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

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"Experts say cranes lack proper testing - Structure that collapsed on Manhattan job may have had past problems"

By DAVID B. CARUSO, Associated Press

First published: Sunday, June 1, 2008

NEW YORK -- The towering cranes that build America's skyscrapers are often not properly inspected for wear, fatigue and other potentially dangerous structural problems, several construction safety experts said following a deadly accident.

Two construction workers died Friday when the huge cab of a 200-foot-high construction crane popped off its mast and plummeted onto a Manhattan street, shearing off part of an apartment building on the way down.

Investigators probing the accident have focused on a possible defect in the turntable that connected the cab to the crane's tower.

Acting Building Commissioner Robert LiMandri said a weld in the mechanism appeared to have failed.

He said forensic experts were examining the break and tracking maintenance records on the turntable, which was part of an aging crane made by the defunct company Kodiak that had been in service since 1984.

Just why the weld came apart was unclear, but several safety inspectors who spoke with The Associated Press Saturday expressed dismay -- but not surprise -- that the problem hadn't been uncovered during safety checks.

These experts, who included crane inspectors and engineers, said construction workers handling the giant machines often lack the expertise to spot structural problems and contractors routinely skip much-needed examinations for wear-and-tear.

Government inspectors are often unqualified to do the type of testing required to ensure structural integrity, they said.

"Their knowledge is fairly limited, along with their education," said Greg Teslia, president of Crane Safety & Inspections Inc. in Coral Springs, Fla.

"You cannot take a one-week course at some facility and all of a sudden say that you are a crane inspector, and that's what I think is happening."

A thorough inspection of the crane's turntable should have been routine, and included a check on any recent repair welds, Teslia said.

City officials have been unable to say whether such an inspection was performed.

Jeff York, a crane safety consultant in Hayward, Calif., said there are many of things that can go wrong with a crane as it ages.

Bolts can loosen and stretch.

Cracks can develop.

Most of these things can be detected, but he said those checks are sometimes performed poorly, or not done at all.

"There is no oversight for this type of work."

"There are people who are rubber-stamping this stuff," he said.

Construction companies, he said, should hire their own, independent experts to asses a crane's structural integrity.

"A lot of this stuff is not visible to the untrained eye."

"Sometimes it's not even visible to the trained eye."

"You need to know the history of the crane," York said.

"Typically, when you climb a crane and are checking a crane, you check every bolt on the crane."

"You check every last inch on the crane."

"It is an all-day job ... sometimes a day and a half."

Crane accidents aren't only a New York problem.

A section of a crane collapsed in Miami in March, killing two workers and smashing a home.

A construction worker died in Annapolis, Md., in April after a section of a crane came lose as it was being dismantled.

A crane collapse that crushed buildings and killed a man in Bellevue, Wash., in late 2006 prompted an overhaul of that state's safety regulations.

The accident in New York came just 2 months after another crane collapsed in midtown Manhattan, killing seven people.

The city building commissioner convened an emergency meeting of some 80 area construction executives Saturday to talk about crane safety.

The meeting was closed to the public, but LiMandri emerged afterward and pledged to get to the bottom of the accident.

He declined to answer most questions about the investigation, but acknowledged that authorities were checking whether there were been problems with the same crane turntable in the past.

The New York Times reported Saturday investigators suspected that the same turntable may have been removed from a crane owned by the same company last year after it was damaged on the job.

Investigators were trying to determine whether the company, New York Crane and Equipment Corp., repaired the plate and then put it back into service.

Calls left at New York Crane and Equipment went unreturned Saturday.

Attempts to reach the company's owner were unsuccessful.

A spokesman for the Manhattan district attorney said a prosecutor has been assigned to the investigation, as is routine for all probes of fatal construction accidents.

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"Paterson mailing called 'mistake' - Event governor's wife sent invitations to on state letterhead canceled"

By IRENE JAY LIU, Capitol bureau, Albany, New York Times Union

First published: Saturday, May 31, 2008

ALBANY -- First Lady Michelle Paige Paterson stumbled in her first foray into the fight for the Senate majority, mixing politics and governance by putting a fundraiser invitation on state letterhead.

Paige Paterson was scheduled to headline a June 24 Manhattan fundraiser for Democratic Senate candidate and family friend Don Barber, who is running against Sen. James Seward in the 51st Senate District.

Barber is currently Caroline Town Supervisor in Tompkins County, a businessman, and a farmer.

In the invitation, Paige Paterson said, in part:

"This is the kind of leadership we need in New York."

"I know you will agree with me that our 'blue' state should be led by a Democratic Senate, and Don's campaign will help us achieve that goal."

Printing the invitation on state letterhead was "absolutely something that should not have happened."

"And the event has been canceled," said Erin Duggan, a spokeswoman for Gov. David Paterson.

"It was an honest mistake," she added.

According to Duggan, the Barber campaign had asked Paige Paterson to do a letter for the event, and then called the office for a sheet of state stationary.

A junior staffer unwittingly complied, and the campaign printed copies of the letter on its own, so no state resources were used except the one sheet of paper.

Still, Duggan emphasized it should not have happened.

"We hold the first lady's office to similar standards as the governor's office even though she's not a state employee or an elected official."

The event will be rescheduled, and new invitations will be printed.

Besides the issue of the state letterhead, the invitation is notable in its overtly political tone.

So far, Paterson has stayed out of the public fight for the Senate, in which Republicans are defending their 32-30 majority.

But it isn't clear whether that will continue once the legislative session is over.

Thursday, Senate Majority Leader Joseph L. Bruno heralded Paterson's understanding of "partnership" and said that Paterson "gets pressure to be more political as the leader of the party."

The Barber event, had it gone forward, would have included on its attendee list state Democratic Chair June O'Neill, Senate Minority Leader Malcolm Smith, and a number of Democratic senators.

While the Barber race is not currently considered in the top tier of competitive Senate races, the attendee list indicates there is high-level party interest in it.

Irene Jay Liu can be reached at 454-5081 or by e-mail at iliu@timesunion.com.

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"Getting tough on public corruption - Prosecutor handling Spitzer case says he's cracking down on 'bad actors'"

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

First published: Wednesday, June 4, 2008

ALBANY -- The federal prosecutor investigating Albany's "bad actors" delivered a sobering speech about abuse of state resources Tuesday, warning 250 lawyers and public officials that the price of violating public integrity laws is more than a reputation.

"Lately there seems to be much attention paid on bad actors ... exploiting the systems that lack transparency or stretching already too-flexible conflict of interest rules beyond the breaking point," U.S. Attorney for the Southern District Michael Garcia said.

Garcia is probing member-item thefts as well as Gov. Eliot Spitzer's alleged patronage of a high-priced call-girl service.

He gave the address as part of an Albany Law School Government Law Center "Excellence in Government Service" event.

The crowd had been prepared for a more upbeat address, several people said.

Instead, Garcia, 46, a graduate of Albany Law School, recounted crimes and suspected wrongdoing he's been investigating.

His address came just a few hours before he secured his second conviction from among the four people indicted for running the Emperor's Club VIP, the prostitution business linked to Spitzer's resignation.

Cecil "Katie" Suwal, 23, pleaded guilty to money laundering and prostitution conspiracy charges.

Spitzer quit in March after being identified as "Client 9" in a wiretapped conversation disclosed in the Emperor's Club indictment.

Garcia declined to discuss the potential for an indictment of Spitzer when asked by the Times Union.

Spitzer's state travel records for his trip to Washington, D.C., last February have been requested by criminal investigators, according to aides to Gov. David Paterson.

The former governor is alleged to have had a tryst during a taxpayer-paid trip to Washington the night before he met with a congressional panel Feb. 14.

He allegedly paid for the $4,300 evening with a prostitute with withdrawals from a bank account that appeared set up to get around money-laundering statutes.

In his remarks, Garcia did not specifically discuss the Emperor's Club case, but stressed that public corruption cases undermine faith in government.

He cited some of the member-item cases he's probed, noting the conviction of former Assemblyman Brian M. McLaughlin.

The Queens Democrat steered tens of thousands of dollars in member items to a nonprofit group in Flushing that was supposed to buy sports equipment for a Little League baseball team.

McLaughlin raided the organization's treasury, stole from his campaign fund, took payouts from contractors and misused $2.2 million for a variety of personal expenses, according to court and state records.

Other prosecutions, Garcia said, involve lawmakers who embezzled funds or sold their office for profit.

He lamented that he and other prosecutors get tagged with "political motivation" for the way they handle their cases.

"Politics has no place in the process," Garcia said.

Garcia told a reporter that he is getting ready for his case against Sen. Efrain Gonzalez Jr., which also entails allegations of member-item theft.

The Bronx Democrat has pleaded not guilty and a trial is set for October.

Public corruption, Garcia said, is "intolerable" at a time when families are struggling with household budgets and people are being laid off from jobs.

The event honored 30 graduates for their public service, including Robert F. Mujica Jr., who works for Senate Majority Leader Joseph L. Bruno, R-Brunswick.

Bruno is being investigated by the U.S. attorney in the Northern District.

Also honored was Kristine Hamann, Spitzer's former inspector general.

The event was underwritten by several special-interest groups and big lobbying firms, which also are major campaign donors, such as Patricia Lynch Associates and Featherstonhaugh, Wiley and Clyne.

James M. Odato can be reached at 454-5083 or by e-mail at jodato@timesunion.com.

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"NY commission calls for property tax cap"

By MICHAEL GORMLEY, Associated Press

Last updated: 7:32 p.m., Monday, June 2, 2008

ALBANY -- A special commission on Monday recommended that New Yorkers' property taxes be capped at 4 percent a year, among other reforms.

If the Commission on Property Tax Relief's recommendations are accepted by Gov. David Paterson and the Legislature, local school taxes could be capped at either 4 percent or 120 percent of inflation, whichever is less.

That would be about half of the annual, average growth in most recent years.

A school district could exceed the cap if 55 percent of voters agree.

But if the district received more than a 5-percent increase in state aid, 60 percent of voters would have to agree to override the cap.

The Working Families Party, influential with the Democratic party that controls the Assembly and governor's office, called a tax cap "merely a gimmick."

"It neither cuts taxes for those who already can't afford them, nor promises state aid to make tax increases unnecessary," said Dan Cantor of the Working Families Party.

"We need to repeal the Pataki-era tax cuts for the wealthiest New Yorkers."

The powerful New York State United Teachers union and the state School Boards Association oppose a tax cap.

Kenneth Adams of the state Business Council said the commission's cap "offers a real chance to make New York's economy competitive again."

Even New York City schools, with little property tax income, would benefit from the commission's recommendation to eliminate two dozen mandated programs and costs created by the Legislature, but not paid for by the state.

The commission headed by Nassau County Executive Tom Suozzi also calls for changes to the state's STAR tax subsidy designed to lower school taxes.

He said STAR, which now costs the state $5 billion a year, has done little or nothing to slow local school spending.

"It's clear a property tax cap is essential," Suozzi said.

"You can't afford every great program."

"You have to have some fiscal discipline."

"The cap forces hard choices and discipline."

Assembly Speaker Sheldon Silver said he was reviewing the report and noted that the Assembly's Democratic majority has long called for meaningful tax relief.

"Any action that we take must guarantee that schoolchildren across the state will have the resources necessary to get a quality education," Silver said.

New York's local property taxes are the highest in the nation, 79 percent above the national average.

And Suozzi said 71 percent of education cost goes to salaries and benefits.

He said per pupil spending is $18,768 a year outside New York City.

Suozzi said poor school districts that can't raise enough in local taxes would be able to turn to the state for more aid.

"You have to bring some sanity back into this process because it's low- and moderate-income people who are suffering the most," Suozzi told reporters.

The report, called preliminary, goes to Paterson Tuesday.

A final report that will take on additional areas including the state's high cost of special education and the unique fiscal problems of the state's four biggest city districts and poor rural districts.

The final report is due in December, but Suozzi said many of the proposals released Monday should be taken up by the Legislature this year.

"It's a comprehensive examination of the issue," said Elizabeth Lynam of the independent Citizens Budget Commission.

She said the proposal would improve use of STAR subsidy for the neediest taxpayers and redistribution of state funding that could make sure the districts most in need get enough state aid.

"They not only proposed a cap which is exactly what the doctor ordered, but they actually improve the cap," said E.J. McMahon of the Empire Center for New York State Policy, part of the fiscally conservative Manhattan Institute.

He noted the proposal allows a district to "bank" up to 1.5 percent of budget growth below 4 percent for use in tougher years.

McMahon says that would eliminate automatic 4 percent increases.

He also said the proposal calls for disclosure of teachers' labor contracts.

"This is a very solid proposal," he said.

"We've been getting blue ribbon reports seemingly once a decade for the 30 or 40 years on school finances."

"This is the first one that really views things from the perspective of people paying the bills."

Suozzi said testimony included the story of a man paying 15 percent of $44,000-a-year income on property taxes.

He also said a man in his 80s had to take a part-time job to pay the taxes on his family's home, but had to quit to care for his ailing wife and may now lose the home.

The cap may require more state aid beyond historic increases in the last two years and for coming years, despite projections of more than $20 billion in deficits over the next three years.

"We are saying very clearly that regardless of what happens at any other level, you cannot continue to let these school districts solve their problems by raising their property taxes above the capped amount," he said.

------

On the Net:

http://www.cptr.state.ny.us/

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"NY commission calls for property tax cap"

By MICHAEL GORMLEY, Associated Press

Last updated: 7:32 p.m., Monday, June 2, 2008

ALBANY -- A special commission on Monday recommended that New Yorkers' property taxes be capped at 4 percent a year, among other reforms.

The powerful New York State United Teachers union and the state School Boards Association oppose a tax cap.

New York's local property taxes are the highest in the nation, 79 percent above the national average.

And Suozzi said 71 percent of education cost goes to salaries and benefits.

"You have to bring some sanity back into this process because it's low- and moderate-income people who are suffering the most," Suozzi told reporters.

AND THIS IS WHAT WE ARE GETTING IN RETURN FOR THE EXORBITANT SALARIES THAT WE PAY UP HERE IN THE CORRUPT EMPIRE OF NEW YORK TO THESE POWERFUL TEACHERS ...

SO IT IS MORE THAN JUST THE LOW- AND MODERATE-INCOME PEOPLE WHO ARE SUFFERING HERE ...

IT IS THE CHILDREN THEMSELVES WHO ARE THE VICTIMS OF THESE PREDATORY TEACHERS ...

THEIR POWER OVER US HAS GONE TO THEIR HEADS ...

ALONG WITH THEIR UNACCOUNTABILITY ...

THANKS TO THEIR LOBBYISTS WHO HAVE OUR NYS LEGISLATORS DANGLING FROM THEIR POCKETS LIKE SO MUCH BLING ...

And so ...

"Upstate New York teacher accused of raping student"

Associated Press

Last updated: 2:32 p.m., Monday, June 2, 2008

CORTLAND, N.Y. -- Police say an upstate New York social studies teacher is being charged with rape involving a 15-year-old female student.

Nicholas Thomas appeared in Cortland City Court Monday, charged with third-degree rape and two misdemeanor counts of endangering the welfare of a child.

He is free on $1,000 bail and due back in court June 18.

Police say the 26-year-old Thomas is a teacher at Cortland Junior-Senior High School.

Thomas was arrested Saturday after police searched his classroom.

Police say their investigation is continuing.

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"Much ado, little accomplished on state issues - New governor, Senate spar as session nears end with important issues unresolved"

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

First published: Monday, June 2, 2008

ALBANY -- It took two months, but Gov. David Paterson's honeymoon with the Legislature started winding down last week -- just in time for the usual end-of-session frenzy.

On Wednesday, after he was criticized in the press for touting things like cheaper copier paper as budget reduction measures, Paterson was taking heat for what was arguably his boldest move so far: directing state agencies to recognize gay marriages performed in other states.

Republicans promptly broke their 2-month-old detente and suggested they might sue.

At a news conference Thursday, Paterson turned aggressive:

"And for those busy legislators who think I'm making an end-around, maybe they should go to the Legislature and actually do something."

It was a departure from the humorous, conciliatory tone Paterson had set after taking over for Eliot Spitzer, who battled relentlessly with Senate Republicans.

With 12 days left in this year's session, it should come as no surprise that relations are getting testy.

It's the time of year when politicians tend to spar more as they jockey for position in the usual end-of-session negotiations.

And it's the time when interest groups typically bemoan the lack of progress.

So far, the governor and lawmakers have little to show in the face of vast challenges: rising gas prices, complaints about sky-high property taxes, and Paterson's warning of billions of dollars in deficits starting next year.

But this year state government may be on the verge of a replay of the early 1990s when a recession prompted then-Gov. Mario M. Cuomo to make midyear budget cuts.

"We're watching the money not come in," said Sen. Efrain Gonzalez, D-Bronx.

After being thrust into the job in late March after Spitzer resigned amid a prostitution scandal, Paterson admits he's had a steep learning curve.

As lieutenant governor, Paterson focused on four areas: energy policy, stem cell research, domestic violence prevention and promoting businesses owned by women and minorities.

Now, he's got dozens of balls in the air.

That's literally given the governor a headache.

Legally blind, with only limited vision in one eye, Paterson has to hold documents an inch or less from his face to read them.

All the additional reading of briefing documents, he believes, led to his brief hospitalization and surgery earlier in the month for glaucoma, which initially hit him like a bad migraine.

"The concentration that I had to make to make this adjustment, it sometimes feels overwhelming," Paterson said.

Amid that backdrop, lawmakers suggest this year won't be known for groundbreaking legislation.

Assembly Majority Leader Ron Canestrari, D-Cohoes, last month quipped that the session "started with a bang," but added, "Let's end with a whimper and get out of town."

"Understandably, everybody gets a pass," said Michael Tobman, a New York City-based lobbyist.

So far, this year has been marked not by legislative successes but by ideas that have died in the Assembly or Senate.

Those include a congestion pricing fee to relieve traffic in midtown Manhattan and a short-lived idea to tie teacher tenure decisions to student test performance.

As for the reform platform on which Spitzer and Paterson rode into office, talk of changing campaign finance and ethics laws now is almost nonexistent.

Other areas of inaction include:

Property taxes: Nassau County Executive Tom Suozzi, appointed by Spitzer to study the issue, is expected next week to call for a tax cap similar to those in other states, and property tax breaks based on income.

But a cap is opposed by the powerful New York State United Teachers, and Assembly Speaker Sheldon Silver has said he's unlikely to look at one this year.

Economic development: A number of initiatives, including improvements in the way industrial development agencies use tax breaks to foster new business and revision of brownfield laws, are stalled.

On brownfields, for instance, the state has basically frozen funding on new cleanups of former industrial sites since last winter, when critics said the major tax breaks were going to lavish hotel developments in Westchester and New York City rather than depressed areas like Buffalo.

Some lawmakers believe the brownfields issue could be easily fixed if leaders and the governor were to hash it out.

"This is low-hanging fruit," said Sen. Antoine Thompson, D-Buffalo.

Energy plants: Regulations that streamline the process of siting of new power plants expired in 2003 and have yet to be renewed, even as the state's energy demands increase.

Pay hikes: Judges, commissioners, lawmakers and statewide elected officials including the governor have gone without raises since 1999.

The judiciary is particularly vocal.

Gambling: Still on hold are the development rights at Aqueduct race track and averting the closure of New York City's OTB.

Ultimately, this year may be better remembered for its scandals -- a growing investigation into public pension abuses, an inquiry into the State Police and, of course, Spitzer's exit.

Andrew Stengel, director of national election advocacy for the Brennan Center for Justice, which has called the Legislature the nation's most dysfunctional, said it's business as usual.

"This legislative session isn't surprising; ... the Assembly and the Senate have acted in a way that is unaccessible, unaccountable, not deliberative," he said.

"A lot of this is a function of the culture of the Legislature."

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

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"FTC opens formal prove of Intel's microprocessor business in victory for rival AMD"

By JORDAN ROBERTSON, Associated Press

Last updated: 4:42 p.m., Friday, June 6, 2008

SAN JOSE, Calif. -- Escalating the world's largest computer chip maker's legal woes, the Federal Trade Commission has opened a formal probe into Intel Corp.'s sales tactics, a victory for its much smaller rival, Advanced Micro Devices Inc.

Intel disclosed Friday that it has received a subpoena from the FTC for records about Intel's microprocessor sales, which dominate the world market with a roughly 80 percent share.

The FTC's two-year investigation had been considered "informal" until that point, and Intel, which is already fighting antitrust charges in the European Union and was fined this week by antitrust regulators in South Korea, said it had been cooperating.

By opening a formal investigation, Intel said, the FTC will be able to get access to documents revealing Intel's communications with certain customers -- documents Intel couldn't voluntarily provide because of a protective order that is part of a sweeping antitrust lawsuit AMD filed in 2005 that isn't expected to go to trial until 2010.

"From our perspective, it's not a surprising event nor is there any really substantive change in the relationship we've had with the FTC," Bruce Sewell, Intel's general counsel, said in an interview.

The FTC's intensifying look at Intel's business practices is a result of AMD's long-running campaign to convince antitrust regulators around the world that its business has been hurt by Intel's aggressive tactics.

AMD also said Friday that it received a subpoena this week from the FTC -- though the company said it is not a target of the investigation.

The two companies have been fighting for years over what AMD claims is Intel's intimidation of computer makers into striking exclusive deals for the chips they use in their new machines.

AMD claims the rebates and financial incentives Intel offers to those companies for buying more Intel chips are designed to prevent AMD from gaining market share -- and that Intel threatens those manufacturers that it will retaliate if they introduce models based on AMD's chips.

AMD argues that Intel's volume discounts are sometimes so steep that AMD can't cut its own prices enough to compete without losing money on the sales.

Intel has repeatedly denied breaking any laws.

It said Friday that the sharp drop in microprocessor prices over the past seven years shows that the "evidence that this industry is fiercely competitive and working is compelling."

In an interview last week with The Associated Press, before the company received the subpoena, Intel Chief Executive Paul Otellini noted that Intel has been investigated by the FTC and the Department of Justice before, and he said he stands by the company's actions.

"I think there's nothing we've done that warrants further investigation by the U.S. government," Otellini said.

Should the FTC find Intel violated federal law, Intel could face severe fines, and the way the world's computer chips are bought and sold could change.

AMD said the probe helps it hold Intel accountable for sales strategies that it argues have hurt AMD's business and technology consumers.

"Intel must now answer to the Federal Trade Commission, which is the appropriate way to determine the impact of Intel practices on U.S. consumers and technology businesses," Tom McCoy, AMD's executive vice president and chief administrative officer, said in a statement.

"In every country around the world where Intel's business practices have been investigated, including the decision by South Korea this week, antitrust regulators have taken action."

Another major legal headache for Intel is the lawsuit AMD filed against it in U.S. District Court in Delaware in 2005 -- a case that could mean billions of dollars in damages if AMD wins.

The parties are now exchanging documents in the "discovery" phase of that case.

AMD's complaints have also triggered antitrust investigations in several countries outside their home U.S. market as well.

The European Union has accused Intel of paying manufacturers to delay or cancel product lines using AMD chips and selling the manufacturers its own chips below the average cost of producing them.

And on Thursday, Intel was slapped with a $25.4 million fine by the Korea Fair Trade Commission, which accused the semiconductor giant of using hefty rebates to convince Samsung Electronics Co. and other South Korean computer makers to not use central processing units, or CPUs, manufactured by AMD.

Intel shares fell 97 cents, or 4.06 percent, to close at $22.90 on Friday.

AMD shares fell 35 cents, or 4.5 percent, to close at $7.43.

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"I'M IN A NEW YORK STATE OF MIND!"

"Senior NYC crane inspector accused of corruption - NYC crane inspector accused of taking bribes; city says charges not tied to fatal collapses"

By SARA KUGLER, Associated Press

Last updated: 7:32 p.m., Friday, June 6, 2008

NEW YORK -- A senior city buildings official took bribes in exchange for falsely reporting that cranes had been inspected and that crane operators had been certified, but his actions did not appear to be connected to two recent crane collapses that killed nine people, authorities said Friday.

James Delayo, an assistant chief inspector with the Department of Buildings' cranes and derricks division, accepted thousands of dollars in bribes from a crane company, Department of Investigation Commissioner Rose Gill Hearn said in a statement.

In return, he signed off on crane inspections that he did not perform and helped crane operators cheat on licensing exams by providing questions and answers, the city said.

Delayo's actions apparently had no connection to two cranes involved in fatal collapses this year.

Both of those cranes were tower cranes, not the mobile cranes at the center of the investigation into Delayo, she said.

It is troubling that an official responsible for ensuring cranes are safe in New York City would be "selling out his own integrity in a way that compromised public safety," Hearn said.

City investigators did not identify the company that allegedly bribed Delayo.

They said Delayo had been taking the bribes for eight years.

Delayo, 60, has worked for the Buildings Department since 1982, a career that spans the administrations of four mayors and several buildings commissioners.

The Department of Investigation said he earns $74,224 and faces suspension from his job.

Delayo was released without bail after he was arraigned Friday on charges of bribe receiving, tampering with public records, falsifying business records, filing a false instrument and receiving unlawful gratuities.

He entered no plea and his lawyer, Lawrence Linzer, declined to comment.

The charges represent another embarrassment for Mayor Michael Bloomberg's administration as it tries to quell the outrage over the two collapses.

Bloomberg said in a statement that his administration has "zero tolerance for any corruption anywhere in city government," and said it was particularly deplorable that it occurred in an agency charged with protecting the public.

The mayor's last Buildings Commissioner resigned following the collapse of a crane in March that left seven people dead.

Acting Commissioner Robert Limandri said he was "outraged" by investigators' findings.

He pledged to forge ahead with major reforms at the agency.

In Delayo's first year on the job, a derrick boom that he had reportedly inspected himself was involved in a fatal collapse on a construction site in midtown Manhattan.

According to news reports, Delayo had inspected and "approved for use" the 70-foot derrick boom a week before it collapsed; a panel later blamed engineering deficiencies in the accident, which killed one person.

Mobile cranes move around on the ground and are smaller than tower cranes, which are fixed and typically assembled piece by piece at a construction site.

On a large building project in the city, one might see one or two tower cranes and several other mobile cranes working down below.

Right now citywide, there are about 200 mobile cranes in operation and 26 tower cranes, according to the Department of Buildings.

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"Albany DA to release Spitzer, aides testimony in probe"

By MICHAEL GORMLEY, Associated Press

Last updated: 5:02 p.m., Friday, June 6, 2008

ALBANY -- Albany County District Attorney P. David Soares said Friday that he will release the secret testimony of former Gov. Eliot Spitzer and his top aides in the dirty tricks probe that consumed much of Spitzer's abbreviated term.

Soares will release thousands of pages of documents sought by several news organizations after the material is reviewed according to county policy.

The testimony could show how involved Spitzer was in the work of two staffers who collected state police travel logs that showed Senate Republican leader Joseph Bruno -- Spitzer's adversary -- used state aircraft on days he attended fundraisers.

Soares found no criminal wrongdoing, but concluded Spitzer may have lied about his role.

Spitzer resigned in March amid a prostitution scandal.

"This office will comply ... despite the fact that there are serious concerns about pending and future investigations," Soares' special counsel, Christopher D. Horn, wrote to five news organizations that had requested the documents under the state Freedom of Information Law.

Soares had denied initial requests because of pending investigations, but has decided to released the records after the county appeals officer for FOIL records and Robert Freeman of the state Committee on Open Government supported the news organizations' cases.

No date for release of the records has yet been set.

In his second report on the case, Soares concluded Spitzer may have lied when he told investigators he wasn't involved in a plot to embarrass Bruno and that Spitzer could have been indicted had he not resigned in disgrace on March 17.

When Soares did his initial investigation, the report on which was issued Sept. 21, 2007, top Spitzer aides kept the governor's communications director, Darren Dopp, from testifying.

But Dopp later recounted conversations and e-mails to Soares.

The testimony contained in a March 28, 2008, report indicated Dopp was directly ordered by Spitzer, in a profanity laced exchange, to release records that could embarrass Bruno and perhaps lead him deeper into an ongoing federal investigation.

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

The State Investigations Commission and the Senate's investigations committee continue to investigate.

Spitzer's spokesmen didn't immediately respond to a request for comment.

The Democrat hasn't commented publicly since his March 17 resignation and while the federal investigation into a prostitution continues.

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"Paterson tightens standards for use of consultants"

Associated Press

Last updated: 3:42 p.m., Friday, June 6, 2008

ALBANY -- Gov. David Paterson is ordering state agencies to watch their spending when they choose to give work to a private consultant instead of a state worker.

The executive order only lets agencies use consultants when it's the most efficient or cost-effective option.

Unions sought the move to protect the state employees who make up their membership.

It's not uncommon for agencies to hire professional consultants, often engineers.

Paterson's executive order creates a task force to track contracts worth more than $1 million per year.

Agencies who contract with consultants will have to explain to the task force within 10 days why they didn't use state employees.

The Division of the Budget projects the state will spend more than $800 million on consultants in 2008-2009.

[Livyjr]

"Biodiesel plan sees a payoff in weeds - Albany company gets financing to produce fuel from unwanted plants"

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

First published: Friday, June 6, 2008

ALBANY -- Could weeds be the next big source of biodiesel?

An Albany-based startup believes so, and is lining up millions of dollars in financing to construct plants in Fulton, Oswego County, and Hampton, Washington County.

Innovation Fuels Inc. already operates a plant in New York Harbor that makes biodiesel from nonedible oils -- animal fats and used vegetable oils -- producing 40 million gallons a year.

The 1-year-old company also has acquired a biodiesel production facility being developed at the Port of Milwaukee.

But Innovation Fuels also is looking at other plant sources -- mustard seeds, pennycress and camelina -- that could produce the oils for biodiesel, said chief executive John Fox.

"They grow in northern regions, and grow in the shoulder months," he said in a phone interview Thursday.

The plants could be interplanted with corn and soybeans, and harvested with the same equipment.

"You can do two plantings a year."

In the past, the plants have been considered annoyances.

"There's a lot of research on how to eradicate them, but very little on how to cultivate them," Fox said.

Biodiesel and ethanol -- two alternatives to gasoline and diesel -- have been criticized for diverting food crops to fuel.

Ethanol producers mainly use corn to produce the gasoline additive.

Fox blamed the recent surge in food prices on the rising costs of energy, not the production of biofuels.

He said the weeds being explored as oil sources can yield 80 to 100 gallons of biodiesel per acre, compared to 40 gallons per acre for soybeans.

Innovation Fuels on Tuesday announced it had lined up $15.5 million in financing from Credit Suisse Customized Fund Investment Group on behalf of the New York Common Retirement Fund, RNK Capital and Lyrical Partners.

Last month, it announced a line of credit with Citizens Bank, although the amount was not disclosed.

The company employs about three people at its Albany headquarters, which it chose because of the central location, Fox said.

The biodiesel portion of an earlier company founded by Fox, Homeland Energy, was merged into Innovation Fuels, along with Hampton Biofuels.

The new plant in Fulton is projected to produce 5 million gallons of biodiesel annually, while the Hampton plant could eventually produce 50 million gallons a year.

Fox said it would be starting out at a smaller size.

He declined to say how much the two plants would cost, or how many people they would employ.

He said those figures would be released as the plans are closer to completion.

Developers in the fall of 2005 proposed two separate biodiesel production plants for the Port of Albany.

Neither was built.

The Albany Port District Commission is negotiating with developers who propose building an ethanol production plant, a project that could cost up to $350 million.

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

[Livyjr]

"Cuomo forces ratings reform - Deal overhauls review process for investments in risky mortgage debt"

By JOE BEL BRUNO, Associated Press

First published: Friday, June 6, 2008

NEW YORK -- New York Attorney General Andrew Cuomo announced an agreement with Wall Street's three major credit-rating agencies Thursday that would overhaul how they evaluate investments backed by risky mortgage debt.

Cuomo, flanked at a news conference in New York City by executives from Moody's Investors Service, Fitch Ratings, and Standard & Poor's, said the new guidelines will have "a dramatic effect on the industry."

An investigation was launched in February to determine how mortgage-backed securities, home loans that are pooled together and sold as investments, carried high ratings yet still collapsed during the subprime crisis.

The deal applies only to riskier, nonprime loans in the U.S., and is designed to end what the industry calls "ratings shopping" that pits credit-rating agencies against one another.

The $5 billion rating agency industry has been accused of issuing favorable ratings to secure business with leading Wall Street investment banks.

Investment banks looking to issue mortgage-backed bonds previously went to all three agencies for a review, but banks would only use, and pay for, the most optimistic rating.

The agencies will now get paid up front regardless if they are hired to assign a rating, a move expected to avoid any conflict of interest.

"The economic benefits for the ratings agency was to see the transaction close," Cuomo said.

"If the investment bank didn't like where the process was going, they would just go to another rating agency."

"The rating agencies will now undertake new standards."

The overhaul is reminiscent of former Attorney General Eliot Spitzer's settlement six years ago with investment banks over how they conduct stock research.

The banks were accused of pressuring analysts to put out favorable reviews of stocks to help maintain and attract investment banking business.

The three ratings agencies also signed a letter of agreement to continue working with Cuomo to pursue further reforms for the mortgage industry.

The attorney general said his probe into the entire mortgage industry, including loan originators and big banks, is continuing.

"We continue to believe that the more our customers, investors and other market participants know about how we do our work, the better," said Deven Sharma, president of Standard & Poor's.

"We continue to work with the attorney general and policymakers to support effective operations of the world's capital markets."

The reform package also forced rating agencies to require investment banks to provide more detailed data on packaged loans before a rating can be issued.

The standards in which they review these pools must also be posted on their Web sites.

Cuomo said all three agencies have favored such rules, but none of them wanted to act alone.

The changes will be implemented within the next six months.

Putting more restrictions on the rating agencies, criticized for not sounding the alarm soon enough over risky mortgage investments, is just one step Cuomo sees in reforming the housing industry.

While agencies were motivated to churn out favorable ratings to collect fees, big Wall Street firms were at the same time pressuring loan originators to sell more mortgages.

Cuomo's office worked on the reforms alongside the Securities and Exchange Commission.

The regulator will vote on its own set of reforms on June 11.

[Livyjr]

WE HAVE A CONFLICT-OF-INTEREST OCCURRING HERE UNDER DEMOCRAT DAVID PATERSON, IT CERTAINLY DOES SEEM ...

HANDING CONTROL OF OUR ECONOMIC DEVELOPMENT OVER TO A BANKER WHO CAN PROFIT FROM HIS INVOLVEMENT HERE AS CEO OF M&T BANK ...

A BANKER WHO ALSO HAS A POTENTIAL FOR CONFLICT-OF-INTEREST DUE TO HIS POSITION ON THE BOARD OF THE NEW YORK STATE BUSINESS COUNCIL, WHICH IS A LOBBY GROUP FOR BUSINESSES IN NYS ...

And so ...

"'New sheriff' for state's economy - Governor taps M&T Bank CEO to lead economic development agency"

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

First published: Friday, June 6, 2008

ALBANY -- Robert G. Wilmers, the head of M&T Bank, was tapped to be the unpaid chairman of Empire State Development Corp. on Thursday, Gov. David Paterson announced.

The unpaid nature of the state job will allow the 74-year-old chairman and chief executive officer of the $66 billion-asset M&T to keep his $925,000 job there.

Wilmers is charged with finding upstate and downstate directors to team together under him at ESDC, Paterson's office said.

Wilmers joined Paterson in Rochester in a public appearance, noting that he has been a constant critic of the lack of success in improving the upstate economy.

"Gov. Paterson determined that the best way to shut me up was to give me this job," he joked.

ESDC has lost its three top officers in recent weeks as Paterson overhauls the structure and management.

Former Gov. Eliot Spitzer's hand-picked leaders resigned as Paterson dismantled Spitzer's system of two paid chairmen, one for upstate and one for downstate.

Just a few hours before Wilmers was selected for chairman, Dan Gundersen, the lone remaining ESDC leader, revealed he was stepping down.

Gundersen served as upstate chairman while Patrick Foye, who resigned earlier, focused on downstate.

Government insiders said the arrangement caused inefficiencies and competition for staff attention.

"We can drive the economies of upstate and downstate with a single plan," said Paterson.

"There's a new sheriff in town and I'm going to insist on it."

"For too long our economic development has been thought to be politically motivated, patronized often with poor judgment and often with too much cronyism," he said.

"That is going to stop on a permanent basis."

Wilmers praised Paterson as the "Dewitt Clinton of the 21st Century," the former governor who is credited with developing the Erie Canal.

A resident of both Buffalo and Manhattan, Wilmers made the Forbes list last year of top paid CEOs, with $10.45 million in total compensation, most of that from stock gains from M&T options.

M&T Securities had been listed by ESDC in an Empire Zone report as a company that had not lived up to its commitments, but officials with Paterson and the company described that as an error Thursday.

Economic development professionals applauded Wilmers' appointment.

"Wilmers has been a passionate advocate for upstate New York over the last two decades," said Brian McMahon, executive director of the New York State Economic Development Council, which represents economic development professionals.

"He's from New York City."

"He has done business throughout New York state because his bank is throughout the state."

"He is an outstanding choice."

McMahon added that "Upstate New York is going to miss Dan Gundersen."

"He was a tremendous asset."

Gundersen drew criticism from several lawmakers for setting up a residence in Saratoga Springs even though he was hired to work from the Buffalo-based upstate headquarters of ESDC.

He ended up moving to Buffalo and giving himself a pay raise of $27,500 for a salary of $187,500.

He could not be reached for comment.

"I can't find a finer public servant in New York State than Dan Gundersen."

"He hit the ground running and served admirably the people of New York," said Assembly Economic Development Committee Chairman Robin Schimminger, D-Kenmore.

"I've know Bob Wilmers since he arrived in Buffalo many years ago."

"... He will be an excellent addition to the Paterson team."

Wilmers' post requires Senate confirmation.

Paterson is looking for the appointment to take effect July 12.

Wilmers is a member of the board of the Business Council of New York State.

He also served as chairman of the New York Bankers Association in 2002 and was a director of the Federal Reserve Bank of New York from 1993 to 1998.

"We were concerned that the drift would be back to where we were before (Spitzer): for upstate to be involved in economic development, we would have to go through Manhattan," said Larry Brinker, government relations director for the Greater Binghamton Chamber of Commerce and a member of Unshackle Upstate.

"By appointing Mr. Wilmers, we in upstate have a strong voice."

James M. Odato can be reached at 454-5083 or by e-mail at jodato@timesunion.com.

[Livyjr]

"Medicaid will refuse to pay for hospital errors - 'Never events' include procedures performed on wrong body part or patient, medication errors"

By VALERIE BAUMAN, Associated Press

First published: Friday, June 6, 2008

ALBANY -- When patients walk into a hospital they generally expect to walk out healthier -- and some things are just never supposed to happen.

Soon, New York hospitals won't be able to bill Medicaid for mistakes during surgery, medication errors and other deadly complications caused by preventable hospital blunders.

The state Department of Health tracks these "never events," or mistakes that should never happen.

In October, Medicaid will stop paying for things like wrong-site surgery, wrong patient procedures, disability associated with treatment, medication errors and other problems.

The idea is to shift the burden to hospitals, practices and doctors if they make a dangerous mistake.

Last year, New York had 20 medical cases where a procedure was performed on the wrong patient or the wrong body part.

In another 106 cases, officials found incorrect procedures or treatments, or wrong patient invasive procedures -- more than the 95 reported in 2006.

In 2007, New York hospitals also had 26 cases where a medication error occurred, six resulting in permanent patient harm, 11 nearly killing the patient, and nine cases where the patient died, according to the Health Department.

In 122 cases in 2007, medical professionals left foreign objects inside a patient's body cavity after surgery.

That's slightly down from 129 in 2006.

The state Health Department expects to save $6 million from the change.

New York's Medicaid program is among the most expensive in the nation, costing taxpayers $47 billion a year.

Health officials say New York is following the lead of the federal Centers for Medicare and Medicaid, and patients won't get stuck with the tab.

William Van Slyke, a spokesman for the Healthcare Association of New York State, which represents hospitals, said the association had adopted its own policies for never events, but questioned portions of the new plan.

[Livyjr]

"3rd guilty plea in case of escort service that felled NY Gov"

By ADAM GOLDMAN, Associated Press

Last updated: 6:32 p.m., Monday, June 9, 2008

NEW YORK -- A man accused of running an escort service that led to former Gov. Eliot Spitzer's downfall will plead guilty, his lawyer said Monday.

Murray Richman confirmed that Mark Brener, 62, will appear Thursday in federal court in Manhattan after negotiating a plea deal with the U.S. Attorney's office.

Richman declined to discuss the details of the plea but called it "fair."

"I think it would be inappropriate at this time," he said.

Richman did say the deal would be similar to the one federal prosecutors reached with Cecil Suwal.

The plea deal was reached about a week ago, he said.

Suwal, 23, ran the day-to-day operations of the escort service.

She pleaded guilty to a pair of federal conspiracy charges on June 3.

The plea bargain calls for Suwal, who has no criminal record, to receive between 21 and 27 months in prison -- but a judge could depart from that recommendation.

A spokeswoman for the U.S. Attorney's office in Manhattan declined to comment Monday on the Brener plea deal.

Along with Suwal and Temeka Rachelle Lewis, one of the agency's bookers, Brener would be the third of four defendants to plead guilty in the high-profile case.

Prosecutors say that Spitzer was a client of the "Emperors Club V.I.P."

Spitzer resigned ignominiously March 12, leaving his reputation in tatters.

He has not been charged.

Lewis arranged a date between a prostitute with the pseudonym Kristen and a man identified in court papers as "Client-9," later revealed to be Spitzer, according to prosecutors.

The pair's Feb. 13 rendezvous in Washington, D.C., was monitored by federal law enforcement.

She pleaded guilty in May to promoting prostitution and money laundering.

Lewis agreed to tell everything to federal authorities but there was no provision in Suwal's arrangement calling on her to cooperate with investigators in the probe of the ring's activities.

Another hooker booker, Tanya Hollander, is also in plea talks with the federal government, her lawyer said.

Michael C. Farkas said his client hopes to reach a resolution in the next couple of weeks.

"We've been actively discussing a plea with the government," Farkas said.

Brener, a widower and former financial consultant from Israel, had a license to represent taxpayers before the IRS.

He lived in Cliffside Park, N.J. with Suwal -- a former University of Miami student who graduated from a prestigious prep school.

[Livyjr]

"Ex-trooper fights back in NY state police probe, seeks data"

By MICHAEL GORMLEY, Associated Press

Last updated: 3:22 p.m., Monday, June 9, 2008

ALBANY -- The former state police commander at the center of claims a rogue unit did political dirty tricks for two governors has asked for internal e-mails from the state agency that fired him, information he believes will prove his innocence.

Daniel Wiese, a retired state police official who headed the security detail for Gov. George Pataki and was close to Gov. Eliot Spitzer, wants e-mails between 13 employees at the state Power Authority, which fired him May 23, according to a copy of a letter obtained Monday.

Power Authority spokeswoman Christine Pritchard had no immediate comment.

Wiese was suspended April 1, when Attorney General Andrew Cuomo began investigating claims state police were used for political purposes.

Cuomo said Wiese's computer and cell phone were scrubbed clean of information just as the probe was made public.

Wiese denies that and copies of his e-mails before April 1 were recorded and are available for an unrelated civil lawsuit involving the authority and another employee.

"We strongly believe that Dan Wiese was knowingly fired in violation of several of NYPA's own human resources policies," said Wiese's attorney, Kevin Kitson.

"Once NYPA provides us with our requested documentation we will consider all applicable legal remedies."

Kitson will also seek Wiese's employee evaluations.

Wiese has said he knew of no rogue state police operation.

Pataki and two previous state police superintendents also rejected the idea of a rogue element in the long gray line.

Gov. David Paterson has said suspicions about political misdeeds by an element of the state police include accusations by "more than 10" unidentified lawmakers who said troopers followed and stopped them for traffic infractions.

One lawmaker complained that he was stopped for speeding and, before he drove home, the incident was already mentioned on a blog.

There are no accusations by law enforcers at this point that any state police broke laws, threatened or harassed political figures.

Wiese is a longtime confidant of Pataki and Spitzer, a Democrat who resigned in March after he was identified in a prostitution investigation.

Pataki, a Republican, appointed Wiese inspector general at the Power Authority.

He also appointed most members of the authority board that fired Wiese.

[Livyjr]

"Good timing for good deal"

Albany, New York Times Union

First published: Monday, June 9, 2008

The widow of former state Sen. Ron Stafford last month bought a home from the elder son of Senate Majority Leader Joseph L. Bruno at an apparent premium, at a time when she is seeking legislation that would benefit her company.

Kay Stafford bought 303 Bulson Road, Brunswick, for $475,000 from Joseph M. Bruno.

Town records show the three-bedroom residence on 17 acres, which is next to the senator's, is assessed at $74,100, with a total market value of $304,938.

The deed transfer was recorded May 13.

Stafford did not return calls.

In 2000, she married Sen. Ron Stafford, R-Plattsburgh, an ally of Sen. Bruno.

As Finance Committee chair, Sen. Stafford was second to Bruno in influence in the Senate.

He died three years ago after nearly 40 years in the Senate.

Kay Stafford leads CMA Consulting in Latham, a company that state comptroller records show has received 199 state contracts since 1998 worth $94.6 million.

Most of that work -- in computer programming services and technical database services -- came in recent years.

CMA would benefit from a law proposed by Assembly Transportation Committee Chairman David Gantt, D-Rochester, that would allow counties to install cameras at traffic lights.

The bill would require technology offered by CMA Consulting.

Gantt has come under criticism for the measure because he long opposed traffic light cameras.

He changed his position after CMA hired his friend and former staffer Robert Scott Gaddy as its lobbyist.

Gantt said he does not know Stafford and has never talked to her.

John McArdle, the Senate communications director, said Kay Stafford had been a friend of the Bruno family for 25 years, and she saw the home in Brunswick as an opportunity to live closer to her grandchildren, who live in Williamstown, Mass.

At about the same time he sold his home, Bruno's son quit his $104,000 post as director of job order contracting at the State University Construction Fund on May 15, state records show.

His state career began in 1995, shortly after his father rose to lead the Senate's Republican majority and Gov. George Pataki took office.

Contributors included State editor Jay Jochnowitz and Capitol bureau reporter James M. Odato. Got a tip? Call 454-5083 or e-mail jodato@timesunion.com.

[Livyjr]

"Former state IG inspector gets probation in fraud case"

By BRENDAN J. LYONS Senior writer, Albany, New York Times Union

Last updated: 6:20 p.m., Monday, June 9, 2008

ALBANY -- A former investigator for the state Inspector General's office was sentenced to federal probation today for his role in a mortgage fraud scheme that allegedly involved a network of accomplices.

Mark R. Slagen, who will turn 54 Wednesday, had faced up to a year in prison under federal sentencing guidelines.

But U.S. District Senior Judge Thomas J. McAvoy granted prosecutors' motion for leniency for Slagen, who had cooperated against other conspirators in a scheme that involved sharply inflating the values of homes to steal from banks and lending institutions.

Slagen, a married father of three children, was fired from his state Inspector General's job in June 2005.

Slagen, who had worked as a state investigator for about 10 years, pleaded guilty to a federal conspiracy count last July.

He now works in a maintenance position with the state Education Department, records show.

Slagen is a former Rensselaer police officer and had also previously worked as an investigator with the state Department of Motor Vehicles, records show.

He was paid to be a "straw purchaser'' for Anthony J. Andersen, who pleaded guilty to federal charges in October for his role in running an elaborate mortgage fraud scam involving numerous area properties, many in Troy.

Andersen paid Slagen cash after Slagen agreed to buy two overvalued homes in 2001 and 2002.

The loans were defaulted on, costing banks about $198,000 in losses.

The properties "sold'' to Slagen were at 36 13th St., Troy, and 30-32 Partition St., Rensselaer.

Andersen faces sentencing in September for his guilty plea last fall to two felony counts.

"Mr. Slagen acted out of character here, became embroiled in financial problems and, in a weak moment, began doing this or got involved in this with Mr. Andersen,'' Slagen's attorney, Donald T. Kinsella, told McAvoy.

"He's now gone from a well-paying, white-collar ... job, as an investigator with the state office of Inspector General, to maintenance worker for the state Department of Education.''

In court today, Slagen's wife and daughter sat in the back of a near-empty courtroom.

Slagen's brother, Steve, who is a sergeant for the New York State Police, also was in the courtroom and wearing his trooper's uniform.

The brothers embraced as Mark Slagen left the courtroom to report to federal probation officials.

His sentence will include six months home confinement, McAvoy said.

[Livyjr]

"Sweeney connections to lobbyist examined - Relationship is part of federal criminal probe related to earmarks"

By BRENDAN J. LYONS and JAMES M. ODATO, Staff writers, Albany, New York Times Union

First published: Wednesday, June 11, 2008

ALBANY -- A federal criminal investigation is focusing on the relationship of lobbyist William D. Powers and former U.S. Rep. John E. Sweeney in connection with a series of federal grants that were steered to Powers' clients, according to several people familiar with the probe.

The probe is being overseen by the Justice Department's Public Integrity Section in Washington, D.C.

Several people familiar with the case said it is centered on a period when Powers' clients received the earmarks while Sweeney's then-wife, Gayle, was working for Powers' Albany-based lobbying firm.

Armed with a search warrant, federal attorneys and FBI agents from Albany and Washington appeared at Powers & Co.'s 90 State St. office building on Friday.

They confiscated files and interviewed employees who were encouraged to remain in the office during the search.

It's not clear whether Powers was present.

"The FBI conducted investigative activity at that location last week relating to an ongoing investigation."

"No other details are available at this time," said Paul Holstein, the FBI's chief division counsel in Albany.

"The FBI obtained records on Friday and neither Mr. Powers nor his firm is a target of an investigation," said Donald T. Kinsella, a criminal defense attorney retained by Powers' firm.

"They intend to cooperate."

Powers, 66, of Chatham, has been a lobbyist since he stepped down as state GOP chairman in 2001 after holding the position for 11 years.

Most of the lobbying work by Powers' firm involves state government, and several big-ticket clients, such as the Lincoln Center for the Performing Arts, which paid his firm $180,000 a year in 2005 and 2006, Sweeney's final two years in Congress.

Just five federal clients were identified on a U.S. Senate Web site, including some that are also on his state list, such as the Lincoln Center, which has gotten several public grants for its building projects.

"We believe that the support we've received has come to us on our merits."

"We got it on the merits," said Betsy Vorce, the center's vice president for public relations.

She could not say why Powers was selected as its lobbyist and whether Sweeney was instrumental in the funds received.

The Shaker Museum and Library near Powers' Columbia County home, which was recently put up for sale at $3.25 million, received a grant from Sweeney while Powers represented the museum, according to a watchdog group and public records.

Powers' wife, Judith, is a long-time member of the museum board and both she and her husband have been strong "supporters," said David Stocks, museum president.

State records show Powers lobbied for free but it is unclear if he was paid for representing the museum in Washington.

Stocks, who joined the museum last fall, said he assumes Sweeney set up a $350,000 grant for restoration of the museum's Great Stone Barn.

The grant was linked to Sweeney by Citizens Against Government Waste.

Sweeney and Powers are longtime friends.

And the then-future congressman served as the executive director of the state Republican party when Powers ran the organization.

Powers put Sweeney's wife, Gaia or "Gayle," on the payroll after Sweeney got to Washington.

The Sweeneys began divorce proceedings not long after Sweeney lost his re-election bid.

Neither Sweeney nor his ex-wife could be reached for comment.

Nor could Powers or his wife.

Kinsella, who is a former longtime federal prosecutor, would not say what sparked the investigation or who the FBI is reporting to on the matter.

Other people familiar with the investigation said federal authorities are exploring the circumstances by which Sweeney helped obtain federal funding for groups that had hired Powers' firm for lobbying.

Powers' federal clients included Siena College, which received transportation funding near its Loudonville campus.

The college paid Powers at least $35,000 to represent it, according to state records.

Powers' firm helped Siena lobby for public funds when the college planned to expand across Route 9.

The private school received $240,240 for a perimeter road, part of earmarks totaling $1.3 million sponsored by Sens. Charles Schumer and Hillary Rodham Clinton and Sweeney.

Sweeney's ex-wife worked at Powers' firm until shortly after Sweeney lost a re-election bid in November 2006.

The investigation of Sweeney and Power's relationship is a typical investigation for the Justice Department's Public Integrity Section.

It has opened other probes in recent years on jobs given to the wives of congressmen or their lobbyists in relation to federal earmarks.

The public corruption investigators focus on federal crimes related to election fraud and abuse of public trust by elected or appointed officials at all levels of government.

James M. Odato can be reached at 454-5083 or by e-mail at jodato@timesunion.com.

[Livyjr]

"Exclusive: FBI removes files from office of ex-GOP chief Powers"

By BRENDAN J. LYONS and JAMES M. ODATO, Staff writers, Albany, New York Times Union

Last updated: 2:02 p.m., Tuesday, June 10, 2008

ALBANY -- FBI agents removed files last Friday from the State Street offices of William D. Powers, a lobbyist and the state's former Republican chairman.

Powers, of Chatham, has been a lobbyist since he stepped down as state GOP chairman in 2001 after holding the position for 11 years.

It's unclear why the FBI took files from Powers' office at 90 State St., or, whether it is part of a criminal investigation.

"The FBI conducted investigative activity at that location last week relating to an ongoing investigation."

"No other details are available at this time,'' said Paul Holstein, the FBI's chief division counsel in Albany.

Powers had been credited in the 1990s with reviving the state's GOP from bankruptcy and turmoil.

His most notable achievement came in 1994 behind the successful inaugural campaign of former Gov. George Pataki's victory over then-Gov. Mario Cuomo.

A person familiar with the circumstances of the FBI's raid said it does not appear to be connected to an ongoing federal grand jury investigation of Senate Majority Leader Joseph L. Bruno, R-Brunswick.

Powers could not be immediately reached for comment.

An attorney for Powers said he is not a "target'' of the FBI and that he is cooperating with the investigation.

The attorney declined further comment.