"Employers resist worker's comp 'bailout' plan - Companies that made payments to trusts suing state board that wants them to ante up even more"

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

First published: Tuesday, June 17, 2008

ALBANY -- As soon as this fall, dozens of employers in the Capital Region will face hefty bills from the state Workers' Compensation Board.

They'll be asked to make up for years of underpayment into so-called self-insured trusts that provided their coverage for on-the-job injuries.

Those trusts have failed, and their administrator has agreed to give up its license.

In the meantime, however, healthy self-insured trusts are being asked to cover the failed trusts' costs, and that has triggered a legal battle.

Attorney Richard Honen of the Albany law firm Phillips Lytle LLP calls it a "bailout ... unique even for New York."

Honen, representing a group of 13 trusts -- basically employers that formed pools to self-insure against workers' compensation claims -- says they've seen their combined annual assessments to the board climb from $150,000 a year to $12 million this year.

The assessments typically pay for the operation of the board, including regulatory oversight of the trusts.

Now, the increase is covering the benefits to injured workers of the failed trusts.

"The board needs resources now to pay the current claims of injured workers," said board spokesman Brian Keegan.

"When in the future, the board is able to collect from defaulted trusts, this assessment will be adjusted accordingly."

"In the interim, the board recognizes its first priority is to defend the benefits injured workers across New York count on and will continue to act accordingly," Keegan said.

The group of trusts Honen represents has brought suit against the board and refused to pay the increased premiums.

"They've been paying full price for their premiums," he said Monday.

"And now they're going to bail out people who've been paying extremely discounted premiums?"

When the trusts didn't pay, the board sought to seize more than $14 million in security bonds the funds had posted.

But last month, Kimberly A. O'Connor, acting justice in state Supreme Court in Albany County, blocked that seizure while she decides the case.

The administrator of the failed trusts, Poughkeepsie-based Compensation Risk Management LLC, will surrender its license by Sept. 8.

Meanwhile, a forensic audit is seeking to determine which of the members owes what to make up the shortfall.

The board has rough estimates of the liabilities of at least three of the trusts, and although those estimates are 18 to 30 months old, they show at least $145 million in outstanding liabilities.

There was no word on how many assets the three funds held, however.

"I don't understand why no action has been taken against the administrator," Honen said.

Under an agreement with the board, Compensation Risk Management admitted no violations and paid no fines or penalties, a spokesman said.

"If that's the sum total of the action taken against that administrator, someone has let down the people of New York state," Honen said.

Eric Anderson can be reached at 454-5323 or by e-mail at eanderson

"Ethanol plant developer sued - Company files $72M suit against former project partner, saying idea was stolen"

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

First published: Tuesday, June 17, 2008

ALBANY -- A Cooperstown company has sued the developer of a planned $350 million ethanol plant at the Port of Albany, claiming the idea was essentially stolen.

Empire State Ethanol & Energy LLC, which has offices both in Cooperstown and Colonie, filed a $72 million lawsuit Friday against Albany Renewable Energy LLC in U.S. District Court in Albany.

Christopher Von Zwehl, president of Empire State Ethanol, declined to comment on the case.

His attorney, William Hurst of Hiscock & Barclay LLP in Albany, could not be reached for comment.

In the lawsuit, Empire State Ethanol claims it has been working on developing a corn-to-ethanol plant since 2006.

It teamed up with a Colorado company, BBI International, and potential sites were identified in Oneonta and Cobleskill, according to the suit.

Last year, Empire State Ethanol claims, it started looking at the Port of Albany as a potential site.

But BBI said it could no longer team with Empire State Ethanol on the project, and the two companies parted ways in November.

Empire State Ethanol alleges that while this was going on, BBI executives were working behind its back to create their own ethanol project for the Port of Albany.

The lawsuit claims the group of BBI executives created Albany Renewable Energy, which was selected in March by the Albany Port District Commission to develop 18 acres at the port.

"We have no comment at this time," Tom Owens, general counsel for the port commission, said Monday.

"It's a dispute between private parties."

In its lawsuit, Empire State Ethanol claims Albany Renewable Energy was formed by Jeff Kistner, a Nebraska-based BBI executive.

Other partners, it says, are Mark Yancey, a BBI executive based in Colorado, and Ed Stahl, a BBI executive based in North Carolina.

All three men, along with BBI, are listed as defendants in the case.

A receptionist at BBI said Kistner and Stahl no longer work at BBI.

Yancey was said to be at an industry conference and was not available for comment.

Stahl, who owns BioPro Resources LLC in Huntersville, N.C., has been the public face and spokesman for the $350 million Albany Renewable Energy project.

He could not be reached for comment Monday.

BioPro is also listed as a defendant in the case.

The lawsuit claims Von Zwehl received an e-mail from Kistner in February stating he was "one of the founding members of another entity that has also submitted a proposal" to the port commission.

"I suspect this e-mail comes as a bit of a surprise," the lawsuit quotes Kistner as telling Von Zwehl.

In the suit, Empire State Ethanol is seeking $57 million in compensatory damages and $15 million in punitive damages, along with attorney fees.

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

"Bruno open to a cap? - Some in GOP embrace governor's property tax proposal, urge action"

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

First published: Friday, June 20, 2008

ALBANY -- Senate Majority Leader Joseph L. Bruno may be warming to the idea of a property tax cap, according to a person with knowledge of the negotiations.

Bruno's movement on the issue comes as some of his members, particularly upstate senators in highly competitive races this fall, are starting to put pressure on the Senate majority leader to address the issue.

Republican candidates who are challenging Democratic incumbents, too, have been embracing Democratic Gov. David Paterson's proposal for a 4 percent annual cap on school property tax growth.

That's contrary to Bruno's push for a GOP bill that would allow school districts to phase out property taxes altogether, with the state picking up the cost.

Critics have said the proposal, combined with Bruno's resistance to raising income taxes, is unrealistic, but Bruno, of Brunswick, says the money is out there in gambling revenues and uncollected taxes on Indian reservations.

The issue is still very much in negotiations, the source said, but there is a feeling on the Republican side that a property tax cap might offer a temporary fix while a permanent solution to cut property taxes is worked out.

If Bruno does come around to Paterson's proposal, it may force the Assembly to negotiate.

Assembly Speaker Sheldon Silver, D-Manhattan, has said he's willing to support a property tax cap, as long as it "gives relief to the people who most need it" and ensures continued resources for schools.

Senate Minority Leader Malcolm Smith, D-Queens, has said he would favor a 2 percent tax cap, half that of Paterson's proposal.

Assembly Minority Leader James Tedisco, R-Schenectady, has favored a cap as part of a "holistic" approach that includes relief for schools from unfunded state mandates.

Neither chamber has brought Paterson's proposal to a vote.

The session is scheduled to end Monday, and the Legislature has recessed for this week.

The tax cap debate has already spilled over into the fight for the Senate majority, which the Republicans now hold by a slim 32-30 margin.

In an odd twist, Republican challengers are making no mention of Bruno's proposal, while taking incumbent Democratic senators to task for not supporting Paterson's tax cap proposal.

Republican Larchmont Mayor Liz Feld, who is challenging Sen. Suzi Oppenheimer, D-Mamaroneck, on Tuesday called out Oppenheimer for not sponsoring Paterson's legislation, saying the first thing she'd do if elected would be to put her own name on the bill.

On Thursday, Feld pressed Bruno to work with Paterson to pass the 4 percent tax cap.

"If legislators in Albany go home on Monday without doing anything to ease the property tax burden on families, senior citizens and small businesses, they will be sending a clear signal that special interests matter more than the 74 percent of New Yorkers who support the tax cap," Feld said, referring to a Siena Research Institute poll.

On Wednesday, David Renzi, the Republican challenger to the Senate's newest member, Democratic Sen. Darrel Aubertine of Cape Vincent, called for immediate passage of Paterson's tax cap.

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

"Job losses take merry out of May - Month's unemployment rate hits level not seen here since early '90s"

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

First published: Friday, June 20, 2008

The Capital Region's unemployment rate surged to 4.8 percent in May, the highest rate for that month since 1992.

In May 2007, it was just 3.6 percent, but large job losses in two fields -- financial services and leisure and hospitality -- contributed significantly to the rise this year, the state Department of Labor said Thursday.

The numbers, which are not adjusted to reflect seasonal variations, were even up compared to April.

That's unusual, because the pace of hiring usually picks up as the weather gets warmer.

"Typically, the unemployment rate would drop from April to May," said James Ross, who analyzes the Capital Region labor market for the department.

The statewide unemployment rate, not seasonally adjusted, was also up in May, to 4.9 percent from 4.2 percent a year earlier.

Unemployment rates measure joblessness among people who have no job or are actively seeking work.

Experts interviewed Thursday said they expected the increase in unemployment.

"This is a substantial increase .... but it's not a surprise," said Hugh Johnson, chairman of Johnson Illington Advisors, an investment firm in Albany.

"It just mirrors what has happened nationally."

Tony Riccardi, a private economist in Albany, agreed, saying the Capital Region economy typically lags a few months behind national economic trends.

The numbers, he said, are "just evidence that we're going into a recessionary cycle."

Ross, though, questioned the accuracy of the unemployment numbers because other indicators don't suggest unemployment should be that high.

Ross noted, for example, that the percentage of jobless people receiving unemployment insurance in the Capital Region dropped to 25.8 percent in May from 31.2 percent a year earlier -- a trend that's the opposite of what economists expect during a worsening economy.

And he pointed to a statistically unusual surge in the number of young people seeking or holding jobs, leading him to wonder about the accuracy of the U.S. Census Bureau sampling on which the national, state and local rates are based.

Still, Ross said he does not doubt that the Capital Region's jobless rate is increasing at a pace that suggests a downturn.

Despite the darkening local picture, the numbers Thursday continued to show the Albany-Schenectady-Troy area with a lower jobless rate than most other upstate metropolitan areas.

Saratoga County had the area's lowest unemployment rate, at 4.4 percent, while Schoharie and Greene counties had the highest, 5.7 percent.

The unemployment rate was 4.8 percent in Albany County, 5.0 percent in Rensselaer and Schenectady counties, and 4.6 percent in Columbia County.

The May unemployment rate in the Glen Falls area was 5.1 percent, up from 4.0 percent a year ago.

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

Upstate unemployment picture*

May 2008 - April 2008 - May 2007

Buffalo area: 5.8 - 5.4 - 4.4

Rochester area: 5.3 - 4.9 - 4.1

Syracuse area: 5.2 - 4.8 - 4.1

Binghamton area: 5.1 - 4.8 - 4.1

Utica-Rome area: 5.2 - 5.1 - 4.0

Albany area: 4.8 - 4.4 - 3.6

New York state: 4.9 - 4.5 4.2

* Figures not seasonally adjusted Source: State Labor Department

"Leaders reject foreclosure freeze - Legislation mandates warnings to borrowers, settlement talks"

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

First published: Friday, June 20, 2008

ALBANY -- New York will toughen its mortgage rules but won't enact a one-year freeze on all home foreclosures.

The legislation was announced Thursday by Gov. David Paterson and legislative leaders.

It was hammered out in long negotiations that sorted through competing proposals designed to address rising loan default rates.

"This took some real perseverance," said Senate Majority Leader Joseph L. Bruno, R-Brunswick.

The legislation requires that lenders send written warning to borrowers 90 days before starting the foreclosure process, and establishes a "mandatory settlement conference" between lenders wanting to foreclose and borrowers holding certain subprime loans.

It also requires that lenders establish that borrowers are able to repay a loan; increases the penalties for mortgage fraud; and mandates that all mortgage servicers register with the state, among other provisions.

Housing advocates in recent months have pushed hard for new foreclosure rules, saying rising default rates tied to the subprime mortgage industry represent a crisis that's destabilizing New York neighborhoods.

But the banking and mortgage industries pushed back hard, noting that New York already has some of the nation's toughest consumer protection laws on mortgages.

Bankers particularly reviled a one-year foreclosure freeze passed earlier this year by the Assembly.

Groups like the New York Bankers Association said it would cause many lenders to abandon the state, making credit harder to obtain for all New Yorkers.

On Thursday, Paterson said a moratorium wouldn't be as helpful as some believe, because it would allow owners a longer stay in homes they would eventually lose.

Despite the intense lobbying that preceded Thursday's announcement, proponents and opponents of the new legislation were quiet afterward, saying they were waiting to review its nitty-gritty details.

"We have not seen the actual bill language yet and will not be commenting until we have had the opportunity to review it," said Karen Jannetty, spokeswoman for the bankers association.

"Self-insured trusts under investigation - Failure to provide workers' comp coverage referred to state attorney general's office"

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

First published: Thursday, June 19, 2008

The failure of several self-insured trusts that provide workers' compensation coverage to member employers has been referred to the state attorney general's office, according to a spokesman for the state Workers Compensation Board.

The trusts were administered by Poughkeepsie-based Compensation Risk Management LLC, which has agreed to surrender its license.

Their failure has left dozens of employers in the Capital Region without coverage and facing potentially hefty liabilities.

The self-insured trusts are one way for employers to get workers' compensation coverage.

The largest corporations typically self-insure, paying claims directly.

Private insurance companies and the State Insurance Fund also offer coverage.

But the trusts -- whose members were groups of companies in similar lines of business -- were seen as a cost-effective way for smaller employers with strong safety records to get coverage for a lower price.

A call to the attorney general's office Wednesday wasn't returned.

Compensation Risk Management admitted no violations and paid no fines or penalties in its agreement with the board to surrender its license, a company spokesman said last week.

Also on Wednesday, acting Justice Kimberly O'Connor of state Supreme Court in Albany County rejected a request by a group of self-insured trusts administered by Colonie-based First Cardinal Corp. to inspect and copy the failed trusts' records.

The trusts are suing to block the Workers Compensation Board from boosting their assessments to cover liabilities of the failed trusts.

"By law, we are responsible for the current claims of injured workers and the only funding mechanism the law allows us is through these assessments," said board spokesman Brian Keegan.

"As these funds are recovered, they will be returned to the rest of the self-insurance community that provided the interim cash flow."

Keegan said the members of the failed trusts ultimately are responsible for the shortfalls.

"The former members of the defaulted groups that are causing the cash flow issues are or will be billed for these costs," he said in an e-mail.

"In several cases, we are already aggressively pursuing collection against the members of defaulted group self-insured trusts."

"Board focus of aid probe - Cuomo studies BOCES officials to find if pensions were awarded to lawyers to boost state payments"

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

First published: Thursday, June 19, 2008

ALBANY -- As Attorney General Andrew Cuomo revealed the biggest settlement in his pension fraud investigations, his office was continuing to probe whether BOCES officials were part of a conspiracy to milk the public retirement system.

Cuomo announced a $500,000 deal Wednesday with top lawyers of the Albany law firm of Girvin & Ferlazzo.

He also emphasized he has unfinished business on the case, including civil or criminal cases open against former principals M. Cornelia Cahill and E. Michael Ruberti.

Cahill now works for Hiscock and Barclay.

Her lawyer, Daniel J. French, said he expects Cahill to make a civil settlement soon.

Ruberti could not be reached.

Also, Cuomo's office said it intends to scrutinize the history of the deals in which the Hamilton-Fulton-Montgomery BOCES appears to have conspired to put lawyers on the public payroll as far back as 1989 in order to secure state aid for lawyers who were listed as personnel.

Joseph Iraci, in charge of the BOCES when the deal was first struck, declined to explain why he entered into the arrangements Cuomo called improper.

The current superintendent, Geoffrey H. Davis, would not give an interview.

A person familiar with the case said the BOCES appears to have participated in a scheme that resulted in state aid being unjustifiably awarded to school districts.

Girvin & Ferlazzo said it decided to settle as "a sound business decision despite any good faith disagreement and to forgo a lengthy and expensive litigation."

"This payment is not a fine or a penalty of any kind," Jeffrey Honeywell, managing partner, said.

"It is the cost of allowing the review to end and permit us to continue with the business of serving our clients."

During the 19-year BOCES relationship, Girvin & Ferlazzo decided which lawyers would get the "perk" of being put on the payroll, Cuomo's office said, regardless of whether they worked on school matters.

Twelve Girvin & Ferlazzo lawyers were improperly listed as beneficiaries of public benefits, Cuomo said.

The firm also was paid fees negotiated with each school district.

BOCES would collect the fees from the districts and pay the firm.

The BOCES schools were able to get reimbursed from the state because the lawyers were listed as BOCES employees, doing labor relations work for the districts.

Cuomo noted state aid was only eligible for labor relations services and some of the firm's lawyers getting the pension credits lacked such expertise and couldn't provide such services.

Nevertheless, all of the lawyers were actually acting as outside retained counsel, not as employees, and none should have received public pension benefits, Cuomo said.

It was part of a "fraud" committed for years by hundreds of lawyers serving municipal employers, he said.

Salvatore Ferlazzo, Cahill and Maureen Harris never worked on any labor relations matters for the BOCES, even though that was what the contract called for, Cuomo's office said.

Harris, a commissioner with the State Public Service Commission now, settled allegations against her last month.

She gave up pension credits accrued during her work with the firm and forfeited contributions to the pension system as well.

She also paid $50,000.

The lawyers settling with Cuomo agreed to the same terms, but also promised $500,000, five times the largest settlement to date.

Additionally, the Girvin lawyers agreed to furnish information about former colleagues who did not settle.

Partners James Girvin, Salvatore Ferlazzo, Kristine Lanchantin, Jeffrey Honeywell, Kathy Ann Wolverton and Gregg Johnson said they would cooperate fully with the attorney general's continuing investigation against Cahill and all other current or former partners of the firm who have not settled.

That would include Ruberti, who is drawing a pension of more than $50,000 a year.

The investigators said Ruberti's work with the BOCES may be defensible, because he had an office at the schools and showed up for work there, according to one knowledgeable official.

However, he later negotiated a deal to work for the Troy school district to bump up his pension credits and his annual pay for pension calculations.

The prosecutors have been trying to get him to pay back the additional pension sums he collected and to forfeit future payouts attributed to his Troy career, a lawyer familiar with the probe said.

Ruberti has refused.

Cuomo also announced settling for $100,000 a case against Hogan, Sarzynski, Lynch, Surowka & DeWind in Binghamton.

However, former principal John B. Hogan, retired since 2000, has declined to settle.

The Girvin firm has to pay $250,000 within 15 days and the rest by June 10, 2009.

And for three years, the firm must submit its billing records to the attorney general's office for any invoices sent to school districts.

The firm, or its lawyers, had at least three Albany attorneys representing it in the settlement, including William Dreyer, James Featherstonhaugh and Donald Kinsella.

Although they do not admit guilt, they are forbidden to make any public denials about the allegations made by Cuomo, according to the settlement.

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

"Ethics panel seeking deals in Travelgate scandal cases"

By DANNY HAKIM, New York Times

First published: Thursday, June 19, 2008

ALBANY -- A state ethics panel is seeking to settle cases against top aides to former Gov. Eliot Spitzer, a year after their alleged involvement in an effort to gather the travel records of Joseph L. Bruno, the Senate majority leader.

The panel, the Commission on Public Integrity, has been threatening to open a formal public inquiry against some of the aides if they refuse to settle, according to people who have been briefed on the inquiry.

The commission has also questioned Spitzer under oath since he left office, though it is not clear whether the former governor is a target of the commission's investigation.

The staff could present cases against the former Spitzer administration officials as early as a commission meeting scheduled for today, though the presentation would be made to the 13 commissioners behind closed doors.

It is still uncertain whether Spitzer himself faces sanction in the state investigation, though he is almost certainly more focused on avoiding federal charges related to a prostitution ring; reports that Spitzer was a client led to his resignation three months ago.

Former Spitzer staff members involved in settlement talks include Richard Baum, who as secretary to the governor was Spitzer's top aide, and Darren Dopp, who was Spitzer's communications director.

The commission has also been investigating William F. Howard, who was the former governor's liaison to the State Police.

"Lawyer under pension scrutiny keeps state ties - Collecting retirement at his Georgia home, he works for Westchester County school and as arbitrator"

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

First published: Thursday, June 19, 2008

ALBANY -- One of the founders of what is now the Girvin & Ferlazzo law firm has retired in Georgia, by most accounts.

But his public pension remains under scrutiny by New York's attorney general.

E. Michael Ruberti, who now resides in the seaside community of St. Simon's Island, Ga., has been collecting a $50,577.98 annual pension since 1995, according to state comptroller's office.

But Ruberti, who challenged Albany Mayor Erastus Corning 2nd in 1977 on the Republican line, still travels to New York state on a regular basis and has business dealings here.

Ruberti serves as the lawyer for a small but controversial Westchester County school district, and as an arbitrator for the Governor's Office of Employee Relations, handling grievances from members of the Public Employee Federation union.

He works for the state several days a month at the usual arbitrator's rate of $800 per day, according to Employee Relations.

Officials at the Greenburgh 11 School District confirmed Ruberti continues to serve as a legal adviser, which he's done since the early 1990s.

They stressed that he is listed as contract employee, not a staffer.

Attorney General Andrew Cuomo's agreement announced Wednesday with Girvin & Ferlazzo centers on the firm's practice of having its lawyers listed as employees to be eligible for state pension benefits.

Cuomo and Comptroller Thomas DiNapoli say lawyers around the state have wrongfully collected pension credits and they are moving to strip them of the benefits.

While Cuomo said he's looking into Ruberti's status, the Greenburgh 11 teachers union is calling for Ruberti to be removed in light of the ongoing pension investigations.

In a prepared statement, the union said the district has spent millions on lawyers, including Ruberti, since 1994.

"The district was seeking to punish its teaching staff for speech which was critical of the waste and mismanagement going on at children's village and the school district," the statement said.

"We also believe the Greenburgh 11 school board should consider retaining new counsel for their legal needs."

Ruberti could not be reached on Wednesday.

And district officials didn't return a call seeking to find out how much they've paid Ruberti over the years.

Greenburgh 11 is among a handful of "special act" school districts created by the Legislature and funded largely by the state rather than local property taxes.

Its students live in The Children's Village, a nonprofit child-care agency for troubled youths, located in Dobbs Ferry.

Labor relations with the school district came to a head in 1994 when the board fired two aides and filed disciplinary charges against eight teachers who picketed a dinner attended by school officials to protest their lack of a contract and other labor issues.

"I refer to it as the J.P. Stevens of New York," said Jeff Cassidy, a New York State United Teachers negotiator who had worked at Greenburgh 11, referring to the famed 1930s textile strike.

"It was the worst labor case imaginable."

Relations between the teachers and school board became so bad that NYSUT prepared a special report on the situation and, Cassidy said, pushed successfully for legislation to broaden the school board's representation.

Still, he said, Greenburgh 11 has five teachers who, having crossed the administration, work in what are essentially do-nothing jobs, Cassidy said.

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

"Audit: Project was expensive - DiNapoli report contradicts former officials on dumping excess fill"

By JORDAN CARLEO-EVANGELIST, Staff writer, Albany, New York Times Union

First published: Thursday, June 19, 2008

COLONIE -- A controversial public works project in which tons of excess fill was dumped on land owned by a private club did not save taxpayers a dime, contrary to what former town officials contended, according to a state audit released Wednesday.

State Comptroller Thomas DiNapoli's office says the work at the West Albany Rod & Gun Club -- where several former town officials were members -- actually cost Colonie as much as $42,000 more than other ways of getting rid of the fill -- known as spoils.

Improvements were also made to a road and parking lot at the club, raising the appearance of impropriety, according to the audit.

DiNapoli's findings contradict a previous, internal town audit that said the project saved taxpayers at least $125,000.

DiNapoli said the project "gives new meaning to 'clubhouse politics.' "

"Town government should be working for the people, not the private clubs they belong to," DiNapoli said in a statement.

The controversy stems from the dumping of some 2,600 tons of spoils that accumulated in the town highway yard after storms.

It was trucked to the club's property at the end of the Willoughby Drive.

Town workers eventually spent 700 hours at the site between Aug. 16 and Sept. 7, starting work four days before the contract was even signed, auditors found.

Officials had contended it saved taxpayers money by avoiding more costly disposal methods.

But the state identified at least three cheaper ways -- including paying a private contractor to haul it off at a cost of about $6,100 or dumping it in the town landfill for $27,000.

The audit faults lax oversight by the Town Board, which never approved the project, and supervisors within the highway department.

Two officials who also were members of the club -- former Town Board member Ulderic Boisvert and former Town Attorney Arnis Zilgme -- should have publicly disclosed their interest, the report said.

Both said the audit, released after a draft had been obtained by the Times Union, overstates their involvement.

A major disagreement between the two audits is whether the town landfill would have had to charge the highway department for dumping.

Former town officials said the charge would have been necessary, at a cost of $132,600.

But state auditors said the charge is not required.

Beyond dumping the spoils, the town did $20,000 worth of "major capital improvements" at the club, work described only vaguely in a one-page contract and which, according to the state, far exceeded any benefit to taxpayers.

DiNapoli's office said the project cost $48,000 -- not including $38,000 in roadway materials that the town may not have needed to buy if the project had not been done and between $15,000 and $30,000 in federal money missed by not using the landfill.

Heather Orth, a spokeswoman for Albany County District Attorney David Soares, said the investigation into whether any laws were broken continues.

Soares and DiNapoli, both Democrats, announced their joint inquiry three weeks before the November election that ended eight decades of Republican rule in Colonie.

Their inquiry came on the heels of the town audit, which found no wrongdoing but said the project should have come before the Town Board.

"We never accepted those findings," said Supervisor Paula Mahan, a Democrat who took office in January.

Boisvert questioned the figures in the state audit and said it overstates his role in brokering the project.

"I was never, ever at any time involved in the contract," Boisvert said.

He said the public works department approached him after failing to find someplace to dump the material and that he acted as go-between, pitching the idea as a town official.

"Everybody knew I was a member," Boisvert said, adding the club initially rejected the idea.

Once it agreed, "all I did at that point is call the highway department and say, 'They're interested, you guys work out the particulars.' "

Boisvert said the audit reeked of politics.

Zilgme said the contract never went through his office and that he was out of town the night club members approved the deal.

Former Supervisor Mary Brizzell repeated the town's findings that the project should have had more oversight.

Brizzell stressed that she was never told about the project until weeks after it began.

"If I had known that they were even contemplating doing this, I never would have allowed it to happen, just because of the perception," said Brizzell, a Republican.

"And I stand by that."

Carleo-Evangelist can be reached at 454-5445 or by e-mail at jcarleo-evangelist@ timesunion.com.

"Lawsuit to halt mining rejected - Judge dismisses Nassau claims that plan was not properly reviewed by DEC"

By BOB GARDINIER, Staff writer, Albany, New York Times Union

First published: Thursday, June 19, 2008

NASSAU -- A state judge has dismissed a lawsuit brought by the town to try to stop a hard rock mine proposed by Troy Sand & Gravel.

In May 2007, the state Department of Environmental Conservation authorized a permit allowing the West Sand Lake-based company to mine graywacke stone from 89 acres on a hill off Route 66 near Pikes Pond.

Three months later the town sued DEC and Troy Sand & Gravel, trying to negate the permit by arguing DEC did not take the necessary "hard look" at the project's environmental impacts.

The hard stone is prized in its crushed form for paving state highways.

State Supreme Court Justice Michael C. Lynch of Albany, however, ruled June 12 in DEC's favor.

DEC did take a hard look at impacts at the rural site, including truck traffic, noise, operating hours, visual impacts, blasting, air quality, dust control, surface and subsurface water impacts and community character and zoning issues, the court ruled.

Town Supervisor David Fleming, one of those leading the five-year fight to stop the mine, said the town hasn't yet decided to appeal.

"We have our counsel looking at the decision right now and the Town Board will take up the issue at its next meeting," Fleming said.

"There are more substantial legal issues that still have to be decided in this case and this is just one skirmish in the battle."

No mining has been started at the site because the town refuses to grant the company a required local permit.

Town officials earlier this year also adopted a new comprehensive zoning law that includes a ban on commercial mining they hope may prevent the mine.

Troy Sand & Gravel now has pending lawsuits against the town, arguing among other things that the state permit supersedes local authority.

The company also claims the new zoning would not apply to the proposal because the gravel company's original application preceded the new zoning by five years and may be "grandfathered" in under legal precedents.

Company owner Jude Clemente called the ruling significant but voiced frustration with the time and large amount of money his company has been forced to spend during the fight.

"Many of the elected officials fighting this live in the area of the mine and are using taxpayers' money in their own efforts to keep the mine out of their backyards," Clemente said.

"This is a very remote site and it is likely people will not even know its there."

Fleming said the fight will continue.

"I'll not respond to the personal attacks and political machinations of Mr. Clemente and I remain confident the court will side with the town and its desire to keep its rural character," Fleming said.

Gardinier can be reached at 454-5696 or by e-mail at bgardinier@timesunion.com.

"State workers swapped silence for severance - 19 Power Authority employees signed rare nondisclosure deals in resigning from embattled utility over the years"

By NICHOLAS CONFESSORE, New York Times

First published: Sunday, June 22, 2008

ALBANY -- At least 19 employees who have resigned in recent years from the New York Power Authority, the sprawling and politically powerful state-owned utility, were required to keep secret the circumstances of their departures in order to obtain severance pay or benefits, according to a review by The New York Times.

The nondisclosure provisions -- which are highly unusual for public entities like state agencies and authorities -- bar the former employees from speaking about the circumstances of their departure or even disclosing the existence of the agreements.

The power authority and a former top official, Daniel Wiese, are under intense scrutiny at the same time as Attorney General Andrew Cuomo investigates allegations that State Police were used to gather damaging information about elected officials.

Wiese, a former State Police colonel, served as inspector general of the authority from 2003 until he was fired last month, and remained an adviser to the State Police while working for the authority.

A close friend and ally of former Govs. Eliot Spitzer and George E. Pataki, Wiese has denied any wrongdoing and has disputed suggestions that he or other State Police officials engaged in political skullduggery.

The nondisclosure language was included in severance agreements dating back at least 10 years, all of them crafted by the authority's counsels, and a wide variety of employees, from engineers to a former president, signed them.

The agreements, provided by the authority under a state Freedom of Information Law request, gave the former employees a few weeks or months of pay, or lump-sum settlements, which ranged from $11,728 to $286,397, and other benefits.

At least some of the 19 employees required to sign the agreements had clashed with Wiese, according to interviews with former and current authority employees.

Moreover, some former employees described Wiese as using the kind of tactics against authority employees that some elected officials have accused the State Police of using against them, allegations that Cuomo is investigating.

Among the employees who signed the agreements, for example, was J. Timothy Quranda, who worked as an executive speechwriter for 20 years until leaving in January.

In April, Cuomo's office received a letter from Quranda's wife, Feng Chu Quranda, accusing Wiese of beginning an improper investigation to find information with which to justify firing Quranda, including stationing a State Police car outside the couple's home in Queens on days when Quranda called in sick.

Wiese declined to discuss the severance agreements or respond to the allegations.

But his lawyer, Kevin J. Kitson, issued a statement saying said that Wiese had behaved professionally.

Some of Wiese's former colleagues said he brought heightened professionalism to oversight of the authority's offices and power plants, introducing stringent new security requirements that were needed after the terror attacks of Sept. 11, 2001.

They also said he was instrumental in tightening up enforcement of the authority's policies on travel, expenses and contracting.

The nondisclosure agreements covered only a small number of the hundreds of people who have left the authority in the last decade.

"On rare occasions, after undertaking a litigation risk assessment of actual or potential disputes arising out of an employee's employment, or departure from employment, the power authority has offered an employee the opportunity to enter into a separation agreement," the authority's spokeswoman, Christine Pritchard, said in a statement.

"The separation agreement may contain a narrowly drafted confidentiality clause designed to protect the privacy interests of both parties."

Inquiries at eight other major authorities in the state revealed only two others, the Metropolitan Transportation Authority and New York State Housing Finance Agency, that have included similar language in severance agreements.

The Times tried to contact all of the people who the power authority said had signed the agreements.

Some of those people did not return repeated calls, while others declined to comment for this article on the reasons for their departures from the authority.

A spokesman for the housing agency said that such agreements had been used fewer than a half-dozen times in the last 10 years.

A spokesman for the transportation authority said that nondisclosure language was used only rarely and that a precise tally was not immediately available.

The power authority agreements are likely to renew concerns about the state's public authorities, which some government watchdogs have complained operate with excessive secrecy and limited accountability.

The power authority has long faced criticism of its management and practices, from overly generous salaries to its ownership of a private airplane.

Some experts said that the nondisclosure agreements run counter to the presumption in state law that public employees are free to speak about the function and conduct of government agencies.

They said that that presumption would also extend to authorities, which are created and overseen by elected officials to provide public services.

"I think that it would be unusual, No. 1, and No. 2, probably unenforceable," said Robert J. Freeman, executive director of the State Committee on Open Government, which oversees the implementation of New York's Freedom of Information Laws.

Pritchard said that the confidentiality language was not meant to silence whistle-blowers or prevent criticism of the authority by former employees.

"The separation agreements, as a rule, do not prohibit the employee from discussing aspects of his or her work or experiences at the authority other than the settlement and its terms," she said.

But Assemblyman Richard L. Brodsky, a Westchester Democrat, said that he believed the language in the power authority's severance agreements was so broad that it would prevent former employees from speaking openly about any mismanagement or corruption they witnessed while on the job, even if it was unrelated to their termination.

"There is no public interest in muzzling people who may have witnessed wrongdoing as a condition of their retirement," Brodsky said.

Since learning of the nondisclosure agreements from The Times, Brodsky and state Sen. John J. Flanagan, a Long Island Republican, have introduced legislation to outlaw their use by the state's public authorities.

Seven of the severance agreements predated Wiese's tenure at the authority.

For example, severance agreements with nondisclosure provisions were signed in 1997 by Robert G. Schoenberger, a former president, and Charles M. Pratt, a former general counsel.

Both served at the authority under Gov. Mario M. Cuomo, a Democrat, and left during Pataki's first term.

But former and current employees identified others who signed the agreements as people who had clashed with Wiese, who was installed at the authority in 2003 the day after he retired from the State Police, where he ran Pataki's security detail.

To critics, Wiese's arrival merely bolstered the authority's reputation as a den of political intrigue and patronage.

Some of those individuals, who spoke on the condition of anonymity out of fear of retribution from Wiese, said that he was eager to dig up damaging information on anyone who angered him or collided with his allies at the authority.

A former senior official at the agency praised Wiese's work on improving power plant security, but said, "He liked to get something on everybody."

"In the bureaucracy, it's always good to have something on somebody else."

TALK ABOUT MISLEADING HEADLINES IN THE NEWSPAPERS, ALRIGHT ....

THIS PROGRAM ISN'T INTENDED TO SAVE FORECLOSED HOMES ...

IT IS INTENDED TO SAVE THE BANKING INDUSTRY TIME AND MONEY IN FORECLOSING ON THEM ....

And so ...

"NY courts create program to try to save foreclosed homes"

By SAMUEL MAULL, Associated Press

Last updated: 5:03 p.m., Wednesday, June 18, 2008

NEW YORK -- In response to "crisis" numbers of mortgage foreclosures in New York state, the court system is creating a program to reduce the time, expense and potential losses involved in the process, the state's chief judge said Wednesday.

Judge Judith S. Kaye said that since January 2005, foreclosure filings have increased 150 percent statewide from 15,599 to 38,807 and are likely to rise at least another 40 percent in 2008.

She said 90 percent of filings end with people losing their homes.

"New Yorkers are losing their homes in record numbers," the chief judge said, describing how some neighborhoods have been ravaged by the wave of foreclosures.

"Like so many other problems in our society, the courts end up dealing with the fallout."

Kaye said legislative and regulatory reform was beyond the judiciary's reach, but that the court's Residential Foreclosure Program will serve as a king of mediation service, letting homebuyers know about legal and mortgage counseling services available to them.

Up until now, the courts' role in foreclosures has been chiefly to issue judgments of mortgage default in cases brought by lenders.

Under the program, two notices will go to the homeowner: one from the lender as part of the summons and complaint to the borrower, and the second from the court when the lender files a special foreclosure request for judicial intervention.

The homeowner will receive a brief, easy-to-read court notice with information about the legal and mortgage counselors' services whenever foreclosure begins.

The court system will assign specially trained court personnel to run court departments specifically designed to implement the new program.

With the aid of case managers, they will schedule conferences and provide other support.

Case information will be available online.

The homeowners and lenders will have a chance to attend early court conferences to explore settlement possibilities without further court action.

Court personnel will get involved only at the parties' request.

Even if a settlement is not reached, the conference can help the parties develop a plan to streamline proceedings and avoid unnecessary delays.

Kaye said streamlining could cut the foreclosure process from 18 months to three.

Michael P. Smith, president of the New York Bankers Association, joined Kaye at her news conference and praised the program, saying, "We believe we can develop a model we can export to other court systems."

The program will begin in Queens in the fall and move to other counties later.

According to Kaye's office, the two hardest hit counties in the state in 2008 are likely to be Suffolk on Long Island with 7,445 and Queens with 5,945.

A spokesman for Kaye's office said he knew of four other states that have mortgage foreclosure programs in their court systems -- New Jersey, Connecticut, Pennsylvania and Ohio.

"NY AG reaches pension fraud settlement with law firms"

Associated Press

Last updated: 4:03 p.m., Wednesday, June 18, 2008

ALBANY -- Lawyers and partners at two more law firms will stop collecting state pension benefits for serving public school district clients.

Attorney General Andrew Cuomo said Wednesday that members of the Girvin & Ferlazzo firm in Albany and the Hogan, Sarzynski, Lynch, Surowka & DeWind firm in Binghamton agreed to end the practice and return pension payments and accrued credits.

The lawyers didn't admit any guilt and Cuomo didn't charge them with crimes.

The arrangements have long been approved by auditors and the state Education Department, but are now being challenged by Cuomo and Comptroller Thomas DiNapoli.

With $500,000 from Girvin & Ferlazzo and $100,000 from the Hogan firm, law firms from Buffalo to Long Island have agreed to pay $900,000 and rescind pension credits as part of the investigation.

Cuomo said M. Cornelia Cahill, a lawyer who was a partner in the Girvin firm and didn't settle, could face further investigation.

She is married to state Court of Claims Presiding Judge Richard Sise, whose court hears lawsuits against the state.

Cuomo says she was listed as a school employee but never worked on labor matters, the service for which she was listed.

Cahill, a public finance attorney representing schools and governments, didn't immediately respond to a request for comment.

The state Senate plans to introduce a bill Wednesday that would outlaw public pension benefits for contracted private sector professionals.

Cuomo spokesman John Milgrim said Cuomo is working on a compromise between the Senate and Assembly that could be voted on by the scheduled end of the legislative session next week.

JOE BRUNO WANTS ONLY "RUBBER-STAMPS" IN NEW YORK STATE WHO WILL DO WHAT HE WANTS THEM TO DO AND SAY WHAT HE WANTS THEM TO SAY FOR THESE ROGUES AND THUGS THAT JOE BRUNO REPRESENTS AND DOES HIS DEALS WITH ....

"Bruno: Fire judge in Iberdrola ruling - Top Republican blasts decision; says $4.5B utility deal helps state"

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

First published: Wednesday, June 18, 2008

ALBANY -- State Senate Majority Leader Joseph L. Bruno said Tuesday that if it was up to him, he would fire the administrative law judge overseeing Iberdrola SA's $4.5 billion acquisition of Energy East Corp.

Judge Rafael Epstein issued a decision in the case Monday, saying the deal shouldn't be approved by the five-member Public Service Commission without certain conditions, including limiting where Iberdrola can build wind farms in the state.

Epstein also suggested the PSC require Iberdrola to set aside $646 million in benefits for New York consumers.

In remarks made Tuesday on Talk 1300 AM during New York Post political writer Fred Dicker's daily radio show, Bruno said the judge's decision, which is not binding, is bad for business in the state and bad for its renewable energy goals.

"That administrative judge -- I don't know who that person is -- they have a right to their own opinion," Bruno said.

"But that person ought to be dismissed."

"That's how I feel."

Energy East, based in Maine, has 1.3 million customers in upstate New York through its New York State Electric & Gas and Rochester Gas & Electric subsidiaries.

Utility mergers in the state must be approved by the PSC, and the process that leads up to that vote is much like a trial, with testimony and exhibits filed on behalf of the companies and other interested groups, such as state agencies and consumer groups.

Staff at the PSC, who advise the five commissioners on the PSC, also play a role in the proceedings.

The evidence is presented to an administrative law judge who makes his own recommendation to the commissioners on whether the merger is in the "public interest," as required under law.

The PSC commissioners don't have to follow the judge's recommendation.

Bruno spokesman Scott Reif said Tuesday the senator stands by his comments and believes the Iberdrola merger would encourage alternative energy production that would reduce gas prices and home heating fuel costs in the state.

PSC spokesman Jim Denn noted that the administrative law judge is independent by design and his role is to offer his professional opinion on the case.

"Parties in the case and the public might not always agree with that opinion, but that's what the process calls for -- an independent review of the record," he said.

Iberdrola said it is ready to walk away from the deal if it doesn't get what it wants.

The company is upset by conditions that would prohibit it from building wind farms in the NYSEG and RG&E service areas, and the more than $640 million in benefits that would have to be returned to consumers.

"Iberdrola will reconsider this transaction and seek other options in the United States if the final PSC ruling imposes unacceptable conditions on the transaction in these two key areas," a company spokesman said.

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

"More calls for PSC change - Elected officials fear agency's handling of Iberdrola proposal will limit wind development"

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

First published: Saturday, June 21, 2008

ALBANY -- A Rochester-area Democrat is joining state Senate Majority Leader Joseph L. Bruno in calling for reform of the Public Service Commission.

Assemblyman Joseph Morelle, D-Irondequoit, says he is preparing legislation to re-evaluate the role of the five-member PSC and its staff, known as the Department of Public Service.

Morelle and Bruno expressed outrage this week when an administrative law judge urged the PSC to place significant conditions on Spanish utility Iberdrola SA in its $4.5 billion acquisition of Energy East Corp.

Based in Maine, Energy East has 1.3 million customers in upstate New York through its Rochester Gas & Electric and New York State Electric & Gas subsidiaries.

The RG&E and NYSEG service area reaches from Rochester to Binghamton and to parts of the Capital Region and the North Country.

Legislative leaders from both political parties, as well as U.S. Sen. Charles Schumer, D-N.Y., have been critical of the PSC's handling of the case.

The commissioners, who are appointed by the governor, have yet to vote on the merger or even discuss it.

But as part of the proceeding, staff at the Department of Public Service have opposed the merger on several grounds and called for a number of conditions to be placed on the deal.

The staff have urged PSC members to ban Iberdrola, the world's largest wind developer, from owning or building electric generation in the state.

They have also asked Iberdrola to set aside $640 million in customer benefits, although Iberdrola has only offered $200 million.

The judge overseeing the case, Rafael Epstein, recommended on Monday that the PSC ask Iberdrola for the full $640 million in customer benefits.

Epstein also wants to ban Iberdrola from owning or building power generation, including wind turbines, within the RG&E and NYSEG territories.

Bruno and others say limiting Iberdrola's wind development in the state would be foolish because Iberdrola wants to invest $2 billion in wind projects in New York over the next five years.

Gov. David Paterson, an advocate of renewable energy, has pointed out the judge's ruling is not binding.

In a statement, Paterson said he is specifically focused on Iberdrola's $2 billion wind development plan.

Paterson called the $200 million in customer benefits Iberdrola has already offered to consumers "significant" and hopes commissioners "would not let the perfect be the enemy of the good" when it comes to the final amount they request.

The PSC meets next on July 16, though a vote on the Iberdrola case hasn't yet been scheduled.

Assemblyman Morelle said in a statement he wants the "scope and authority" given to the PSC and the Department of Public Service to be examined in light of the state's deregulated energy market.

"Over the last 12 years, New York's energy industry has gone through a massive and unprecedented restructuring designed by bureaucrats without a single legislative act," he said.

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

AND FROM THE DEPARTMENT OF REALITY, WE HAVE ....

WHO IS KIDDING WHOM HERE ....

THE NEW YORK BUSINESS COUNCIL - HOT TOPICS - AUGUST 1998

"How deregulation of power utilities will affect New York State businesses"

By Kevin Lanahan

The ongoing restructuring of New York's electric utility industry is affecting the state's entire business community in many ways.

Businesses of all sizes and kinds will see many changes in how they buy and pay for power.

High energy costs: New York's electricity costs have exceeded the national average, and business has clamored for relief for more than a decade.

Extremely high taxes, misguided legislative mandates, and overreaching regulations of the past are the main reasons for New York's high electric costs.

Deregulation: In 1996, partly because of these concerns, New York's Public Service Commission (PSC) and major utilities agreed to a sweeping deregulation of the power utility industry.

The goal is to bring the benefits of competition to the market.

It was determined that true competition could be achieved if New York's investor-owned utilities first separated generation, transmission and distribution functions.

So the PSC directed utilities to sell all power generation facilities.

The first sale of a utility's generation assets happened in August.

A Virginia-based company bought six coal-fired plants from New York State Electric & Gas (NYSEG) for $950 million.

NYSEG also sold its 50 percent share in the coal-fired Homer City Electric Generating Station for $1.8 billion to Edison Mission Energy, an international firm.

Other such auctions are expected to follow.

New York utilities can themselves form holding companies and subsidiaries that may also be permitted to buy generation facilities.

In a deregulated market, utilities will still oversee transmission and distribution of power within existing service territories, with the PSC continuing to regulate these activities to ensure safety and reliability.

Generating companies will sell power to "energy service companies" that will, in turn, retail it to residential and business consumers.

The New York State Power Pool, a cooperative of the seven utilities that oversees transmission throughout the state, will be replaced by an independent system operator (ISO).

The ISO will be run by industry experts with experience in power generation, distribution and marketing, economics, consumer protection and environmental advocacy.

The ISO will work with the New York State Reliability Council to implement reliability standards and rules for the transmission system while monitoring compliance.

Market pricing: In the regulated market, utilities were sole providers of generation, transmission and marketing in their service territories.

Prices were regulated and approved by the PSC.

Ideally in the new market, both wholesale prices (what generators charge marketers) and retail prices (what marketers charge consumers) will be set by market forces.

However, the PSC consciously decided to introduce competition gradually with a deregulation plan that minimizes confusion and lets utility consumers make informed choices about their energy suppliers.

The PSC has also given utilities the opportunity to recover their "stranded costs"-past investments by utilities, often on orders from lawmakers.

The PSC recognized that many of these mandated investments of the past could not be recouped if the introduction of competition were immediate and total.

So the restructuring plan obliges new generation companies that wish to acquire generation facilities and compete in New York to add "competitive transition charges" to their bills, with revenues going to existing New York utilities to offset stranded costs.

According to the settlement agreements with the PSC, these competitive transition charges will sunset at varying times, depending on the utility.

Impact on ratepayers: How deregulation will affect ratepayers depends on the utility and the type of ratepayer.

In general, large manufacturers will enjoy the biggest rate cuts, some as much as 25 percent below current rates.

(Existing discounts through economic development incentive programs will be folded into these savings, not added to them.)

Small and medium-sized businesses and residential customers will see more marginal savings.

Next steps for The Business Council: The Council strongly supports competition in all markets and supported the deregulation plan.

But The Council will continue to urge lawmakers to address a key remaining cause of New York's higher energy costs: high energy taxes.

The Council is urging lawmakers to reduce the state's gross receipts tax on utilities and other taxes on transfers of assets between holding companies.

These taxes limit the ability of utility holding companies, and others in the new power market, to make prudent capital investments and further reduce the cost of electricity in New York State.

Kevin Lanahan is The Council's legislative analyst specializing in energy and telecommunications. For information on the new competitive power market, call 1-888-ASK-PSC1.

http://www.bcnys.org/capital/0806kevn.htm

"Drawing state pay from a distance - Ex-tax official allowed to work from retirement home in South Carolina"

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

First published: Monday, June 23, 2008

ALBANY -- The state's former tax commissioner, who retired in January, was quietly rehired to a part-time attorney's job in the agency she headed and is telecommuting from her home near Hilton Head, S.C.

Barbara G. Billet, 58, who has worked in various state jobs for more than 20 years, headed the state Department of Taxation and Finance as acting commissioner for 14 months before retiring from the $155,000-a-year position, which is a politically appointed job.

An agency official defended the hiring last week, saying Billet is considered a valuable worker who must conform to strict telecommuting rules, and is treated like any other employee.

Billet is the only person working for the 4,700-employee agency who is allowed to telecommute entirely from home, according to Thomas Bergin, the agency's spokesman.

Two months ago, agency workers discovered Billet had rejoined the agency in March as a part-time senior attorney in a job that pays about $30,000 a year.

Billet created the position, which had been vacant before her appointment, at a time when she was head of the agency, employees said.

Bergin disputed that account and said Billet's position was created in 1987, and that she was simply reinstated to a post she held years ago before becoming commissioner.

A member of the Public Employees Federation (PEF) familiar with the unprecedented job arrangement contends the state Inspector General's office declined a request to fully investigate the matter when the union filed a complaint on April 12.

The complaint was instead referred to the Department of Taxation and Finance's own deputy inspector general, who found nothing wrong with Billet's job arrangement.

The unusual setup enables Billet to collect a state salary while living nearly 1,000 miles from the agency's Albany headquarters.

Yet the job is a civil service position that was never posted for others to apply, according to the spokesman.

"I do telecommute from here," Billet said Friday in a telephone interview from her home in Beaufort, S.C.

"I've got a special project I'm working on with one of the offices and I have lots of work to show for it."

Records show Billet collects a pension of $49,349 annually on top of her part-time salary.

Billet, a former attorney with the Albany firm O'Connell & Aronowitz, was appointed deputy solicitor general by former Gov. George Pataki.

She then became solicitor general before heading the Moreland Act Commission that investigated New York City schools.

Pataki appointed Billet as acting tax commissioner in November 2006, after she had been with the agency for six years.

Billet holds a South Carolina driver's license, where she is a full-time resident, records show.

She is not listed in telephone or e-mail directories on file with the state tax department, according to people who work there.

"Nobody knew about this little perk that she walked out the door with," said a state employee familiar with the matter.

The employee, who is not authorized to discuss the matter publicly, said the deal allegedly was approved by the office of former Gov. Eliot Spitzer, who kept Billet as acting tax commissioner for more than a year despite her ties to the Pataki administration.

Billet's new job is part of a project she created that's known as "Clear Language Initiative."

It measures the savings and revenues generated by having technical tax codes transformed into directives that taxpayers can more easily understand, Billet said.

"She brings a level of skill and experience here that's unusual for a program like this," said Bergin, the agency spokesman.

"We think we're getting tremendous value in return."

Billet works about 15 hours a week and submits time and attendance cards, he said.

"There was an initiative in the state of Washington that gave me the idea," Billet said of the program she's working on.

"I created an office, set it up; it's a very small office ... (and) I sort of have a passion for it."

"I started it."

Of the telecommuting arrangement, she said the sprawling agency has "people all over the country that are out auditing so it's nothing unique to me."

Indeed, the agency has a field office in Chicago and its auditors routinely travel the nation.

Billet's position does not involve travel.

The agency has strict policies that sharply regulate the amount of time employees may telecommute and who is allowed to do it.

In general, employees said, they cannot work more than a handful of days per month from home, and only with prior approval from a supervisor, according to people who work for the agency.

There are 638 employees who are allowed to telecommute, but only some of the time, Bergin said.

Civil service workers in New York have sought broader telecommuting privileges, but have met resistance from agency heads.

Darcy Wells, a spokeswoman for PEF, said there are many workers who have "valid reasons" to apply for telecommuting privileges and are denied.

"We do take issue with political appointees who manipulate the civil service system for the purpose of job security during the change of administration, which appears to be the case here," Wells said.

"These types of appointments undermine the merit and fitness system, and that offends our membership."

Billet's part-time salary is based on a 40 percent work week in a job that normally pays about $80,000 a year.

The part-time salary is low enough that she may continue collecting her pension without a waiver, according to state officials.

The part-time status also kept Billet's name off quarterly payroll reports that are shared with the union that monitors the agency's employment records.

Union officials said they learned about Billet's job two months ago after seeing her name listed as receiving a $1,000 "longevity bonus" in a separate payroll report on file with the state comptroller's office.

In response, PEF officials filed a complaint with the state Inspector General on April 12 requesting that the situation be investigated as a potential "no-show" job.

Union officials said not long after their complaint was filed the state tax department put out an internal notice to employees -- on June 12 -- formally announcing the project and Billet's re-employment.

J. Lyons can be reached at 454-5547 or by e-mail at blyons@timesunion.com.

Profile Barbara G. Billet, 58, retired as New York's acting tax commissioner, then began part-time work as the agency's only telecommuter: Years of state service: 20.5 Top state salary: $150,553 Current pension: $49,349 Present salary: $31,736 (est.)

Source: New York state public records.

"Time short for tax cap - Despite support from voters, Paterson and many lawmakers facing election, clock likely to expire this session"

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

First published: Monday, June 23, 2008

ALBANY -- Despite earlier predictions that Gov. David Paterson's plan to cap school property taxes was "dead on arrival," state Senate leaders over the weekend were looking seriously at the measure and may take it up today before leaving on summer break.

As a compromise, Paterson and senators were looking at a "sunset" provision that would allow a cap to be revisited in a year or two if it were to become law.

Still, a cap would have to get through the Assembly, which is unlikely to happen during this legislative session given Democratic Speaker Sheldon Silver's opposition to a cap without other measures such as a "circuit breaker," which would provide tax breaks to homeowners and guarantees the state would make up any shortfalls to local school districts.

Paterson, though, has suggested he would bring lawmakers back during the summer or fall to reconsider a cap if it doesn't pass.

Assembly Democrats, who hold a 106-42 seat majority, are under less political pressure to pass the cap than Senate Republicans, who are fighting to maintain their 32-30 majority.

Senators late Sunday were also looking at passing a two-year freeze on property tax assessments, which determine a home's taxable value.

That would be a "companion" bill to the governor's tax cap.

The progress of Paterson's cap in the Senate would ultimately be a matter of political expediency.

By late last week, in the wake of a Siena Research Institute poll showing 74 percent of New Yorkers favor a cap, candidates seeking to unseat incumbent lawmakers in November had seized on the idea -- which was initially met with silence in the Legislature.

"A lot of Republican challengers have come out early in favor of a tax cap," said Matt Mahoney, executive director of the state Senate Republican Campaign Committee.

"The tax cap will be a big issue," agreed John Murtaugh, a Republican challenging Democratic Sen. Andrea Stewart Cousins in the 35th District, which includes much of Yonkers.

Many contested Senate seats are upstate and on Long Island where soaring school property taxes are a major complaint.

And Democratic challengers -- including Brian Foley, Kristen McElroy -- have been quick to embrace the issue.

Gioia Shebar, an Ulster County tax activist, said she believes there is growing sentiment to oust incumbents who are seen as obstructionist.

Her group, known as Tax Nightmare, is joining other organizations to consider starting a political action committee that would support candidates running on the tax cap issue.

"We've got a movement," she said.

The most recent tax cap concept arose from a study headed by Nassau County Executive Tom Suozzi, a former gubernatorial candidate.

The study found that there are a number of ways to ease the state's property tax burden, which is 79 percent above the national average.

But the signature idea was to cap the annual growth in school taxes at 4 percent or 120 percent of the Consumer Price Index, whichever is less.

The plan also has provisions for voters to override the cap and for districts to bank unused increases.

Much of the opposition has come from New York State United Teachers, the statewide teachers' union, whose half-million-plus members and significant campaign contributions carry a lot of influence in the Senate and Assembly.

NYSUT and other members of the education lobby say a cap could hurt some poor school districts.

They also worry it could link school funding too closely to state tax revenue, which fluctuates with the economy.

Among other alternatives, NYSUT last week was pushing for a closer look at cost-saving measures, such as consolidations of services, before capping taxes.

"We're talking to the Senate on redundant costs and inefficiencies," said Steve Allinger, NYSUT's legislative director.

NYSUT has focused on the Senate in the waning days of the session given Silver's opposition to a cap.

Assembly Democrats also have floated the idea of raising income taxes on the wealthy as a way to help fund schools.

Whether lawmakers can work out a deal in a day remains uncertain, although the Assembly is expected to be in town at least one more day, according to Majority Leader Ron Canestrari, D-Cohoes.

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

"Utility bill surcharge to increase"

Albany, New York Times Union

First published: Monday, June 23, 2008

Utility bills are going up, thanks to the PSC.

The Public Service Commission agreed last week to have utility companies start collecting $172 million more a year for a "systems benefit charge," about twice what they now take in.

That cost, passed on to customers, will add 16 to 30 cents a month to homeowner bills, the PSC estimates.

Two years ago, lawmakers and then-Gov. George Pataki battled over the money from the charge, which critics say is a hidden tax over which the Legislature has no say.

Pataki vetoed a bill to seize the money for the general fund.

Environmental groups hailed the latest increase, and the PSC says the money will eventually come back to consumers by helping to fund energy efficiency programs aimed at a projected 15 percent reduction in energy usage by 2015.

The fine print

The law that rescued New York City Off-Track Betting Corp. comes with an unusual provision that allows the board of directors to meet in secret for two months.

Deep in the bill signed Tuesday by Gov. David Paterson is a passage that lets the board disregard open government laws.

It says the board may meet in executive session, including by telephone, on an emergency basis "without notice at any time" until Aug. 1, 2008.

"I don't know that it's necessary."

"It always bothers me when there's an aberration from the general rule," said Robert Freeman, executive director of the Committee on Open Government.

Most public bodies must meet openly and notify the public of the time and location.

Executive sessions require a public vote on a motion based on a limited set of legal reasons, such as talking about litigation or firing someone.

Staffers for Sen. William Larkin and Assemblyman Gary Pretlow did not know why the clause was inserted and said the proposals came from the governor's office.

Paterson's spokesman also did not have an answer.

Contributors: State editor Jay Jochnowitz and Capitol bureau reporter James M. Odato. Got a tip? Call 454-5424 or e-mail jjochnowitz@timesunion.com.

"Bruno won't seek reelection - Majority leader tells colleagues he's retiring"

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

Last updated: 6:28 p.m., Monday, June 23, 2008

ALBANY -- Senate Majority Leader Joseph Bruno told fellow Republican senators a short time ago that he will not seek reelection, according to Republican sources.

The senator and his conference have been behind closed doors at the Capitol.

The senatorial order shall be a model for the other sections of the citizen body.

If we achieve this, we shall have achieved everything.

The state, as a whole, is constantly corrupted when its leading men display evil ambitions and vicious behavior.

It is bad enough that leading figures in the state should do wrong.

But what is much more damaging is that there are so very many people who want to follow their example.

Recollect what happened in Rome's early history, and you will see that the character of our leading citizens was what moulded the shape of the entire community.

Whatever alterations occurred in the life-styles of the leading men were reflected in the lives of the whole population.

For that reason, national leaders who act improperly present a particular danger to the state, not only because of the undesirable practices in which they themselves indulge, but because they themselves infect the whole community with this poison - not only, that is to say, because they are corrupt, but because they corrupt others.

The examples they set to others do more harm than the bad things that they themselves are doing.

This law applies to the whole senatorial order.

Yet it can also be considerably narrowed down.

What I mean is that the capacity either to corrupt the morals of the nation or to improve them rests, actually, with only a few people, in fact, very few indeed, because of the lofty positions or reputations that they enjoy.

- Cicero, ON LAWS, translation by Michael Grant

"Bruno won't seek reelection - Majority leader tells colleagues he's retiring"

By JAMES M. ODATO , Capitol bureau, and JAY JOCHNOWITZ, State editor, Albany, New York Times Union

Last updated: 7:45 p.m., Monday, June 23, 2008

ALBANY -- Senate Majority Leader Joseph Bruno will not seek re-election, the Brunswick Republican confirmed this evening.

Bruno's decision will end a more than three-decade career that led him to become one of the most powerful men in state government, and the defacto leader of the state Republican Party.

Insiders say Assemblyman Roy McDonald, R-Wilton, is Bruno's preferred replacement for his Senate seat, although Rensselaer County Executive Kathleen Jimino is said to be interested, too.

It also means a seat that had been considered a safe one for Republicans will not necessarily be a sure thing this fall.

With all New York lawmakers' two-year terms ending in December, Republicans are defending their narrow 32-30 majority in the Senate, the party's last stronghold in state government.

Democrats now hold the governor's post and dominate the Assembly by a 106-42 margin.

Should Bruno, 79, be followed by other older senators into retirement, the GOP would lose the power of incumbency in even more districts, further threatening the party's control of the chamber.

Who leads the Senate Republican conference next year was yet to be known.

Dean Skelos, R-Rockville the current deputy majority leader for legislative operations, has long been considered one of the most likely successors, but upstate Republicans may argue that a conference leader should come from what has traditionally been the party's base.

Bruno and his conference were meeting behind closed doors since late afteroon.

In a statement from his office, Bruno said that "After 32 years in office, I have decided that it is time to move on with my life and to give my constituents an opportunity for new representation and my colleagues in the Senate who have supported me, an opportunity for new leadership."

He also mused on his his time in public office, describing boths ups and downs.

"Public service has been a blessing for which I will be ever grateful."

"I have had the opportunity to work for and with hundreds of proud, distinguished New Yorkers."

"I have viewed my work not as a job, but as a privilege to come here day in and day out and stand up for the people of Rensselaer and Saratoga counties and stand up for the hardworking people I have come to know over the years."

He also called politics "a tough ball game."

"Tougher now than it has ever been."

Bruno said he was moving on "with a heavy heart, but an optimistic soul."

Bruno had earlier told his Republican conference and Democratic Gov. David Paterson of his decision.

Speaking with reporters, Paterson said he had no indication that Bruno's decision was connected to an ongoing FBI probe of the senator.

"He's a class act."

"He's a wonderful person."

"When he chooses the time, that time is fine," said Paterson, who was Democratic minority leader in the Senate before being elected lieutenant governor in 2006 on a ticket with Eliot Spitzer.

"It's a sad say for Albany, and for me."

Attorney General Andrew Cuomo concluded Bruno did nothing wrong under the state's lax travel rules, which were subsequently tightened.

Cuomo faulted Spitzer's aides for involving State Police in a political matter.

Bruno and Spitzer feuded for months as new information came to light on Spitzer's involvement in the records' release, and a report by District Attorney David Soares challenged Spitzer's claims that he didn't know about it.

Spitzer resigned in March after his involvement with a high-priced prostitute was revealed.

Bruno has had a quieter relationship with Paterson, the lieutanant governor who succeeded Spitzer.

"NY Senate leader Joseph Bruno won't run again"

By MICHAEL GORMLEY, Associated Press

Last updated: 7:12 p.m., Monday, June 23, 2008

ALBANY -- Senate Majority Leader Joseph Bruno, who has run the Republican chamber for more than a dozen years, confirmed Monday that he won't seek re-election in the fall.

The 79-year-old Bruno, considered the oldest serving state legislative leader in the country, has been the state's top Republican since 2006.

Several Republican senators some of whom could seek the powerful majority leader's job, refused to comment on Bruno's decision, announced in a closed-door session on the last scheduled day of the 2008 legislative session.

Bruno has been under an FBI investigation for more than a year which appears to be looking at his business associates outside of state government.

Bruno's wife, Barbara, died in January.

They had been married more than 50 years.

"Today, I met with my Republican colleagues in the Senate and informed them that I will not be running for re-election this November," Bruno said in a prepared statement.

"After 32 years in office, I have decided that it is time to move on with my life and to give my constituents an opportunity for new representation and my colleagues in the Senate who have supported me, an opportunity for new leadership."

Bruno said he was grateful and felt blessed to be in his role so long.

"I have viewed my work not as a job, but as a privilege to come here day in and day out and stand up for the people of Rensselaer and Saratoga counties and stand up for the hardworking people I have come to know over the years," Bruno stated.

"Politics is a tough ball game."

"Tougher now than it has ever been."

"But after 32 years of many successes and a few failures, I know now more than ever, and I can say that with comfort and confidence, there is no calling greater than that of public service," Bruno stated.

Gov. David Paterson, a Harlem Democrat who has long had a close relationship with the upstate Republican, told reporters outside the Senate conference room that Bruno wants to pursue other interests in life.

"I think that it is, in some ways, a sad day for Albany and for me who would like to feel that I have a friendship with him outside of government," Paterson said.

Paterson said he didn't know if the decision had anything to do with the FBI investigation.

Paterson said he's unsure when Bruno would step down as majority leader.

Bruno's term ends Dec. 31.

------

AP Writer Valerie Bauman contributed to this report from Albany.

"Bruno will exit arena - After 32 years in Senate, majority leader says he won't seek re-election"

By JAY JOCHNOWITZ, State editor, Albany, New York Times Union

First published: Tuesday, June 24, 2008

ALBANY -- Senate Majority Leader Joseph L. Bruno will leave office at year's end, adding to the shake-up at the top echelons of state government.

The Brunswick Republican stunned allies and colleagues Monday, confirming he will not run for re-election after a 32-year Senate career.

The de facto leader of the state Republican Party, Bruno has already set in motion a plan to pass the power to Sen. Dean Skelos, R-Rockville Centre, GOP insiders said.

When he will do so is unclear, although one senator, Thomas Morahan, R-Rockland County, said a vote today on replacing Bruno is expected, with the winner filling out his term as majority leader.

Bruno is expected to make a public announcement today about his decision and Skelos, according to a Senate official and a Republican operative briefed on the plans.

Sen. Thomas Libous of Binghamton, who has also been keen on becoming majority leader, will replace Skelos as deputy majority leader, a GOP official said.

Bruno becomes the third high-ranking state official to unexpectedly leave office in the past two years.

Democratic Comptroller Alan Hevesi left office in 2006, and Democratic Gov. Eliot Spitzer resigned earlier this year.

Few people seemed to know of Bruno's intentions.

"He called us in right before he told his members," said Edward Lurie, Bruno's former political director, referring to top staffers.

Assemblyman Roy McDonald, R-Wilton, would be Bruno's preferred replacement for his Senate seat, GOP officials said.

McDonald said he is "very much interested."

Rensselaer County Executive Kathleen Jimino had also been interested.

Bruno's seat, representing Rensselaer County and much of Saratoga County, had been considered a safe one for Republicans.

The race for the 43rd Senate district may be competitive for the first time in decades.

Bruno departs at one of the toughest points in his career, with a two-year-old FBI investigation of his business dealings hanging over his head and a recent push by federal investigators for more and more documentation.

Already, the probe has led to Bruno breaking off a more than 10-year job with a Connecticut investment firm, Wright Investors Service.

The FBI has looked into Wright securing contracts to invest New York labor union pension and benefit funds.

The senator had also been under heavy scrutiny for his use of state resources, including planes.

He spent months last year and early this year in a bitter battle with former Gov. Eliot Spitzer.

In January he became a widower when his wife, Barbara, succumbed to Alzheimer's disease.

Political problems have added to the burden.

With all New York lawmakers' two-year terms ending in December, Republicans are defending a 32-30 majority in the Senate, the party's last stronghold in state government.

The GOP has had setbacks, including a Democratic victory in a GOP-dominated North Country district in a special election in February.

Democrats now hold the governor's post and dominate the Assembly by a 106-42 margin.

Should Bruno, 79, be followed by other older senators into retirement, the GOP would lose the power of incumbency in even more districts, further threatening the party's control of the chamber.

However, a Senate source said all the GOP incumbents who had planned to run this year promised to campaign for re-election despite Bruno's departure.

Bruno met for almost two hours with his Republican colleagues behind closed doors but declined to face about 50 reporters and television crews.

An aide said Bruno would say more today.

The mood in the meeting, Morahan said, "was like a wake."

His colleagues in politics paid tribute to Bruno.

"Joe Bruno's leadership helped transform New York State and he will forever be remembered as a true statesman who always put the best interests of good government and the people he served first, foremost and always," said James Tedisco, the Republican Assembly minority leader.

Bruno released a statement as word spread of his decision.

A source familiar with his plans said he will be taking a vacation to Italy soon, although the senator told reporters earlier in the day to expect the Senate to return to Albany in July.

Bruno said in the statement he was ready "to move on with my life and to give my constituents an opportunity for new representation and my colleagues in the Senate who have supported me, an opportunity for new leadership."

He also mused on his time in public office, describing both ups and downs.

"Public service has been a blessing for which I will be ever grateful...I have viewed my work not as a job, but as a privilege to come here day in and day out and stand up for the people of Rensselaer and Saratoga counties and stand up for the hardworking people I have come to know over the years."

He also called politics "a tough ball game."

"Tougher now than it has ever been."

Bruno said he was moving on "with a heavy heart, but an optimistic soul."

Gov. David Paterson said he had no indication that Bruno's decision was connected to the ongoing FBI probe of the senator's business dealings.

"He's a class act."

"He's a wonderful person," said Paterson, who was Democratic minority leader in the Senate before being elected lieutenant governor in 2006 on a ticket with Eliot Spitzer.

"It's a sad day for Albany, and for me."

State Democratic Chairwoman June O'Neill suggested Bruno left because of doubts about the GOP's prospects in the Senate races.

"There is no better gambler in this business than Joe Bruno, but ... Joe Bruno looked across the table and saw we had a royal flush ..."

"We'll be curious to see who else decides to join him in the retired legislators section at the Saratoga Racetrack."

Bruno arrived in the Senate after winning a seat in 1976.

He rose to majority leader in late 1994 after he toppled the sitting leader at the same time that Republican George Pataki became governor.

Pataki, in a statement, said Bruno possessed passion and dedication that is rare in public life.

Assembly Speaker Sheldon Silver, D-Manhattan, said the senator's "no nonsense manner and spontaneous wit will certainly be missed in the Capitol."

Union staffers Irene Jay Liu and Kenneth Crowe contributed. James M. Odato can be reached at 454-5083 or by e-mail at jodato@timesunion.com

THE NEW YORK DAILY NEWS

"Senate GOP Leader Joe Bruno won't seek another Albany term"

BY KENNETH LOVETT and ELIZABETH BENJAMIN, DAILY NEWS STAFF WRITERS

Monday, June 23rd 2008, 11:06 PM

ALBANY - In an announcement both unexpected and stunning, the state's highest-ranking Republican, Senate Majority Leader Joseph Bruno, said Monday he will not seek reelection.

Bruno, 79, of upstate Rensselaer County, is expected to give up his leadership post Tuesday, a variety of sources said.

"While there may never be a good time to make these kind of life decisions, I have decided that it is time for me to move on with my life," Bruno said.

"I do so with a heavy heart but an optimistic soul."

Bruno recently lost his wife of 57 years and is the subject of an ongoing federal investigation into his outside business interests.

Just Monday, a source said, the Senate delivered 30 boxes of documents to federal investigators.

Bruno, who was treated for prostate cancer several years ago, departs at a time when the GOP has been bitterly fighting to keep control of the state Senate, where it has a 32-30 edge. Democrats control the Assembly.

Many older senators have hung in, in large part, because of Bruno, who has been Senate majority leader since 1995.

His departure could change that, which would be a benefit to Democrats, who have picked up four seats in recent years.

While calling Bruno a "dedicated public servant," state Democratic Chairwoman June O'Neill crowed that the Republican saw the writing on the wall for his majority.

"We'll be curious to see who else decides to join him in the retired legislators section at Saratoga Racetrack," she said.

The announcement came several hours after Bruno held a press conference with Gov. Paterson and Assembly Speaker Sheldon Silver to announce a host of deals to close the legislative session.

Bruno showed no signs of his pending decision, joking with both leaders but there were some signs before yesterday.

As he took the legal steps for a reelection run in recent weeks, Bruno was surprisingly coy when asked if he was running.

After meeting with Bruno later in the day, Paterson said he had an idea something was up several days ago during a private conversation with the majority leader.

"It is in some ways a sad day for Albany and for me," said Paterson, who was Senate minority leader while Bruno was majority leader.

The Democratic governor said he was not aware if the federal probe of Bruno was a factor in the decision.

"The senator wants to move on, there are other things he'd like to do," Paterson said.

"He's a class act."

Silver was also gracious in his remarks.

"Although we experienced our share of disagreements, I always recognized and appreciated the Senator's unwavering commitment to public service," said the Assembly majority leader.

Some of Bruno's members were ashen and close to tears as they left a closed-door meeting with him.

Deputy Majority Leader Dean Skelos of Long Island is expected to take Bruno's leadership slot today and Thomas Libous of Binghamton will get Skelos' deputy position, Senate sources said.

Bruno became majority leader shortly after Republican George Pataki was elected governor in 1994.

With the backing of powerful GOP leaders, he orchestrated a Thanksgiving Day coup against then-Majority Leader Ralph Marino, who campaigned with Democratic incumbent Mario Cuomo.

He started his tenure as a strong conservative but over the years, partially because of pressure from Pataki and partially because Democrats made gains in the house, he moved his members leftward.

"Senator Bruno always fought for what he believed in, tough enough to take a punch and always strong enough to land a punch," Pataki said Monday night of the former Army boxer.

While Bruno had his ups and downs with Pataki, it was all-out war with Pataki's Democratic successor, Eliot Spitzer, who was elected in 2006.

In what has become known as Troopergate, the Spitzer administration had state police compile travel records on Bruno so they could be released publicly to embarrass him.

Bruno went toe-to-toe with the tough-talking governor, accusing him of political espionage and often dismissing him as a "spoiled brat."

They battled until the day Spitzer resigned for hiring a hooker.

klovett@nydailynews.com

http://www.nydailynews.com/news/2008/06/23...nt_seek_an.html

THE NEW YORK DAILY NEWS

"Scandals plagued Joe Bruno who once claimed he had 'nothing to hide'"

By Corky Siemaszko, Daily News Staff Writer

Tuesday, June 24th 2008, 12:34 AM

New York's most powerful Republican pulled the plug on his political career in the face of a widening FBI probe into his businesses - including land deals and racehorses.

That Senate Majority Leader Joseph Bruno was under investigation was no secret - he made the bombshell announcement in December 2006 as rumors swirled.

"I have nothing to hide," he said at the time.

The FBI probe faded into the background as the Troopergate scandal erupted and the majority leader was revealed to be the target of Gov. Eliot Spitzer, whose career was about to implode over a hooker scandal.

In February, The Albany Times Union reported the feds subpoenaed labor unions that invested pieces of their pension funds with a Connecticut firm that employed Bruno as a consultant.

Bruno again denied any wrongdoing - he later told New York magazine he might have "inadvertently" done something to get himself in a jam with the feds.

"Who the hell knows if, inadvertently, there's something there, that they uncovered, that they want to accuse you of," Bruno said.

"I think, 'What the hell could they get somebody to say that I said or did?'"

"I know that's what they try and do."

The probe began when a grand jury sent out subpoenas related to Bruno's dealings with Albany-area businessman Jared (Jerry) Abbruzzese.

Abbruzzese was a principal in a high-tech company in upstate Troy to which Bruno steered $500,000 in pork-barrel grants over the past four years, sources said.

One specific subpoena was issued to a bigtime Albany lobbyist, who confirmed the FBI rousted him for records on a land deal he and his pal Bruno were involved in until last year.

There have also been reports the FBI probe had expanded to look into Bruno's horse-breeding business.

In 2004, Bruno bought two mares from developer Earle Mack for $50,000, spent $74,000 to breed them and then sold three foals at auction for $425,000.

http://www.nydailynews.com/news/2008/06/23..._once_clai.html

"Retirement won't end FBI probe - Senate has turned over boxes of records sought in Bruno inquiry"

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

First published: Wednesday, June 25, 2008

ALBANY -- An FBI investigation of former Senate Majority Leader Joseph L. Bruno is moving forward and will not be derailed by his abrupt decision to leave elected office at the end of the year, people familiar with the case said.

Bruno's announcement that he would not seek re-election comes as federal prosecutors for the Southern District of New York have visited Albany in connection with the nearly three-year-old criminal probe of Bruno's public and private business dealings, according to sources who spoke to the Times Union on condition they not be identified.

Several months ago, FBI agents from Albany met with prosecutors from the Southern District regarding the Bruno investigation, a person with knowledge of the meeting said.

The agents made an informal overture to the Manhattan-based federal prosecutors at a time when the FBI and prosecutors in New York's Northern District, under U.S. Attorney Glenn T. Suddaby, have been at odds about the handling of the Bruno investigation, which sources believe has been dogged by unnecessary delay.

Suddaby is awaiting confirmation by the U.S. Senate to a position as a federal judge in upstate New York.

He has declined to comment on the Bruno investigation.

In recent days, Boyd M. Johnson III, who leads the public corruption unit of the United States attorney's office for the Southern District, visited Albany around the time that boxes of records from the state Senate were turned over to federal authorities.

Sources close to the case said that the files had been requested by federal authorities months ago, but that the Senate delayed responding to the request.

It's unclear whether Johnson was in Albany specifically because of the Bruno records provided to the government.

The federal investigation is centered around Bruno's private consulting business, his horse breeding interests and the state's horse racing industry.

Federal grand jury subpoenas also were issued regarding Bruno's work for a Connecticut company that received tens of millions of dollars in investment dollars from New York labor unions.

Bruno, 79, abruptly resigned from that investment company in December.

The senator's Brunswick consulting company, Capital Business Consultants, also has been a focus of the probe.

Bruno has declined to identify his private consulting clients, or to disclose whether any of them have an interest in state government contracts or public funding.

Like many other legislators, the senator has, when asked, also declined to disclose publicly the amounts of his personal income, net worth or debt.

Paul Holstein, chief division counsel for the Albany FBI field office, declined to comment on why agents had met with the Southern District prosecutors.

He said the office is "fully committed to the public corruption program, which is a high priority for the FBI, and are committing necessary resources to address ongoing investigations."

The investigation of Bruno is being headed by two agents with extensive experience in white-collar and public corruption cases, Michael Bassett and Charles Dougherty.

Bassett has been with the agency 25 years and worked at field offices in Tampa, Fla., and Chicago, where he worked undercover posing as a commodities futures trader on the floor of the Chicago Board of Trade.

That investigation -- Operation Sourmash -- led to dozens of convictions and legislative reforms.

In Albany, Bassett has been the case agent on several high-profile public corruption investigations, including the insurance fraud case involving Albert Lawrence and the state bribery case of Albany engineer Ronald Laberge.

Dougherty came to Albany from the Newark field office, where he worked white-collar crime and public corruption investigations for more than 20 years, including 12 years as a supervisor.

Dougherty's work in the Newark office included investigations that brought convictions against multiple elected officials, including state senators, assemblymen and the former mayor of Newark, Sharpe James.

Early in the investigation, Bruno met with Bassett and another FBI official in Albany to discuss their probe, according to a person briefed on the meeting.

Bruno responded to their questions about his business dealings, and his answers were documented in FBI files.

It was a risky act for Bruno because citizens can be prosecuted for making false statements to federal agents involved in an official probe.

If a federal grand jury decides there are no criminal violations on Bruno's part, prosecutors have the option of providing Bruno or others with a letter indicating the panel took no action, a step that is akin to being exonerated.

Much of the investigation has focused on horse racing, an industry Bruno has staunchly supported and in which he has a deep personal interest.

The FBI probe outlasted a tumultuous period in New York's state-operated racing industry as it struggled to recover from allegations of mismanagement by its longtime operator, the New York Racing Association.

NYRA's contract to run the state's three thoroughbred tracks was renewed, but not before being imperiled by a heated takeover bid from several competing racing consortiums, including some whose investors have strong ties to Bruno and other elected officials.

More recently, the federal investigation has plied opinions Bruno received from the Legislative Ethics Commission that relate to his personal business ventures, including real estate development and horse breeding.

A person close to the investigation said federal authorities are examining the process by which Bruno received authorization from the ethics panel.

Bruno's attorney in Albany, William Dreyer, is a former federal prosecutor.

He could not be reached for comment Tuesday.

Dreyer's law firm has been paid more than $203,000 over the past two years from campaign funds connected to Bruno, records show.

A source briefed on the investigation said the FBI has built its investigation around the "honest-services" provision of federal statutes, a one-sentence amendment Congress inserted into federal law 20 years ago to close a loophole in its laws defining mail fraud and wire fraud.

The broadly written law prohibits anyone from depriving the public of an inherent "right to honest services."

J. Lyons can be reached at 454-5547 or by e-mail at blyons@timesunion.com.

"Skelos expected to replace Bruno as Senate GOP leader"

By MICHAEL GORMLEY, Associated Press

Last updated: 11:52 a.m., Tuesday, June 24, 2008

ALBANY -- Sen. Dean Skelos of Long Island was expected to be elected leader of the Republicans' tenuous majority in the Senate on Tuesday, according to two Republicans briefed on the succession deal struck Monday night after Senate Majority Leader Joseph Bruno announced his retirement.

Under the agreement, Skelos' closest rival, Sen. Thomas Libous of Broome County, will be deputy majority leader, according to the two Republicans, who spoke on condition of anonymity because the decision had not been officially announced.

Skelos, 60, has been in the Senate since 1985 and is steeped in the ways of power Albany, including the authority of strong majority leaders to determine what bills even get to the floor for debate.

His expected election in a closed party conference would mean the Senate majority leader, the Assembly speaker, the Senate minority leader, the governor, comptroller and attorney general will all be from New York City or its suburbs.

Bruno, 79, is from upstate's Rensselaer County and has held the leader's job since 1995.

Skelos refused comment Tuesday morning.

"I think Sen. Bruno made his decision based on wanting to get on with other things in his life," Libous said Tuesday.

"We're all focused in coming back in the majority (after elections) and I think we will pick up a seat or two."

"My interest is in the Senate majority."

The agreement for Libous to step aside in favor of Skelos was made Monday night by senior senators to avoid an internal fight that could jeopardize the chance for the Republicans to keep their 32-30 advantage in the chamber.

Republican senators said Bruno simply had enough after a yearlong fight with former Democratic Gov. Eliot Spitzer, a two-year FBI investigation, and, most of all, the death of his wife in January.

They had been married 57 years.

"I felt he was suffering, the loss of his wife and few other things," said Sen. Hugh Farley, a Schenectady County Republican.

"He's my best friend and we came into the Senate together."

Farley and other senators said the change, while sad and surprising, will help re-energize the Senate Republican conference, which faces an increasing threat in the increasingly Democratic state.

The change in guard will also likely mean the millions of dollars in state funding and projects Bruno steered to his Albany area district will now go to Long Island if Skelos and the GOP keep the majority.

"It's time for a change," a sometimes teary eyed Bruno told reporters Tuesday.

"It's time for me in my life to step back and enjoy my family ... I'm satisfied."

Bruno said the FBI investigation played no role in his decision.

He insists he has never been accused of a crime and won't be, and the federal probe will end without action against him.

JOE BRUNO IS "IL PADRONE" IN RENSSELAER COUNTY IN THE CORRUPT EMPIRE OF NEW YORK ...

THE "IRON DUKE" ...

ONE FIST MADE OF IRON, THE OTHER OF STEEL ...

AND "THE BATTLING DUKE" ISN'T AFRAID TO USE THEM BOTH QUITE LIBERALLY TO DESTROY ANYONE WHO GETS IN HIS WAY ...

And so ...

"Options are open for Bruno - Observers expect senator to shift to private sector, with possible link to female friend"

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

First published: Thursday, June 26, 2008

ALBANY -- Former Senate Majority Leader Joseph L. Bruno's exit plan involves continuing to work in the private sector, and insiders say, possibly with close friend Kay Stafford's Latham consulting firm.

"I think he intends to enter the business world," said Republican State Committee Chairman Joseph N. Mondello, who said he had several conversations with Bruno before his announced departure from the Senate.

"He has this feeling he hasn't adequately taken care for his family."

"Maybe it's an Italian thing."

Bruno, 79, stepped down on Tuesday from the leadership post he's held since 1995, a day after he announced he won't run for re-election.

The Senate chose Deputy Majority Leader Dean Skelos, R-Rockville Center, to replace him.

Bruno's personal financial picture is unclear, although it may be difficult for him to afford the lifestyle he enjoyed as majority leader.

Retiring from the post means losing the $41,500 stipend he received on top of his $79,500 base pay, along with a host of perks such as cars, drivers, secretaries and more.

Still, even if he doesn't work again, Bruno's retirement paycheck from the state pension system will be well above the median pay for Rensselaer County -- an estimated $95,000 per year given his 44 years of service credits and pay level.

According to people who have seen them together, Bruno and Stafford are very close.

She recently became the senator's neighbor, having purchased the property next door to Bruno from Bruno's oldest son for $475,000.

Also, Stafford and her firm, CMA Consulting Services, which performs computer data services and related work, hosted a $1,000-per-person fundraiser honoring Bruno on June 17, six days before he announced he won't run for re-election.

He has discussed joining CMA as an executive, according to a person familiar with Bruno and Stafford.

CMA has received $95 million in state contracts over the past decade.

It also gets subcontract work with other state contractors as a woman-owned enterprise.

Bruno has often touted his management acumen and his interest in continuing to be a businessman.

He once led Coradian Corp., a company that sold phone systems to public and private customers.

It was acquired in 1990.

His outside consulting and private employment has come under scrutiny by federal investigators.

That probe led to his breaking off a long-term job with Wright Investors Service, which had been a source of extra income for him during his 14 years as majority leader.

The FBI has subpoenaed Bruno's records as well as documents of those with whom he's done business, according to subpoenas obtained by the Times Union.

The FBI received 30 boxes of materials from the senator's office on Monday, according to a person with knowledge of the investigation.

The material sought included almost anything that's flowed into Bruno's office, according to a lawyer involved in the probe.

Legal expenses to deal with the criminal inquiry have mounted dramatically since the bills began trickling in two years ago, according to public campaign records.

The first few bills to the Dreyer, Boyajian law firm in Albany, Bruno's outside attorneys, amounted to $2,403 in 2006.

The Senate Republican Campaign Committee picked up the tab.

By 2007, when Bruno's own campaign fund started paying the legal bills, the figure had grown to $201,500.

Costs in 2008 have yet to be reported.

Robert Brehm, a spokesman for the state Board of Elections, said Bruno's campaign committee can continue paying the law firm even when he's out of public office.

"Just the fact that he's leaving doesn't trigger a change," as long as the costs arose from legal representation connected to holding office, Brehm said.

Indeed, other lawmakers have continued to dip into campaign funds for such expenses after leaving office.

With $1.6 million on hand as of January, Bruno's campaign fund has reserves.

Yet his expenses could prevent him from sharing the money to help others in his conference win election, which his campaign has done in the past.

Mondello noted that for Assemblyman Roy McDonald, R-Wilton, to win Bruno's 43rd District seat "it's going to take a lot of money."

Bruno did not specify his post-Senate plans during a lengthy news conference Tuesday.

He said he wanted to spend more time with his family -- mentioning grandchildren and a great-granddaughter.

The Brunswick Republican, whose wife died in January, said his departure has nothing to do with ill health, a lack of faith in the GOP's ability to hold the Senate or the FBI probe that he says goes back three years.

"He wants to make a few bucks ... for his grandchildren," said Mondello, a friend since Bruno was an aide to former Assembly Speaker Perry Duryea almost 40 years ago.

"He's made that comment to me several times."

Bruno, during a speech that drew a standing ovation in the chamber Tuesday night, paid tribute to all his colleagues and noted the former desk of the late Sen. Ron Stafford, Kay Stafford's husband, who died three years ago.

"I'm going to take it a day at a time in my life," Bruno said.

"Because I have learned that we only live a day at a time."

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

"Legislative inaction on IDAs costs NY nonprofits, taxpayers"

By VALERIE BAUMAN, Associated Press

Last updated: 5:22 p.m., Wednesday, June 25, 2008

ALBANY -- Plans to build several nursing homes, senior citizen apartments, libraries, and some schools may be headed to the waste basket after the Legislature decided not to extend or amend a law that for years gave nonprofit groups access to low-cost industrial development agency funding.

It's another victory for organized labor, which opposed the measure unless it required nonprofit agencies to pay union-level wages, and was among several measures handled in the hectic last days of the 2008 legislative session.

Industrial development agencies (IDAs) were created by local governments to provide tax-free financing and other tax breaks to attract and retain employers.

But IDAs have been criticized for not delivering on the promised jobs and providing tax breaks to politically connected companies.

"While I am proud of what we have accomplished in such a short time, I recognize that we still have more to do," Gov. David Paterson said in a written statement about the end of the session.

"New Yorkers are voting with their feet, leaving the Empire State, and we have the responsibility in Albany to make New York more affordable and keep our residents here."

An element of the IDA law lapsed in January, meaning IDAs could no longer provide tax-subsidized financing to nonprofit agencies because they can't afford to pay union-level wages.

Nonprofits rely on government funding and private donations.

"The bill expired, so unless it's renewed you can say it's a permanent change," said AFL-CIO President Denis Hughes.

"But I'm sure they'll be looking at this again next session."

"It was a bad piece of legislation."

"It was a failed economic tool that resulted in destabilization of wage rates in upstate New York."

Brian McMahon, executive director of the New York State Economic Development Council, said the only options nonprofits have now is to keep projects on hold until the Legislature decides to act or pursue private financing at a much higher rate.

"The unions are the fourth branch of government in New York State," McMahon said.

"They have enormous power, enormous resources."

"And in an election year their influence seems to grow even greater."

Lawmakers did manage agreement on measures as the session wound down:

-- The Marine Transfer Station on Manhattan's Gansevoort Peninsula will be reactivated.

This key component of the city's solid waste management plan will allow shipping Manhattan's recyclables to processing facilities by barge instead of by truck, cutting 30,000 truck miles per year from city streets.

-- Victims of various forms of domestic violence don't have to be married to their abuser to seek protection through New York Family Courts.

The bill will allow victims to obtain a civil order of protection instead of having to go through the often more intimidating criminal justice system.

-- Workers for companies that self-insure and then default will be able to retain worker's comp benefits.

The new bill will require regular, independent reviews of trust finances, increased penalties for misconduct, and new procedures to ensure that underfunded trusts are fully funded.

-- Lawmakers agreed to pass a series of reforms to protect children and adults in residential care.

The changes will more clearly define what abuse is, give parents and guardians more time to seek records on the care of a family member and prohibit withholding food or drink as a method of discipline.

-- More children will be able to receive care at home instead of being placed in an institution, despite not qualifying for the current financial standards.

A Medicaid waiver will be available for more children with physical disabilities who require the level of care normally found in nursing facilities or hospitals.

-- In response to high profile violent crimes committed by people with mental illness, lawmakers agreed to pass a bill that would create multi-agency mental health "incident review panels" to investigate violent incidents.

The idea is to deliver better mental health care and eliminate safety risks from those who fall through the cracks during the treatment process.

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On the Net:

http://www.state.ny.us

http://www.nysaflcio.org

http://www.nysedc.org

http://www.nyahsa.org

"Former NY commissioner will no longer use alias"

Associated Press

Last updated: 3:43 p.m., Wednesday, June 25, 2008

ALBANY -- A retired state tax commissioner collecting part-time pay from her South Carolina home in addition to her pension will no longer work under an alias, agency officials said Wednesday.

Barbara Billet, who telecommutes from her home in Beaufort, S.C., is listed in a state Department of Taxation and Finance e-mail directory as "Barbara Clarkstone."

Though she is retired on an annual pension of $49,349, she is listed in the directory for her $30,000-a-year part-time job.

Tax department spokesman Tom Bergin said the assumed name was used to avoid confusion among employees who might notice the names of both Billet and her successor as commissioner.

He said employees might have been inhibited in dealing with her on work issues.

But Bergin said they would change the directory listing, which was first reported by the Times Union of Albany.

"In retrospect, it wasn't a good idea," Bergin said.

"We should have been more forthcoming."

Billet, 58, is listed under her own name on the state payroll, he said.

The Times Union said the "Clarkstone" is apparently drawn from a combination of Billet's grandmothers' maiden names.

Billet told the newspaper that she was not trying to hide anything, but wanted to avoid undermining the agency's new commissioner.

Billet was acting tax commissioner for 14 months before retiring from the $155,000-a-year position in January.

She now works about 15 hours a week on a project called the "Clear Language Initiative," which measures the financial benefits of translating technical tax codes into everyday English.

Billet is the only tax department employee allowed to telecommute entirely from home.

Bergin said the work arrangement is under review.

"AMD chief pays a visit to Capitol - Hector Ruiz meets with Paterson, Bruno and Silver, says plans for computer chip factory are unchanged"

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

First published: Wednesday, June 25, 2008

ALBANY -- Hector Ruiz, chief executive of Advanced Micro Devices Inc., made a surprise visit to the Capitol on Tuesday to meet with Gov. David Paterson and legislative leaders about the company's planned $3.2 billion computer chip factory in Malta.

Ruiz denied he was in Albany to seek more state assistance for the plant, which already is due to receive $1.2 billion from New York.

"No, no, no," Ruiz said when asked if he was here to get more funding.

"I haven't had the pleasure of meeting the new governor."

"So I look forward to it."

Ruiz's visit might have stayed a secret had state Senate Majority Leader Joseph L. Bruno not revealed it during a news conference Tuesday morning on his pending retirement from the Legislature.

AMD's plant would be located on the Luther Forest Technology Campus, in Bruno's district.

The visit was Ruiz's first public appearance in the region since he and Gov. George Pataki first announced the proposed chip plant in June 2006.

Bruno has been saying for months that Ruiz was expected to make a visit.

The trip sparked speculation that Ruiz might have an announcement regarding the plant, known as Fab 4X.

AMD, which lost almost $3.4 billion last year, has yet to officially commit to building the facility, and local political and business leaders have been anxiously waiting for a decision from Ruiz.

The world's No. 2 microprocessor manufacturer, based in Sunnyvale, Calif., has until July 31, 2009, to move forward with the project and still be eligible for state incentives, which include $650 million in cash, tax breaks and infrastructure improvements.

Ruiz, accompanied by Ward Tisdale, AMD's director of global community affairs, arrived at the Capitol at about 1:45 p.m. and met first with Bruno and Paterson, and then with Assembly Speaker Sheldon Silver until about 3:15 p.m.

AMD spokesman Travis Bullard said Ruiz was scheduled to fly to Washington, D.C., afterward.

Between meetings, Ruiz reiterated that he was not asking for more money, and said there are currently no changes planned for Fab 4X.

"I had the opportunity to meet with the governor -- this is something that I wanted to do," Ruiz said.

"Our project has gone through three governors."

"I wanted to thank the senator (Bruno) for his leadership."

Ruiz said Paterson "sounded very excited" about the project, and he called the governor a "straight-shooter."

Kris Thompson, a spokesman for Bruno, also said Ruiz's visit was straightforward, with no developments to report.

"Nothing new was addressed at the short meeting that the senator and Hector had," Thompson said.

"It was a very friendly and cordial visit, and everything went fine."

"Again, we're on target."

Larry Rulison can be reached at 454-5504 or by e-mail at lrulison@timesunion.com. Capitol bureau reporter James Odato contributed to this story.

"Tax agency home worker used a false name - Department says ruse allowed retired commissioner to return without undermining new chief"

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

First published: Wednesday, June 25, 2008

ALBANY -- A former state tax commissioner who was rehired to a part-time tax attorney's job has been working from her home out of state under an assumed name so that she would not draw attention, the Times Union has learned.

Barbara G. Billet, 58, who is telecommuting from her retirement home near Hilton Head, S.C., is listed in a state Department of Taxation and Finance directory as "Barbara Clarkstone."

The name "Clarkstone" is apparently drawn from a combination of Billet's grandmothers' maiden names.

Billet said she did not create the assumed name to hide her employment status.

Rather, she said in a telephone interview Tuesday, it was intended as a way to allow her to return to a senior attorney's post without undermining the agency's new commissioner, Robert L. Megna.

"I wanted Bob to be able to take over the leadership of the department unimpeded by my presence," Billet said.

"It was HR's (human resources) suggestion that I create an e-mail account that didn't have my name prominently displayed."

Billet is the only employee of the 4,700-member agency who is allowed to telecommute entirely from home.

She also is the only person who works under an assumed name, an agency spokesman said.

In an internal employee network, the business address for "Barbara G. Clarkstone" is listed as the agency's executive offices at the state office campus in Albany.

The unprecedented job arrangement, which was first reported by the Times Union on Monday, has drawn criticism from state Public Employees Federation officials who questioned whether Billet's $30,000-a-year job was politically arranged to quietly keep her on the state payroll while she also collects a pension.

Billet retired as commissioner in January and flatly denies that politics played a role in her rehiring, which took effect March 6.

"If I thought there was anything wrong with this arrangement, I never would have done it," she said.

"I thought it was straight up the middle."

Thomas Bergin, an agency spokesman, confirmed the agency had signed off on Billet's use of a made-up name.

"The department believed that this would be a way to avoid having the outgoing commissioner, who was staying on the payroll in a lower-level, part-time role, impair the authority of the incoming commissioner," Bergin said.

"We wanted to avoid any confusion over department protocol and allow Barbara the freedom to work unimpeded."

Billet has worked in various state jobs for more than 20 years.

She headed the state tax department as acting commissioner for 14 months before retiring from the $155,000-a-year position, a politically appointed job.

Billet uses a state-owned laptop computer and works about 15 hours a week from her home in Beaufort, S.C.

She works on a program she helped create -- the Clear Language Initiative -- that seeks to save the state money by translating complex tax codes into simple language.

She is considered a valuable worker and must conform to strict telecommuting rules, including submitting time slips, Bergin said.

Billet's salary, under civil service rules, is capped at $30,000 a year.

She would need a waiver to exceed that amount.

She also collects an annual state pension of $49,349, records show.

The part-time attorney's job was not posted so others could apply for it, Bergin said.

Billet was formerly an attorney with the Albany firm O'Connell & Aronowitz.

She left the firm in 1995 after being appointed deputy solicitor general by then-Attorney General Dennis Vacco.

She went on to become solicitor general before former Gov. George Pataki appointed her to head the Moreland Act commission, which investigated New York City schools.

Pataki appointed Billet as acting tax commissioner in November 2006, after she had been with the agency for six years.

Billet is a full-time resident of South Carolina and surrendered her New York driver's license earlier this month, records show.

PEF officials filed a complaint with the state inspector general on April 12 requesting that the situation be investigated as a potential "no-show" job.

The inspector general's office referred the matter to the deputy inspector general for the tax department, which determined there was nothing wrong with the arrangement, Bergin said.

"I thought maybe I can still make a contribution."

"It's a limited basis," Billet said.

"It takes me back to being a young lawyer ... doing the hands-on work."

Brendan J. Lyons can be reached at 454-5547 or by e-mail at blyons@timesunion.com.

"GOP confident in Skelos' ability - Upstate senators see new leader as being able to keep Republican control of chamber"

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

First published: Wednesday, June 25, 2008

ALBANY -- To those outside Nassau County, newly minted Senate Republican Majority Leader Dean Skelos has been known as a champion of everything Long Island.

His annual push to bring more state aid to his region's school districts is legendary and well publicized, and he doesn't hesitate to take on those he sees as working against his constituents' interests.

Earlier this year, Skelos and the rest of Long Island's Senate delegation called for the ouster of Education Commissioner Richard Mills for what they said was Mills' slow response to pension abuses by retiring superintendents.

Last week, he offered legislation that would freeze real estate tax assessments, which can cause one's school taxes to rise steeply -- a major issue in Long Island and other suburbs.

With that reputation, Skelos' main challenge as Joseph Bruno's successor may be convincing fellow senators from upstate that he's looking after their interests, too.

After all, 20 of the Senate's 32 Republicans hail from areas north of New York City and Long Island.

So far, he seems to have their trust, largely due to his steady hand as Bruno's deputy.

While he may not have Bruno's flair and back-slapping ease, lawmakers and others note that his straightforward style of addressing the issues has long been appreciated.

His style, one Senate staffer said, is simple: delegate tasks to senators who are on the relevant committees, give them the help they need and hold them accountable for results.

As a result, Skelos has earned the confidence of Republicans who in November will fight to keep their 32-30 majority in an increasingly Democratic state.

"We're in a very tough situation and I think he's the guy who can really bring us home," said Sen. Hugh Farley, R-Niskayuna.

He'll probably want to carry on Bruno's legacy in at least two ways, said one longtime lobbyist.

Bruno avoided being drawn into battles with groups like abortion-rights or gay-rights advocates who have historically clashed with Republicans.

He also cultivated close ties with organized labor, which has provided both get-out-the-vote support and campaign dollars.

Keeping the money spigot flowing may be one of Skelos' first tasks as leader.

"The challenge is going to be to raise the bucks to get the message across," said Republican State Chairman Joseph Mondello, a longtime friend of Skelos.

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

"Colonie tax bid dies in Senate - Lawmakers adjourn without vote on midyear levy intended to cut deficit"

By JORDAN CARLEO-EVANGELIST, Staff writer, Albany, New York Times Union

First published: Wednesday, June 25, 2008

ALBANY -- Colonie's bid to levy a midyear tax to cut its multimillion-dollar deficit appeared to have died in the state Senate on Tuesday night when lawmakers there adjourned without voting on it.

The deficit-correction tax needed the Legislature's blessing because town officials hoped to collect it before January, when regular property tax bills go out.

Now, Colonie may have no choice but to wait until then.

"We've been told we can do this in January without (state) legislation."

"And that's where we would be headed at this point, unless the Senate comes back into session and something changes," Supervisor Paula Mahan said.

"These things happen, and we knew that this was always a possibility."

It wasn't immediately clear why the measure stalled.

Mahan, a Democrat who took office in January, proposed the tax in April as the quickest, fairest way to raise several million dollars to improve the town's cash flow and credit rating and stabilize its finances.

In February, the state comptroller's office put the town's deficit as high as $18 million, following an assessment last year that faulted several years of unbalanced budgets.

With the town's credit rating in danger of falling, and with millions in short-term debt scheduled to come due in October, Mahan lobbied for the tax to avoid sustained tax hikes.

The tax would have raised just shy of $7 million.

But Republicans in town opposed the proposal and the bill's fate in the GOP-led Senate was never certain.

Tuesday, town officials held out hope the Senate would follow the Democrat-led Assembly, which had passed it a week earlier with bipartisan support, where even Minority Leader James Tedisco, of Schenectady, voted for it.

It was not clear whether the bill could be passed if the Senate returns to session later this summer.

"I try not to get too frustrated because that's not going to help anyone," Mahan said.

"NY consumer laws not trumped by federal statute"

By MICHAEL VIRTANEN, Associated Press

Last updated: 5:06 p.m., Thursday, June 26, 2008

ALBANY -- The state's highest court ruled Thursday that the federal Truth-in-Lending Act doesn't pre-empt New York consumer protection laws, upholding a suit brought by then-Attorney General Eliot Spitzer claiming deceptive practices by a nationwide bank and its debt collector.

The Court of Appeals, in a 5-1 ruling, said federal law prevents states from requiring additional disclosures from credit card issuers.

But the judges said New York's laws against fraud and deception simply prohibit misinformation.

"New York's Executive Law and Consumer Practice Act, collectively, do not require respondents to disclose anything," Judge Carmen Beauchamp Ciparick wrote for the majority.

"These statutes simply require that they refrain from fraud, deception, and false advertising when communicating with New York consumers."

Chief Judge Judith Kaye and judges Victoria Graffeo, Eugene Pigott Jr. and Theodore Jones Jr. agreed.

They noted that since 1997, Cross Country Bank and debt collector Applied Card Systems solicited consumers in the subprime market to apply for credit cards they would not qualify for under traditional underwriting guidelines.

Spitzer argued customers were deceived into applying for cards with credit lines up to $2,500, while most actually received far less credit, and card fees were immediately billed against them.

The judges agreed some claims against the Delaware-based bank were settled in a 2002 California class-action suit.

But the court let stand restitution for others -- nearly $8 million in civil penalties -- and an order against future fraud in the state that had been issued by lower New York courts.

In a dissent, Judge Susan Read said the federal law does bar the attorney general's attempt to impose disclosure requirements under "the guise" of the lawsuit, saying the only way for the bank to comply is to revise both the form and content of its credit card solicitations.

"The majority's desire to maximize our state's regulatory reach in the area of consumer protection is unsurprising," Read wrote.

"But state pride and good intentions are not enough to justify this lawsuit."

Cross Country, now called Applied Card Bank, said it was pleased the court rejected an attempt to undo the California class-action case, but was disappointed by the pre-emption ruling.

"It is an important victory since the attorney general, as well as 30 other state attorneys general, asked the court to give them the right to disregard class-action settlements," said the bank's attorney, H. Peter Haveles Jr.

"In light of Judge Read's dissent, the bank is giving careful consideration as to whether it should ask the (U.S.) Supreme Court to review the Court of Appeals pre-emption decision."

New York Attorney General Andrew Cuomo continued the case started by Spitzer.

"The court's recognition of the state's right to go after credit card companies that deceive customers is a clear victory for New York consumers," Cuomo spokesman John Milgrim said.

"Good government groups knock NY lawmakers"

By VALERIE BAUMAN, Associated Press

Last updated: 4:44 p.m., Thursday, June 26, 2008

ALBANY -- While New York lawmakers are virtually high-fiving each other for what they called groundbreaking political progress, good government groups are unimpressed with the 2008 legislative session.

"After promising to change the way Albany operated, the governor allowed the process in Albany to return to it's bad old roots: secrecy and insider negotiations," said Blair Horner of the New York Public Interest Research Group.

The biggest objection from observers was the traditional "three men in a room" dealings and a lack of transparency.

Much of Paterson's major legislation wasn't adopted, including an extensive plan for campaign finance reform introduced earlier this month on the same day good government groups held a press conference chastising lawmakers for a lack of action on the issue.

Paterson ran as former Gov. Eliot Spitzer's lieutenant governor on the promise of changing state government's bad reputation.

Then Spitzer was linked to a high-priced prostitution ring and resigned, leaving Albany reeling.

Now groups like NYPIRG and the Women's League of Voters are objecting to the status quo that continued to grip Albany under Paterson's leadership.

"We are somewhat sympathetic of our governor, who had to take over and finish our budget in two weeks, but the budget was done behind closed doors," said the league's Barbara Bartoletti.

"We thought things would get better, but they didn't -- they got worse."

Paterson, however, rejected the criticism.

"In only three months the governor was able to achieve enactment of 26 of his priority bills ..."

"This was, by any measure, a historically productive legislative session," Paterson spokeswoman Risa Heller said.

"We look forward to working with the legislature, the advocates and other interested parties in the coming months on a variety of issues including campaign finance reform and the property tax cap."

Newly minted Senate majority Leader Dean Skelos and Paterson have described the session as productive.

Skelos stopped short of calling it a success, saying crushing property taxes in New York still haven't been dealt with.

Officials in Skelos' office declined to comment on the criticism of good government groups.

"Considering all of the tumult New Yorkers endured in the first half of this year, the 2008 Legislative session was remarkably successful, though our work is not done," Assembly Speaker Sheldon Silver in a written statement.

"In a time of economic challenges and political distress, Governor David Paterson worked with the Legislature to achieve a balanced and on-time budget."

He also cited successful measures on gun control, to prevent foreclosures, save New York City Off-track Betting jobs, end mandatory overtime for nurses, and reform the state's brownfields program.

But good government groups were horrified when a bill that would have protected children from lead poisoning failed at the last minute.

It would have mandated preventive measures by the state Department of Health and offered state tax credits to landlords who update their properties.

It's an issue that could gain more traction next year, but "meanwhile, children very well may die," Bartoletti said.

The groups did praise a few developments as positive -- tougher state oversight of doctors, the reforms in the way New York gives tax breaks for cleaning up brownfields and net metering of electricity.

NYPIRG praised Paterson and the Legislature for coping with the abrupt departure of Spitzer and managing to pass a budget a little more than a week late.

They also hailed the bills that brought relief to home owners facing foreclosure and protections against identity theft.

Overall, though, special interests got their way in this election year instead of the voters, Bartoletti said.

Some of the biggest winners were the unions.

One bill that passed both chambers would give the public employee unions the ability to veto any attempt to change retiree health benefits -- even if a government employer found a way to offer the same benefits for less money.

It would create a one-year moratorium that would prevent state and local governments from changing benefits, but many think it's likely to become permanent.

"For the state as a whole, and for the state's economy, this is a bad thing," said E.J. McMahon of the Empire Center for New York State Policy, part of the fiscally conservative Manhattan Institute.

"It simply adds to the very high cost of government in New York and is one of the things that is going to perpetuate our heavy tax burden."

Unions argue the moratorium is necessary while a 12-person task force -- which will include several union members -- evaluates health plan options.

"What was passed was a two-year study about how to best fund health plans," AFL-CIO President Denis Hughes said.

He said the moratorium will allow time to review the health care benefits before there are any changes.

The bill has been sent to Paterson, who hasn't made a decision on it yet.

Whatever he decides, the good government groups will be watching.

"We certainly would encourage more openness as we go forward," Bartoletti said.

"Especially in these times when things economically are changing rapidly."

"People should be able to feel that the government is working for them, not the special interests."

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On the Net:

http://www.nypirg.org

http://www.lwvny.org

http://www.aflcio.org

http://www.empirecenter.org

"Analysis: NY governor's first 100 days of tumult, trials"

By MICHAEL GORMLEY, Associated Press

Last updated: 10:52 a.m., Thursday, June 26, 2008

ALBANY -- It was supposed to be a joke, but there was truth lurking beneath the schtick.

Gov. David Paterson was laying out his agenda with legislative leaders at a news conference this month when he was asked if there was any progress on a bill requiring insurance coverage for post-traumatic stress disorder.

Paterson, subtle as a Warner Brothers cartoon, covered his face with his hands and flopped his head onto the podium in surrender: "Yes."

"I have it."

The gag went over well.

The Democrat's feigned frustration at the slow grind of the Albany process was an apt reaction to his first 100 long, frustrating and unpredictable days that started with the unfathomable self-destruction of Eliot Spitzer.

"It was a supreme test of my endurance and ability and obviously patience and self-confidence," Paterson told The Associated Press.

"After this, I figure I'm about ready for anything."

The accidental governor, they call him.

Paterson, legally blind since infancy, grew up in Harlem and then on Long Island steeped in New York City politics.

His father, Basil, is a former secretary of state.

The son said he never thought about becoming governor, making him perhaps the only one in New York's Capitol to feel that way.

Even as lieutenant governor, the former state Senate minority leader wasn't included by pundits or in polls as a potential governor.

There was no room among the Andrew Cuomos, Rudy Giulianis and Michael Bloombergs to think of a Gov. Paterson.

Not even he thought so.

"I didn't realize how much I didn't take it seriously until the day it happened," he said.

"I was profoundly shocked."

That day was March 17, shortly after Spitzer was named in a federal prostitution investigation and resigned.

"The first week I was governor, I remember we were getting ready to make a decision," Paterson said.

"I heard on the radio a decision was coming down and the governor would rule on it."

"It took me 10 seconds to realize they were talking about me."

He knew, intellectually, that he was governor.

Becoming governor came a couple weeks later.

"The moment came for me in the budget negotiations when I realized that we were going to have to make a lot of cuts and they were going to have to be across the board and I didn't get that anyone else knew or appreciated it," Paterson said.

"That's when I felt like the governor because I felt a personal obligation to the voters.

"I realized, 'If I don't do something, it's not going to get done,'" Paterson said.

For a governor who didn't take office until just two weeks before the budget was due and already halfway through the legislative session, he has a list of action to back up what his office calls a "historically productive" session that ended last week.

He says 26 of the bills he made a priority passed.

They include: Reform of the "brownfields" law intended to clean up polluted sites for reuse but which was known mostly for waste and political scandal; a measure to better protect homeowners in default as part of the national subprime mortgage crisis; a deal to save New York City Off-Track Betting Corp. and preserve 1,500 jobs; and a law that ends a costly and time-consuming process to get rid of teachers convicted of having sex with students.

Few, however, say the bills are earthshaking for Albany, a place in need of a thorough shaking.

But Paterson can also take credit for less tangible success.

He used his sharp sense of humor and conciliatory approach to salve a fractured New York state government.

In 2007, hard-edged Spitzer was quickly mired in political conflict, then political scandal, then the prostitution investigation.

New York's first legally blind, black governor faced a bigger obstacle than most.

Spitzer's fall came in the middle of negotiating a $121 billion budget riddled with looming deficits.

He chose to begin his administration admitting to past marital affairs and drug use as a youth so the actions couldn't be used to compromise his agenda.

He also had emergency eye surgeries brought on by the stress of reading reams of documents, nose to paper, required to do the job.

"The institutional challenge that Gov. Paterson assumed was probably tougher than any governor in modern history," said Robert B. Ward of the Rockefeller Institute of Government.

"When I came in, I thought I could take advantage of the crisis in management because everybody basically wanted to help me," Paterson said, comparing it to support for the president after Sept. 11.

"This was the problem other governors have had in that they would come in and throw down a bill," Paterson said.

"Either you win it or you don't ... the only problem is, government isn't set up that way."

"That's how you play football."

"That's not how I see it and, I argue, that's not how the framers of the constitution saw it," Paterson said.

Instead, he worked with lawmakers, making unheard of visits to their working sessions and, on the last day of session, going to legislators in the Senate and Assembly to thank them.

"Have they accomplished an awful lot?"

"No," said Maurice "Mickey" Carroll, director of the Quinnipiac University Polling Institute.

"But is the tone just an awful lot better?"

"Yes."

"That's really important."

"The idea of politics as scorched earth is nothing I really approved of."

So far, Paterson's charisma and character got him through his first legislative session as governor admirably, noted Lee Miringoff of the Marist College poll.

"But he's got to set his direction," he said.

"The likeability is nice, but he's got to be governor, or else."

"Because the vacuum will fill and the other people sitting around that triangular table aren't shy."

------

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

"Changes sought in union construction rules - Requirements in new Wicks Law would hurt upstate, nonunion firms, business and building groups say"

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

First published: Thursday, June 26, 2008

ALBANY -- For decades, business groups pushed for overhaul of a state law that they said inflates the cost of public construction projects.

In April, they got it.

Now, proving that you really should be careful what you wish for, business and construction groups are demanding that the changes be changed.

They claim that changes made by lawmakers to the Wicks Law will hammer the upstate economy and small, nonunion contractors.

"At a time when everyone is focused on the high cost of government, it is amazing that the state would add another burdensome set of requirements," said Kenneth Adams, president of The Business Council of New York State Inc., the state's largest business lobby.

The long-controversial Wicks Law required cities and towns to bid out construction projects of more than $50,000 to four separate contractors.

Business groups and municipal officials said having four contractors do what one could accomplish raised taxpayer costs by as much as 20 percent.

The changes to the law, passed in April as part of the state budget, raised the threshold for projects to $500,000 upstate and $3 million in New York City.

They go into effect Tuesday.

The changes also allow cities and towns to opt out of the Wicks Law, but only if they enter into a so-called project labor agreement that all but requires that contractors hire a mostly union work force.

The provision has some nonunion contractors saying they will no longer bid on municipal construction projects, because winning would mean they couldn't use their own workers.

"What do you do with the people you've been working with over the years?" asked Peter Wilkinson, owner of Zapatanze Painting, a three-employee company in Albany.

"It's like if the Republicans won, but then they were told, 'You have to use 80 percent Democrats.' "

Rebecca Meinking, president of the Empire State Chapter of Associated Builders and Contractors Inc., a nonunion industry group, said if contractors like Zapatanze opt out of public projects, it will increase project costs.

"Simple economics says that when you shrink the size of the bidding pool, construction costs go up," she said.

Meinking's group and others campaigned for lawmakers to repeal the changes, but the effort failed when lawmakers on Tuesday night ended the legislative session.

Business and nonunion construction groups on Wednesday promised to continue their effort if lawmakers return to address unfinished business later this summer.

Wilkinson said that in the meantime, he'll likely have to survive on nonmunicipal work.

That might not be easy: Last year, work from the city of Schenectady kept his company afloat, he said.

"That was the only thing I had going," Wilkinson said.

"That kept me busy and kept my bills paid."

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

"Court decision favors ex-chairman of NYSE - Judges dismiss four counts against Richard Grasso that had been filed by Spitzer"

By JENNY ANDERSON, New York Times

First published: Thursday, June 26, 2008

NEW YORK -- On Wall Street, there are stars that fade and stars that fight.

Richard A. Grasso is one of the latter.

On Wednesday, Grasso, the former chairman and chief executive of the New York Stock Exchange, won another round in his almost five-year battle to keep the $187.5 million of pay he amassed during his eight years at the helm of the Big Board.

The state Court of Appeals upheld a lower court ruling dismissing four of six counts originally brought by Eliot Spitzer, then New York's attorney general, against Grasso.

The decision leaves Spitzer's successor, Andrew M. Cuomo, two claims to pursue.

Since 2004, the attorney general's office has argued that Grasso's pay was unreasonable under state nonprofit laws and that his compensation was not properly disclosed to the exchange's board.

(The exchange became a public, profit-making corporation in 2006.)

But the Court of Appeals ruled that state law did not give the attorney general the authority to bring major parts of the case.

While the decision is a win for Grasso, the war is not over.

In 2006, Justice Charles E. Ramos of state Supreme Court in Manhattan ruled that Grasso had breached his fiduciary duty to keep the board informed about his pay and ordered Grasso to pay back at least $100 million.

Grasso is appealing that decision.

"Both sides have something to look forward to," said Richard J. Schulman, a securities lawyer for Bryan Cave.

"The attorney general has a decision from the lowest court saying there has been a breach of fiduciary duty."

"But Grasso has slimmed down the case against him."

Grasso's fight to keep his pay has drawn widespread attention, partly because of his rags-to-riches story.

He grew up in a working-class neighborhood in Queens, dropped out of college and started working as a clerk at the exchange.

But he rose through the ranks, ultimately securing the chairman's title and ringing the exchange's famous bell with business and political luminaries.

Grasso will now wait to see what happens with his appeal of the two remaining charges, while Cuomo must decide how to proceed with the remaining claims.

"City 'burned' on building deal"

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

First published: Friday, June 27, 2008

TROY -- City officials say a woman who promised to rehab an abandoned South Troy apartment building stripped the structure instead, forcing its demolition Thursday.

"We got burned," Mayor Harry Tutunjian said.

Officials say Maxine Douglas purchased 393 Fourth St. from the city in November under the stipulation that she begin renovation of the long-neglected structure within six months.

When Douglas failed to do so, officials said, they moved to retake ownership.

The city says that as of June 1, Douglas no longer owned the building.

But that didn't stop her and contractors from allegedly entering the building and removing everything of value, including a mahogany staircase, windows, copper piping and more.

The city alleges Douglas even cut the floor joists that hold the building together, rendering the structure unsound and a danger to the neighborhood.

Douglas has been ticketed for several code violations.

But Tutunjian and David Mitchell, the city's attorney, promised they will push for dozens of civil and criminal charges, including criminal trespassing and endangering public health and safety.

"We're going to be asking for jail time," Mitchell said.

Douglas on Thursday did not return a phone call.

A man who identified himself as a maintenance worker at her Ninth Street home went inside to retrieve Douglas, but returned saying he "did not believe" she was home.

On Fourth Street Thursday, neighbors gathered to watch the afternoon demolition, placing chairs on the sidewalk as if the Flag Day parade, which traveled up the street weeks ago, was set to return.

They said the building, one of the oldest and most distinctive on a street of closely packed row houses, was a nuisance and frequent cause of complaints.

But they also rued that it would not be rehabbed, as several others in the neighborhood have been.

"Yes and no," said Fourth Street resident Pam Booker, a social worker, when asked if she was pleased by the demolition.

"For safety purposes, absolutely."

"For historic reasons and for the neighborhood, we don't want to see it."

Many neighbors on the close-knit street said they had noticed workers removing materials from the building, but didn't report the alleged theft because they didn't realize the work was not part of the promised rehab.

Some residents, though, privately said they believed some city officials were aware of the ongoing theft.

Tutunjian denied the claim.

"When I found out about this Monday, I was very angry and I'm still angry."

Still, the experience calls into question the city's process of selling abandoned homes in need of renovation.

Critics say Troy doesn't do enough to ensure buyers can afford the often extensive renovations.

City officials said they ran a criminal background check on Douglas and checked to ensure she did not have a history of code violations in the city.

Tutunjian said the city learned a lesson, and will "tighten up" its checks on prospective buyers.

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

"Home sales tepid but hint at rebound - Numbers for last month indicate buyers may be returning to local market"

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

First published: Friday, June 27, 2008

Home sales in the Capital Region continued to slump in May, amid signs that the worst of the downturn might be over.

The number of closed sales climbed in Saratoga and Rensselaer counties last month, when compared to a year ago, according to the Greater Capital Association of Realtors Inc., a Colonie-based trade group.

But sales dropped dramatically in Albany County, down 23 percent, and in Schenectady County, down 29 percent.

Median sale prices increased in every county but Schenectady, where they fell 14 percent to $150,500.

The numbers were an improvement from April, when both sale and price declines were widespread.

"There are signs that we have perhaps reached the point where buyers are returning to the market," said Marie Bettini, president of GCAR and owner of Albany Realty Group.

Still, for the year, the number of closed sales is down in all four counties, while prices are flat at best.

Columbia and Greene counties are not included in the GCAR report.

In the broad 11-county area the association serves, which extends far north and west of Albany, closed sales fell 10 percent in May while the median price rose 1 percent, to $195,000.

Nationally, sales of existing homes (GCAR includes both new and existing homes) rose slightly in May.

Prices, however, continued to fall, according to the National Association of Realtors.

The association said the national median price of an existing home dropped to $208,600, a 6.3 percent decline from the same month a year ago.

The sale of existing homes and condominiums nationally rose 2 percent in May.

"2 Democrats eye state Senate bids - Keehn, Yepsen plan to gauge potential support in 43rd District race"

By DENNIS YUSKO, Staff writer, Albany, New York Times Union

First published: Friday, June 27, 2008

SARATOGA SPRINGS -- Two Spa City Democrats will enter the race for former state Senate Majority Leader Joseph L. Bruno's seat this fall if they can enlist enough support over the next two weeks.

Former Mayor Valerie Keehn and city Supervisor Joanne Yepsen both said Thursday they would start gathering petition signatures for election to the 43rd District state Senate seat.

Both said Bruno's decision this week to retire made them want to run.

They need to collect 1,000 voter signatures in the district by July 10 to be candidates.

"If I can get the signatures, I think I can definitely be in this ballgame," Keehn, 49, said Thursday.

Yepsen could start collecting signatures over the weekend, she said through a spokeswoman.

If Keehn and Yepsen become candidates, it would likely mean challenging each other and Rensselaer County Democrat Brian Premo of Brunswick in a September primary.

Assemblyman Roy McDonald, R-Wilton, is favored to represent district Republicans in the fall.

On Thursday, Rensselaer County Executive Kathy Jimino announced she would not be a candidate for the seat.

New York's 43rd Senate district includes all of Rensselaer County and eastern and southern Saratoga County.

Rensselaer County is almost evenly split between enrolled Democrats and Republicans, while the parts of Saratoga County in the district lean Republican but can swing Democratic.

Premo, 48, launched his bid to challenge Bruno several weeks ago and has already picked up endorsements from the Democratic committees of both counties.

The attorney from Brunswick welcomed others into the race, which he said would be about making the state Legislature functional.

"There is no question that democracy is served when voters have a greater choice of candidates," Premo said.

Yepsen, 49, was elected to a second term as city supervisor last year.

"Because I believe so strongly in nonpartisan leadership and working for the people as a whole, despite their party affiliation, I believe I could offer the people in the 43rd district a refreshing new spirit of cooperation," Yepsen said in an e-mail.

Keehn was defeated by Republican Scott Johnson in November.

But she's shown strength in Democratic primaries, winning two in the city in 2005 and 2007.

She said Thursday that she would campaign as a "tried and true Democrat," and represent "middle-class taxpayers trying to maintain their quality of life in New York, which is getting more and more difficult."

Dennis Yusko can be reached at 454-5353 or by e-mail at dyusko@timesunion.com.

THERE WAS NO TRAUMA FOR ME IN LOSING THE "WHORE MASTER" SPITZER AS GOVERNOR, NOR IN LOSING THE THUG JOE BRUNO AS A SENATOR, EITHER ...

RATHER, THERE WAS JUBILATION AND A SENSE OF RELIEF ...

NYS SENATOR NEIL BRESLIN FEELS THERE WAS TRAUMA FOR HIM BECAUSE HE IS A VERY WEAK MAN ...

And so ...

"Tumultuous session's end a victory for lawmakers - 811 passed bills enact reform in New York"

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

First published: Friday, June 27, 2008

As lawmakers earlier this week left for the summer, Gov. David Paterson hailed what he said was "one of the most productive legislative sessions in a generation."

If Paterson and lawmakers get extra points for working through adversity, that may be true.

This year's session will likely be remembered mostly for the chaos that erupted in March when former Gov. Eliot Spitzer suddenly resigned amid a prostitution scandal.

Then, Paterson marked his second day as governor by admitting to his own extramarital affairs.

And, he warned, the economy and state's budget picture were worsening by the day.

Cap that with Republican Sen. Joseph L. Bruno's stepping down as Senate majority leader, and it's a wonder the session ended just a day behind schedule on Tuesday.

"The trauma of losing a governor and losing a majority leader of 14 years is enough for one session," said Sen. Neil Breslin, D-Delmar.

All said, 811 bills were passed this year of about 4,300 proposed in 2008.

(Lawmakers have offered about 20,000 bills over their two-year terms).

While there may not be anything earth-shattering, this year's legislation offers the usual mix of good news for some New Yorkers and bad news for others.

As always, there's also a batch of bills -- yet to be signed by Paterson -- that are targeted toward certain groups or industries.

Here are some highlights.

THE GOOD

Foreclosure protection: Law makers and the governor took a two-pronged response to the subprime mortgage foreclosure crisis that prompted 50,000 foreclosures in the state last year.

Homeowners facing foreclosure now will get notices explaining their situation and a list of counselors who can help them try to keep their homes.

The goal is to encourage banks and borrowers to try to work out deals, such as lowered interest rates.

The new law also cracks down on misleading sales pitches on mortgages, especially those with variable interest rates.

Brownfields: Legislation limits the amount of tax breaks the state would owe to developers who clean up brownfields, fixing a flaw in a 2003 bill that was threatening to cost billions.

The new rules are aimed at encouraging cleanups in distressed areas rather than economically strong communities that don't really need the incentive.

Health care: Starting next year, nurses won't be forced to work lengthy overtime shifts.

The public will be apprised of unanimous medical board complaints against errant physicians.

Midwives gained more secure footing with a bill that makes it harder for hospitals to dismiss them without a good reason.

Parents and guardians of people with disabilities will have broader access to safety records.

New Yorkers will also be able to get immunization shots at their local pharmacy.

Consumer protections: It will be easier for federally recalled toys to be taken off the shelves.

People will be able to quickly freeze their credit if they think they've been the victim of identity theft.

Pension reform: The highlight here is a crackdown on "double dipping," in which officials such as school superintendents retire one day, get a waiver and then go back to work as fill-ins while collecting both their pay and pension.

THE BAD

Auto insurance: In a last-minute deal, lawmakers agreed to let auto insurers raise their rates by up to 5 percent without prior approval.

Since the cap applies to a statewide average, that means rates could jump sharply in specific areas, such as inner cities or rural locales, while remaining stable in others, noted Russ Haven, legislative counsel for the New York Public Interest Research Group, who added the Empire State already has the second-highest rates in the nation.

Property taxes: Paterson introduced a plan to cap the state's soaring school property taxes, but with the Legislature still undecided, a solution will have to wait at least until lawmakers return, possibly next month.

Campaign finance reform: Both Spitzer and Paterson called for reforming a system that critics say fosters undue influence by well-heeled special interests.

The Senate in particular has resisted their ideas.

Soaring gas and heating oil prices: No major deal, although under one bill independent gas station owners would be able to buy from sources other than their "branded" company, which could lower the prices a few cents.

THE SPECIAL

Oil: A bill allows oil companies and distributors to more easily get rebates on sales of tax-exempt government vehicles like police cars or firetrucks.

Segways: NYPIRG's Haven described this measure as a "classic one-company special interest bill" to allow Segway's unique two-wheeled scooters on sidewalks.

They say it's a useful transportation tool, but opponents fear it could clog sidewalks.

Spitzer vetoed it last year.

Plastic knuckles: Now banned from schools.

Some of them apparently are nearly as hard as brass but can't be caught in metal detectors.

Modular homes: The bill would make modular homes no longer subject to sales tax if they are sold by a dealer.

One of the sponsors, Assemblywoman Ro-Ann DeStito, D-Utica, along with Sen. Joe Griffo, R-Utica, noted there are some large factories and dealers in her region of the state.

Animals: One bill prohibits direct contact, such as petting, between humans and "big cats" such as lions or tigers in zoos or other forms of captivity.

Pooper scooper fines would rise.

The use of electric stunning devices for killing fur-bearers like foxes or mink would be banned.

Junior hunters -- 14- and 15-year-olds -- would be allowed to hunt deer and bear with firearms, under adult supervision.

Farmers could place their composting areas into lower-taxed agriculture zones.

Taxes: Warren County would be able to impose a quarter-percent mortgage tax.

Gambling: Development of a gambling resort at the site of the Concord Hotel in the Catskills is allowed.

Public employees: One measure passed imposes a one-year moratorium on the reduction of health care benefits for public sector retirees and sets up a commission to study the topic.

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

"Deficit-tax vote wasn't just along party lines"

Albany, New York Times Union

First published: Friday, June 27, 2008

When it comes to Colonie's would-have-been midyear deficit-correction tax, most of the attention has been on the vote that didn't happen in the Republican-led state Senate before the end of the session, effectively killing the bill.

And while the bill easily passed the Democrat-led Assembly 87-53, the vote didn't slide strictly along party lines.

As previously noted in these pages, Assembly Minority Leader James Tedisco, a Schenectady Republican, voted for the bill, as did GOP Assemblyman Roy McDonald of Saratoga.

Tedisco's office explained his vote by saying the lawmaker generally doesn't believe the state Legislature should be micro-managing the affairs of local municipalities.

Among the locals voting "no" were first-term GOP Assemblyman George Amedore of Rotterdam and Assemblyman Tim Gordon of Bethlehem, an Independence Party member who sits with the Assembly's Democratic majority.

Amedore's vote is not necessarily surprising: a Republican who won a special election to fill Democrat Paul Tonko's unexpired term would probably not bolster his street cred in GOP circles by backing a local tax increase.

Gordon, seeking re-election to a second term this fall, said he is wary of paving the way for tax hikes.

"As a rule, I vote against local property tax increases," Gordon told Inside Politics.

"I just wanted to be fair and consistent with what I've done for other towns."

Yet Gordon said he does not fault Assemblyman Robert Reilly, D-Colonie, for bringing the bill to the Legislature and doing what he believed was necessary for a town in his district.

(Gordon, incidentally, grew up in Newtonville, a Colonie hamlet that is Reilly's home turf.)

Of Colonie's fiscal pains, Gordon said:

"I was shocked, like so many others, to find out the situation was a bad as it was."

Farley ready to run

We'd be remiss not at least mentioning state Sen. Joseph L. Bruno in the week he announced he'll not seek re-election.

Even though fellow Sen. Hugh Farley started the same year as Bruno, who stepped down this week as Senate majority leader, Farley made clear Thursday he's not going anywhere anytime soon.

Farley, of Niskayuna, said he'll be running for re-election in the 44th Senate District seat he's held for 16 terms in November.

Do not let his age, 76, or his relationship to Bruno's tenure fool you, Farley said.

"I'm still first place in my tennis league," Farley quipped.

Farley said he'll formally announce his intentions soon.

He wanted to work on getting support and petition signatures for lines he wants to run on -- Independence and Conservative in addition to the Republican line -- before formally announcing.

Web slight

An alert reader reports to Inside Politics that the Albany County Democratic Committee's Web site is woefully out of date and suggests criminality (admitted or implied) is more acceptable than disloyalty.

The Web site ( http://albanycountydemocrats.org/Links.aspx ) offers links to various elected Democrats around the county and beyond, including former Gov. Eliot Spitzer and former state Comptroller Alan Hevesi.

Both men, you may have heard, resigned in disgrace.

Hevesi has been out of office 18 months.

Spitzer quit in March.

Not included in the list, however, is Albany County Comptroller Michael Conners, who infuriated Democratic leaders when he left the party to challenge Democratic state Sen. Neil Breslin as a Republican in 2004.

Conners eventually re-enrolled as a Democrat and won re-election to a fourth term as the county's fiscal watchdog last year, defeating party-backed candidate Patricia Slavick, who is also a member of the Guilderland Town Board, in the Democratic primary.

Conners told Inside Politics that, despite attempts to reach out to the party, he's never been listed on the committee's Web site since it was created.

"Well, they like Alan Hevesi and Eliot Spitzer and they don't like me," Conners reasoned.

"Independence is not a highly valued trait among elected officials."

He added with a smile you could practically see over the telephone: "It certainly hasn't hurt my ability to win a primary."

Inside Politics is a companion to the Local Politics blog -- http://blogs.timesunion.com/ localpolitics -- and compiled by Jordan Carleo-Evangelist. Staff writer Lauren Stanforth contributed.

"Colonie acts to sanction town employees"

By JORDAN CARLEO-EVANGELIST, Staff writer, Albany, New York Times Union

First published: Friday, June 27, 2008

COLONIE -- A week after state auditors criticized the town's handling of a public works project on private land, the town took the first step Thursday toward potentially punishing employees linked to it.

In a closed session, the Town Board approved a resolution authorizing Supervisor Paula Mahan to seek sanctions "against certain town employees'' and appoint a hearing officer required under state civil service law.

Peter Gannon, the town's director of operations, said the resolution was "directly related to the Rod and Gun Club issue'' but declined further comment, citing the privacy of personnel issues.

Gannon's statement was a reference to the West Albany Rod & Gun Club, the site of the controversial public works project on Willoughby Drive, where several former town officials were members.

The seven-member Town Board approved the resolution after going into an executive session before the formal Town Board meeting.

The vote breakdown was not immediately available.

In an audit released last week, state Comptroller Thomas DiNapoli's office said the specter of impropriety was raised when town officials sent work crews last August and September to dump and grade excess fill at the club and improve a parking lot and driveway.

Contrary to an internal town audit, which contended that the project actually saved the town at least $125,000, DiNapoli's office said it may have cost taxpayers as much as $42,000 more than necessary at a time when Colonie's finances were already stretched thin.

Albany County District Attorney David Soares' office has said it is still looking at whether any laws were broken.

The state audit identified town employees only by job title.

Among other things, it cited potentially costly lapses in oversight and communication within various sections of the Public Works Department.

The two people who the audit said should have publicly disclosed their interests, again identified only by job title, were former Town Attorney Arnis Zilgme and former Town Board member Ulderic Boisvert -- both club members.

Boisvert was defeated in November's election and Zilgme left in December during the transition to the new administration.

Both men have denied any wrongdoing and said their involvement in the project was minimal and that their membership at the club was well known.

Jordan Carleo-Evangelist can be reached at 454-5445 or by e-mail at jcarleo-evangelist@.timesunion.com.

"Race for Bruno's seat still in flux - Pair of Democrats making late plans to enter fray in the 43rd"

By DENNIS YUSKO, Staff writer, Albany, New York Times Union

First published: Sunday, June 29, 2008

SARATOGA SPRINGS -- Former city Mayor Valerie Keehn is out.

City Supervisor Joanne Yepsen and Michael Russo, an ex-local union leader, want in.

Saratoga County Democrats emerged from two days of meetings on Saturday with a different lineup for the 43rd District state Senate seat now held by retiring Sen. Joseph Bruno.

Keehn announced Saturday that she will not seek the seat and instead throw her support behind Yepsen, who started collecting signatures on Saturday to run.

"I am very encouraged by the positive feedback and support our effort is receiving," Yepsen said in an e-mail.

Keehn intends to publicly endorse Yepsen for the seat, possibly on Monday.

"I am very pleased to support Joanne."

"She has a record of commitment to open government, transparency and constituency service, which will be a welcome change for the citizens of the 43rd Senate District," Keehn said.

Russo, who now works as district officer for U.S. Rep. Kirsten Gillibrand, D-Greenport, said in a brief phone interview Saturday that he, too, started circulating petitions to join the race.

"I am strongly considering (a run)," he said.

He and Yepsen need 1,000 signatures each from enrolled Democrats in the district by July 10 to challenge the only Democrat officially in the race -- Rensselaer County Democrat Brian Premo of Brunswick -- in a September primary.

Their late attempts to enter the race come less than a week after Bruno, a Republican from Brunswick, announced he would retire.

Bruno has endorsed Assemblyman Roy McDonald, R-Wilton, to replace him.

Nassau Councilman Ray Seney also is seeking the Republican nomination.

The 43rd Senate district is made up of all Rensselaer County and parts of Saratoga County, including Clifton Park, Halfmoon, Saratoga Springs, Mechanicville and Stillwater.

Premo has received the endorsements of both county Democratic committees.

"I'm under a lot of pressure to call a county meeting to reconvene and reconsider this race," Saratoga County Democratic Chairman Larry Bulman said.

"We're not going to do that."

"We're just going to move forward and good Democrats are going to do what good Democrats are going to do."

Dennis Yusko can be reached at 454-5353 or by e-mail at dyusko@timesunion.com.

JOE BRUNO WAS A GOOD FRIEND TO THUGS, BULLIES, HIGH-ROLLERS, "PLAYAHS", AND GAMBLERS OF ALL STRIPES ....

AND THE "PROPERTY" OF THE STATE OF NEW YORK, INCLUDING ITS STATE CAPITOL BUILDING AND TREASURY, WAS JOE BRUNO'S PERSONAL PROPERTY TO DO WITH JUST AS HE PLEASED ...

And so ...

"Racing industry will miss Bruno"

By TIM WILKIN, Staff writer, Albany, New York Times Union

First published: Sunday, June 29, 2008

When Funny Cide shocked the thoroughbred racing world with his win in the 2003 Kentucky Derby, State Senate Majority Leader Joseph L. Bruno threw a party at the state Capitol.

The whole Funny Cide gang -- except the horse, of course -- was there.

Bruno beamed and applauded the New York-bred's amazing accomplishment.

"Senator Bruno led the troops down there when they honored Funny Cide and the connections," said Jack Knowlton, the managing partner of Sackatoga Stables, which owns the gelding.

"He used to kiddingly talk about Funny Cide being his most famous constituent."

When Bruno would comment about Funny Cide or any other thoroughbred, he knew what he was talking about.

He was a student of the game.

"I think Joe Bruno is a huge loss for the Saratoga community and the racing industry," said Charles Hayward, president and CEO of the New York Racing Association.

"You are not going to find someone with the passion or knowledge of racing -- and I don't mean that in a flip sense -- to replace him."

"Every time there was an issue with racing, we knew we had an advocate in Joe Bruno," Knowlton said.

"Quite honestly, I don't think it's going to be possible to replace him."

Hayward talked about seeing pictures of Bruno on horseback or mucking out a stall at his farm in Rensselaer County.

In Hayward's mind, Bruno understood his game.

Even though Bruno did not support NYRA when it was trying to keep the franchise to run racing in New York, Hayward said he respects Bruno's body of work.

"Generally, he has been a strong supporter of New York racing," he said.

"I thought he was keeping an open mind on all the bidders."

Hayward said Bruno also was cognizant of the thoroughbred breeding program in New York.

Rick Violette, a thoroughbred trainer and President of the National Thoroughbred Horsemen's Association, said Bruno supported getting bigger purses in the New York-bred races, which in turn encouraged a better breeding program.

Hayward said NYRA paid out $35 million in purses in races for state-breds last year.

There now are more than 400 breeding farms throughout the state, which employ about 18,000 people.

Hayward said those farms generate about $1.2 billion in economic activity to the state annually.

"Senator Bruno is a fan of the game, he doesn't just have an outside appreciation for the sport," Violette said.

"He was absolutely a friend to racing."

"It will be our job to underline the importance the industry has to whoever fills his shoes."

Tim Wilkin can be reached at 454-5415 or by e-mail at twilkin@timesunion.com.

"Bruno may not finish term"

By RICK KARLIN and ERIC ANDERSON, Staff writers, Albany, New York Times Union

Last updated: 1:20 p.m., Tuesday, July 8, 2008

Republican state Senator Joe Bruno earlier today said he's going day-to-day in office and may not finish his term.

If he steps down early, "There'll be a vacancy until Assemblyman Roy McDonald gets elected in this district," Bruno said during a press conference this morning in Mechanicville to announce a new railyard project there.

Bruno had been Senate Republican Majority Leader since 1995 and has been in the Senate for 32 years.

He stepped down from the leadership last month.