.

Eric Anderson can be reached at 454-5323 or by e-mail at eanderson@timesunion.com.

[Livyjr]

"Port aims for ethanol project - Alternative energy plant is commission's pick for site; plan faces hurdles"

By ERIC ANDERSON, Deputy business editor, Albany, New York Times Union

First published: Tuesday, April 1, 2008

ALBANY -- An ethanol production plant costing up to $350 million and capable of producing 165 million gallons of the corn-based fuel annually is planned for 18 mostly vacant acres at the Port of Albany.

The developer, Albany Renewable Energy LLC, would bring in 60 million bushels of corn annually -- about what is produced in all of New York state -- from regional and Midwest farmers.

At the port, it would be turned into the ethanol and 500,000 tons of distillers grain, a byproduct that could then be used for cattle feed.

The plant faces two hurdles.

Financing could be a challenge, given the tightening of credit and the rising cost of corn, said Ed Stahl, president and founding partner of Huntersville, N.C.-based BioPro Resources, which is the project's developer.

And the plant could consume as much as 900 million gallons of water annually, producing additional revenue for the city of Albany, said Cross, who is also the city's water commissioner.

"Public funds fuel for ethanol plant - Empire Zone aid, tax breaks, other incentives likely to boost facility"

By ERIC ANDERSON, Deputy business editor, Albany, New York Times Union

First published: Wednesday, April 2, 2008

COLONIE -- The ethanol production plant to be built by Albany Renewable Energy LLC at the Port of Albany likely will receive public support from a number of sources.

The developer, BioPro Resources of Huntersville, N.C., which will build the plant for Albany Renewable of Elkhorn, Neb., also could get a break on sales tax when purchasing construction materials for the plant.

Ed Stahl, president of BioPro, said Tuesday afternoon that he didn't yet know how much of the $350 million investment might come from grants and other public assistance.

"We will certainly be exploring every opportunity to enhance the long-term viability, including state incentives, absolutely," he said.

"Corn hits $6 a bushel on tight supplies"

By STEVENSON JACOBS, Associated Press

Last updated: 7:02 p.m., Thursday, April 3, 2008

NEW YORK -- Corn prices jumped to a record $6 a bushel Thursday, driven up by an expected supply shortfall that will only add to Americans' growing grocery bill and further squeeze struggling ethanol producers.

Corn prices have shot up nearly 30 percent this year amid dwindling stockpiles and surging demand for the grain used to feed livestock and make alternative fuels including ethanol.

Prices are poised to go even higher after the U.S. government this week predicted that American farmers -- the world's biggest corn producers -- will plant sharply less of the crop in 2008 compared to last year.

"It's a demand-driven market and we may not be planting enough acres to supply demand, so that adds to the bullishness of corn," said Elaine Kub, a grains analyst with DTN in Omaha, Neb.

Corn for the most actively traded May contract rose 4.25 cents to settle at $6 a bushel on the Chicago Board of Trade, after earlier rising to $6.025 a bushel -- a new all-time high.

Worldwide demand for corn to feed livestock and to make biofuel is putting enormous pressure on global supply.

And with the U.S. expected to plant less corn, the supply shortage will only worsen.

The U.S. Department of Agriculture projected that farmers will plant 86 million acres of corn in 2008, an 8 percent drop from last year.

Moreover, cold, wet weather in parts of the U.S. corn belt may force farmers to delay spring planting, potentially sending prices even higher.

While corn growers are reaping record profits, U.S. consumers can expect even higher grocery bills -- especially for meat and pork -- as livestock producers are forced to pass on higher animal feed costs and thin their herd size.

"Higher corn prices is going to affect meat prices."

"If you're feeding with $6 corn, you'll definitely have some (cost) pressure," Kub said.

In addition, corn and corn syrup are used in an array of products, meaning the price of everything from candy to soft drinks will eventually go up, analysts say.

It's the latest dose of bad news for U.S. consumers, who are already struggling with higher food costs from record increases in the price of wheat, soybeans and other agriculture products.

Another loser in higher corn costs is ethanol producers, who are struggling to squeeze out gains as corn's record-setting run outpaces the price of ethanol, currently at around $2.50 a gallon.

"For years, corn was cheap and fermentation processes for ethanol production came to completely dominate the biofuel industry in North America," Michael Jackson, president and chairman of Vancouver-based ethanol maker Syntec Biofuel, said this week.

"Now, with corn prices well over $5 a bushel, corn ethanol economics have gone out the window."

The nation's 147 ethanol plants now have the capacity to produce 8.5 billion gallons of fuel a year, according to the Renewable Fuels Association.

Corn is the basic feedstock for most of the plants and about 20 percent of last year's 13 billion bushel corn crop was consumed by ethanol production.

That percentage is expected to increase to 30 percent for the next crop year, which ends Aug. 31, 2009, according to Terry Francl, a senior economist for the American Farm Bureau Federation.

There are still plans to build or expand another 61 plants, which will add about 5.1 billion gallons of capacity.

However, as corn prices have climbed over the past year or so, construction of several plants has been halted or delayed, shaving about 500 million gallons worth of capacity off the original figure, according to Broadpoint Capital analyst Ron Oster.

At least one facility, the Alchem plant in Grafton, N.D., shut down late last year because of high prices.

A new plant hasn't broken ground over the past couple of quarters, Oster said, and while producers can have positive gross margins with ethanol at $2.50 a gallon and corn at $6 a bushel, that doesn't mean companies are profitable.

"Bottom line earnings are near break-even or modestly below break-even," he said.

Looking ahead, only the strongest ethanol producers will survive in an era of ever-rising corn prices, said Soleil Securities analyst Ian Horowitz.

"There are going to be some particular companies that definitely have the balance sheet and efficiencies that will be able to eke out a positive return in this kind of environment," Horowitz said.

"And then there will be others that will suffer at the hands of $6 corn."

------

Associated Press Business Writer Lauren LaCapra contributed to this report.

[Livyjr]

"Spitzer's embattled NY inspector general resigns"

By MICHAEL GORMLEY, Associated Press

Last updated: 5:32 p.m., Thursday, April 3, 2008

ALBANY -- State Inspector General Kristine Hamann, who was appointed by former Gov. Eliot Spitzer and was criticized for her two investigations into his administration, has resigned.

Her spokesman, Stephen DelGiacco, said Hamann submitted her resignation Thursday and it will be effective April 10.

Her one-page letter said she was honored to serve and proud of her accomplishments in just over a year in office.

But Hamann's biggest investigations drew severe criticism by the Senate's Republican majority that was in open conflict with Democratic Gov. Spitzer and his administration.

Republicans faulted her for her investigation of Spitzer when his top aides were accused of plotting to discredit Senate Republican leader Joseph Bruno.

Her July 2007 report on the scandal involving the use of state police to compile travel records on Bruno was a one-page letter that said she concurred with Attorney General Andrew Cuomo, who found no laws were broken but that aides had acted inappropriately.

She said she determined in her investigation that she had a conflict of interest because her boss, then-Secretary to the Governor Rich Baum, was one of the Spitzer officials who had internal conversations about the case.

Hamann reported to Baum, who recently left the executive chamber.

In February, Hamann also faced scrutiny for her 10-month investigation of a former Spitzer energy policy adviser who was accused of threatening the job of a Republican-appointee on the independent Public Service Commission.

Her investigation found no conclusive proof that Spitzer energy adviser Steven Mitnick threatened the job of state Public Service Commission member Cheryl Buley or tried to force her to vote for Spitzer policies.

Buley had said Mitnick threatened her job last year to make room for a Spitzer appointment.

Bruno had no comment, said spokesman Mark Hansen.

Bruno and Senate Republicans have questioned Hamann's investigations and whether she was independent from the governor.

The Inspector General's office is responsible for detecting and investigating allegations of corruption, fraud, criminal activity, conflicts of interest and abuse involving state agencies, departments, commissions and authorities headed by appointees of the governor.

Not all of her investigations were contentious.

In December, she found New York City Police Department's crime lab cut corners analyzing evidence and submitted results in drug cases without having done the required tests in 2002.

In September she found that while thousands of people waited years for affordable apartments in New York City, the agency that regulates low-cost housing allowed ineligible renters to move into the projects.

And on Wednesday, she reported that a former state employee certified more than 200 unqualified crane operators even though they failed the practical exam.

Gov. David Paterson, who succeeded Spitzer last week after he was implicated in a prostitution investigation, is expected to replace Hamann in the $145,000-a-year job.

The governor accepted the resignation and thanked Hamann for her service, said Errol Cockfield, the governor's spokesman.

Dennis E. Martin, special deputy to the inspector general, was named acting inspector general.

Hamann spent 30 years in the Manhattan district attorney's office.

She served as executive assistant district attorney to Robert Morgenthau since 1998, leading the development of procedures for DNA testing and the creation of a child advocacy center.

Before that, she headed the office's criminal court trial division and headed training efforts for three years and worked briefly in the district attorney's office when Spitzer worked there.