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

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"Bruno: Big economic news ahead - Senate majority leader offers few details; says new name to emerge in governor's race"

By JAMES M. ODATO, Capitol bureau, Albany, New York Times Union

First published: Friday, December 30, 2005

ALBANY -- Senate Majority Leader Joseph Bruno braced reporters Thursday for exciting economic news coming to the Capital Region and a mystery candidate who may emerge soon to run for governor.

"If you own property you're happy people."

If you don't own property, go buy some."

"It's going to be a great investment around here."

"Loan crisis hits home - Subprime mortgages pose a threat to region's housing stability as lending rates revealed"

By CHRIS CHURCHILL, Business writer, Albany, New York Times Union

First published: Saturday, January 26, 2008

TROY -- A ZIP code that includes much of Troy has the area's highest total of subprime mortgages, leading to fears of rising foreclosures and destabilized neighborhoods.

ZIP code 12180, which also includes the town of Brunswick, has the Capital Region's highest number of subprime loans held by borrowers who occupy the buildings, according to a statewide analysis released Friday by the Federal Reserve Bank of New York.

And 12180 has the state's highest number of subprime mortgages held by borrowers who don't live in the buildings.

"The absentee landlord issue is a big one here," said South Troy resident Meisha Rosenberg.

"And it had been long before the subprime mortgage problem."

Subprime mortgages are high-cost loans typically given to borrowers who have shaky credit, relatively low incomes or little money for a deposit.

Rising default rates among holders of the loans have rocked the nation's financial institutions, leading to a credit crisis that some believe is pushing the economy toward recession.

Most reports have suggested that the Capital Region, along with upstate New York, has mostly avoided the subprime crisis, as mortgage default rates are generally lower here than in much of the country.

But the Fed statistics, which took stock of loans existing as of October, show cause for concern:

In the 12180 ZIP code, 10 percent of subprime loans borrowers were in foreclosure, while more than 20 percent had fallen at least 30 days behind on payments.

Subprime loans frequently have adjustable payment rates.

Some borrowers can pay the introductory rate, but struggle to make the higher payments that come one or two years into the mortgage.

The Fed statistics show that 24.2 percent of the subprime mortgages in ZIP code 12180 will reset after April, suggesting the potential for a new wave of foreclosures.

ZIP code boundaries can appear arbitrary, and some codes have higher populations than others.

Therefore, ZIP code 12180 may have the highest number of subprime mortgages only because its boundaries are expansive and include densely populated neighborhoods.

While most of Troy falls into 12180, cities like Albany and Schenectady are divided by several ZIP codes and share the codes with suburban neighbors, leaving the possibility that the two cities have more subprime mortgages than Troy.

Several ZIP codes that included parts of Schenectady had high numbers of subprime mortgages, with varying rates of default.

Subprime mortgages problems are not confined to cities or areas considered relatively poor.

The Fed said ZIP code 12020 in Ballston Spa, for example, had 217 subprime mortgages, and 26.8 percent of the loan holders were either in default or behind on payments.

On Friday, some Capital Region housing counselors welcomed the release of the Fed numbers, because they have wanted statistics outlining the scale of the subprime mortgage problem.

"We haven't had that," said Ellie Pepper, assistant director of Better Neighborhoods Inc. in Schenectady.

"We've only had our own anecdotal evidence."

The Fed said the statistics were compiled to help governments prepare for subprime problems.

In ZIP code 12180, the number of subprime mortgages held by borrowers who did not live in their buildings raised particular concern.

To some, it suggested landlords who either had poor credit histories, evaded even the investment required by a down payment, or took an adjustable rate mortgage because they didn't intend to own the property for long.

A ZIP code including the West Hill section of Albany, 12206, had the state's third highest number of subprime mortgages held by non-occupying borrowers.

The Fed did not detail foreclosure rates among those borrowers.

Officials in Albany have targeted blight and abandoned buildings in recent months.

The problem extends beyond the city borders and could be exacerbated if borrowers are unable to repay subprime mortgages.

"What worries me is the result of the foreclosures," said South Troy resident Sidney Fleisher.

"If the building sits vacant or is abandoned, that becomes a real problem."

"It has a destabilizing effect," he said.

Lynn Kopka, a former Troy director of planning who continues to live in the city, said Friday she hadn't noticed an increase in foreclosed properties.

The office of Mayor Harry Tutunjian declined to comment on the statistics, citing the need to review them.

To some in Troy, foreclosures have been a ongoing concern.

Rosenberg said the house next to her Second Street home went into foreclosure after its owner died.

The vacant building eventually became an eyesore, she said, leading her to buy it at auction for $99.

The building at 319 Second St. has since been demolished.

"We had to take matters into our own hands," she said.

Churchill can be reached at 454-5442 or by e-mail at cchurchill@timesunion.com.

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"Easing homeowners' pain - Gillibrand joins effort to loosen IRS rules for deducting property taxes"

By JENNIFER A. DLOUHY, Washington bureau, Albany, New York Times Union

First published: Sunday, January 27, 2008

WASHINGTON -- Homeowners fed up with rising property taxes could get a big break under a proposal in Congress that would make it easier for them to deduct real estate taxes on their federal income tax returns.

Current federal tax law allows property taxes to be deducted -- but only by those who itemize their deductions on federal tax returns.

Many taxpayers don't itemize their deductions but instead take the standard deductions when filling out their annual returns.

According to data from the National Association of Realtors, more than 40 percent of homeowners do not itemize.

Legislation being pushed by a bipartisan group of lawmakers, including Reps. Baron Hill, D-Ind.; Mike Pence, R-Ind.; and Kirsten Gillibrand, D-Greenport, would allow homeowners to claim a property tax deduction even if they don't itemize.

The property tax deduction would be on top of any standard deduction they already receive.

Sen. Evan Bayh, D-Ind., has sponsored a similar bill in the Senate.

Gillibrand, one of the lead cosponsors of the House bill, said the legislation responds to a complaint she hears from constituents in her upstate New York district who say that property taxes are out of control.

Gillibrand said property taxes are "the number one issue throughout the district."

Rising tax rates -- coupled with increased assessments of the value of a homeowner's property -- have "priced families out of their homes," she says.

The standard deduction that taxpayers can claim on their annual returns has not kept up with the rising cost of property taxes, she said in an interview.

For tax returns due April 15, a single person or a married person filing separately would get a standard deduction of $5,350.

Married couples filing jointly would qualify for a standard deduction of $10,700.

The issue is a big one for New York homeowners, who had the fourth-highest average property tax in 2006 -- $3,301 -- in the nation.

Property taxes account for roughly 4.7 percent of the average income in the state.

The problem is so acute that Gov. Eliot Spitzer recently convened a panel to come up with ideas for revamping New York's property tax structure.

Property taxes are fundamentally a local issue; the tax rates generally are set by elected city and county officials, and periodic assessments are done locally.

The amount homeowners could stand to gain in slashed federal taxes varies, depending on their household income and the size of their annual property tax bill.

But lawmakers who support the legislation say it could easily amount to hundreds of dollars for homeowners who do not itemize.

Lower-income taxpayers would benefit especially because most of them take the standard income tax deduction.

The percent of taxpayers who itemize increases along with their income.

For instance, according to data from the nonpartisan Congressional Research Service, 36 percent of people with annual incomes of $30,000 to $50,000 itemize their tax returns, compared to 77 percent of those making $75,000 to $100,000 each year.

"The folks who don't itemize will typically be middle-income and lower-income families and the elderly," Gillibrand said.

"So this is really, in my view, a targeted middle-class tax cut -- something that will really put money back in the pockets of the families (in) my district and in the country that really need it."

Like many of the bill's supporters, Gillibrand is a member of the Blue Dog Coalition -- a group of fiscally moderate and conservative Democrats.

The proposal also would help the U.S. economy, Gillibrand said, because it would "get dollars back in the hands of our families."

A more limited version of the legislation passed the House last year as part of a broader package of tax measures.

But the property tax provision was dropped by the Senate.

This year, lawmakers behind the measure say they will push for it to be part of a package of economic proposals Congress could tackle in several months.

That would follow a short-term stimulus bill Congress is expected to move immediately.

On Thursday, congressional leaders and the White House reached agreement on the scope of that short-term stimulus bill that would authorize tax rebates.

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"Report: Cuomo gets cooperation in probe"

Associated Press

Last updated: 6:23 a.m., Sunday, January 27, 2008

ALBANY -- A company that analyzed the quality of subprime mortgages for investment banks has agreed to provide the New York attorney general with information for an investigation, a newspaper reported Saturday.

The agreement involves Clayton Holdings, of Shelton, Conn., a publicly held company that is a major provider of mortgage due diligence services to investment banks, The New York Times reported.

Clayton was provided immunity from civil and criminal prosecution although there was no evidence of its wrongdoing, according to the newspaper.

Calls to New York Attorney General Andrew Cuomo's office and Clayton by The Associated Press were not immediately returned Saturday.

Both Cuomo and Connecticut Attorney General Richard Blumenthal are investigating whether Wall Street banks hid crucial information about high-risk loans bundled into securities sold to investors.

About a quarter of all subprime mortgages are in default, resulting in billions of dollars in losses for buyers of securities backed by them.

Investment banks have said that they provided adequate disclosures, while also taking more than $100 billion in their own write-downs.

In a statement Saturday, Clayton chairman and chief executive Frank Filipps acknowledged a cooperation agreement.

"We have complied with a subpoena to produce due diligence reports on various pools of loans that we had reviewed for clients and on loans that had exceptions to lenders/seller guidelines and were eventually purchased," he said.

"This information that we provided to the attorney general is the same information that we provided to our clients."

The mortgage business boomed from 2002 to 2006, generating lucrative fees for mortgage brokers, lenders, credit rating firms, investment banks and many investors.

Investment banks hired companies like Clayton to evaluate samples of loans to determine whether they complied with the law and met the lending standards that mortgage companies said they were using.

Loans that did not were classified as exceptions.

Banks pooled the mortgages into securities, often by blending loans from different lenders.

Information on those mixed pools was then delivered to the rating agencies, which assigned the securities a score.

Pension funds and other big investors bought them because they had triple-A ratings.

Clayton has told the prosecutors that starting in 2005 it saw a significant deterioration of lending standards and a parallel jump in lending exceptions.

At issue is what information about the quality and risk of the loans was given to the investment banks and what was given to the rating agencies.

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"Bloomberg says Spitzer budget shortchanges New York City"

By MICHAEL GORMLEY, Associated Press

Last updated: 5:42 p.m., Monday, January 28, 2008

ALBANY -- New York City Mayor Michael Bloomberg on Monday said Gov. Eliot Spitzer's proposed state budget shortchanges the city by about $500 million and breaks funding promises in education and social services.

"Talk about chutzpah," Bloomberg told state legislators at a budget hearing.

He referred to a revenue raiser in Spitzer's budget, which would charge the city $10 million more to handle mailed income tax returns from city residents despite raising the fee a year ago and despite an increase in city taxpayers filing electronically.

"When someone's gouging you on price because he thinks he has you over a barrel, it's time to find a competitor at a better price," Bloomberg said.

He added that the city may seek a cheaper private service to handle the work.

The cost was part of Bloomberg's criticism of the budget by his ally and neighbor.

Bloomberg said Spitzer's budget proposal hurts New York City, even though the city sends $11 billion more back to Albany than it receives in state aid.

He is calling on the powerful New York City coalition in the Democrat-led Assembly and the Senate's Republican majority -- which has long been close to the former Republican -- to restore the aid.

Spitzer's plan includes less aid that has already been calculated in the city's current budget.

The city fiscal year starts three months after the state's fiscal year, which begins April 1.

In a parting shot, Bloomberg noted the city's budget has filled a $500 million deficit this year and a projected $1.3 billion next year because he cut 2.5 percent of spending in his agencies and set aside billions of dollars in better economic times.

He said the state could likely find the same efficiencies if it tried.

Spitzer's $124 billion budget proposal also includes economic development aid for the upstate economy, which is faring far worse than the New York City economy fueled by Wall Street.

In his State of the State speech, Spitzer noted that former Gov. Hugh Carey and the state bailed the city out of its fiscal crisis in the 1970s and now it's time for a similar "investment" upstate.

Spitzer proposes spending $1 billion for upstate revitalization, much of which would be borrowed.

"The '70s were an awfully long time ago," Bloomberg said.

He added that he hadn't heard Spitzer present that argument.

"I'm sympathetic with the governor, you read about upstate having problems that aren't the same problems we have."

"A lot of New York City's problems are problems of success: Not enough infrastructure, too many people, overcrowded schools, no land to build on."

"You go elsewhere," he said, "they have vacant land and deserted buildings and a lot schools with nobody in them and no tax base, and that's a different kind of problem."

"I'd rather have our kind of problem than their problems, and I understand that.

"New York City has to help the rest of the state," Bloomberg said.

"The question is, 'How much?'"

"If you go and try to get too much out of the parts that are doing well, all you are really going to do is destroy the parts that are doing well."

Democratic Assembly members and Republican senators at the hearing said they would seek to help Bloomberg.

On Tuesday, another big effort to restore New York City education funding is planned.

The powerful United Federation of Teachers union plans to lobby state lawmakers, said union spokesman Ron Davis.

He said the UFT will seek to restore the increase in state school aid to New York City to the $1.24 billion level projected a year ago.

Davis said the union will fight to restore $350 million of the increase reduced by Spitzer.

"The economic storm clouds that hang over our nation and this state call for hard choices and shared sacrifice," Spitzer said Monday.

"Economists I spoke to just this morning are forecasting a sustained economic downturn, which demands fiscal restraint from leaders across the country."

"I understand the City did not get everything it wanted, but rocky economic times mean that every recipient of state funds must share the responsibility of across-the-board belt tightening," Spitzer said.

Spitzer's budget would hold spending to a 5-percent increase, twice the inflation rate but less than recent years' increases of 7 percent to 10 percent by the time the Legislature approved the budgets.

Spitzer said New York City would receive a net increase of $1.2 billion in school aid, property tax relief, Medicaid savings and other measures.

But Bloomberg said some of those are benefits from agreements years ago, and that too much of the school aid is restricted to uses other than paying for operations.

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"IRS plans to slash claim against NYRA by $1.58 billion"

By JACQUELINE PALANK, Associated Press

Last updated: 2:52 p.m., Monday, January 28, 2008

WASHINGTON -- The Internal Revenue Service announced plans to reduce its tax claim against the New York Racing Association to $15.2 million from $1.6 billion, but an attorney for the horse-racing association said negotiations continue over the disputed claim.

In an interview Monday, attorney Brian S. Rosen said "$15.2 million is a far cry from $1.6 billion," but "we reserve our right to object to that proof of claim."

"The parties are continuing to discuss the issues associated with it and hope to reach an agreement soon."

Back in November, NYRA said the IRS agreed to withdraw the $1.6 billion claim and to file a new claim that was $25 million or less.

The two parties said in documents filed with the U.S. Bankruptcy Court in Manhattan this month that the IRS will file a new claim for $15.2 million, subject to further changes.

The IRS filed its claim amid an ongoing audit of NYRA for the years 2000 through 2005, pointing out 16 adjustments to NYRA's tax returns.

The new agreement resolves issues with all but two of the adjustments, which the IRS values at about $23 million and which NYRA disputes.

NYRA, which filed for Chapter 11 protection in November 2006, will try to resolve disputes with some of its major creditors as the clock ticks on its exclusive right to file a bankruptcy exit plan.

NYRA has until Feb. 11 before other parties can offer competing plans for reorganizing the company and repaying its creditors.

NYRA said it plans to present the stipulation with the IRS to the bankruptcy court on Feb. 4.

Ten days later, it will face off with the federal government's private pension insurer, the Pension Benefit Guaranty Corp., at a hearing to work out disputes over at least $100 million in claims that the PBGC says it's owed.

NYRA runs the three largest thoroughbred racing tracks in the state of New York -- Aqueduct, Belmont Park and Saratoga.

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"Cash-strapped states resort to taxing narcotics, sports stars"

By MICHAEL GORMLEY, Associated Press

Last updated: 7:42 p.m., Monday, January 28, 2008

ALBANY -- It's the perfect tax: Government exacts a big payment without having to fend off lobbyists or wage a political fight.

And in most cases, the taxpayer doesn't even have a say.

That's the allure of New York's proposal to tax illegal drugs, just one of the innovative -- and sometimes odd -- ways states are trying to raise revenue in these increasingly gloomy economic times.

Politicians love to use such methods because they don't have to raise income taxes.

But critics say that's also the danger, if long-term problems never get fixed and essentials such as health care and education go wanting.

Need a few million dollars to fill a budget deficit?

Lease a toll highway, like Indiana and Virginia did, or cash in on future lottery profits as a half-dozen states are considering.

You could slap a tax on pornography as six states already have, or tax strip joints like they do in Texas, where they call it a "pole tax."

Some states take a slice out of pumpkin sales at Halloween.

And most states tax Shaquille O'Neal and Barry Bonds when they visit, using a "jock tax" on professional athletic events.

Amused?

That will cost you, too.

Many states collect an amusement tax for live performances.

"They range from the outright crazy to the absolutely insane," said Nate Bailey, of the nonpartisan Tax Foundation based in Washington.

"People at the local level already feel overtaxed and politicians, in a somewhat spineless way, look for a hidden way to increase revenue without raising taxes."

In New York, Gov. Eliot Spitzer last week proposed redefining little cigars as cigarettes and "hard" lemonade and other flavored alcohol drinks as liquor instead of beer, all of which would increase tax revenue.

More than a half-dozen states have a tax on narcotics and other controlled substances.

Theoretically, a drug dealer in North Carolina can go to the state revenue office and get a tax stamp for $50 per gram for cocaine over 7 grams (the first 6 grams are tax-free).

A moonshiner could get a stamp for $1.28 per gallon of mash.

Then the dealer or the moonshiner can walk away -- the law prohibits snitching on anyone who buys the stamps -- with proof he paid his debt to the tax department.

The idea is that a peddler, even one who sells illegal substances, should pay taxes.

But in reality the revenue is only collected after arrests, when dealers are slapped with a tax bill.

"The only folks we have buying those stamps are stamp collectors," said Kim Brooks, spokeswoman for the North Carolina Department of Revenue.

In New York, which faces a $4.4 billion deficit, Gov. Spitzer likes the idea.

In his budget proposal to the Legislature last week, he promised $17 million in revenue from it.

He also wants to require Internet giants such as Amazon.com to collect tax on an estimated $47 million in sales to New Yorkers, who are currently on an honor system to report on their tax returns how much they spend online.

Three recent reports predicted states will feel the pinch of the economic downturn.

Nearly half are projecting a budget shortfall within the next two years.

A few states such as Maryland still raise money the old-fashioned way -- by increasing broad-based taxes.

Maryland raised taxes by $1.4 billion in November, but it is also considering legalizing slot machines to pay for health care.

New York's fiscal year starts April 1, and typically deals with such problems ahead of most states, where the budget goes into effect on July 1.

New York also has a tradition of some of the most outlandish schemes.

In 1991, the Legislature famously approved the "sale" of Attica prison to a state authority for $242 million that was then used to help balance the budget.

state was left with a total mortgage of more than $450 million including some of the original debt on a prison it had already paid to build.

Now another idea is for New York to lease its lottery, presumably to a Wall Street investor, in return for an upfront payment of $4 billion, $200 million a year in interest and a continuation of the $2.1 billion the lottery now generates for education.

"It's the idea that you can get away with raising taxes as long as you don't say the word 'tax,'" said New York Assemblyman Richard Brodsky, a Democrat who represents affluent suburbs north of New York City.

"And the consequences are disastrous for the average middle class or poor people, and a boon to big business and the wealthy."

In New Jersey, officials are weighing reforms to the highway system that could allow a nonprofit corporation to operate toll roads.

The agency could also raise money by putting solar panels on sound barriers, erecting windmills along the roadways and selling naming rights for rest stops.

That could mean New Jersey Turnpike rest stops now named for famous residents such as Thomas Edison, Walt Whitman and Red Cross founder Clara Barton could be renamed for corporations.

"There's an incredible desire to avoid general sales and income taxes," said Scott Pattison of the National Association of State Budget Officers.

"And when you think about it, states own a lot of assets."

"So if you are turning them over to private companies to lease and manage for a while, and get upfront money, you have a lot of options."

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On the Net:

Tax Foundation: http://www.taxfoundation.org/

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"Counties claim Spitzer budget would raise taxes"

By MICHAEL GORMLEY, Associated Press

Last updated: 6:43 p.m., Tuesday, January 29, 2008

ALBANY -- County executives blasted Gov. Eliot Spitzer's proposed budget on Tuesday, saying it would actually force higher local property taxes by shifting $80 million of state costs to counties.

But Spitzer shot back that his budget adds $500 million in funding to counties.

A Spitzer aide said that should be enough for county executives to protect their already overtaxed residents.

"County executives who are threatening to raise taxes will be doing so because of their own choices, not because of the New York state budget," said Spitzer spokesman Errol Cockfield.

"They are threatening tax increases at a time when the public is feeling squeezed, despite increased state aid that makes doing so unnecessary ..."

"So it strains belief for any county executive to say that they might be forced to raise taxes because of this budget."

The county officials at the New York State Association of Counties annual meeting, however, said Spitzer's budget will transfer the full cost of jailing juvenile delinquents and some social service spending.

Republican Rensselaer County Executive Kathleen Jimino said that if Spitzer's $124 billion budget is enacted without change, her county's taxpayers would face an 8.5 percent property tax increase.

"We have nowhere else to go but property taxes," said Jimino, a close ally of state Senate Republican leader Joseph Bruno.

"It's a net loss for us," said Suffolk County Executive Steve Levy, a Democrat.

Levy also said there were some positive aspects to the budget, including Spitzer's effort to reduce the number of small taxing jurisdictions.

Albany County Executive Michael Breslin, a Democrat and ally of Spitzer, says the counties' concerns span political divisions and include large and small counties.

Breslin said his review of Spitzer's budget shows the county would lose a couple of million dollars in state aid.

"The governor is trying to do a lot of good things," Breslin added.

"We're early in the process and the governor is listening and I hope he hears us."

Spitzer's proposal to the Legislature seeks to hold spending to about 5 percent to reflect a declining economy and reduced growth in revenues while closing a $4.4 billion deficit.

On Tuesday, Spitzer told reporters annual state spending should grow by no more than 5.3 percent, including in the 2008-09 budget he is proposing now.

That opened what appeared to be an allowance for some added spending by the Legislature.

The governor and the counties appear to be counting differently.

Spitzer includes continuing measures that avoid or cut costs for the counties in his calculation.

County officials said those measures shouldn't be used to distract from the reduced aid, some of which is less than anticipated in their current budgets.

The Legislature must approve the budget, which is due by the start of the new fiscal year on April 1.

"It's not easy to thread the needle," Spitzer told the county executives.

"We have to build for our economic future," he said, referring proposed increases in education, higher education and health care spending, although at lower levels than expected.

"But simultaneously we have to control the cost of government."

Spitzer gained some support for his proposed cap on local property taxes.

The executives, however, wouldn't be subject to the cap.

Any cap, which could begin in 2009, would be aimed mostly at school districts.

The county executives quickly drew the support of the Senate's Republican majority.

"When (Spitzer) withdraws from you, where is it going to land?"

"On the property tax," Bruno told the county officials.

"We're going to deal with that in the budget."

Democratic Assembly Speaker Sheldon Silver emphasized that Spitzer wants to negotiate with the Legislature on his budget.

Silver also said he expects pork-barrel spending, which lawmakers prefer to call "member items," will be added to the budget this legislative election year.

The spending is directed by lawmakers to programs, projects and groups back in their home districts.

Silver notes many of the grants are for widely supported health, education and social service goals.

Critics say they are used by lawmakers to attract votes and campaign contributions.

Spitzer didn't include the spending in his proposal, but adding it could add $170 million or more to the budget.

Member items had been $200 million a year, but Spitzer dropped the governor's piece -- $30 million -- in the current budget.

The spending often ends up in budgets late in closed-door negotiations.

"I think we can always afford member items," Silver said.

Silver also said Spitzer told him he's "not adverse" to a long proposed raise for lawmakers, which has been part of negotiations involving several issues since last year.

Democratic Senate leader Malcolm Smith, a Queens Democrat, said his conference is looking for "efficiencies" to cut spending in the budget.

"I think we're spending much too much," he said.

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"Comptroller says removing Canal Corp. is no quick Thruway fix"

By RICHARD RICHTMYER, Associated Press

Last updated: 5:13 p.m., Tuesday, January 29, 2008

ALBANY -- Separating the state Canal Corp. from the Thruway Authority to cut costs could take years, state Comptroller Thomas DiNapoli said Tuesday.

"It's not something that's going to be done tomorrow," DiNapoli told a legislative panel looking into the Thruway Authority's plan to hike tolls and his proposals to reduce its expenses.

"Some of the options I've identified ... might even require changing the state constitution, so you're talking about something that may be many years off," he said.

The Assembly Transportation Committee called DiNapoli and Thruway Authority officials to testify at a public hearing after DiNapoli on Sunday released his review of the authority's proposal to raise tolls to generate roughly $520 million to cover cash shortfalls projected over the next five years.

DiNapoli's audit found that the agency should not raise the tolls but instead focus on better financial management and cost cutting.

Removing the Canal Corp. -- which the state Legislature folded into the Thruway Authority in 1992 -- would save the authority about $395 million through 2012, according to the audit.

David Gantt, a Monroe County Democrat who chairs the transportation committee, said separating the Canal Corp. from the Thruway Authority is unlikely this year because lawmakers already are trying to close a $4.4 billion budget deficit amid slowing state revenue growth.

"We're in the hole this year, and no matter where you put (the Canal Corp.) someone's going to have to pay for it," Gantt said.

"I don't think we're going to be able to do it this year."

DiNapoli said the Thruway Authority could avert the toll hikes by following his other recommendations, including using a collection agency to recover unpaid E-Z Pass tolls, deferring some capital projects and including a "reasonable estimate" for future Federal highway funding in financial projections.

Thruway Authority Executive Director Michael Fleischer said the authority is already working on getting a collection agency and is considering delaying some projects such as noise barriers and trails along the canal system.

As for the federal funding: "It's a basic disagreement on whether we should bank on federal aid that we have no commitment to get," Fleischer said.

Gantt also repeated calls for the Thruway Authority's board of directors -- most appointed by former Gov. George Pataki -- to resign in order to allow Spitzer to name members who are more aligned with his policies.

He also said he might subpoena authority chairman John Buono -- who did not appear at Tuesday's hearing but instead provided a written statement -- to testify.

Fleischer said the board members weren't asked to testify until late Thursday, and Buono is out of the state.

"I think he's on vacation," he said.

Senate Majority Leader Joseph Bruno said there's no need for toll increases right now, and he'll address the issue through legislation if he gets the opportunity.

The Legislature currently has no role in the way the Thruway Authority operates.

Spitzer said he is looking at whether to move the Canal Corp. out of the Thruway, but noted it will still have to be a cost paid by the state.

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Associated Press Writer Michael Gormley in Albany contributed to this report.

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"State troopers to be moved from NY schools and racinos"

By MICHAEL HILL, Associated Press

Last updated: 3:03 p.m., Tuesday, January 29, 2008

ALBANY -- Gov. Eliot Spitzer plans to redeploy almost 200 state troopers from schools and "racinos" around New York to high-crime areas -- a politically sensitive move that worries some local police and school officials.

Spitzer in his budget proposal last week said the redeployment would put state police where they are most needed in tough fiscal times.

While local officials said the move could stretch their own resources, state police stressed Tuesday they are not abandoning the eight race tracks in New York with video lottery terminals or the 118 school districts with troopers working as school resource officers.

"We're not totally ceasing our responsibilities to provide service to those areas," said Sgt. Kern Swoboda, a state police spokesman.

"We're just not having dedicated personnel assigned to those locations."

There are 92 troopers and investigators posted at racinos from Yonkers to the Buffalo area that perform employee background checks and handle complaints.

Another 96 troopers are stationed at school districts to help maintain order.

A minority of New York's roughly 700 school districts use troopers for their school resource officers.

Districts can rely on local police or choose not to have one.

Spitzer wants to reassign those officers to Operation Impact, a law enforcement program targeting the 17 counties that report 80 percent of the crimes outside of New York City.

Given the state's fiscal constraints, Spitzer in his budget said state police will have to be moved from "lower-priority posts" to keep state crime rates decreasing.

Swoboda said the troopers would stay in schools through the end of this school year and that there was no timetable for moving officers from the racinos.

State police are working to make sure there are no gaps in public safety during the transition, he said.

Local police who would likely have to take up the slack are concerned, though.

Saratoga Springs Police Chief Ed Moore said he does not have the staff to replace the entire trooper contingent at Saratoga Racing and Gaming, a worry echoed by sheriffs with racinos in their counties.

"I have no one to put there, actually," said Tioga County Sheriff Gary Howard, who would have to take up the slack at Tioga Downs, west of Binghamton.

"We're stretched as far as we can go right now."

School officials also are worried about losing troopers, saying the officers handle issues ranging from harassment to education to cyber-bullying.

"It would be a huge loss for us," said Kelly DeFeciani, a spokeswoman for the Shenendehowa school district in suburban Saratoga County.

The schools could seek replacements from local police forces.

But Christy Multer of the Burnt Hills-Ballston Lake district near Albany said that would be difficult since the district spans two counties and four towns.

That means multiple police jurisdictions, she said.

"Could we get a local police officer to assist?" Multer asked.

"Sometimes yes and sometimes no."

"It depends what school it is."

[Livyjr]

And yes, this does indeed look like a case of pure mental illness arising here .....

But whose?

DATE: October 11, 1988

TO: John Buono, Rensselaer County Executive

FROM: Associate Public Health Engineer, Rensselaer County Health District

SUBJECT: Integrity of Environmental Health Programs

As the Director of the Environmental Health Division, it is my responsibility to certify on behalf of Rensselaer County the integrity of the Code Enforcement Programs to the State of New York for the purpose of payment of our State operating funds.

I have reached a juncture where such certification by myself is no longer feasible.

My certification of our operations is as a licensed professional.

My conduct is governed in large part by Part 29 of the Codes of the Education Department which sets forth the actions deemed to constitute unprofessional conduct on the part of licensed individuals.

Section 29.1(b)(6) defines unprofessional conduct as "willfully making or filing a false report, or failing to file a report required by law or by the Education Department, or willfully impeding or obstructing such filing, or inducing another person to do so."

I can no longer vouch for the integrity of our programs and will not place my professional standing in jeopardy.

It is my professional opinion stated in writing to yourself that the programs I am responsible for have been very seriously undermined and compromised.

As my internal investigation proceeds, the probability of actions for damages against the Department increases, due to errors of omission and commission of former engineers and the Public Health Director.

As the Public Health Law requires me to conduct investigations into incidents involving public health nuisance or hazard, I find myself in the course of such investigation returning to our own files with consistent violation of code on the part of County staff.

THE NEW YORK DAILY NEWS DAILY POLITICS BLOG:

Originally, topo, yes, this matter started out as an investigation pursuant to the Rules of the NYS Board of Regents as they pertain to licensed professional engineers and surveyors, specifically, section 29.3(a)(1), to wit:

§ 29.3 General provisions for design professions.

Unprofessional conduct shall also include, in the professions of architecture and landscape architecture, engineering and land surveying:

1. being associated in a professional capacity with any project or practice known to the licensee to be fraudulent or dishonest in character, or not reporting knowledge of such fraudulence or dishonesty to the Education Department;

end quotes

Had that investigation been allowed to go its course, none of this discussion would be taking place in here, at all ...

But that investigation, topo, was derailed ...

Here are the facts as determined by a federal judge in Albany in 2005, and yes, Eliot Spitzer was involved in the matter at that time, so he and the State of New York are aware of these facts, and THESE FACTS WERE NEVER IN DISPUTE:

III. FACTS:

On May 22, 2001, Jeffey Pelletier was issued a sewage system construction permit by the County of Rensselaer.

On July 7 (2001), PLAINTIFF conducted an investigation of defendants Aiken (engineer) and McGrath’s “deliberate falsification of inspection data and fraudulent submissions” resulting in the issuance of the Pelletier permit.

During PLAINTIFF'S investigation, Pelletier assaulted him.

On August 9 (2001), defendant Reiter (Rensselaer County Director of Veterans’ Services) warned PLAINTIFF to “back off” the Pelletier investigation because he (Pelletier) was a “protected person” in the county.

On August 17 (2001), defendant Jimino (Rensselaer County Executive) allegedly phoned PLAINTIFF threatening to harm him if he did not stop his investigation.

Thereafter, he claims that Jimino conspired with Cybulski (County Director of Community Services) to obtain a fraudulent involuntary commitment order and a medical certification from Samaritan Hospital.

end quotes

Jeffrey Pelletier WAS A "PROTECTED PERSON" in Rensselaer County, and the engineer and surveyor were as well ...

That is an UNDISPUTED FACT ...

And as Mike implies, that is POLITICAL REALITY in upstate NY, DESPITE ANY LAWS OR REGULATIONS to the contrary ...

THE SELLING OF PROTECTION FROM THE LAW IN NYS IS JOE BRUNO'S BUSINESS ...

And however it was accomplished, Jeffrey Pelletier was able to "PROCURE" from a doctor in Troy, NY a fraudulent certification that stated, falsely, that the engineer was a dangerous mental patient with a criminal history who required "TREATMENT" in a secure mental facility at Samaritan Hospital in Troy, New York ...

Without ever seeing this engineer, the doctor prescribed treatment for him, anyway ....

In this big STEROIDS BUST by the Albany County DA, that same conduct by other doctors was considered a felony ...

BUT NOT IN THIS CASE ...

And Eliot Spitzer became involved right at the outset, right after the incarceration occurred, through Lisa Ullman, when, pursuant to the NYS Mental Hygiene Law, the engineer tried to find out who the doctor was and who else was involved ....

That is when the COVER-UP began at the state level ...

So what started out as a "local dispute" quickly escalated ...

And now, we are here discussing it, because to me, anyway, this particular case gets right to the heart of what the ALBANY CULTURE OF RETALIATION AND RETRIBUTION is really all about, and this case serves to put a spotlight on Eliot Spitzer's role in MAINTAINING AND ACTUALLY STRENGTHENING THAT CULTURE ...

Which then serves to put a spotlight on his subsequent public statements that he is in Albany to "clean up" corruption ...

Which I think, based on the UNDISPUTED FACTS in this particular case is a bunch of BULL **** ...

YOU DO NOT CLEAN UP CORRUPTION IN ALBANY BY VIGOROUSLY AND ZEALOUSLY DEFENDING THAT SAME CORRUPTION ...

YOU DO NOT ATTACK THE SELLING OF PROTECTION FROM THE LAW BY ZEALOUSLY DEFENDING THOSE WHO SELL THAT PROTECTION!

Which has Mike and I now chatting back and forth about that, with you as a neutral observor ...

And everyone else in here, as well, as a "jury" so to speak, in this "COURT OF PUBLIC OPINION" that is this OPEN UNCENSORED BLOG ...

A true GOD-SEND to us common citizens in here who are without a voice in upstate NY ...

And so ...

Posted by: John Galt | July 30, 2007 8:02 AM

http://www.nydailynews.com/blogs/dailypoli...itz.html?page=2

"FBI probes 14 companies over home loans"

By ALAN ZIBEL, Associated Press

Last updated: 7:02 a.m., Wednesday, January 30, 2008

WASHINGTON -- The FBI on Tuesday said it is investigating 14 companies for possible accounting fraud, insider trading or other violations in connection with home loans made to risky borrowers.

Agency officials did not identify the companies under investigation but said the wide-ranging probe, which began in spring 2007, involves companies across the financial services industry, from mortgage lenders to investment banks that bundle home loans into securities sold to investors.

The Federal Bureau of Investigation is working in conjunction with the Securities and Exchange Commission on the corporate-fraud probe, said Neil Power, chief of the FBI's economic crimes unit in Washington.

As the nation's housing crisis worsens, there has been a dramatic spike in the number of mortgage fraud cases under investigation.

An agency spokesman said 1,210 such cases are open, up from roughly 800 a year ago.

The announcement comes weeks after authorities in New York and Connecticut said they are investigating whether Wall Street banks hid crucial information about high-risk loans bundled into securities sold to investors.

Power said the FBI is looking into the practices of so-called subprime lenders, as well as potential accounting fraud committed by financial firms that hold these loans on their books or securitize them and sell them to other investors.

Referring to certain unnamed bankrupt subprime lenders, Power said there are "some irregularities there that we're looking into," including the timing of stock sales by executives.

Dozens of subprime lenders have filed for bankruptcy in the past year, most prominently New Century Financial Corp.

"We're looking at the executives to see if they were committing insider trading," Power said.

Power also said law enforcement officials are looking at whether homebuilders manipulated financial statements to inflate revenues.

An SEC spokesman declined to comment.

The agency has said about three dozen investigations related to the mortgage market meltdown are ongoing.

Defaults on subprime loans have risen over the past 12 months and are primarily responsible for the credit crunch that has disrupted global financial markets.

Morgan Stanley, Goldman Sachs Group Inc. and Bear Stearns Cos. all disclosed in regulatory filings Tuesday that they are cooperating with requests for information from various, but unspecified, regulatory and government agencies.

Officials at the companies either declined to comment, or could not immediately be reached.

FBI officials also highlighted what they called a growing pattern of suspected mortgage loan fraud potentially committed when loans were made to shaky borrowers.

They cited a surge in "suspicious activity reports" that banks are required to file with the government.

The number of those reports is projected to rise to 60,000 this year after hitting 48,000 last year, up from about 7,000 in 2003.

"We're going to have to take a hard look at these things," said Assistant FBI Director Ken Kaiser.

Earlier this month, Connecticut Attorney General Richard Blumenthal said he and New York Attorney General Andrew Cuomo were looking whether banks properly disclosed the high risk of default on so-called "exception" loans -- considered even risker than subprime loans -- when selling those securities to investors.

In November, Cuomo said he issued subpoenas to government-sponsored mortgage companies Fannie Mae and Freddie Mac in his investigation into what he claims are conflicts of interest in the mortgage industry.

He said he wanted to know about billions of dollars of home loans they bought from banks, including the largest U.S. savings and loan, Washington Mutual Inc., and how appraisals were handled.

------

Associated Press Writers Lara Jakes Jordan in Washington and Joe Bel Bruno in New York contributed to this report.

[Livyjr]

"Loan crisis hits home - Subprime mortgages pose a threat to region's housing stability as lending rates revealed"

By CHRIS CHURCHILL, Business writer, Albany, New York Times Union

First published: Saturday, January 26, 2008

TROY -- A ZIP code that includes much of Troy has the area's highest total of subprime mortgages, leading to fears of rising foreclosures and destabilized neighborhoods.

ZIP code 12180, which also includes the town of Brunswick, has the Capital Region's highest number of subprime loans held by borrowers who occupy the buildings, according to a statewide analysis released Friday by the Federal Reserve Bank of New York.

And 12180 has the state's highest number of subprime mortgages held by borrowers who don't live in the buildings.

In the 12180 ZIP code, 10 percent of subprime loans borrowers were in foreclosure, while more than 20 percent had fallen at least 30 days behind on payments.

THE NEW YORK DAILY NEWS DAILY POLITICS BLOG:

Good ol' Troy.

You think that's just a coincidence, John?

You know the territory much better than I do.

What's your take?

Posted by IronMike on January 27, 2008 12:54 PM

http://www.nydailynews.com/blogs/dailypoli...3.html#comments

[Livyjr]

THE NEW YORK DAILY NEWS DAILY POLITICS BLOG:

My take is and has been, Mike, that Joe Bruno's TROY in New York State's Rensselaer County is the EPICENTER of this SCAM ....

And I base that on a stack of official government records, including Federal Bureau of Investigation records, plus direct experience in Rensselaer County as a New York State licensed professional engineer from 1986 on who was also certified as an associate level public health engineer in New York State ....

Joe Bruno's PONZI, Mike ...

Joe Bruno's carefully constructed HOUSE OF CARDS IS coming tumbling down ....

Fancy people are going to be caught with their pants down in public is my thought, Mike ....

It's like Salmon swimming back to where they were born, is one way of looking at it .....

Certainly, chickens are coming back home to roost .....

BOGUS APPRAISALS ....

BOGUS HEALTH DEPARTMENT CERTIFICATIONS AND APPROVALS ....

QUESTIONABLE TITLE SEARCHES ....

A PONZI ....

Flip some property back and forth with some shills .....

And then sucker some fool ....

EXCEPT ....

Worthless property is worthless property .....

And eventually ....

The price of the PONZI gets to be too great, like all PONZIS ....

And then, they collapse ....

I would say that it was a money funnel, Mike .....

People from elsewhere had money that needed to be cleaned up, so running it through land subdivisions and property transfers was a good way to do that, because nobody looks at where that money came from, or how ....

And once the LAUNDRY is up and running good, YOU CAN'T STOP!

People who need to move big sums of money have to keep that money moving, so they need more and more property transfers ....

But the "reality" of what is actually being sold cannot bear them ....

A WORTHLESS PROPERTY IS IN THE END STILL WORTHLESS DESPITE WHAT YOU PAID FOR IT ....

As the engineers say, that is a SUNK COST ....

And there you are ....

Just as if you owed a bundle for a boat that just sank to the bottom of the sea .....

SUCK IT UP, DUDE, YOU'RE NOW THE ONE WHO HAS JUST BEEN SCREWED ...

And so ....

Posted by John Galt on January 27, 2008 2:42 PM

http://www.nydailynews.com/blogs/dailypoli...3.html#comments

[Livyjr]

THE NEW YORK DAILY NEWS DAILY POLITICS BLOG:

WHEN YOU READ THE WORDS OF FED CHAIRMAN BEN BERNACKE IN THIS NEWS ARTICLE, Mike ....

TO ME, IT IS AS IF HE IS SPEAKING DIRECTLY TO TROY AND RENSSELAER COUNTY RIGHT HERE IN THE STATE OF NEW YORK ...

"Fed endorses home mortgage protections"

By JEANNINE AVERSA, Associated Press

Last updated: 5:52 p.m., Tuesday, December 18, 2007

WASHINGTON -- The Federal Reserve moved Tuesday to protect home buyers from dubious lending practices, its most sweeping response to a mortgage meltdown that has forced record numbers of people from their homes.

The Fed has been under attack for not doing more to stem the crisis as hundreds of thousands of people lost the roof over their head.

The situation raised the odds the country will fall into recession, unhinged Wall Street, racked up multibillion losses for financial companies and resulted in political finger-pointing over who was to blame.

"Unfair and deceptive acts and practices hurt not just borrowers and their families, but entire communities, and indeed, the economy as a whole."

"They have no place in our mortgage system," Fed Chairman Ben Bernanke said.

"We want consumers to make decisions about home mortgage options confidently, with assurance that unscrupulous home mortgage practices will not be tolerated," he said.

end quotes

UNFAIR AND DECEPTIVE PRACTICES = RENSSELAER COUNTY IN THE STATE OF NEW YORK ...

And so ...

Posted by John Galt on January 27, 2008 2:58 PM

http://www.nydailynews.com/blogs/dailypoli...3.html#comments

[Livyjr]

THE NEW YORK DAILY NEWS DAILY POLITICS BLOG:

And it isn't as if any of this has ever been any kind of a secret, Mike ....

Here is what the FBI had to say about matters in Rensselaer County vis-a-vis BOGUS land certifications and appraisals by the CORRUPT REPUBLICAN-contolled Rensselaer County Department of Health in a March 16, 1989 Report of the Federal Bureau of Investigation, which was before Bush-appointee federal District Court Judge Gary L. Sharpe in Albany in 2005 as an exhibit in a Motion for Injunctive Relief submitted to federal District Court for the northern District of New York in 2005 by the engineer Paul R. Plante up here in Rensselaer County:

"According to [name deleted], the results of the State's investigation were that New York State laws were not being followed by the Rensselaer County Health Department, Rensselaer County laws were not being followed by the Rensselaer County Health Department, and there was very little 'enforcement activity' even in the face of illegal sales."

"According to [name deleted], the object of any county health department (in the state of New York) is to protect the public, and not to facilitate developers, or development."

"In the case of Rensselaer County, it appears that the Rensselaer County Health Department was in business to facilitate developers and development rather than to protect the public!"

end quotes

FACILITATE DEVELOPERS AND DEVELOPMENT!

FACILITATE: to make easier ...

- Webster's New Collegiate Dictionary

And so ....

Posted by John Galt on January 27, 2008 3:12 PM

http://www.nydailynews.com/blogs/dailypoli...3.html#comments

[Livyjr]

THE NEW YORK DAILY NEWS DAILY POLITICS BLOG:

AND TALK ABOUT FACILITATION, ALRIGHT!

HERE ARE FINDINGS OF FACT OF FEDERAL DISTRICT COURT JUDGE GARY L. SHARPE IN 2005 AS TO EXACTLY WHAT KINDS OF CONDUCT BY LAND DEVELOPERS WERE BEING FACILITATED IN RENSSELAER COUNTY AS LATE AS 2001 ....

WHICH IS THE SAME KIND OF CONDUCT THAT WAS BEING FACILITATED IN RENSSELAER COUNTY WHEN THE FBI POSTED ITS FINDINGS IN 1989 ....

And so ....

III. FACTS:

On May 22, 2001, Jeffey Pelletier was issued a sewage system construction permit by the County of Rensselaer.

On July 7 (2001), PLAINTIFF (Paul R. Plante, NYSPE) conducted an investigation of defendants Aiken (engineer) and McGrath’s “deliberate falsification of inspection data and fraudulent submissions” resulting in the issuance of the Pelletier permit.

During PLAINTIFF'S investigation, Pelletier assaulted him.

On August 9 (2001), defendant Reiter (Rensselaer County Director of Veterans’ Services Robert "BOB" Reiter) warned PLAINTIFF to “back off” the Pelletier investigation because he (Pelletier) was a “protected person” in the county.

On August 17 (2001), defendant Jimino (Rensselaer County Executive Kathleen Jimino) allegedly phoned PLAINTIFF threatening to harm him if he did not stop his investigation.

end quotes

"DELIBERATE FALSIFICATION OF INSPECTION DATA AND FRAUDULENT SUBMISSIONS" RESULTING IN THE ISSUANCE OF A RENSSELAER COUNTY HEALTH DEPARTMENT SEWAGE SYSTEM CONSTRUCTION PERMIT ......

There is the GAME, Mike ....

THERE IS THE SCAM ....

BOGUS APPRAISALS OF LAND ....

And as I said ....

It never was a secret .....

Just a story not widely told before this ....

And so ....

Posted by John Galt on January 27, 2008 3:23 PM

http://www.nydailynews.com/blogs/dailypoli...3.html#comments

[Livyjr]

THE NEW YORK DAILY NEWS DAILY POLITICS BLOG:

JOE BRUNO'S PONZI ....

THE LAND SCAM ....

Here's Joe pushing it in the newspapers right out in plain sight while on the public's dime ....

And so ....

"Bruno: Big economic news ahead - Senate majority leader offers few details; says new name to emerge in governor's race"

By JAMES M. ODATO, Capitol bureau, Albany, New York Times Union

First published: Friday, December 30, 2005

ALBANY -- Senate Majority Leader Joseph Bruno braced reporters Thursday for exciting economic news coming to the Capital Region and a mystery candidate who may emerge soon to run for governor.

"If you own property you're happy people."

"If you don't own property, go buy some."

"It's going to be a great investment around here."

Asked about assertions that Attorney General Eliot Spitzer threatened former Goldman Sachs Chairman John Whitehead in a telephone conversation in April, Bruno said the charges of bullying are so serious that an independent review is in order.

Posted by John Galt on January 27, 2008 6:55 PM

http://www.nydailynews.com/blogs/dailypoli...3.html#comments

[Livyjr]

"Thruway closed between Buffalo, Rochester by whiteout conditions"

Associated Press

Last updated: 2:36 p.m., Wednesday, January 30, 2008

CHEEKTOWAGA, N.Y. -- State police say the Thruway is closed between Buffalo and Rochester after numerous accidents caused by blowing snow.

The state police Thruway detail says the eastbound and westbound lanes are closed Wednesday afternoon between Exit 46 at Henrietta, near Rochester, to Exit 49 in Cheektowaga, just east of Buffalo.

Troopers say some injuries have been reported from the accidents along the 60-mile stretch of Interstate 90, but no details are immediately available.

Whiteout conditions caused by winds gusting to more than 50 miles an hour are being reported in western New York.

[Livyjr]

THE DAILY STANDARD

'Spitzer Struggles - A scandal that just won't go away."

by Kevin Kusinitz

01/30/2008 12:00:00 AM

BETWEEN GROWING UP IN Rhode Island and later moving to New York, I've witnessed a lifetime of political corruption.

It's part of the landscape, like barren trees in the winter and obese tourists in the summer.

When an elected official vows to "clean up the capitol," I calmly wait for the headline that features his or her name followed by the words "under investigation."

And so it is with New York Governor Elliot Spitzer.

As Attorney General, Spitzer was known as the Sheriff of Wall Street, bringing down the wing tipped bad guys with a loaded subpoena and a grimace that would make Richard Widmark shudder.

To me, he always seemed like the kind of guy who'd go after a self-employed accountant for not cleaning out the coffee filter.

It wasn't until he successfully sued several record companies in a payola scandal that I grudgingly gave him his due.

Anyone who forces an industry to pay the price for putting Jennifer Lopez on the public airwaves is okay by me.

Not okay enough for me to actually vote for him, but enough to give him a 100-day pass upon election.

"Day one, everything changes": that was Gov. Spitzer's promise, alluding to George Pataki's administration.

It was bad enough that the rebuilding of Ground Zero went nowhere during his hapless third term.

What was worse, to his one-time supporters anyway, was the way Pataki--distracted by a possible presidential run--watched the destruction of the state Republican party with the interest of a halfwit studying a dustbunny.

So to most New Yorkers, "Day one, everything changes" sounded mighty good indeed.

Unfortunately, in no time that promise was replaced by the livelier "I'm a f---ing steamroller, and I'll roll over you."

Spitzer might have been talking to Republican minority leader James Tedisco, but it was definitely a warning shot to anyone else who dared disagree with him.

Enter Senate Majority Leader Joe Bruno.

A powerful upstate Republican, Bruno was suspected of abusing state-owned helicopters for personal use.

Spitzer, in response, abused state troopers by ordering them to spy on Bruno.

When it hit the papers, Spitzer first claimed no knowledge of the crime, blaming overzealous aides.

When that proved untrue, Spitzer did what he does best: telling New Yorkers to mind their own business or, if that didn't work, to go to hell--and don't forget to pay the toll on your way down.

In an apparent effort to run out the clock, Spitzer stalled.

Aides presented with subpoenas claimed executive privilege.

Computer hard drives containing potentially implicating evidence disappeared.

E-mails went missing.

By August, Attorney General Andrew Cuomo, refusing to be intimidated, announced he was widening his investigation.

In what might have been a curious way of taking heat off the scandal, Spitzer announced his plan to give drivers licenses to illegal aliens.

That's like distracting cops from your child pornography collection by showing off your meth lab.

On the other hand, it created the opportunity for yet another classic Spitzer quote.

When Mayor Mike Bloomberg gently questioned the wisdom of licenses for illegals, the always-diplomatic governor replied, "He is wrong at every level--dead wrong, factually wrong, legally wrong, morally wrong, ethically wrong."

And you thought Rudy Giuliani was bullheaded.

One of the latest chapters of Troopergate involves investigator Herbert Teitelbaum, who doubles as the executive director of the Public Integrity Commission.

(I know--integrity in Albany?)

Apparently needing a little R&R from the scandal, Teitelbaum--a lawyer friendly with Spitzer's aides--recently took a two-and-a-half week vacation to South America.

And just so he can afford the ducle de leche, he received a $15,000 raise.

Now for all you cynics out there, Elliot Spitzer didn't hand out this raise.

No sir.

It was, instead, approved by the commission's chairman, John Feerick . . . who just happens to be a Spitzer appointee.

While State Democrats haven't publicly condemned their leader's behavior--for that he'd have to do something really reprehensible, like approve school vouchers--neither have they defended him.

Indeed, a little over six months after his inauguration, some were already griping that he was going to be a one-termer.

And no wonder.

The vindictive crime, the sloppy cover-up and subsequent stonewalling, the missing evidence, paranoid tongue-lashings and angry denials--even the shifty eyes and perpetual five o'clock shadow--Gov. Spitzer is positively Nixonian.

"Day one, everything changes."

Did it ever.

Almost immediately upon taking office, New York's Democratic governor created a scandal that refuses to go away and, in doing so, revived a state Republican party that was considered dead two years earlier.

Perhaps Elliot Milhous Nixon might reconsider his choice of heavy equipment.

Far from being a steamroller, he more resembles a steam shovel, digging his political grave.

Kevin Kusinitz is a writer living in New York.

http://www.weeklystandard.com/Content/Publ...4oyuyv.asp?pg=1

[Livyjr]

THE NEW YORK DAILY NEWS DAILY POLITICS BLOG:

ELIOT SPITZER ON GOVERNMENT REFORM TO THE ROCKEFELLER INSTITUTE OF GOVERNMENT, November 21, 2005:

I'm proud of the fact that my office has achieved a great deal during the last seven years in reforming Wall Street and the financial sector.

THAT WAS POSSIBLE IN PART BECAUSE I KNEW WHOSE SIDE I WAS ON.

I DIDN'T WAIVER.

I didn't worry about the pushback that inevitably comes when you try to change the status quo.

I believe that what happened on Wall Street and in these various other areas can also happen on State Street here in Albany.

My starting point is this proposition: you can't achieve reform - you can't achieve meaningful, far-reaching reform - unless it is based on core values.

In the financial sector we argued core values that no one could dispute: honest, full, free and fair competition.

OUR GOAL WAS AND IS TO MAKE THE FRE ENTERPRISE SYSTEM WORK AS IT SHOULD - THROUGH TRUTHFUL, FULL DISCLOSURE AND THE CREATION OF A LEVEL PLAYING FIELD.

To be sure, there were those who asserted that our actions would harm the markets.

The people who did that were protectors of the status quo.

THEY DID NOT UNDERSTAND THAT THERE ARE MOMENTS WHEN GOVERNMENT MUST ACT TO HELP RESTORE THE INTEGRITY OF THE MARKETS.

They did not understand that enforcement of the rules is good for business, and that such action helps unleash the true power of the system - with capital flowing freely to the greatest opportunities for growth.

On Wall Street and throughout the financial sector, the status quo was a system based too frequently on cronyism.

It was a system in which a favored few special interests took advantage, BY FRAUD, of the rest of us.

It was a system where one senior participant, without any sense of irony, observed that what often was a conflict of interest was now a synergy.

The reality, though, was that they were robbing people of pensions and nest eggs.

And their actions distorted and harmed the markets.

We stepped forward and stopped the fraud we found, returned money to people, and restored competition.

THIS WAS GOOD FOR THE MARKETS AND GOOD FOR THE ECONOMY OVERALL.

IN FACT, CONTRARY TO THE PREDICTIONS OF THE NAYSAYERS, THE INDUSTRIES WE INVESTIGATED AND THEN REFORMED ARE STRONGER NOW THAN THEY WERE BEFORE.

That even goes for the individual companies that we investigated.

They may not have liked the process, but they were made stronger as a result.

IN THE END, WE ACHIEVED RESULTS WHERE OTHERS HAD FAILED AND GIVEN UP, AND WHERE NO ONE THOUGHT IT WAS POSSIBLE.

WE HAVE DONE IT TIME AND TIME AGAIN - INVESTMENT BANKS, MUTUAL FUNDS, PHARMACEUTICAL COMPANIES, INSURANCE COMPANIES AND ELSEWHERE.

Posted by John Galt on December 22, 2007 5:46 PM

http://www.nydailynews.com/blogs/dailypoli...4.html#comments

FOR IMMEDIATE RELEASE:

January 18, 2008

"GOVERNOR SPITZER LEADS FIRST MEETING OF COMMISSION TO MODERNIZE REGULATION OF FINANCIAL SERVICES - Commission Discusses Regulatory Reform to Help Maintain New York’s Status as World Financial Capital and Ensure the Highest Standards of Consumer Protection for New Yorkers"

Governor Eliot Spitzer today hosted the first formal meeting of the Commission to Modernize the Regulation of Financial Services, which includes heads of major financial services organizations, consumer advocates, the business community, legislators and regulators.

The commission discussed an innovative proposal to institute principles-guided regulation in New York along with other potential reforms.

New York’s financial services market has been burdened by current regulations – a litany of detailed rules that are ineffective at achieving consumer protection.

The United Kingdom and other international markets are moving to principle-based regulation, which focuses on broad guidelines.

Some companies and consumers are concerned this may mean diminished compliance with specific rules, but the new principles-guided approach preserves relevant rules, while asking regulators and companies to focus on achieving desired outcomes.

The result will be healthy markets and strong consumer protection without unneeded burdens.

By reforming burdensome and ineffective regulation, the commission's recommendations will help New York retain and enhance its status as the world's financial capital.

“Modernizing regulation of financial services is first and foremost about keeping New York the financial capital of the world,” said Governor Spitzer.

“The fact of the matter is that New York’s current regulations are out of date."

"We must have regulations that promote our essential goals: a healthy, creative competitive market for financial services, access for consumers and businesses to the services they need, and strong, effective consumer protection."

"Furthermore, my experience has demonstrated to me that proper regulations will have a positive impact on the financial market."

"We have brought together many of the best minds in the State to accomplish this task.”

The commission will consider:

Developing “principles-guided” regulation as a unique alternative to the principles-based approach being instituted in the United Kingdom.

Under the principles-guided approach, the principles act as guidance for interpreting existing regulations and statutes, and as key objectives for developing any future regulation.

The principles guide the regulator to focus on outcomes, rather than the rules in and of themselves.

Examinations of financial services companies should focus on what is important and what really makes a difference.

Insurance Superintendent Eric Dinallo, the Chair of the Commission to Modernize the Regulation of Financial Services, said:

“The benefit of state regulation is that states can be the laboratory for developing best practices."

"We want to offer New York as a national model of how to regulate financial services.”

http://www.ny.gov/governor/press/0118081.html

"Bond insurer plan key to market calm"

By STEPHEN BERNARD, Associated Press

Last updated: 5:22 a.m., Saturday, January 26, 2008

NEW YORK -- If the struggling bond market is saved by a potential bailout, turbulence in the stock market could ease -- but without a bailout, cities across the country could have difficulty building everything from sewers to schools.

A string of gains in the stock market this week came in part from the Federal Reserve's cut of a key interest rate, but news of a potential bailout of the bond insurance industry also sparked hope that credit markets could return to a more normal environment.

Hope for a bailout has "kept the Titanic from going straight down, and now we have a listing ship that needs to be righted," said Joseph Battipaglia, a market strategist for the private client group at Stifel Nicolaus.

"The insurance iceberg was probably a sinker."

But bailing out the bond insurers is very complicated with trillions of dollars in insurance coverage at stake, Battipaglia said, echoing sentiments a deal might take a while to finalize.

On Wednesday, the New York State Insurance Department met with banks about trying to determine a plan to help the beleaguered insurers and essentially save a flailing industry.

The insurance superintendent cautioned that any plan could take some time to develop because of the number of groups working on the project.

"Spitzer: NY bond insurer rescue advances"

By JOE BEL BRUNO, Associated Press

Last updated: 5:22 p.m., Thursday, January 31, 2008

NEW YORK -- New York Gov. Eliot Spitzer said Thursday a plan by the state's insurance regulator to bail out struggling bond insurers is making good progress amid fresh worries about the financial industry.

Spitzer said the plan is mindful the federal government might soon take a more active role.

Among those advising the state on a rescue is New York Federal Reserve Bank President Timothy Geithner.

"We are having conversations with experts," Spitzer told reporters in New York City.

He added that the state is "not going out ahead of where the Fed and Treasury would want us to be" and that it is making "good progress" at capital raising.

A number of bond insurance companies are struggling to stay in business as rating agencies demand they raise more capital.

There have been concerns for the past few months that bond insurers might not have enough capital to guarantee billions of dollars in debt imperiled by the subprime mortgage crisis.

The financial health of bond insurers such as MBIA Inc., Ambac Financial Group Inc., and ACA Capital Holdings Inc. could jeopardize some $2.4 trillion of debt the industry guarantees.

New York State Insurance Superintendent Eric DiNallo hired advisory firm Perella Weinberg to help find to help find fresh capital for bond insurers.

He has also approached investor Wilbur Ross, a specialist in buying distressed assets, among others.

Capital injections might come from overseas, said David Neusted, a spokesman for the commission.

Major global banks like Merrill Lynch & Co. and Citigroup Inc. have received capital injections from investment funds run by foreign governments.

However, specifics about the plan have not been disclosed -- drawing criticism from some analysts that the rescue might have been started too late.

Schumer said the process for rating municipal bonds must be examined, because it differs from that for corporate bonds and often results in states and municipalities paying higher interest rates even though their default rate is comparable those of companies.

That forces states to take out more bond insurance -- money that could go to building affordable housing, Schumer said in a letter to Moody's.

Financial markets are rife with speculation that more downgrades could come this week.

There is also concern about the poor quality of the assets held by the insurers -- which could prove tough to sell.

"No one wants to touch the toxic waste," said T.J. Marta, a fixed-income analyst at RBC Capital Markets.

"No one in their right mind would want to buy them."

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Associated Press business writers Marcy Gordon in Washington and Leslie Wines in New York contributed to this report.

[Livyjr]

THE NEW YORK DAILY NEWS DAILY POLITICS BLOG:

And it isn't as if any of this has ever been any kind of a secret, Mike ....

Here is what the FBI had to say about matters in Rensselaer County vis-a-vis BOGUS land certifications and appraisals by the CORRUPT REPUBLICAN-contolled Rensselaer County Department of Health in a March 16, 1989 Report of the Federal Bureau of Investigation, which was before Bush-appointee federal District Court Judge Gary L. Sharpe in Albany in 2005 as an exhibit in a Motion for Injunctive Relief submitted to federal District Court for the northern District of New York in 2005 by the engineer Paul R. Plante up here in Rensselaer County:

"According to [name deleted], the results of the State's investigation were that New York State laws were not being followed by the Rensselaer County Health Department, Rensselaer County laws were not being followed by the Rensselaer County Health Department, and there was very little 'enforcement activity' even in the face of illegal sales."

"According to [name deleted], the object of any county health department (in the state of New York) is to protect the public, and not to facilitate developers, or development."

"In the case of Rensselaer County, it appears that the Rensselaer County Health Department was in business to facilitate developers and development rather than to protect the public!"

end quotes

FACILITATE DEVELOPERS AND DEVELOPMENT!

FACILITATE: to make easier ...

- Webster's New Collegiate Dictionary

And so ....

Posted by John Galt on January 27, 2008 3:12 PM

http://www.nydailynews.com/blogs/dailypoli...3.html#comments

"FBI director: mortgage fraud substantial"

By JAYMES SONG, Associated Press

Last updated: 3:12 a.m., Friday, February 1, 2008

HONOLULU -- FBI Director Robert Mueller said Thursday that the agency is committed to investigating and prosecuting companies involved in mortgage fraud and other violations in connection with home loans made to risky borrowers.

Mueller said probes were being conducted across the country, including in Hawaii, where he stopped on his way back from a trip through Asia.

"There is not a state that does not have some investigation," he told reporters at the FBI office in Honolulu.

"It is a substantial problem but we've been through problems like this in the past."

The FBI said Tuesday it was working with the Securities and Exchange Commission to investigate 14 companies, from mortgage lenders to investment banks, for possible accounting fraud, insider trading or other issues connected to subprime mortgage lending.

Mueller declined to identify the companies.

The FBI allocated substantial manpower and resources to address the savings and loan crisis in the early 1990s and corporate fraud earlier this decade, and Mueller said he was prepared to do the same to address fraudulent lenders.

"I anticipate that we will see the same extensive investigations that we saw then with successful prosecutions following those investigations," Mueller said.

As the nation's housing crisis worsens, there has been a dramatic spike in the number of mortgage fraud cases under investigation.

An FBI spokesman said 1,210 such cases are open, up from roughly 800 a year ago.

The bureau is looking into the practices of so-called subprime lenders, as well as potential accounting fraud by financial firms that hold subprime loans on their books or securitize them and sell them to other investors.

During his trip to Asia, Mueller met Chinese officials in charge of security for this summer's Olympic Games in Beijing.

He also was in Cambodia to inaugurate an FBI office at the U.S. Embassy in Phnom Penh.