"Assembly aide accused of welfare fraud - Staffer retired making close to $80,000-a-year salary; faces grand larceny, welfare fraud charges"

By ROBERT GAVIN, Staff writer, Albany, New York Times Union

Last updated: 5:34 p.m., Thursday, July 10, 2008

ALBANY -- A state Assembly staffer who retired last month making close to $80,000-a-year ripped off nearly $53,000 from the Albany County Department of Social Services by lying about her income on benefit applications, authorities said today.

Diane Gamble, 60, of Watervliet, told investigators she's been on and off Medicaid for nine years and has been "misrepresenting" her income from New York state in letters to her case worker sent under the letterhead of Assemblyman Jose Rivera, a Bronx Democrat, court papers said.

Gamble, who was arrested Thursday, not only failed to report all her earnings - but admitted she didn't report a 2000 Mercedes SUV, 2005 Volvo and 1990 Oldsmobile registered with the state Department of Motor Vehicles, court papers said.

"I would like to inform the Department of Social Services that I know what I did was wrong and intentionally did this so that I could continue to receive Medicaid benefits," she told a department fraud investigator on April 17.

"I am sorry for what I have done."

Gamble is accused of swiping $52,954.24 from Social Services between August 2004 and April 2008.

She was arraigned in City Court on second-degree welfare fraud and grand larceny charges, the latter carrying a maximum sentence of 5 to 15 years in prison.

She was released without bail after pleading not guilty before Judge William Carter.

Approached outside court by the Times Union, Gamble said she had worked for Rivera for three legislative sessions but no longer works for him.

She said "when everything is taken into account" the case will be seen as a misunderstanding.

"This is news?" Gamble added.

Her attorney, Todd Monahan, quickly arrived, stopped the interview and declined further comment.

Dan Weiller, a spokesman for Assembly Speaker Sheldon Silver, initially identified Gamble as an active Assembly employee.

He later said she retired June 28.

Gamble's salary upon retirement was $79,998, said Jennifer Freeman, a spokeswoman for state Comptroller Thomas DiNapoli.

In an e-mail, she said Gamble has more than 30 years of state service, with her pension still being calculated.

In Gamble's statement, she told investigators she reported her biweekly wages as $1,023.82 in July 2006 when they were actually $2,493.14.

She said in July 2007, she reported bi-weekly earnings at $289.01 when they were really $1,918.97, court papers said.

In 2006, Gamble allegedly applied for Medicaid benefits listing the phony figures.

The next year, she completed a recertification for Medicaid listing the false amount, she told the county investigator.

"These wages were false," she said in the statement, "and I submitted them to insure that I would receive Medicaid."

Michael Nieves, a spokesman for Rivera, noted Gamble was retired.

He said the lawmaker was unaware of the allegations.

He called the case "not our problem."

"Colonie workers suspended in paving project probe"

By TIM O'BRIEN, Staff writer, Albany, New York Times Union

Last updated: 5:17 p.m., Friday, July 11, 2008

COLONIE -- The town suspended two public works supervisors today over their alleged roles in the use of public crews to make improvements at a private club.

William Neeley and Thomas Romano were suspended without pay for 30 days pending a public hearing into their case, said Town Supervisor Paula Mahan.

She declined to discuss the exact charges, though she confirmed their suspensions are connected to work by town crews at the private West Albany Rod & Gun Club.

"Because it's a personnel matter, I can't get into the details,'' Mahan said.

Neeley and Romano are both long-term town employees, said Gary Favro, a labor relations representative of the United Public Service Employees Union that represents the two employees.

Neither Neeley nor Romano could be reached for comment Friday.

"We will be responding, denying all the charges,'' Favro said.

"We think they are going to be exonerated based on what we know.''

Last August and September, then-town officials sent work crews to dump and grade excess fill at the West Albany Rod & Gun Club and to improve a parking lot and driveway.

In an audit released last month, state Comptroller Thomas DiNapoli's office said the work may have cost taxpayers as much as $42,000 more than necessary at a time when Colonie's finances were already stretched thin.

Former town officials had claimed the work saved the town $125,000.

The United Public Service Employees Union signed up non-represented employees after Mahan was elected town supervisor, ending decades of Republican rule in the town.

Favro said the two men are entitled to a hearing, and their case has been turned over to an attorney for the union.

"We'll represent them and do whatever it takes,'' he said.

OLD CHARLIE RANGEL HAS NEVER BEEN AFRAID TO STICK OUT HIS HAND FOR A LITTLE BIT EXTRA ....

HE'S A NATURAL BORN POLITICIAN IN THAT REGARD ....

IN IT FOR HIS POCKET, AND NOTHING ELSE ....

THE POCKET COMES FIRST, ALWAYS ....

And so ...

"Rangel: Not unfair to have 4 rent-stabilized apts - NY Rep. Rangel on his 4 rent-stabilized apartments: 'I don't see anything unfair about it'"

By AMY WESTFELDT, Associated Press

Last updated: 6:52 p.m., Friday, July 11, 2008

NEW YORK -- U.S. Rep. Charles Rangel on Friday defended living in three combined, rent-stabilized Harlem apartments as a legal benefit of long-term city residency, but said he may abandon a fourth apartment he uses for campaign work if it's not allowed.

Rangel, one of New York's most influential politicians and the chairman of the House Ways and Means Committee, held a news conference outside his Lenox Terrace apartment complex to respond to a report Friday in The New York Times on his four below-market apartments.

"I feel so terribly proud of never having to leave my neighborhood," said Rangel, 78, who said he has lived in two homes in Harlem throughout his life.

He said he didn't negotiate a deal with his landlord for his current apartment, where he has lived for about 20 years.

"I don't see anything unfair about it, and I didn't even know it was a deal," the Democrat said.

Housing experts said Rangel's living arrangement was legal and said tenants often combine smaller, rent-stabilized apartments into larger ones over the years.

Gov. David Paterson acknowledged earlier this year paying below-market rents in an apartment in Rangel's building.

But some questioned whether the powerful congressman and champion of affordable housing initiatives was taking advantage in a market where low-income housing is disappearing.

"It's that he seems to have gotten away with certain things with his landlord, which is notorious for unfairly targeting other rent-stabilized tenants for eviction," said Joe Catron, an organizer for the Metropolitan Housing Council, a tenants' rights group.

Rangel, who earns $165,200 a year and has a time-share in the Dominican Republic, pays a combined $3,894 a month for the four apartments, the Times reported.

The rent is roughly half the market rates advertised by his landlord, The Olnick Organization.

Olnick spokeswoman Jeannette Boccini declined to comment Friday on Rangel's living situation.

Regulations governing the city's 1 million rent-stabilized apartments allow a tenant to live in an apartment at below-market rates as long as it's a primary residence -- the tenant's home for just over six months of the year.

Tenants' rent rises every one or two years, with the increase set by a city board.

Long-term residents sometimes pay far lower rents than newer arrivals, since owners can impose higher rents on apartments when they change hands.

Combining apartments to make a larger one is "not uncommon," said Nancy Peters, spokeswoman for the state Division of Housing and Community Renewal, which oversees regulations for rent-stabilized apartments.

Rangel said he moved into an apartment that had already been combined by a previous tenant.

The congressman said he added another studio apartment a few years later to accommodate visiting relatives.

The regulations do not allow rent-stabilized apartments to be used for business.

The rules usually are enforced at the landlord's discretion, Peters said.

Rangel said in a separate statement that he rented the fourth apartment, six floors below his home, about a decade ago and thought it was appropriate to use as an office because there are other offices in the complex.

"I guess I have to take another look at something that hasn't come up until now," Rangel said of the office.

He said he would talk to his landlord and would move his campaign office if necessary.

Some tenants openly challenged Rangel as he spoke Friday, including a critic who said the congressman didn't help him when he was facing eviction from another apartment building owned by the same landlord.

"He's got a reputation of not helping anyone other than himself," said Lance Smith, 45, who has a Web site critical of Rangel.

Catron said Olnick has targeted residents legally living in Lenox Terrace for eviction, sometimes citing false records of home ownership elsewhere.

Hanif I. Shabazz, a film producer who lives in an Olnick building next to Rangel's, said the congressman helped alleviate a rat problem in his building and responded to other tenants' complaints.

Shabazz, a 30-year resident of a rent-stabilized apartment, said he had no problem with Rangel's similar arrangement.

"We know Charlie," said Shabazz.

"We love him."

"Teacher accused of making suicide pact with pupil"

Associated Press

Last updated: 7:52 a.m., Friday, July 11, 2008

BUFFALO, N.Y. -- Police say a former Buffalo charter school teacher who disappeared with a male eighth-grade student last month made a suicide pact with the teen.

Cara L. Dickey, 30, surrendered to Buffalo police Thursday on four charges, including felony counts of promoting a suicide attempt and unlawful imprisonment.

Arrest papers allege Dickey sent the 14-year-old boy inappropriate text messages, picked him up on the afternoon of June 16, drove him to numerous locations and supplied him with rum and over-the-counter drugs.

Police found both of them the next morning, the boy in a suburban mall and Dickey sleeping in her vehicle elsewhere.

Dickey was fired from her job at South Buffalo Charter School.

Dickey's lawyer declined comment as she was released on $5,000 bail.

------

Information from: The Buffalo News, http://www.buffalonews.com

"NY teacher charged with rape of disabled student"

Associated Press

Last updated: 3:12 p.m., Thursday, July 10, 2008

NEW YORK -- A teacher faces charges that she raped a mentally disabled student, prosecutors said Thursday.

Mandi Weeks, 27, is charged in a criminal complaint with third-degree rape, criminal sexual act, and endangering the welfare of a child, according to prosecutors in Queens.

Authorities said the 15-year-old boy was abused while he was home on break from Devereux New York, a residential school for children with developmental disabilities and behavioral disorders in upstate Red Hook.

Weeks had been a teacher there since February 2007.

The boy was believed to have an IQ or intelligence quotient of 50; average IQ is 85.

Prosecutors said the boy was the victim of statutory rape at his Queens home.

He also was abused while sitting in a car in a Queens parking lot on July 6.

The investigation began after the boy got on a subway looking for Weeks and got lost.

His mother reported him missing to police, who discovered inappropriate e-mails from Weeks while going through the boy's computer in search of leads.

Weeks has been fired and will not be permitted back on campus, school officials said Thursday.

She had been screened before she was hired, but there was nothing to indicate any problem or concerns, officials said.

"The Devereux staff is shocked and saddened by such a charge."

"The welfare of our students is our top priority," said John O'Keefe, executive director of the school.

"We will cooperate fully with law enforcement officials, and we are reviewing our internal policies and procedures in order to assure the safety and security of those we serve."

Weeks, who was arraigned Tuesday, will appear in court again Aug. 11.

Her attorney did not immediately return a call seeking comment.

"Census: NYC grows as upstate cities shrink"

By MICHAEL HILL, Associated Press

Last updated: 12:02 a.m., Thursday, July 10, 2008

ALBANY -- The Big Apple is getting bigger as the largest cities in upstate New York continue to lose more people, according census estimates released Thursday.

New York City grew by 23,960 people in the 12 months ending July 2007 for a population of 8.27 million, according to the yearly estimates from the U.S. Census.

The city has been steadily growing for years and remains a magnet for immigrants and young people.

Population growth in New York has been centered for years in the metropolitan area.

Some suburban villages north of the city in the Hudson Valley were among the fastest growing in the state over the 12 months, including Wurtsboro (7.9 percent), the Hasidic enclave of Kiryas Joel (5.2 percent) and Wappingers Falls (4.8 percent).

The story was different around much of upstate New York, where the largest cities showed slight losses in the annual estimate.

Buffalo's population of 272,632 was down 0.93 percent over the year; Rochester, at 206,759, was down 0.49 percent; Syracuse, 139,079, down 0.78 percent; Albany, 94,172, down 0.46 percent, according to the estimates.

The numbers reflect a long-term trend of population losses in upstate areas as manufacturing jobs dry up and people settle in the South and the West.

California and Texas each had five cities among the 25 fastest-growing cities in the census estimates released Thursday.

Politicians in New York are particularly concerned about the exodus of young people just out of college, the so-called brain drain.

Among the upstate cities that grew over the year were Saratoga Springs (up 0.68 percent), Plattsburgh (0.16 percent) and Ithaca (0.14 percent).

Census estimates released earlier this year showed the state's population nudged up over the period by 15,741 to 19.3 million people.

----

On the Net

http://www.census.gov/

"Ex-NY prosecutor gets 2 years for sex with boys"

By JIM FITZGERALD, Associated Press

Last updated: 6:52 p.m., Wednesday, July 9, 2008

NEW CITY, N.Y. -- A former prosecutor was sentenced Wednesday to two years in prison for having sex with underage boys after her daughter alleged that her 15-year-old boyfriend was among the woman's victims, seduced into a sex act in the bathroom of the family home.

Beth Modica, 44, wept as her daughter Danielle said in court that she was banging on the bathroom door one day last year as her mother and her boyfriend were engaging in oral sex.

"We were competing for the same 15-year-old boy," Danielle Modica said.

"I was betrayed by both of them."

Modica told her children to lie to their father -- the Spring Valley police chief -- about the marijuana and alcohol she gave to them and their friends.

They were changed forever by their mother's "constant lying and the things she did around me and my brothers," she said.

She urged Rockland County Judge Catherine Bartlett to send her mother to state prison.

Her brother, 17-year-old Joseph Modica, wrote -- in a letter read by prosecutor Dominic Crispino -- that he knew his mother was having sex with his friend in her bedroom although "she lied to my face" and claimed the boy was sick.

Addressing his mother, he said, "I am truly embarrassed and disgusted with you."

Modica's 12-year-old son, Nicholas, also wrote to request prison time for his mother, saying, "I need to know when she gets out of jail it will be safe for me to be around her."

Leslie Brown, mother of one of the boys who had sex with Modica, told the judge that Modica was "a sly and manipulative sexual predator."

Modica, in an orange prison jumpsuit, her hands shackled to her waist, apologized through sobs to her family and her victims, saying she knows she has destroyed her family and devastated others.

"I will be eternally remorseful," she said.

Her attorney, Gerard Damiani, asked for a shorter sentence or just probation, saying the outlaw behavior was an aberration and noting that Modica, a former prosecutor in Queens and Rockland, had already lost her law license and custody of the children.

She is estranged from her husband.

Damiani said she is benefiting from psychiatric treatment.

But the judge told Modica, who lived in Sloatsburg, she was "a disgusting monster."

"At some point in your life you decided to become a manipulator, a conniver and a sexual predator," she said.

"You had unprotected sex with children."

"You gave them drugs and alcohol."

"... Some of these acts took place in your home with your children present."

At one point the judge said, "Your daughter's boyfriend?"

"That's disgusting."

Besides two years in state prison for Modica's guilty plea to statutory rape and criminal sex act, Bartlett imposed 10 years probation, sex offender registration and 10-year orders of protection for the two boys she had sex with.

"'Adverse possession' law revised in New York"

By MICHAEL VIRTANEN, Associated Press

Last updated: 5:32 p.m., Tuesday, July 8, 2008

ALBANY -- New Yorkers will no longer be able to simply mow a neighbor's lawn for 10 years to claim the property as their own.

A law signed Tuesday by Gov. David Paterson says "adverse possession" of another's land also will not happen simply because a fence, hedge, shrub, shed or other minimal, non-structural item is placed across the deeded property line.

Under New York law, an owner has 10 years to claim land back from encroachment.

The old law said the land had to be "usually cultivated or improved," which could mean regular maintenance like mowing or a fence.

The revision requires encroachment "sufficiently open to put a reasonably diligent owner on notice" or a "substantial enclosure."

"I think this law was just outdated, and it needed to be updated," said Assemblywoman Teresa Sayward, who sponsored the bill.

The Republican from the eastern Adirondacks said that as a former dairy farmer, she appreciated that the old law was meant to establish a way for people "to claim land they in fact put their heart and soul into."

While acknowledging the statutory language leaves the courts some "wiggle room," Sayward said one intent is to prevent people from claiming land when they know someone else holds the legal deed.

The kind of substantial structure that could lead to adverse possession now could be a garage or a house addition that went unchallenged for more than 10 years, she said.

The revised law does require having "a claim of right" or "reasonable basis for the belief" that the property belongs to you even to take adverse possession, except in cases where ownership cannot be determined.

Dating back to English common law, adverse possession allows a person to get title to land from the actual owner by using the land.

If someone doesn't dispute a neighbor's use of the property, the actual owner has abandoned rights to the property.

Denise Przybylo, who lost one-eighth of an acre to a neighbor in the Warren County town of Queensbury, pursued that case to the Court of Appeals, New York's highest court, where she lost.

She believes she would have won under the new law, which takes effect immediately.

"In my case, he just mowed it," Przybylo said.

"(Now) it has to truly be cultivated or a structure."

"It has to be something that alerts the true homeowner to knowing there's a problem there."

State Sen. Betty Little, another Adirondack Republican and sponsor, said legislation last year that would have simply precluded adverse possession by anyone who knew their neighbor was the true owner was vetoed by then Gov. Eliot Spitzer.

This year they worked with bar associations, title companies, the Assembly and the governor's office to refine the measure.

"We worked with them until we had something that I think allows for legitimate adverse possession cases but doesn't allow someone to just take someone else's land," Little said.

"We heard from many many people throughout the state that have had adverse possession cases."

"Usually the loser is the one that calls," Little said.

"It's really a big change in property rights."

Paterson signed more than 130 bills into law Tuesday, among them:

--Authorizing a revenue sharing structure for a proposed $1 billion gaming resort with video lottery terminals at the site of the old Concord Hotel in the Catskills.

--Doubling the maximum civil penalties for price gouging from $10,000 to $25,000.

--Prohibiting smoking at college and university residence halls, including private schools.

--Establishing a new parking violation for drivers who block cross-traffic at intersections in New York City, allowing enforcement by parking attendants as well as police officers.

--Enhancing criminal penalties for identity theft when the perpetrator knows that the victim is serving in the armed forces overseas.

--Outlaws plastic knuckles as a dangerous weapon.

"Bruno likely to resign by week’s end"

July 15, 2008 at 2:55 pm

by Irene Jay Liu, Albany, New York Times Union

Former Senate Majority Leader Joseph Bruno will likely resign by the week’s end, according to Bruno spokesman Kris Thompson.

“At this point, we’re looking to wrap things up by the end of the week,” he said.

When Bruno gave his last press conference as Senate Majority Leader on June 24, 2008, he hinted that a big announcement was coming, but didn’t go into details.

It looks like the announcement of IBM’s $1.5 billion investment upstate was likely that announcement, and Bruno said as much at the press conference this morning, “With all the love and affection I feel comfortable in slowly riding off into the sunset.”

Bruno will be releasing a statement later on today, said Thompson.

"NY Senate leader Bruno to resign seat by Friday"

By MICHAEL GORMLEY, Associated Press

Last updated: 4:32 p.m., Tuesday, July 15, 2008

ALBANY -- New York Sen. Joseph Bruno, the chamber's Republican majority leader since 1995, said Tuesday that he will officially leave office by Friday.

He surprised most in state government last month when he said he would resign but had not given a firm date when he would leave the office he's held since 1976.

The 79-year-old resident of Rensselaer County near Albany said he would like to return to the private sector and run a business.

State law prohibits him from a lucrative job of lobbying the Legislature for two years.

Republican Sen. Dean Skelos of Long Island has been chosen to replace Bruno, with Bruno's support.

In the two years since Gov. George Pataki left office, Bruno has been New York's top Republican leader.

"Frankly, my work is fairly well done," Bruno said Tuesday at his last major public event, an announcement of an IBM Corp. high-technology project in Albany.

"I feel like my transition is done."

"The furniture is moving out of my office tomorrow, the pictures are off the walls."

Then Bruno, true to form, joked:

"It can get depressing if I hang around."

"I push the buttons and nobody's answering."

His term would have ended Dec. 31.

A general election in November will pick Bruno's successor, who will be sworn in in January.

He said his exit doesn't threaten the Republicans' majority, now that the regular session is over.

The Senate's Republican majority would likely only convene a special session if there was broad agreement on issues with the Democratic minority.

With Bruno's departure, and Democratic Sen. John Sabini taking over as head of the state's Racing and Wagering Board, Republicans will maintain a 31-29 advantage in the chamber they have controlled since the 1960s.

Bruno leaves behind numerous projects in his home district named for him -- such as Joseph L. Bruno Stadium -- or which honor him with statues or plaques, such as the bust of him in Albany International Airport.

Bruno steered state and federal funding to numerous projects in his district as well as millions of dollars in pork-barrel spending for local groups, projects and charities.

He has also been part of Albany's notorious three-men-in-a-room negotiations with governors and the Assembly speaker to agree on state budgets and major policy matters behind closed doors.

"Upstate has never had a more dedicated advocate than they have had in Sen. Bruno," said Assembly Speaker Sheldon Silver, a Manhattan Democrat.

"He led our conference and the state Senate for 14 years and distinguished himself as one of the greatest leaders in the history of the state," Skelos said.

"I thank Joe Bruno for his leadership and his friendship and I join millions of New Yorkers in wishing him the very best of luck as he moves forward with the next phase of his life."

"All of us owe him a tremendous debt of gratitude."

Bruno said he's had eight or nine opportunities presented to him in the private sector since his surprise announcement that he would relinquish the majority leader's job.

He didn't identify any and said he's still thinking about how to return to the business world.

He ran a telephone company before being elected to the Legislature.

"I'm not the kind of guy who is going to go off and play with horses and golf or whatever else is out there," said Bruno, who owns horses and still rides.

He again told reporters that his decision has nothing to with a two-year-old investigation by the FBI into his consulting and other business ties outside the Senate.

"I am not worried about that," Bruno said, noting that he met with his lawyers Monday.

"I have never been charged."

"There is nothing I could ever contemplate that was inappropriate or illegal."

"Bruno will retire, end 32-year career - 'Time for me to ride off into the sunset,' senator says in a statement?

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

First published: Wednesday, July 16, 2008

Former Senate Majority Leader Joseph L. Bruno on Friday will resign from the seat he's held since 1976, ending 32 years in public service.

"I have no regrets because this has been a great trip and it is time for me to ride off into the sunset," said Bruno in a statement released Tuesday.

Bruno, who gave up his majority leader post last month, is retiring after announcing several major economic development projects for the Capital Region.

On Tuesday, he joined Gov. David Paterson and Assembly Speaker Sheldon Silver in unveiling a $1.5 billion investment by IBM in upstate New York.

In recent weeks, Bruno also disclosed a plan by Momentive Performance Materials to move its worldwide headquarters to Rensselaer County, the expansion of biomedical research at UAlbany's East Campus in East Greenbush, a new neonatal care unit at Albany Medical Center and a new rail terminal in Mechanicville.

Developing the Capital Region has been Bruno's priority, and will likely be the lasting legacy of his 14 years as majority leader.

Citing these achievements, Bruno said, "As a businessman, job creation was my top priority and I'm proud that these new projects are in place to build on our economic successes in the Capital Region and boost the economy of all of upstate New York."

Bruno said he hopes to work in the private sector, and a person with knowledge of the situation said Bruno has discussed joining CMA Consulting Services as an executive.

Bruno is close to Kay Stafford, widow of former Sen. Ronald Stafford and head of CMA.

"I want to do something, because, frankly, I'm not the kind of guy to retire and just play with horses and golf and whatever else is there," Bruno said.

The former Senate Republican leader stunned colleagues and political foes alike when he said on June 23 that he would not seek re-election in November.

He quickly bowed out as majority leader and was replaced by his deputy, Sen. Dean Skelos, R-Rockville Centre, who must now try to hold onto the Senate majority in this November's elections.

Bruno's departure leaves Republicans with a slim 31-30 majority in the Senate.

But Bruno said he wasn't worried that his conference would be outvoted if the Legislature reconvenes before the election, saying he has spoken with Paterson and the Senate would only return if there was a "consensus."

Bruno leaves office in the shadow of an ongoing, two-and-a-half year investigation into his public and private business dealings.

Bruno said is not concerned about the investigation, but indicated that he would like to see it end.

"There is nothing there, and I am told by my lawyers, who I met with yesterday, there is absolutely nothing that we have done wrong."

"So I'm very comfortable in that."

"But would it be nice if people would just go on and let me live my life?"

"Yes, that would be very, very nice," he said.

Bruno's departure has led to a flood of candidates vying to fill the vacant Senate seat.

On the Democratic side, there's Brunswick attorney Brian Premo, Saratoga Springs Supervisor Joanne Yepsen, and Michael Russo, district director for U.S. Rep. Kirsten Gillibrand, D-Greenport.

Republican Assemblyman Roy McDonald, R-Saratoga, and Nassau Councilman Ray Seney will face off in a primary, and Troy resident Chris Consuello will challenge Premo for the Working Families Party line.

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

"Cuomo probe in 'new phase' - Investigation of public pension abuse expanded to include more detailed information from lawyers"

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

First published: Wednesday, July 16, 2008

ALBANY -- In what's being described as a significant expansion of his probe into pension abuse, Attorney General Andrew Cuomo last week sent out some 200 letters to lawyers who work for towns, counties, sewer districts and other government agencies statewide asking for details on their benefits, hours worked and how many employers they list for the purposes of public pension credits.

Cuomo is seeking information dating back eight years.

His office called it "a new phase" in its ongoing probe of private lawyers and other professionals who the state maintains improperly accrued public pension credits by being listed as employees of school districts rather than as independent advisers or contractors.

Cuomo, with Comptroller Tom DiNapoli, has said that these professionals should not be considered public employees, and that they don't qualify for the pensions earned by legitimate full-time employees.

The inquiry began last winter with revelations that a Long Island attorney, Lawrence Reich, had been listed as an employee of multiple school districts.

Much of the work has focused on schools and BOCES organizations.

Dozens of lawyers are under active investigation by Cuomo, and during the past few months he has collected approximately $900,000 in settlements in at least seven cases.

Beyond school districts, Cuomo two months ago began gathering data from thousands of government entities across the state.

At the time, he said he believed hundreds or even thousands of lawyers had for years been collecting pension credits they really didn't qualify for.

The 200 letters are going to those whose answers in the initial round of data-gathering raised "red flags," Cuomo's office said.

Almost half those letters are going to upstate lawyers as well as a handful of other professionals such as doctors, accountants and engineers.

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

"Hard-to-ignore recession makes optimism hard to come by"

By FRED LEBRUN, Staff writer, Albany, New York Times Union

First published: Wednesday, July 16, 2008

Anyone who isn't a little apprehensive about our economy and making personal ends meet is either asleep or brain dead.

Handing over a $100 bill to gas up the truck is a sobering reminder that the bank and truck now own you, not just the bank.

Even my devout Republican friends are having a harder and harder time pretending there isn't a recession in progress as the Dow continues to slalom downhill.

As bad as it is for small time investors watching hard-earned 401ks melt away like an ice cream cone on an August day, imagine the roar of pain we would be hearing in this country if George W. Bush's plan to privatize Social Security had gone through.

There would be riots in the streets.

What safety net?

The Times Union front page headline Tuesday did nothing to quell nervousness, fueled as it was by more big-time mortgage lenders going wobbly on us and an old-fashioned run on a failed bank in California.

"Rash of bank failures unlikely," is certainly a left-handed confidence builder.

Yet amid all the anxiety this dismal news creates, it is noteworthy that the latest Siena Research Institute consumer confidence poll of New Yorkers caught in these economic crosshairs is surprisingly reasonable and nuanced.

The poll found that while once again New Yorkers by a large majority say they favor a property tax cap, they are even more inclined toward a property tax "circuit breaker."

That would be an individualized rather than institutionalized response to our state's burdensome tax problem.

A circuit breaker is triggered when property taxes reach a predetermined percentage of an individual's ability to pay.

Given a choice between a general property tax cap that would benefit all, and a circuit breaker that would benefit only the most stressed, Republicans and Democrats, upstate and downstate, all preferred the circuit breaker.

Which means that most New Yorkers are probably in favor of the logical extension of that preference, although it wasn't asked in the poll.

Namely, taxing wealthier New Yorkers, say those earning $300,000 and up, a shade more than they're paying now so the state could compensate school districts for the lost revenues of a circuit breaker.

A few of my devout Republican friends, including some in government, will get all twitchy at this prospect, I suspect.

And they can't be pleased either that a property tax cap comes in second to a circuit breaker.

But that's the way it is.

After all, a property tax cap shouldn't be a bail-out for a bunch of suburbanites living way beyond their means.

In an interesting match-up that only a poll could concoct, New Yorkers were nearly evenly divided over whether they would prefer a property tax cap, or eliminating 32 cents of the state's gas tax, with dropping the gas tax getting the edge.

I'm not sure what this shows, except how wedded we are to the cars we drive.

Which in turn means many of us remain in denial over the future of gas prices.

The signs are conflicting out there on how those of us upstate are faring in the current troubled economy, with soaring gas prices, tight money, a lousy housing market, eroding investments and so on.

Dick Beamish, the publisher of The Adirondack Explorer in Saranac Lake, says it is his impression that tourism in the Adirondacks is not being adversely affected so far by the gas crunch.

Rather, he suggests, the North Country is benefiting from folks choosing to vacation closer to home.

It will be many months before we know for sure whether this commonly held view holds up to the reality in the cash register.

At the same time, Beamish concedes motorboat traffic on Lake George seems to be dramatically reduced this summer.

But what does that mean to the businesses along the lake, more money in the till or less?

Jim Trezise, head of the state's Wine and Grape Foundation in the Finger Lakes, notes that tourism is taking a hit out there.

"About a month ago, visitor counts seemed pretty even with last year, and purchases actually up -- so the people who came intended to buy -- but more recently that seems to have eroded, just like the economy in general," he states in his latest news letter.

That's particularly bad news for the central-western area of the state, because Finger Lakes wine country tourism has been one of the few bright economic success stories for this depressed region.

The Siena poll shows that for all the grief, high taxes and limited opportunities New York is experiencing, 81 percent of residents have no plans to move out at least until retirement.

Although 7 percent would love to leave tomorrow if they could.

That would be an exodus of more than 1 million New Yorkers, by the way, and another 2 million are threatening to leave if conditions don't improve.

So, I'd say it's tough to find a pair of rose-colored glasses to brighten this picture.

Fred LeBrun can be reached at 454-5453 or by e-mail at flebrun@timesunion.com.

"Bruno could take job with company helped by state"

By MICHAEL GORMLEY, Associated Press

Last updated: 5:32 p.m., Wednesday, July 16, 2008

ALBANY -- When longtime Senate Majority Leader Joseph Bruno retires this week from the Senate seat he's held since 1976, he could land a job with a friend whose business grew fast in recent years with the help of millions of dollars in state contracts, according to two Republicans close to Bruno.

The Republicans who spoke on the condition of anonymity said Bruno is considering taking an executive job with CMA Consulting Services among some other opportunities.

The Republicans spoke on the condition of anonymity because they weren't authorized to speak for Bruno.

Under state ethics law, Bruno acknowledged that he would be prohibited from lobbying the Legislature.

But Walter Ayres of the state Public Integrity Commission said there appears to be no law or regulation that would prohibit Bruno from lobbying the executive branch, which awards most state contracts.

CMA Consulting Services, based in the Albany County suburb of Colonie, is headed by Kay McCabe Stafford, the widow of Republican Sen. Ronald Stafford.

Sen. Stafford was a close friend and contemporary of Bruno, now 79.

Bruno had appointed Stafford to the powerful position of Senate Finance Committee chairman.

Kay Stafford was also appointed by former Republican Gov. George Pataki, a Bruno ally, to the State University of New York Board of Trustees, an unpaid but prestigious post in state government.

But the Albany connections go deeper.

CMA under CEO Kay Stafford was certified as a woman-owned business, which helps companies start and grow through help in landing state contracts.

And CMA has won more than $9 million in competitively bid contracts since 2006 for computer programming and information technology, according to state records.

They helped the company grow since 1984 to a national corporation with offices in New York City, Maryland serving Washington, D.C., Texas and Arizona.

Its Web site states the company serves Texas to Oregon and Guam to Maine.

Bruno praised the company Wednesday in a radio interview on WGDJ-AM Radio in Albany, saying he would announce as early as Sunday where he will next be employed.

"He hasn't reached a decision on what he's going to do," said Bruno's Senate spokesman Kriss Thompson.

"He's mulling a couple of opportunities."

"He has narrowed his choices."

Thompson wouldn't comment on whether CMA was among those choices.

"He's going to take a little time, and probably not much time, to see how to write the next chapter of his life," Thompson said.

CMA spokesman Sean Casey wouldn't comment on whether Bruno is being considered for a position.

A good-government advocate advises Bruno to seek counsel if he were to choose to work for CMA.

"I don't know of any limitations that might exist," said Blair Horner of the New York Public Interest Research Group.

"I think it would be in the senator's interest and the public's interest if he got an opinion from the Public Integrity Commission on what he can and can't do."

"He's different than a rank-and-file legislator," Horner said.

"He was one of the `three-men-in-a-room' and a powerful political figure for well over a decade."

"So his relationship with the executive branch is different than a backbencher," he said, using a British term for low-ranking lawmakers.

"State raids County Waste amid allegations of $15M fraud - Company won't comment, ex-Colonie Supervisor Brizzell: 'Of course I was unaware of it'"

By JORDAN CARLEO-EVANGELIST and BRIAN NEARING, Staff writers, Albany, New York Times Union

Last updated: 1:22 p.m., Thursday, July 17, 2008

COLONIE -- Authorities are raiding the Clifton Park transfer station and offices of County Waste & Recycling this morning amid a whistleblower's allegation the region's largest trash hauler defrauded the town of Colonie out of at least $15 million by creating phony weight slips for trucks and dumping far more at the landfill than it was paying for.

Investigators from the Department of Environmental Conservation and the state Attorney General's office arrived at the landfill at 8:11 a.m., forbidding other vehicles from entering the property.

Eighteen marked and unmarked law enforcement vehicles were on the scene.

The raid stems from allegations County Waste defrauded the town out of at least $15 million by systematically creating phony weight slips for trucks and dumping far more at the landfill than it was paying for, according to civil complaint filed by a company whistleblower.

The alleged fraud went undetected, according to the complaint, because town landfill workers did not weigh the trucks known as "Colonie specials'' when they arrived at the Route 9 dump.

County Waste declined to speak with a Times Union reporter today.

"We are not taking any calls for comment."

"Have a great day,'' a woman who answered the phone at County Waste said before swiftly ending the call.

The incendiary allegations are contained in a sealed complaint filed in Albany County on behalf of a former manager at County Waste in Clifton Park, who says he oversaw the fraud and was eventually forced to quit after refusing to continue to participate in it.

Often, the trucks were never put on the scale at all, the whistleblower alleges, with County Waste workers simply inventing numbers.

The Times Union is withholding the whistleblower's name.

He claims County Waste and its head, Scott Earl, defrauded the town out of "not less than $15 million'' dating back at least to 2005 the same period that Colonie was amassing a deficit that state Comptroller Thomas DiNapoli pegged as high as $18 million.

In the state review of town finances, some $9 million of the deficit is attributed to money the town was supposed to be saving to eventually close the landfill but wasn't -- instead using the revenue it generated to subsidize overspending elsewhere.

Former Town Supervisor Mary Brizzell said she knew nothing of the alleged defrauding of the town during her tenure, which ended with Democrats sweeping into office amid a public outcry of town finances.

"It's an allegation, and there are no facts there."

"I don't know enough facts to make an intelligent comment,'' she said.

"Of course I was unaware of it."

"I wouldn't let something like that happen.''

The complaint was filed in May and sealed by acting state Supreme Court Justice Gerald Connolly under a section of state finance law that empowers the state Attorney General's Office to investigate false claims filed against state and local government.

Known as the New York False Claims Act, the law also makes the whistleblower eligible to receive a percentage of whatever is recovered.

The whistleblower is trying to stake his claim as being the first to tip the government to the fraud.

A copy of the complaint was reviewed by the Times Union.

The whistleblower's claim was filed on his behalf by Albany attorney Kurt Bratton, who declined comment.

Among the allegations:

The whistleblower, a former facility manager at County Waste's Route 9 transfer station in Clifton Park, claims to have been ordered by Earl to systematically dispatch overweight trucks to the Colonie landfill to increase the transfer station's profitability.

"Earl stated that the Colonie landfill would not weigh his transfer trucks and would accept false weight slips showing that his trucks weighed much less than their actual weight,'' the complaint reads.

Because County Waste pays the town a per-ton rate typically between $50 and $60 the company is alleged to have cheated the town by dumping more than it was paying for.

The complaint continues: "Earl explained that the Colonie landfill would accept these understated weight slips instead of actually weighing his trucks on its scale.''

What's more, the complaint suggests that "Earl was calling someone at the Colonie landfill to tell them that those 'Colonie Specials' were on their way.''

According to the whistleblower's complaint, the overladen trucks didn't go unnoticed, with drivers not in on the alleged scheme noting that the trucks appeared to have mechanical problems because they could not get them out of first gear.

"When these overloaded trucks were brought to the Colonie landfill,'' the complaint alleges, "they would often be so heavy that their metal frames would bulge noticeably and the tires would be so compressed that they appeared to be practically flat against the ground.''

Joe Stockbridge, the director of the town's environmental services department, which runs the landfill, said last week that the allegations were news to him.

Stockbridge said standard operating procedure is for all incoming trucks to be weighed but that on rare occasions before last year some trucks hauling large trailers were too big to be weighed on Colonie's 60-foot scales.

In those cases, Stockbridge said, it is possible that weight slips would have been accepted from an incoming driver if the truck originated at a transfer station with a Weighmaster licensed by the state Department of Agriculture and Markets.

"If you read the Ag and Markets law, the person who certifies that weight would be the person responsible for that,'' Stockbridge said.

Jerry Wellspeak, a County Waste driver who lives in Shaftsbury, Vt., said this morning that the practice of driving around the scales was common when he started working for the company a month ago.

But town landfill officials abruptly halted the practice a few weeks ago.

He said when he first started working for the company and driving loads to the town of Colonie landfill he would drive around the scale and present paperwork as to the weight of the load.

"And that was OK,'' Wellspeak said in an interview while he waited to find out where he would get his next load.

The Paperwork came from County Waste scales in Clifton Park.

Within the last few weeks, Wellspeak said, the town of Colonie landfill officials began insisting on weighing all County Waste trucks.

The allegations of fraud come as town's new administration, through Supervisor Paula Mahan, has raised questions about why records indicate the landfill last year took in more than 30,000 tons less than its permit from the Department of Environmental Conservation allows.

Mahan viewed this as lost revenue at a time when the town's fiscal situation was worsening and its credit rating was in danger of falling lower.

To make sure it doesn't happen again this year, the Town Board recently struck a deal with County Waste to accept trash at an even more reduced rate of $45-a-ton for the rest of the year in return for the company guaranteeing a certain tonnage and money up front.

The town has also commissioned engineering firm Clough Harbour & Associates to audit landfill operations, including how much space appears to be left.

Stockbridge said the landfill came in under its allowed tonnage last year because of delays caused while it replaced both of its scales, adding a new 70-foot scale that allows it to weigh the larger trailers.

Furthermore, Stockbridge said, landfill officials did not go out of their way to drum up business because there were concerns about whether there would be enough space during the transition from one section of the landfill to another newer one.

According to the complaint, the whistleblower contacted the Albany County District Attorney's Office and DEC in March 2007.

He alleges that County Waste sent an average of between 2,000 and 3,000 tons a month in unpaid tonnage to the landfill, with the number hitting as high as 4,500 tons during peak months.

"Capital Region jobless rate jumped in June"

July 17, 2008 at 11:56 am by Eric Anderson, Deputy business editor, Albany, New York Times Union

Unemployment surged in the Capital Region in June, climbing a full point above last year’s level, to 4.9 percent of the workforce.

Job growth was almost nil, with just 100 new jobs added over the past year.

That’s an increase of less than 0.1 percent, according to figures released today by the state Department of Labor.

What growth there was came in the public sector.

Private sector jobs fell by 300, the Labor Department reported.

Statewide, unemployment climbed to 5.3 percent in June on a seasonally adjusted basis, up from 5.2 percent in May and 4.6 percent a year ago.

June’s figure was the highest since December 2004, when it hit 5.4 percent.

The financial sector was particularly hard hit in the Capital Region, with a loss of 1,000 jobs over the year.

Manufacturing, meanwhile, shed 500 jobs and the leisure and hospitality sector lost 800 jobs.

The education and health services sector added 1,400 jobs, while professional and business services grew by 600 jobs.

Government employment was up by 400 jobs.

In the five-county metropolitan area, Saratoga County’s 4.5 percent jobless rate was the lowest, while Schoharie County’s 6.0 percent was the highest.

Albany County had 5.0 percent unemployment, while the rate was 5.1 percent in both Schenectady and Rensselaer counties.

"Bruno unveils plans to replace Troy City Hall with park, offices"

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

Last updated: 11:59 a.m., Thursday, July 17, 2008

TROY -- City Hall will be torn down and replaced with a park, an underground parking garage and a possible mixed-use building housing new city government offices, officials said this morning.

The total project will cost $8 million, Sen. Joseph Bruno, R-Brunswick said this morning.

He added that $6 million in state funds will be made available for the project, which includes an esplanade running from Monument Square north to the Green Island Bridge and other park and recreation improvements.

The city will provide $2 million in funding.

Mayor Harry Tutunjian, a Republican, and City Council President Clement Campana, a Democrat, pledged to work together to get the project done.

The administration and the City Council have fought over many different issues this year including the sale of City Hall.

"20 charges against Stephentown official tossed"

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

Last updated: 12:02 p.m., Thursday, July 17, 2008

TROY - A judge has thrown out nearly half of the 44 felony counts lodged in February against a town highway superintendent accused of purchasing gravel from an illegal mine and submitting forged documents to cover it up.

Stephentown Highway Superintendent Neil Gardner, 52, was indicted Feb. 15 on 22 counts of first-degree offering a false instrument for filing, 10 counts of first-degree falsifying business records and 12 counts of second-degree criminal possession of a forged instrument, all felonies.

He is also charged with one misdemeanor count of operating a mine without a permit.

He is free pending trial in September.

Gardner's lawyer, Thomas Spargo, made motions recently to have the entire indictment thrown out, arguing his client was not guilty of any crime.

Rensselaer County Court Judge Robert Jacon then ruled last week that there was insufficient evidence put before the grand jury to support 20 of the 44 felony counts.

The quashed charges include 10 counts of first-degree offering a false instrument for filing and 10 counts of first-degree falsifying business records.

Those charges applied to gravel billing slips forwarded to the town that Gardner allegedly approved.

State Assistant Attorney General Nancy Snyder appeared before Jacon Tuesday to argue against his ruling but the judge said his decision would stand.

The indictment, the result of a state Department of Environmental Conservation investigation, accuses Gardner of falsifying documents filed with the town to conceal that he bought thousands of cubic yards of sand and gravel for the town from a mine that did not have a state operating permit on property on Route 22 owned by Anthony Cormier.

In October 2006, state investigators took records from the offices of the town clerk, Gardner and from Russ Freeman of Russ Freeman Excavating Inc. in Nassau, which regularly performed work for the Stephentown Highway Department.

Freeman mined and delivered the gravel and billed the town.

The case began when Freeman sent a bill to the town in the amount of $30,715, but the town refused to pay after discovering the mine was illegal, officials have said.

According to the indictment, Gardner is also accused of knowing town records were manipulated in November 2005 to make it look like the gravel came from a legally operated mine run by Troy Sand and Gravel of West Sand Lake.

Gardner still faces felony counts on those charges.

Freeman pleaded guilty in Town Court in October 2007 to second-degree offering a false instrument for filing and was fined $1,000.

He died of cancer in December.

"Closure of workers' comp centers questioned - Critics say shutting 11 state offices to save money makes it harder for people to get to hearings"

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

First published: Thursday, July 17, 2008

ALBANY -- It's been two-and-a-half years since Lorraine Hamm tripped on a phone line and tore her rotator cuff and injured her neck and back.

Since then, her life has included a frustrating regimen of periodic visits to state Workers' Compensation Board offices in either Schenectady or, sometimes, Queensbury.

"It's a nightmare, believe me," said Hamm, of Ballston Spa, recounting the ongoing effort to collect compensation payments, which were first opposed by her employer, a Glens Falls nursing home, and then delayed by problems with the workers compensation trusts, akin to insurance carriers that are supposed to make the payouts.

Now, with news that the state Workers' Compensation Board is closing 11 of its 30 service centers statewide, including the Schenectady location, Hamm has another headache.

Rather than riding the bus to a hearing, as she could to the Schenectady office, she will have to take her aging Isuzu Trooper to Queensbury and lay out $30 or $40 for gas each round-trip.

"It would be horrendous," she said.

Hamm isn't the only one questioning the state's move.

While state officials say no one will be more than 50 miles from a Workers' Compensation office, that means claimants in rural areas such as Fulton or Montgomery counties now may have to travel 100 miles round trip.

"There will be claimants that cannot afford to go to their own hearings," said Raymond Seligman, Hamm's lawyer.

Others wondered why a call from Gov. David Paterson for state agencies to cut 3.35 percent of their budgets should even apply to the Workers' Compensation Board, which is funded by assessments on insurers, not from the state's general fund.

"It is an utterly insensitive move," said Peter Walsh, another compensation lawyer.

Walsh also questioned whether the decision exhibited a lack of knowledge about upstate New York, since many of the 11 were in rural areas like Norwich, Oswego or Olean.

"It's going to hurt the public," added Bill Jones of Mayfield, a former Fulton County sheriff's officer who is on workers comp and has been traveling to Schenectady when called in for hearings.

Complaints like this will likely resound from other quarters of New York as various state agencies put Paterson's cuts in place.

The reaction illustrates just how hard it can be to trim spending even modestly.

Between the complaints and potential attacks by powerful public employee unions if their members face layoffs or relocation, cutting the state's budget can open up a whole new world of potential headaches.

Lawmakers may get involved as well.

Hamm said she's contacted local legislators, including Assemblymen Robert Reilly and George Amedore as well as Sen. Hugh Farley.

Amedore's office sent her a copy of the closure notice, and Hamm hasn't yet heard from the others.

But this being an election year, it's a good bet that legislators statewide may start protesting the closures.

The Workers' Compensation Board is one of just dozens of agencies making cuts to help cope with a $5 billion projected budget gap next year.

Many are losing staff through attrition, including the Office for the Aging, departments of Health, Insurance and Labor, as well as SUNY.

The Paterson administration stressed that the governor's cuts go beyond those enterprises run out of the general fund.

"This is trying to keep costs down for business and taxpayers in general," said Workers' Compensation spokesman Brian Keegan, who added that Paterson's calls for cost savings are aimed at all agencies, even those funded by user fees.

He also noted the the 11 centers slated for closure handle only 15 percent of the state's hearings.

"What Gov. Paterson believes is it's important to bring down overall spending," added Matt Anderson, a spokesman for the Division of Budget.

He explained that Workers' Compensation savings should be passed along to the insurance carriers, which could then contain costs for businesses.

"We need to cut across government and make it more efficient," said Anderson.

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

"Thruway ethics code stalled - Non-paid authority board members question limits on political contributions"

By CATHY WOODRUFF, Staff writer, Albany, New York Times Union

First published: Thursday, July 17, 2008

ALBANY -- Members of the state Thruway Authority board are balking, for now, at adopting new ethics rules that would restrict their freedom to contribute to political campaigns.

The issue arose Wednesday as Thruway Counsel Sharon O'Conor was summarizing revisions to the authority's code of ethics and the state Public Officers Law.

Executive Order No. 2 signed by Gov. Eliot Spitzer during his first hours in office in January 2007 says:

"No individual covered by this executive order may make or offer to make any monetary contribution to the campaign of the governor or the lieutenant governor or to any political campaign committee organized by or for the specific benefit of the governor or the lieutenant governor."

The order goes on to forbid solicitation of monetary contributions to campaigns or committees benefiting the governor or the lieutenant governor.

"I have a slight problem with this," said Erin Crotty, who was appointed to the Thruway Board by Gov. George Pataki, a Republican, and served as Environmental Conservation commissioner under Pataki.

Crotty noted Thruway board members serve without pay and the authority is not part of the governor's administration.

"We're not compensated, and I don't particularly appreciate people telling me what I can and cannot do with my money regarding my contributions," she said.

"It strikes me as incompatible with the level of service that is provided here."

Thruway Chairman John Buono also pointed to puzzling wording in the order, which appears to place no restrictions on contributions to candidates who might run against the governor or lieutenant governor.

The board tabled that change to the Thruway ethics code and asked O'Conor to further investigate whether the order applies to the authority.

O'Conor said exploration of the questions may lead to larger questions about whether the authority is bound by other executive orders, as well.

"There is no case law on this," she said.

"There are no public authorities that have challenged the applicability of executive orders."

A spokeswoman for Gov. David Paterson was unable to immediately respond to inquiries regarding orders signed by Spitzer, nor was a spokesman for the Commission on Public Integrity.

"We don't have jurisdiction over executive orders," said spokesman Walter Ayers.

"We don't interpret executive orders, and we can't enforce executive orders."

"AMD changes CEO as chip maker struggles - AMD sends CEO Ruiz to executive chairman post as chip maker struggles"

By JORDAN ROBERTSON and RACHEL METZ, Associated Press

Last updated: 6:52 p.m., Thursday, July 17, 2008

SAN FRANCISCO -- Hector Ruiz was pushed aside Thursday after six tumultuous years as CEO of Advanced Micro Devices Inc., as the chip maker tries to pull itself out of a deep financial hole caused by a questionable acquisition and a major product gaffe.

Ruiz, 62, who had been the only person to head AMD other than founder and longtime CEO Jerry Sanders, is stepping down as chief executive but will remain on the board of directors.

Ruiz, one of the few Hispanic CEOs of a major U.S. corporation, had also been AMD chairman but now takes on the title of executive chairman, a distinction that lets him retain some day-to-day responsibilities.

He's being replaced as CEO by AMD's current chief operating officer, Dirk Meyer, 46, an engineer and chip designer who has been helping Ruiz run the company since 2006.

That means he knows AMD's operations intimately but also that he shares some of the responsibility for the company's financial distress.

"He is the right leader at the right time for this company," Ruiz said in a conference call with analysts for the company's quarterly report.

Meyer had previously led AMD's microprocessor division, the company's primary business unit.

Microprocessors act as the brains of personal computers.

Nearly all the world's personal computers and many of the servers inside corporate data centers run on chips made by AMD or its much larger Silicon Valley rival, Intel Corp.

Intel commands 80 percent of the global market for microprocessors.

AMD has roughly the other 20 percent.

Meyer was involved in the design of AMD's Opteron server chip, which marked the company's 2003 foray into a lucrative segment of the server market where Intel had a stranglehold.

The success of that chip -- and Ruiz's sales savvy in lining up new customers -- helped AMD transform itself from a perennial second-fiddle competitor to Intel into a serious rival across all computing platforms.

But the semiconductor industry is notoriously volatile, prone to boom-and-bust cycles.

AMD has crashed hard over the past two years, racking up billions in losses and struggling to regain the competitive edge it squandered against Intel.

The management changeover will be welcome news to AMD investors who have questioned Ruiz's leadership as the company has faltered.

But it's unclear if Meyer's appointment will be enough to woo Wall Street back to a company that hasn't yet provided a clear picture about how it intends to mend its battered balance sheet.

The executive changeover came as AMD reported that it lost $1.19 billion in the second quarter, worse than the $600 million it lost in the same period a year ago.

Taking one-time events into account, AMD's adjusted loss totaled 60 cents per share, below the 52 cents expected by analysts polled by Thomson Financial.

AMD's revenue rose to $1.35 billion from $1.31 billion, but it was short of the $1.45 billion in revenue expected on Wall Street.

Results were impacted by an asset impairment charge of $876 million, or $1.44 per share, that made up the bulk of its loss from discontinued operations.

AMD's discontinued operations include its cell phone and digital television chip businesses, both of which it gained through its 2006 purchase of graphics chip maker ATI Technologies Inc.

AMD is looking to divest both businesses, and in the conference call Chief Financial Officer Bob Rivet indicated some action would be taken regarding them "before the end of the year."

AMD shares were down 35 cents, or 6.6 percent, to $4.95 in after-hours trading.

The stock had finished trading Thursday up 24 cents, or 4.7 percent, at $5.30.

AMD's stock was above $40 per share as recently as 2006, and the resulting fall has vaporized $20 billion in shareholder wealth.

Ruiz's tenure will be marked by the way AMD became a much more dangerous rival to Intel than it had ever been in AMD's nearly 40-year history.

He also was an effective advocate for pushing AMD's antitrust claims against Intel to regulatory authorities around the world.

On Thursday, in fact, European regulators broadened their antitrust case against Intel, claiming that it has deliberately squeezed AMD.

Yet Ruiz ultimately takes the blame for a series of management mistakes and technical problems.

One notable fumble happened in the aftermath of the original Opteron chip's success.

A technical glitch delayed the launch of the Opteron's successor by eight months, forcing AMD to slash the price of its existing chips to stay competitive.

AMD also continues to be hurt by the heavy debt it took on to finance its $5.6 billion acquisition of ATI.

AMD says ATI is now worth just over half the price it paid.

The deal was done to improve the graphics abilities of AMD's chips -- increasingly important with more Internet video and high-definition movies being watched on computers.

But it has forced AMD to sell off parts of itself and tap the market for urgent cash infusions to stay afloat.

In November, the company sold an 8.1 percent stake to the Abu Dhabi government's investment arm.

One of Ruiz's primary jobs as executive chairman will be helping sort out AMD's manufacturing strategy.

The company has been working on that for more than a year but needs to crystallize it soon as it looks to cut the ponderously expensive costs of making computer chips.

AMD could end up selling some of its factories, which require constant multibillion-dollar overhauls to stay cutting-edge.

------

Rachel Metz reported from New York

"Travel probe's integrity compromised? - DA among those accusing ethics panel chief of improper behavior during investigation"

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

First published: Friday, July 18, 2008

ALBANY -- The leader of the state's Public Integrity Commission is facing accusations of unethical behavior himself for his handling of the commission's probe into last year's battle between former Gov. Eliot Spitzer and former Senate Majority Leader Joseph L. Bruno.

District Attorney David Soares, in letters obtained by the Times Union, alleged Public Integrity Commission Executive Director Herbert Teitelbaum should not be involved in investigating the Spitzer administration's release of documents on Bruno's use of state aircraft because he compromised the integrity of the commission's probe.

"We had received allegations that . . . Teitelbaum was inappropriately releasing confidential information pertaining to the commission's investigation," Soares wrote to Commission Chairman John D. Feerick on Feb. 26.

"We have secured evidence which supports the allegations."

Two letters from Soares complaining about Teitelbaum, the other dated March 3, stress the Albany County Democrat's deep concerns.

Soares spokeswoman, Heather Orth, reviewed the letters and said they were authentic.

Asked directly if he still holds the view about Teitelbaum, Soares said he had no comment.

Teitelbaum declined a request for an interview.

His spokesman, Walter Ayres, provided two letters of support recently authorized by commissioners.

"The commissioners thoroughly reviewed the issues raised in the district attorney's letter and continue to have full confidence in Mr. Teitelbaum's ability to lead the commission's investigations," Ayres said.

He added that Soares continued to provide confidential information to the commission even after alerting Feerick to his concerns about the executive director.

On Monday, Darren Dopp, a Spitzer aide under investigation by Teitelbaum for allegedly violating the public officer's law, alerted the commission that he, too, distrusts Teitelbaum.

He wrote to Commissioner Daniel Alonso, a former assistant U.S. attorney named to the commission by Spitzer.

He claimed in the letter, also obtained by the Times Union, that Teitelbaum conducted an unfair and improper probe by engaging in "ex parte communication with members of the Spitzer administration" to reveal facts of the case and to discuss on whom to place blame for alleged wrongdoing in the release of travel documents.

Several probes of the matter were triggered by allegations that the travel documents were collected improperly and released to damage Bruno for political gain.

Dopp said in an interview that Teitelbaum furnished confidential information to former Spitzer aide Lloyd Constantine and others.

He said Teitelbaum conferred with one of his former law partners who now works in Gov. David Paterson's administration.

Constantine would not confirm such actions by Teitelbaum.

He said he is prevented from discussing the matter because of attorney-client privilege.

He served as a special counsel to Spitzer during the probes involving the released documents.

Dopp also claimed Teitelbaum passed details of the case to a third party who benefited from the knowledge.

Dopp wrote that an immediate investigation of Teitelbaum's behavior is critical.

Alonso did not return a call, but Commissioner Andrew Celli, also a Spitzer appointee, said in an interview that Teitelbaum's performance has been terrific and that he does not question his integrity.

People familiar with his style describe Teitelbaum as a tough interviewer, extremely aggressive and demanding.

The concerns addressed about Teitelbaum arise as the commission is preparing a report of its findings with supporting documentation.

Some of the Spitzer administration officials investigated by the commission are getting the opportunity to plead to violating one provision of the public officer's law dealing with conduct that could raise suspicions of improper acts.

The violation carries no fine.

Lawyers for William Howard and Richard Baum, two former Spitzer administration officials being probed, declined to confirm the arrangements.

Dopp said no offer was made to conclude the case against him.

He said the commission seeks to force him to prove his innocence before an administrative law judge to avoid a fine of up to $10,000 and a reputation-damaging conviction.

"Mr. Teitelbaum insists that I plead guilty to knowingly and intentionally violating laws," he said.

"I cannot admit to violating the law on purpose because it isn't true."

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

"Raid stuns trash hauler - Firm denies $15M ripped off from Colonie"

By BRIAN NEARING , JORDAN CARLEO-EVANGELIST , TIM O'BRIEN and ROB GAVIN, Staff writers, Albany, New York Times Union

First published: Friday, July 18, 2008

CLIFTON PARK -- State investigators launched an early-morning raid Thursday on the Capital Region's largest trash hauler amid a whistleblower's allegations that the company cheated Colonie out of at least $15 million.

Officials from the state attorney general's office and Department of Environmental Conservation kept County Waste and Recycling on Route 9 sealed off for more than seven hours after an armada of 18 state vehicles swept in at 8:11 a.m.

The raid came as Ralph Hunter, a company whistleblower, accused company owner Scott Earl of defrauding Colonie of "not less than $15 million" by creating phony weight slips for garbage trucks and dumping far more at the town landfill than was paid for.

The practice goes back several years, he claims.

Jerry Cifor, a principal with County Waste, rejected the allegations, which he called a vendetta by Hunter "trying to get his 30 pieces of silver."

He also claimed Hunter tried to "shake the company down for money."

Investigators shut down the company's computers during the raid, Cifor said.

John Milgram, a spokesman for the attorney general, would only confirm the raid and that search warrants were executed, but he declined to say what records or other possible evidence was seized from the company, which has 180,000 customers in the region.

Colonie Supervisor Paula Mahan said the town will use every avenue to recover any missing money, but added the town has not explored its legal options.

"If our employees are involved in any way there will be repercussions," she said.

The town also has hired engineering firm Clough Harbour & Associates to audit landfill operations, including how much space appears to be left.

The incendiary allegations against County Waste are contained in a sealed complaint filed in Albany County in May by Hunter, who says he oversaw the fraud and was forced to quit his job at the hauler after refusing to continue the effort.

A copy of the complaint was reviewed by the Times Union.

Hunter's claim was filed by Albany attorney Kurt Bratton, who declined comment.

Trucks were often not weighed at all, Hunter claimed, with County Waste workers simply inventing numbers.

Hunter also claimed the fraud stretched back to at least 2005 -- the same period that Colonie was amassing a deficit that state Comptroller Thomas DiNapoli pegged at up to $18 million.

Hunter claims County Waste sent an average of 2,000 to 3,000 tons a month in unpaid waste to the landfill, with the number hitting as high as 4,500 tons during peak months.

At an average rate of up to $60 a ton, that would be up to $270,000 a month.

On Thursday, DEC police kept dozens of garbage trucks from entering the facility, a transfer station where trash collected from around the region is kept for later removal.

County Waste employees arriving for work were pulled over along the company's long driveway, where DEC police could be seen quizzing them.

Jerry Wellspeak, a County Waste driver from Shaftsbury, Vt., was among dozens of drivers turned away by police.

Wellspeak, who said he started working for County Waste a month ago, said the company trucks commonly drove around landfill scales.

"You could just present scale paperwork and that was OK," he said.

Landfill officials abruptly halted the practice a few weeks ago and started weighing the trucks to issue a dumping bill, he said.

Former town Supervisor Mary Brizzell said she knew nothing of the alleged fraud, which apparently fueled a deficit that helped Democrats sweep into office last fall amid a public outcry over town finances.

"It's an allegation, and there are no facts there."

"I don't know enough facts to make an intelligent comment," she said.

"Of course I was unaware of it."

"I wouldn't let something like that happen."

The complaint was sealed by acting state Supreme Court Justice Gerald Connolly under a section of state finance law that empowers the state attorney general's office to investigate false claims filed against state and local government.

Known as the New York False Claims Act, the law also makes the whistleblower eligible to receive a percentage of whatever is recovered.

Under the law, the whistleblower would be entitled to a substantial percentage of the amount that's recovered for the town.

Among the allegations:

"Earl stated that the Colonie landfill would not weigh his transfer trucks and would accept false weight slips showing that his trucks weighed much less than their actual weight."

"Earl was calling someone at the Colonie landfill to tell them that those 'Colonie Specials' were on their way."

"When these overloaded trucks were brought to the Colonie landfill, they would often be so heavy that their metal frames would bulge noticeably and the tires would be so compressed that they appeared to be practically flat against the ground."

Late Thursday, Earl issued a formal statement on behalf of County Waste & Recycling.

"County Waste & Recycling is cooperating fully with the Attorney General and the state Department of Environmental Conservation."

"We are confident the inquiry will find that the company acted properly."

"We will let the evidence speak for itself."

He said the company is now back to normal operations and all collection routes are on regular schedules.

Joe Stockbridge, the director of the town's environmental services department, which runs the landfill, said last week that the allegations were news to him.

Stockbridge said the only trucks not weighed were those too large for Colonie's 60-foot scales.

In such cases, he said, weight slips would be accepted if the truck came from a transfer station with a Weighmaster scale licensed by the state Department of Agriculture and Markets.

Ken Champagne, chairman of the town Solid Waste Alternative Planning Committee, said he raised the County Waste issue with DEC a year ago.

"It was difficult to weigh the trucks, and it would slow the operation down," he said.

But without at least spot checks, Champagne said, the town could not make sure its landfill customers were being honest.

Brian Nearing can be reached at 454-5094 or by e-mail at bnearing@timesunion.com.

"Ex-Health Dept. worker gets prison for child porn"

By BRIAN NEARING, Staff writer, Albany, New York Times Union

Last updated: 11:20 a.m., Friday, July 18, 2008

ALBANY -- A former state worker has been sentenced to up to 58 months in prison for possession of child pornography on a government computer, officials said.

Andrew Swartz, a 38-year-old Clifton Park resident, who was a computer programmer with the state Health Department, will also be supervised for 10 years after his release, under the sentence issued Wednesday by U.S. District Judge Lawrence E. Kahn.

In March, Swartz pleaded guilty to possessing more than 1,000 images of child pornography on two computers -- including one owned by the state -- at his home on March 19, 2008.

He also admitted that he used his credit card to buy an online subscription to a Web site offering child pornography in April 2006.

The sentencing was announced by U.S. Attorney for the Northern District Glenn T. Suddaby, Attorney General Andrew M. Cuomo and Acting Resident Agent in Charge Patrick Coultry of the U.S. Immigration and Customs Enforcement of the Department of Homeland Security.

State Police from the Clifton Park barracks assisted in the investigation.

IN BLATANT VIOLATION OF THE NEW YORK STATE CONSTITUTION, JOE BRUNO HAS USED THE STATE TREASURY AS HIS OWN PRIVATE PIGGY BANK ...

AND HE HAS STUFFED MILLIONS OF DOLLARS OF STATE FUNDS DOWN THE POCKETS OF HIS FRIENDS AND BID-NESS ASSOCIATES ...

AS IS PATENTLY CLEAR FROM THE RECENT JOBLESS NUMBERS ABOVE HERE, THIS MONEY HAS DONE ABSOLUTELY NO GOOD FOR THE LOCAL ECONOMY ...

IT JUST HAS BENEFITTED JOE AND HIS FRIENDS ...

THEY HAVE DONE VERY WELL BY IT, IN FACT ...

And so ...

"Before exit, Bruno delivers for Troy - Senator announces $6M in aid for waterfront project on eve of his retirement"

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

First published: Friday, July 18, 2008

TROY -- The city will receive $6 million in state funds to transform its Hudson River shoreline by replacing the decaying City Hall with a park and retooling the waterfront with recreation and development opportunities.

State Sen. Joseph L. Bruno unveiled the funding package Thursday, making it his last economic development announcement before he retires today.

He also urged the city's feuding Republican administration and Democratic City Council to work together and pledge $2 million in city funds to get the entire $8 million riverfront overhaul completed.

"City Hall is going to come down."

"In its place will be a 200-space underground parking garage."

"On top, it will be all grass," said Bruno, R-Brunswick.

The $6 million from the state Environmental Protection Fund revives the push to demolish City Hall and relocate city government.

The City Council must still decide how it wants to raise the city's $2 million share of the funding package.

One option officials have discussed includes borrowing the money.

Mayor Harry Tutunjian and City Council President Clement Campana said they would follow Bruno's advice to work together.

"We're going to work with the council," Tutunjian pledged.

"We will work with the administration to bring this plan to fruition," Campana promised.

Tutunjian said City Hall at 1 Monument Square is deteriorating and has to be replaced.

Campana agreed that the city needs a home for its government that is modern.

Tutunjian's proposal to sell City Hall last year became a major political issue in the city elections.

While Tutunjian was re-elected to a second term, the Democrats took control of City Council.

A council committee reviewed the condition of City Hall, while Tutunjian asked for proposals to develop the City Hall site and relocate city government.

Discussions about the future of City Hall have stalled since June 5.

Talks between Tutunjian and Campana about City Hall began again in the past several weeks.

Campana said the entire City Council would be involved in developing the City Hall site and finding a new location.

The city will either use reserve funds or borrow money to meet its $2 million contribution to the project.

The City Hall site proposal calls for using part of the $2.5 million the city received from the Restore NY program to demolish the existing building.

On the south side of the City Hall site, a mixed-use building, including space for a possible new city hall and commercial space, is proposed.

Other aspects of the waterfront project include building an esplanade along the river; improving the Riverfront Park band shell and building a new amphitheater; building a Troy Maritime Welcome Center; improving the Ingalls Avenue boat launch; and relocating the rock salt piles to South Troy industrial areas from north of the Beacon Institute site.

The rejuvenation of the city waterfront has the support of local business leaders.

"It will help the perception of Troy as well as bring new businesses to the area," said Jake Dumesnil, vice president of the Rensselaer County Regional Chamber of Commerce.

"The one really positive aspect was the announcement of moving the salt dunes project."

"It opens up more prime riverfront," Dumesnil said.

Bruno's final news conference came in Rensselaer County, his home county which he has represented for 32 years in the state Senate.

"I've gotten a lot of satisfaction out of it," said Bruno, who spent 14 years as Senate majority leader feeding funds into his district and the rest of the Capital Region.

"One thing I'm not thinking about doing is retiring from life," said Bruno, maintaining his customary sense of humor.

"I'm not going to lay down and play dead."

"I'm told it's not fun."

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

"Bruno era carries high price"

By FRED LeBRUN, Staff Writer, Albany, New York Times Union

First published: Sunday, July 20, 2008

Can there be a Capital Region as we know it without Joe Bruno sitting in Albany as our de facto governor?

I suppose we're about to find out.

But frankly, I doubt it.

Fourth of July night, I watched our own Tri-City ValleyCats play the Jamestown Jammers before a record 6,600 fans at Joseph L. Bruno Stadium across the river.

A splendid evening of affordable family entertainment in what can only be termed a spectacular ballpark for single A ball.

You can be reasonably sure there's nothing like it in Jamestown, or Olean, or Hornell or ...

You get the idea.

So what, you say?

It was our turn and Joe got us plenty.

OK, well, hold that thought, we'll get back to it.

The man former Gov. Mario Cuomo disdainfully called "the handsomest man in the Senate" departs on his own terms from a governmental career as spectacular as the ballpark he created.

When he started out as Senate majority leader 14 years ago, he was greatly underestimated by any number of politicians, and certainly by many in the media -- myself included.

Once he got himself established, though, he became our Papa Joe in a hurry, our benefactor.

And how the money rolled in.

He solved our airport problem.

He gave us a new train station.

He poured more state funding into area projects than he ever could have as the actual governor.

A governor has to worry about balancing the needs of a state that has so many worthy needs, and other silly things like public policy and running state agencies that actually do things.

But Joe didn't.

He had to satisfy his conference, and make sure his fellow Republican senators got what they needed in terms of projects and local pork to stay in office, which he obviously did admirably.

Staying in office, after all, is the top priority for any state legislator.

Which goes to the root of our problems with the Legislature, because for too many of its members it is the only priority.

But Joe handled his in-house politics with an agility that surprised many of us.

The teeming cauldrons of Rensselaer County had taught him well.

We also learned there's always a price for Papa Joe's gifts.

The ego could be overwhelming.

Naming too many things after the benefactor cheapened his genuine accomplishments.

Taking good care of family members made us wince.

Then there was the meddling in local politics, notably the imposition of his son Ken as district attorney in Rensselaer County.

Ken is a likable guy, but was a remarkably bad fit as a DA.

So, those of us on the receiving end of what Joe perceived we deserved had to take the good with the bad.

He decided what we needed.

This last week, Joe's exit was celebrated by the last two minutes of a fireworks display, with rocket after rocket going off.

On Tuesday, he announced IBM's $1.6 billion investment upstate and on Wednesday, another $6 million for Saratoga Springs, bringing the total for that city up to $15.2 million in the last three months.

On Thursday, there was his swan song, $6 million to raze Troy City Hall and rebuild the waterfront.

None of it was his money.

While it is undeniable that Joe has been very good to the region, and that we are likely never to see anything like this largesse come our way again, the hypocrisy of praising the guy for steering state money our way regardless of merit or the needs of others is rather overwhelming.

How can we even mouth the pieties of good government and demand reform and change, and approve of how Joe has done what he's done?

Which is simply spend money the way he wanted to by setting his own priorities and funding only those projects he embraced?

What kind of responsible government is that?

There is something dreadfully wrong with a system that works off cult of personality.

Take by way of a tiny example his very last bequest, that "gift" of $6 million in state dollars for Troy.

Forget that he is setting policy for the city, whether the city likes it or not.

But just look at the source of the funding and be appalled.

The Environmental Protection Fund was designed to close landfills and acquire land in the Adirondacks, and for similar environmental issues.

There's not nearly enough in that fund now to revamp antiquated sewer and water systems across the state.

Yet Joe, as a condition for his approval of projects and spending that were the priorities of the governor and Assembly speaker, had inserted a line in the annual EPF budget for "Rensselaer County Waterfront Revitalization."

You can be reasonably sure there isn't a comparable line for any number of counties in the state that deserve it too.

So absolutely, Papa Joe has been great to us and will be dearly missed.

But the real price for being his favorite sons is that we are poster children for how government shouldn't work.

Fred LeBrun can be reached at 454-5453 or by e-mail at flebrun@timesunion.com

"Bruno takes a last bow on tour - Senator's final day in office includes bus trip, media crush and lots of reminiscing"

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

First published: Saturday, July 19, 2008

Joseph L. Bruno had wandered off again.

Walking through the Albany International Airport, with a crush of staffers, media and well-wishers in tow, Bruno was supposed to be headed toward the observation deck that bears a bust that honors the former Senate majority leader, and now former senator.

Bruno was saying goodbye Friday, the last of many "lasts" over the past few weeks, and he couldn't resist the stares from people at the Colonie airport.

He bee-lined toward anyone at all -- airline attendants, passengers, custodial workers, a baby.

Some recognized him, others responded to his greetings with curious looks.

He chatted, he shook hands, and before moving on, he introduced himself:

"I'm Senator Joe Bruno."

But as of 12:01 a.m. Saturday, "everybody calls me Joe," Bruno said.

Friday was his last day in office as senator of the 43rd District, representing Rensselaer and Saratoga counties, a post he held for 32 years, 14 of them as Senate majority leader.

As the top Republican in the Senate, he cultivated a persona that alternated between down to earth and larger than life, joshing and jousting with the news media, colleagues and political foes.

He took on the seemingly unassailable Gov. Eliot Spitzer, who eventually left the Executive Mansion amid a prostitution scandal.

Even on his last day, Bruno took a few shots at Spitzer, at one point calling his successor, David Paterson, wonderful "compared to that previous piece of work."

His final workday hours were, in keeping with character, spent with the news media, sponsoring a bus tour to view his achievements, the ride paid for from his $1.7 million campaign coffers.

The bus traveled his district, stopping for photo ops at the landmarks created through his power and influence over millions of state dollars -- the Joseph L. Bruno Stadium in Troy, nicknamed "the Joe"; Rensselaer Tech Park; the former site of Rensselaer High School, where a riverfront residential and commercial development is slated; the Rensselaer Train Station; the UAlbany East Campus; and Albany International Airport.

The start of Bruno's final day on the job was much like any other day.

He woke up around six in the morning, walked up the hill with his dog and worked out.

He has taken to targeting certain areas of the body for short intervals -- Friday it was the upper body, shoulders, and arms.

He made a lot of phone calls and met a few "big people" from Long Island to talk business over lunch at the Troy Country Club.

Boarding the bus, Bruno used the intercom to speak to the reporters, photographers, and cameramen surrounding him.

He cracked jokes, threatened to drive the bus himself, reminisced about the "inefficient, unresponsive" Legislature he inherited when he became leader.

Bruno talked about the last day of session, June 23, when he shocked the Capitol by announcing that he wouldn't seek re-election.

"When I was in here Monday when session was closing, I wasn't sure that I would actually pull the trigger to say I wasn't running," said Bruno.

"I kept weighing all the ramifications in my mind, and all the scenarios."

"... I knew one of the first things people would do is say, 'Ah, he thinks they're going to lose.' "

Bruno leaves the Senate Republicans with a majority at its slimmest margin in decades -- 31 Republicans to 30 Democrats.

His successor, Senate Majority Leader Dean Skelos, R-Rockville Centre on Long Island, must fight to maintain the majority in the November elections.

Walking into "the Joe," the baseball stadium that is home to the Tri-City ValleyCats, Bruno stopped mid-step and looked up at the banner that reads, "Welcome to Joseph L. Bruno Stadium."

Once inside, he worked the crowd -- a strong handshake and the shoulder squeeze for the men, cheek kisses for the ladies clustered in an admiring gaggle for the 79-year-old senator who sported a navy-blue striped polo and chinos.

He periodically ran his hands through his coiffed silver hair.

At the Rensselaer Train Station, Bruno talked up a 10 year-old named Darryle Perry, who was waiting by himself for his father.

Bruno waited with the boy after telling him he'd stay until his dad came.

When his mother and sister walked up, Bruno bought ice cream for the family and his staff.

He bought one for himself as well, and proceeded to eat it through a television interview, gesticulating with the cone as chocolate ice cream dripped on his hands and arms.

Preparing for another interview, Bruno asked the guys around him, half-joking, half-fishing, "How's my hair?"

"How's my hair?"

Then with a grin, he quipped to a balding companion, "better than yours."

At the Colonie airport, the final stop on the tour, a well-wisher asked Bruno whether he's going to enjoy retirement.

Bruno paused for a beat.

He said he would miss the trappings of public service -- the entourage, the media scrum, talking with citizens.

"It's a whole way of life," he said.

"My family asks me, 'How are you going to feel?'"

"'Not being senator anymore?'"

"I don't know."

"We'll find out."

Back on the bus, returning the Capitol, Bruno took up the intercom microphone again.

"Don't try to keep track of what I'm doing from here on out."

"Just forget it," he joked.

Bruno said he hasn't made any decisions about what he'll do next, but he hopes to make a decision by Monday.

The shadow of an FBI investigation of his business dealings still hangs over Bruno, but he said it doesn't affect his life, except in the news media.

Throughout the day, Bruno asked people whether they will know his name after midnight.

Though asked as a joke, there was a hint of sadness around the edge of the words.

He even said it to Gov. David Paterson, who called him on the bus to wish him well.

"I'm going to call you next week and quiz you," Bruno said.

"To see if you remember who Joe Bruno is."

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

AND WHILE WE ARE ON THE SUBJECT OF THE CORRUPT EMPIRE OF NEW YORK BEING A "NATION OF MEN" AND NOT AT ALL A NATION OF LAW, WE HAVE ....

RAMPANT CAUDILLO-ISM IN RENSSELAER AND SARATOGA COUNTIES, AND IN THE STATE CAPITAL, AS WELL ....

AS IF WE WERE SOME THIRD-WORLD COUNTRY IN SOUTH AMERICA INFESTED WITH TIN-POT DICTATORS AND TIN-POT WANNA-BE'S ....

And so ...

"With war chest, Bruno still a factor - Former senator has $1.71M to aid Republicans in fall"

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

First published: Monday, July 21, 2008

The region's state legislator whose campaign has far and away the most money to spend isn't even a legislator any more.

Joseph L. Bruno, the longtime senator, majority leader and Brunswick Republican who left office Friday, still has $1.71 million in cash on hand, according to his campaign financial report filed with the state Board of Elections.

The next closest is Republican Sen. James Seward, with about $490,600.

Bruno's recent decision to retire left a field of 43rd Senate District candidates scrambling to collect signatures for their nominating petitions, and fundraising for their campaign treasuries hadn't been a priority.

Kris Thompson, a Bruno spokesman, said the former senator would use the funds to support the Republican Party and its candidates.

It's anticipated that Bruno's endorsed candidate, Assemblyman Roy J. McDonald, R-Saratoga, will receive some of that financial backing.

McDonald transferred $15,900 to his Senate campaign committee from his Assembly campaign committee, according to the report.

Democrat Brian Premo of Brunswick has lent his campaign $75,000 and received a $1,000 donation.

After paying off previous campaign debts, he now has $72,659 on hand, according to his committee filings.

As of Saturday, the other candidates -- Democrats Mike Russo and Joanne Yepsen and Republican Ray Seney -- hadn't established campaign committees, according to online Board of Elections filings.

Here's how other campaigns are shaping up, as the Sept. 9 primaries approach, based on campaign reports due last week:

108th Assembly

Steve McLaughlin, R-Melrose, a banker and former airline pilot, doesn't have any money in his campaign war chest.

McLaughlin is campaigning on the promise that he is working for middle class families and seniors affected by soaring gas prices, property taxes and health insurance costs.

Campaign spokesman Adam Kramer said McLaughlin is still very much in the race.

McLaughlin was not available for comment.

His opponent, incumbent Tim Gordon, I-Bethlehem, has almost $50,000 in his war chest.

Gordon, who runs an advertising and public relations firm, has been in the Assembly since 2006.

He has focused on escalating Thruway tolls and obtaining state money for local school districts.

He is also campaigning on the interests of working families and tax relief.

44th Senate

Incumbent Republican Hugh Farley, seeking his 17th term, has a balance of $415,774 -- almost 15 times what one of his challengers has.

It helped he had an opening balance this quarter of $337,334.

Farley's camp spent $16,603 this quarter and took in $95,044.

Democrat and Working Families candidate Bahram "BK" Keramati of Galway raised $29,265 since January, spending $1,272 of it.

He expects his fundraising will increase now that he'll be on the ballot.

"I'm not daunted, it's just money," said the retired General Electric engineer.

"We have a good message and we'll work hard to get it out."

Schenectady County attorney and Democrat Fred Goodman, who filed petitions for the Democratic line and would run in a primary against Keramati, hasn't formally announced he's running.

The state Board of Elections Web site shows no financial filing for Goodman.

105th Assembly

A year after winning the 105th Assembly District seat, developer and Republican politician George Amedore finds himself in the incumbent role.

To capture his first full term, Amedore, 39, will have to fend off challenges from Schenectady City Councilman Mark Blanchfield and Joseph Salamone of the Working Families Party.

With $41,276, Amedore has roughly double the amount of campaign money in his coffers than Blanchfield, according to state campaign finance filings, while Salamone as of last week said he was running on empty.

Salamone, 21, a Mohonasen Board of Education member, said he planned to huddle with his campaign officials to talk fundraising.

"We're going to do what we can with what we get," Salamone said.

Blanchfield, 41, handles legal cases for and against insurance companies.

The 105th district, which includes Schenectady and Montgomery counties, became available when longtime Assemblyman Paul Tonko resigned to take a state job in the administration of former Gov. Eliot Spitzer.

Staff writers Lauren Stanforth, Scott Waldman and Paul Nelson contributed to this article.

"Upstate New York's looming natural gas nightmare - Regulators asleep as lawmmakers attempt to declare vast acreage open to the energy industry's iffy underground fracturing technique"

By ABRAHM LUSTGARTEN, Albany, New York Times Union

First published: Tuesday, July 22, 2008

Of ProPublica, Special to the Times Union

On May 29, top state environmental officials assured state lawmakers that plans to drill for natural gas near the watershed that supplies New York City's drinking water posed little danger.

A survey of other states had found "not one instance of drinking water contamination" from the water-intensive, horizontal drilling that would take place across New York's southern tier, the officials said.

Reassured, the legislature quickly approved a bill to streamline the permitting process for a huge influx of wells which could bring the state upwards of $1 billion in annual revenue.

Gov. David Paterson has only until Wednesday to sign the bill, and the state's Department of Environmental Conservation says drilling permits could be approved in as little as 12 weeks.

But a joint investigation by ProPublica and New York City public radio station WNYC revealed hundreds of instances of drinking water contamination in states where comparable drilling has been done.

In New Mexico, oil and gas drilling using waste pits like those proposed for New York has caused toxic chemicals to leach into the water table at some 800 sites.

Colorado has reported more than 300 spills affecting its ground water.

DEC officials told ProPublica and WNYC they were not aware of those incidents, even though that information could have been found through a rudimentary internet search.

They apparently hadn't understood that the new drilling techniques pump trace amounts of toxic chemicals into the ground, and they couldn't say for sure how New York would dispose of the millions of gallons of hazardous fluids that are the byproducts of this type of drilling.

Four days after one interview, the DEC sent a letter to the drilling companies asking for detailed information about the type and amount of chemicals they will use.

With energy prices at record highs, a growing number of difficult-to-reach deposits of oil and gas in the United States are becoming commercially viable.

At least nine companies have been locking up leases in New York, Pennsylvania and the southern Appalachian states for drilling rights to the Marcellus Shale, a gas-rich rock layer that lies 9,000 feet beneath the earth's surface.

Some geologists predict it could meet the entire nation's natural gas needs for more than two years.

Protecting the environment from the effects of this drilling falls to individual states, which have a patchwork of laws and viewpoints.

New York's laws have served it well for the most part.

Since 1963 the state has permitted over 13,000 gas wells with few problems.

"When we say we are going to protect the environment, you don't have to trust us, you don't have to believe us," said Val Washington, director of the division of mineral resources at DEC.

"But look at our track record."

"I think it's pretty good."

But the Marcellus development will be far more complicated than any previous drilling operations in the state.

It will involve deeper, horizontal wells, possibly thousands of them.

Each well could suck up, and later spit out, between one million and five million gallons of water.

That would place an unprecedented burden on New York's watersheds, including those that feed New York City's reservoirs and farmland in Chemung, Tioga, Broome, Delaware and Sullivan Counties.

Some of the regional DEC offices that would oversee Marcellus wells have no experience with gas drilling at all.

Yet New York officials said they see no reason to update their environmental impact statement, which was drafted in 1992, long before this form of drilling, called horizontal hydraulic fracturing or "hydrofracking," was feasible on the scale now contemplated.

"There is a little bit of learning curve ... and that is where the concern falls," said William Kappel, a hydrologist with the U.S. Geological Survey in Ithaca, N.Y.

"The tremendous amounts of water used for these processes - where are you going to get it and what are you going to do with that?"

DEC officials could not answer those questions.

They acknowledged that the state's current rules allow independent contracting companies to take water from upstate streams and wetlands at will.

They also acknowledge they don't track the process drillers use to dispose of "produced water," as the gas and oil industry refers to its waste.

The gas in the Marcellus is held in tiny pockets, like bubbles in a brick of Swiss cheese.

To extract it, a mixture of water, sand, and chemicals is shot into the earth with such explosive force that it fractures the rock, releasing the bubbles to the surface.

Along with the gas comes most of the water that was shot down the well.

But by the time the water re-surfaces, it is laden with natural toxics from the shale layer below, as well as the chemicals added by industry.

The U.S. Department of Energy lists produced water from gas drilling as among the most toxic of any oil industry byproduct.

When that water is returned to the surface, it must be dealt with as toxic industrial waste.

Waste water from the Marcellus formation may turn out to be slightly cleaner than that from other formations because the water pulled back out contains fewer of the naturally occurring toxins - early trials indicate this - but the U.S. Department of Energy lists produced water from gas drilling as among the most toxic of any oil industry byproduct.

According to a 2004 report from Argonne National Laboratory prepared for the U.S. Department of Energy, "Studies indicate that produced waters discharged from gas ... platforms are about 10x more toxic than the produced waters discharged from oil platforms."

In most states the tainted water produced by gas drilling is injected back into the ground in areas where solid rock layers keep it isolated from people or their drinking water.

But the geology in New York and Pennsylvania is different and the water will be discharged into an ecosystem where it might wind up coming out of New York City's taps.

DEC's current regulations require only that produced waste be treated to "high standards" before being discharged back into rivers.

DEC officials said the water would be shipped to Pennsylvania and treated in specialized plants there.

But an executive for three of the Pennsylvania plants told ProPublica and WNYC that New York officials hadn't talked to him about the Marcellus wells.

He said his plants don't have the capacity to accept wastewater from New York.

"Don't bet on it," said Paul Hart, president of Hart Resource Technologies, which owns and operates three of the region's five qualified facilities, and whose phone number was given to Propublica by New York DEC.

Hart said his company can't even build plants fast enough to handle Pennsylvania's drilling expansion.

An executive with another plant said he had talked to DEC about taking some of the waste, but he too had serious concerns about limited capacity.

Few Regs for Hydrofracking

The challenges New York faces to control a drilling's effect on water are illustrated by what's happening at Tamarac Swamp, a state protected ecological area.

The swamp sits on a quiet rural road outside Oxford, N.Y., about a 45-minute drive from Binghamton.

Last year, Oklahoma City-based Chesapeake Energy, the nation's third largest gas producer, approached the sprawling wetland's owners with an offer to lease drilling rights for $75 an acre, a bargain compared to today's asking prices of $2,500.

The Zunno family declined Chesapeake's offer, intending to reserve the wetland instead.

But last month the family spotted a tanker truck from another drilling company with a long septic hose draped over the side of the public roadway, draining water from the Zunno's culvert.

Lori Zunno said a well had been built on a neighbor's land and its operator had sent contractors in search of water for the drilling.

"We can't even build within 100 feet of [the swamp] so I don't understand why they can take septic trucks and pump it out," Zunno said.

Zunno filed a complaint with the DEC, but she said no one seemed to know who was responsible for protecting her land, or what, if anything, the tanker company had done wrong.

"They don't even know their own rules what's regulated and what's not," she said.

"There was such a lack of knowledge on their part about what could be done."

"There is no clear cut 'you cannot take water from this spot.'"

It turns out that thewithdrawals from the Zunnos' property should be regulated by the Susquehana River Basin Commission.

But Zunno didn't know that.

And neither, apparently, did the DEC, which declined to comment on the Zunnos' complaint because the investigation has not been closed.

Outside of specific areas regulated by the Susquehana River Basin Commission and the Delaware River Basin Commission, which requires permits for regular or large water withdrawals, New York does not regulate surface water extraction.

Anyone can take water from, say, the Hudson or Susquehana rivers, according to DEC's regional captain for law enforcement in the Zunno's part of the state.

When it comes to smaller water resources such as the Tamarac swamp, the rules say only that wetland cannot be drained.

Scientists and local land owners fear thousands of small water sources such as the Tamarac will be tapped to support the drilling industry.

"It's not clear to me that there is any group who is looking at the overall impact of withdrawing the amount of water that might be required for the hydrofracking."

"Who is looking at the broader picture?" said Susan Riha, director of the New York State Water Resources Institute, a federally funded study group at Cornell University.

Riha is especially concerned about limitations of the DEC's Environmental Assessment Form, a crucial environmental impact document drilling companies must file to get a permit.

It doesn't ask where drillers plan to get their water, and only asks for a vague estimate of how much they plan to use, which Riha considers standard questions.

"Looking at that short form, I was shocked," Riha said.

"It seems like we would have some procedures in place to put some pressure on the gas drilling operators to show that they are taking all possible steps to mitigate environmental impacts."

DEC officials acknowledged the gaps.

"You're getting into the concept of cumulative impacts," said James Tierney, assistant commissioner for the division of water.

"One water withdrawal may not have an impact, but 50 would have a huge impact."

"We're trying to figure it out."

This issue alone, says Riha, is reason enough under the State Environmental Quality Review Act, which mandates impact evaluations, to order a supplement to the 1992 environmental impact statement the DEC is still using.

Scientists are also concerned about chemicals added to the water to prevent corrosion in the drill bits, lubricate the drilling, and keep the drilling mud, as the mixture is called, at the right consistency to coax out gas.

As recently as last month, Bradley Field, the DEC's commissioner for the division of oil and minerals - the agency responsible for overseeing resource extraction in the state - appeared unaware of these additives.

At a meeting with conservation advocates and state legislators he said drilling fluids contained nothing more than water and sand, according to Roger Downs, a conservation associate of the Sierra Club's Atlantic Chapter.

DEC has since adjusted its stance.

"They add chemicals, we know they do that," said Tierney, the water division official, in a meeting July 4.

"We don't know exactly what they are."

In part that's because the industry views its chemical recipes as trade secrets, akin to the formula for Coke or Pepsi, and the 2005 federal Energy Policy Act exempts the oil and gas industry from disclosing those recipes to the public.

For the most part, states have learned about the chemicals by analyzing waste pits and the contaminated ground water around them.

The Dirty Side of Water

In 2004 Theo Colborn, a widely respected scientist who specializes in the health effects of low-dose chemical exposure, began to investigate the makeup of drilling fluids.

She was spurred by the story of a Colorado resident who suspected her cancer was tied to water contamination from a nearby gas well.

To figure out what was in the water, Colborn collected shipping manifests that trucks must carry when they haul hazardous materials for oil and gas servicing companies.

When an accident occurred - a well spill in Colorado, or an explosion at a drilling site in Wyoming - she took water and soil samples and tested them for contaminants.

Colborn's list eventually grew to more than 200 chemicals, from suspated cancer-causing compounds like Benzene to a compound called 2-BE, which she connects to serious human health problems.

Colborn's findings are supported by studies in New Mexico and Wyoming.

Tests done by the New Mexico Office of Oil Conservation on mud and water from two gas drilling pits showed Benzene, Toluene, Naphthalene and other substances.

In Wyoming, where natural gas development has occurred on a large scale, the Environmental Protection Agency recently raised flags about one of the state's largest gas fields, the Pinedale anticline, where data appears to indicate that much of the drinking water aquifer has been contaminated.

In a letter circulated to drillers there this summer, the EPA wrote that it found Benzene and other compounds in more than a third of groundwater samples tested at one site.

"Such impacts are environmentally unsatisfactory" the letter said.

Washington, the New York DEC official, insisted New York can handle such problems.

"This is not New Mexico, this is not Colorado, this is New York," said Washington.

"Out of 13,000 wells that we have permitted we have not, for example, had a single ground water problem with any of them."

In conversations with ProPublica, DEC officials repeatedly downplayed the importance of chemical additives.

Additives make up just a tiny fraction of a percent of the fluids; 99.4 percent is water and sand, Field said.

But six-tenths of one percent of two million gallons of drilling water still equals 10,000 gallons of toxic chemicals and that's just for one well.

When pressed on whether New York would make such information a prerequisite for approving an application in the Marcellus, Field said:

"I don't know."

"We'd have to take a look."

"I can't say for sure right now."

Asked why he might not require it, he said:

"Because it would be a departure from how we typically do this."

"I haven't really come to terms with that just yet," he said.

Disposing of the produced water presents even larger challenges the DEC has also not addressed.

When water is sent thousands of feet below the surface for hydrofracking it picks up other contaminants held deeply underground such as fuel-related hydrocarbons, cancer-causing compounds including Benzene, Toluene, Ethylbenzine, and Xylene - and even radioactivity from uranium ore.

When asked how the DEC intends to shepherd its waste water, the DEC could offer few details.

Making sure the water gets treated isn't part of DEC's permit review process, so long as the end result complies with state laws that say, somehow, it eventually gets treated and meets discharge standards.

Paul Hart, the Pennsylvania treatmnent plant executive, said the last time he talked with New York's DEC, the caller, whose name he couldn't remember, displayed a general lack of understanding of water issues, and did not have a clear grasp of the waste water disposal alternatives.

"He did not understand the variations of the different chemicals and the potential for contamination," Hart said.

"Now with the Marcellus they are just completely unprepared for it."

"What I really think they are waiting for is the industry to make recommendations."

"I don't think they are going to be proactive."

On July 11 Bradley Field's office issued a hefty letter to the gas industry requesting exhaustive data and information that closely adhered in both substance and actual language to the questions presented to him by ProPublica and WNYC.

The letter gave the companies four and a half week to respond.

But it didn't indicate that a response would be required in order to continue drilling.

For now, DEC's officials are asking their critics to have faith.

"If there is any doubt in anybody's mind that we are going to proceed with these applications without full protection and consideration for the environment they are just wrong," Washington said.

"It may be that the applicants down the line are going to have to wait a long time for their permits."

"There are some things to sort out here."

WNYC will air radio versions of this story beginning this morning.

Abrahm Lustgarten is a reporter for ProPublica, a non-profit investigative newsroom based in New York City. He is a former staff writer and contributor for Fortune, and has written for Salon, Esquire, the Washington Post and the New York Times since receiving his master's in journalism from Columbia University in 2003. He is the author of the new book China's Great Train: Beijing's Drive West and the Campaign to Remake Tibet, a project that was funded in part by a grant from the John D. and Catherine T. MacArthur Foundation.

"Bruno to take CEO job at CMA Consulting Services"

July 22, 2008 at 1:00 pm by Eric Anderson, Deputy business editor, Albany, New York Times Union

The former Senate majority leader, who gave up that post last month and retired as a state senator on Friday, will become CEO of the Latham-based information technology consulting firm.

Kay Stafford, whom he replaces, will become president and chairwoman of the CMA board.

The appointment, announced this afternoon, is effective immediately.

CMA employs 410 people and has offices in New York City; Hyattsville, Md.; Austin, Texas; and Phoenix.

Stafford, the widow of former state Sen. Ronald Stafford, who had represented the Plattsburgh area, has spent more than 20 years at CMA.

Under her leadership, the company boosted annual revenue to $42 million from $300,000.

The privately held company doesn’t disclose income.

“As CMA’s day-to-day leader, Senator Bruno’s insights, direction and vision will be great for our company, great for our customers and great for our employeees,” Stafford said.

The company’s list of clients includes a number of New York state agencies, as well as government agencies in other states and in Guam.

"DiNapoli pulls pension credits from 5 lawyers - Attorney for Duanesburg schools among those cited"

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

Last updated: 12:23 p.m., Tuesday, July 22, 2008

ALBANY - State Comptroller Thomas DiNapoli has revoked or rescinded pension credits for five more lawyers, all working for upstate school districts, as part of his ongoing review of whether hundreds of attorneys have actually earned those state-funded benefits.

Among those who have lost pension credits was Paul Callahan, who worked part time for the Duanesburg school district until he retired last month.

The comptroller, as well as Attorney General Andrew Cuomo have for several months now been reviewing the records of hundreds of lawyers who work for schools or other government entities.

They say many of these lawyers were listed as employees when they were actually contract workers and thus shouldn't qualify for lucrative state pensions.

"Ties to Albany firm probed - Criminal investigation centers on Sweeney, lobbying business"

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

First published: Wednesday, July 23, 2008

ALBANY -- A federal criminal investigation is focusing on former U.S. Rep. John Sweeney and exploring his dealings with an Albany lobbying firm in the years after Sweeney was appointed to the House's powerful Appropriations Committee.

A federal search warrant used to raid the Albany offices of lobbyist William D. Powers shows FBI agents from Washington, D.C., are examining records related to Sweeney and Powers' firm back to January 2001, which was when the then-second term congressman secured his Appropriations Committee seat.

The committee and some of its congressional members have been central in a broader investigation tied to former Washington lobbyist Jack A. Abramoff, who is serving a federal prison sentence for a conviction on conspiracy and fraud counts.

In response to a request from the Times Union, a U.S. magistrate judge in Albany unsealed portions of federal search warrant documents that were used to raid the State Street office of Powers' lobbying firm on June 6.

A sealing motion filed by Richard C. Pilger, a trial attorney with the Justice Department's Public Integrity Section, said the search of Powers' office was part of "an ongoing investigation into alleged violations of federal criminal law."

U.S. Magistrate Judge David R. Homer declined to unseal an FBI agent's sworn statement that outlined the FBI's reasons for seeking a warrant and also gave details about the origin and history of the investigation.

"A review of the applications and affidavits indicates that no portion of those documents may be unsealed without compromising the interest in the integrity and security of the investigation," Homer wrote in his decision.

"The applications set forth the legal theories of the investigation."

Still, the unsealed documents confirm that material seized from Powers' firm relate to a series of federal grants that were steered to Powers' clients.

The investigation also is examining the circumstances by which Powers gave Sweeney's former wife a job while the couple were still married and Sweeney was in Congress.

Gayle Sweeney left Powers' firm shortly after Sweeney's last term ended in December 2006.

Sweeney lost a re-election bid in November 2006.

Armed with two search warrants, federal attorneys and FBI agents from Albany and Washington entered Powers & Co.'s 90 State St. office building on a summer Friday and corralled workers into a conference room.

They confiscated client lists, letters, files, cellphones, computers, notes, pictures, computer discs, credit card statements and lobbying records, according to a copy of the search warrant "return," as courts label it.

The search warrant identified items that would be seized to include "any thing of value paid to or received by Gayle Sweeney or John Sweeney ... (including) gifts, loans, offers of employment, contracts, billings, financial transactions, travel, tickets, souvenirs or photographs of sporting or entertainment events, or dining at restaurants."

E. Stewart Jones, a Troy attorney who has represented Sweeney on a number of unrelated issues, said Sweeney is being represented by an out-of-state firm in this matter.

Jones declined to identify Sweeney's other attorney.

Sweeney could not be reached for comment.

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

His firm's short list of federal lobbying clients include the Lincoln Center for the Performing Arts, Siena College, and the Shaker Museum and Library near Powers' Columbia County home.

The search warrant documents show federal agents seized numerous records from Powers' offices related to those three entities.

The Lincoln Center for the Performing Arts paid Powers' firm $180,000 a year in 2005 and 2006, Sweeney's final two years in Congress.

The Shaker Museum received a grant from Sweeney while Powers represented the museum, according to a watchdog group and public records.

Siena College received federal transportation funding for improvements to its Loudonville campus.

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

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

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

Sweeney and Powers are longtime friends.

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

The FBI affidavit used to obtain the search warrant for Powers' offices includes the identity of a "cooperating witness whose help is important to the ongoing investigation."

The identity of the person who is helping guide the FBI's investigation is unclear.

Abramoff, who is in federal prison, pleaded guilty in Washington, D.C., in January 2006 to three federal charges.

He had earlier pleaded guilty in federal court in Florida to related charges.

Under a plea agreement, Abramoff, who is seeking to reduce his federal prison sentence, is continuing to cooperate with federal agents in an ongoing corruption investigation involving members of Congress.

Abramoff's sentencing in the Washington, D.C.-based case was recently adjourned to September after attorneys in the case asked for a delay, citing his ongoing cooperation from prison.

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

"Ethics report: 4 state officials violated law"

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

Last updated: 12:59 p.m., Thursday, July 24, 2008

ALBANY - The state Commission on Public Integrity has just released its findings in the long-running travel records or Troopergate affair.

Their findings:

Darren Dopp, Preston Felton, Richard Baum and William Howard violated the Public Officers Law.

All were top officials in the Spitzer administration: Dopp was the communications director, Felton acting State Police superintendent, Baum was secretary and Howard was a top homeland security official.

Baum and Howard admitted to violating the Public Officers Law.

Dopp and Felton are alleged to have "caused the State Police to serve the Governor's and their own non-governmental interest in a manner that compromised the State Police."

They are contesting the charges.

Both men can now plead guilty or face a quasi-judicial hearing before the commission's administrative law judge.

They could face financial penalties as well.

While Eliot Spitzer wasn't charged, the commission was highly critical of the former governor, who stepped down in March amid a prostitution scandal.

Nor did it rule out the possibility that he could be charged.

The commission found that "The Executive Chamber's piecemeal document production and its spurious claims of privilege unnecessarily and improperly delayed the Commission's investigation and the promises of Governor Spitzer that the Administration was cooperating fully with the Commission's investigation."

The travel records scandal started over a year ago when former Senate Republican Majority Leader Joseph Bruno charged Spitzer was spying on him when the governor released to the press, itineraries of the senator's trips to New York City on state helicopters and state vehicles.

"State liquor exec accused of bilking taxpayers - Director of Enforcement at liquor authority found receiving nearly $30,000 to pay for Syracuse-Albany job commuting"

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

Last updated: 1:34 p.m., Thursday, July 24, 2008

ALBANY - The head of enforcement for the State Liquor Authority may have violated state travel reimbursement rules, according to a new report.

That official, Daniel A. Malay, is also a double dipper of public compensation.

The Office of Inspector General said today Malay may have improperly obtained nearly $30,000 in travel money.

He is also a retired Syracuse cop collecting a state pension of $29,953 annually.

He received a "211 waiver" in 2006 sought by the Office of General Services on behalf of the SLA so that he could go to work as the leader of investigators probing alcohol licensing violations.

Malay, 55, was hired by his former boss at the Syracuse Police Department, Daniel Boyle.

Boyle had served as the first deputy police chief in Syracuse.

He later became commissioner of public safety in Schenectady.

In February 2006, Gov. George Pataki tapped him as the SLA commissioner.

When Malay went to work for Boyle a few months later, however, he never moved from his Syracuse-area home in Jamesville despite having a job designated for Albany, according to State Comptroller records.

Nevertheless, he put in for and received more than $28,337 in travel reimbursement, despite driving a state-assigned car and working in Syracuse no more than a couple of days a week.

His lodging reimbursement was for night-after-night of hotel bills at some of Albany's best hotels, particularly the Hampton Inn & Suites and the Marriott, according to comptroller records.

Malay and Boyle told the State Inspector General, which began looking into the matter a year ago, that Malay's official station was Syracuse.

State officials say the Swan Street headquarters of the the SLA is the designated site for the investigations job however.

The IG said there is no record of the SLA setting up Syracuse for Malay's base and referred the matter to Comptroller Thomas DiNapoli on Monday.

An OSC spokeswoman did not have an immediate comment but furnished information that showed Albany to be the location of the director of enforcement's office.

It also stated that the official station must be at a site that is in the "best interest of the state."

Malay, who receives $89,603 annually in his SLA post, according to comptroller records, could not be reached.

An SLA spokeswoman did not immediately return a call.

"A state employee or agency cannot choose a work station for personal convenience or to boost travel reimbursements," Inspector General Joseph Fisch said.

"That's the bottom line."

"Housing market sluggish, at best"

July 24, 2008 at 8:37 am by Chris Churchill

Albany, New York Times Union

The Capital Region housing market is slow and, in some parts of the region, median sale prices are dropping.

Numbers released this morning by the Greater Capital Association of Realtors Inc. show that median sale prices fell in June in two of the Capital Region’s four core counties.

Only Saratoga and Albany counties saw the median price increase, when compared to the same month a year ago.

Meanwhile, the number of closed sales in June dropped considerably everywhere: They were down 23 percent in Saratoga County, 25 percent in Rensselaer County, 26 percent in Albany County and 30 percent in Schenectady County.

James Ader, president of the association, in a written statement this morning conceded the market is “slower than usual,” but added that it is doing relatively well compared with what’s happening nationally.

The June median sale price in Saratoga County was $265,000, up 6 percent from the same month a year ago.

In Albany County, the price was up 2 percent, to $213,800, while it fell 6 percent in Schenectady County, to $158,800, and 7 percent in Rensselaer County, to $170,000.

The June numbers alone, though, are a relatively small sample size.

For the first six months of the year, median prices were up 1 percent in Saratoga, Rensselaer and Albany counties and down 1 percent in Schenectady County, when compared to the first half of 2007.

The number of sales for the first six months of the year were down 22 percent in Albany County, 7 percent in Rensselaer County, 13 percent in Saratoga County and 24 percent in Schenectady County.

The Greater Capital Association of Realtors does not cover Greene and Columbia counties, and does not release statistics for Warren and Washington counties.

The numbers reflect sales of existing and new single-family homes.

"A down, not out housing market - Capital Region home sales slip 17 percent, but median prices steady"

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

First published: Friday, July 25, 2008

If the Capital Region's real estate market were a boxer, he would be weary and bruised but still on his feet.

But perhaps that's pretty good considering the punches he has taken, including a downturn in the economy, plummeting consumer confidence and a credit crunch that has made it harder for buyers to get a mortgage.

Numbers released Thursday by the Greater Capital Association of Realtors Inc. show that in the first six months of the year, closed sales of single-family homes regionally were down 17 percent compared to the same period last year.

Median prices, meanwhile, were flat.

The numbers show that the Capital Region housing market is stronger than the national market, which is on its knees and looking to the referee for help.

In some parts of the country, the market has been knocked out cold.

But can the Capital Region continue to buck national trends?

And will the housing market, both nationally and locally, recover soon?

Hugh Johnson, chief investment officer at Johnson Illington Advisors, an investment firm in Albany, said the answer to the first question is yes, because while the Capital Region had a housing bubble, "it wasn't as euphoric a bubble as it was elsewhere."

So because prices here didn't rise as high as they did in, say, San Francisco or Boston, they don't have as far to fall.

But Johnson, along with many analysts, isn't expecting a quick real estate market recovery.

"The level of unsold homes, the inventory, is substantial," he said.

"There are a lot of homes that need to be sold that can't be sold, and that's likely to exact downward pressure on prices."

"We've got a ways to go."

Johnson was speaking primarily about the national market, but said the Capital Region faces the same concerns.

Moreover, there are some troubling real estate trends taking shape here.

For example, the California firm RealtyTrac, in a report being released today, foreclosure filings in the Albany-Schenectady-Troy metro area increased 276.6 percent in the second quarter, compared to the same three months in 2007.

That could add homes to the market and depress prices.

Nationally, foreclosure filings rose 121 percent, according to RealtyTrac.

And the rates on 30-year mortgages surged to 6.63 percent this week, the highest level in nearly a year and up from 6.26 percent last week -- another factor that could slow sales.

Still, local real estate agents said Thursday there is reason for optimism, especially when the local market is measured against the national market.

"That's been my battle cry," said Marie Bettini, president of the Greater Capital Association of Realtors and owner of Albany Realty Group.

"Considering all the negative things we're hearing nationally, we're not doing that bad here."

The GCAR numbers show price stability across the region.

For the first six months of the year, median single-family home prices were up 1 percent in Albany, Rensselaer and Saratoga counties and down 1 percent in Schenectady County.

Closed sales for the first six months, when compared to the same period in 2007, were down 22 percent in Albany County, 7 percent in Rensselaer County, 13 percent in Saratoga County and 24 percent in Schenectady County.

"It's obviously not a very active market," said James Ader, chief executive of GCAR, a Colonie-based trade group.

"But it's also not a market that we should put in a casket and bury."

Also Thursday, the National Association of Realtors reported that sales of existing homes nationwide dropped by 2.6 percent in June.

The national median price for a home sold last month dropped to $215,100, down by 6.1 percent from a year ago.

It was the fifth largest year-over-year price drop on record.

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

This morning on the radio news up here in the CORRUPT EMPIRE of New York, they had our blind governor Daivd Paterson on the radio crying the financial blues ....

Corporations and bid-nesses in the CORRUPT EMPIRE aren't making profits, so they aren't paying taxes ....

Now there is a BIG SHORTFALL in tax receipts ...

So the blind man is going to have to call back the legislature to PUNISH US TAXPAYERS and CITIZENS by cutting out some more of our government up here ....

The governor and the legislature between them have billions of dollars in SLUSH FUNDS LOOTED from our state treasury ....

But that money is SACRED, because they agreed among themselves that it would be so .....

So they are going to cut out public health protection and infrastructure maintenance and public access to government ....

And downwards and backwards we slide up here ....

The idea that we are a civilized society of laws up here is a total joke ....

And so ...

"AP interview: Spitzer may yet face ethics inquiry"

Associated Press

Last updated: 1:22 p.m., Friday, July 25, 2008

ALBANY -- The panel that charged former Gov. Eliot Spitzer's aides with breaking the law in a political scandal may investigate if Spitzer was behind a pattern of obstacles that delayed the initial probe.

Public Integrity Commission Executive Director Herbert Teitelbaum tells The Associated Press a "post-mortem" will see if the commission should investigate who directed a series of obstacles, delaying tactics and "games" that prolonged the 10-month probe.

Teitelbaum says he didn't try to determine who orchestrated the delay tactics because he focused on whether the four aides misused state police for Spitzer's political gain.

His comments come a day after two aides agreed to ethics charges and two more were charged but vowed to fight.

Spitzer has not been charged.

"Honestly, integrity unit a bust"

By FRED LEBRUN, Albany, New York Times Union

First published: Sunday, July 27, 2008

After reading the state Commission on Public Integrity's whitewash of Troopergate, small wonder the public has lost all faith in governmental Albany's ability to police itself.

As critics forewarned, after a full year of investigating the predominantly Spitzer-picked commission did a spin job on the evidence it selectively gathered to pin pretty lame ethics offenses on four underlings while letting the governor walk.

This commission has been an abject waste of taxpayer money.

At the first opportunity, this pathetic commission ought to be dissolved and something credible created.

It doesn't work, just as the State Ethics Commission before it didn't inspire much confidence either.

The integrity commission's 68-page report tries to build the case that using the State Police to gather politically damaging information about then-Senate Majority Leader Joe Bruno's use of state aircraft violated the state's Public Officers Law, and was mostly the work of four people, especially former communications director Darren Dopp and former acting State Police Superintendent Preston Felton.

After all the verbiage is hashed through, it isn't at all clear to me any wrongdoing occurred, even an ethical violation.

All's fair in love and politics, and the State Police did not make anything up in those damaging reports about Bruno, but merely collated what already had happened.

Felton, after all, was head of a paramilitary organization whose commander and chief is the governor.

Respecting a request from the governor's office is not that far out of line.

The other two named are William Howard and Richard Baum, who already have pleaded to minor charges that carry no penalty.

Howard was Dopp's contact with the State Police, while Baum was up the chain of command between Dopp and the governor.

Never mind that by my count, five top-flight lawyers in the inner circle of the Spitzer administration -- including and especially the governor himself -- were intimately involved with the information gathered about Bruno, and had many meetings about what to do with it.

The testimony provided by the commission tells us that.

Yet mysteriously not a single lawyer, who might get his ticket punched over it, is deemed to have violated any ethics laws.

Nor is there any indication in all the testimony taken that any of these top lawyers ever suggested to Dopp that he might be on dangerous ground ethically.

The commission's report does anticipate with a vague and equally lame explanation why the governor himself doesn't even get his wrist slapped, an obvious omission even to them.

"In carrying out its mandate, the Commission must abide by the statutory provisions that define the Commission's authority to enforce the law."

"Unless an investigation conducted by the Commission adduces sufficient, reliable evidence -- not surmise, conjecture, speculation or rumor -- to support a determination that there is reasonable cause to believe that a person subject to the Commission's jurisdiction has violated one or more of those laws, the Commission may not issue a Notice of Reasonable Cause under Executive law."

"The failure to supervise subordinates ... does not violate the Public Officers Law."

Dopp repeatedly has made the point in news stories that when he was being interrogated by the commission that the interrogator did not want want to hear the name Eliot Spitzer dragged into it.

At the mention of Spitzer's name, the interrogator -- commission executive director Herb Teitlebaum -- would quickly change the subject.

This certainly raises questions as to whether the commission may have gone out of its way to avoid finding evidence damaging to Eliot Spitzer.

In which case, the justification cited above is just plain deceptive.

Obviously, that's one lawyerly way to handle an investigation to assure the outcome.

Lucky for us, this commission report and the charges brought are only the beginning of a public process that should be an eye-popper.

That's because both Dopp and Felton are fighting the charges, and at some point we should be seeing the accusers in as much of a sweat over this overblown Troopergate business as the accused.

Dopp faces $10,000 in fines and Felton $20,000, not to mention horrendous legal expenses.

The next step is for the charges to be adjudicated before the commission's administrative law judge.

These judges can go the gamut, from fierce independence to toady compliance with the agency they serve.

We'll see.

After that, the issue could well wind up in a regular courtroom.

Darren Dopp's attorney, former federal prosecutor Mike Koenig, is arming for bear at all levels and he says he'll be treating the administrative law process as if it is a real trial.

Compared to the commission's investigation, what happens now should see the light of day.

That's a welcome change.

LeBrun can be reached at 454-5453 or by e-mail at flebrun@timesunion.com.

"Does giving big green to Big Blue pay off? - States throw money at IBM, but company shifts jobs around the globe"

By CHRISTINE YOUNG, Special to the Times Union

First published: Sunday, July 27, 2008

It was December 2004, and Tulsa, Okla., was abuzz with excitement.

IBM, which already employed more than 1,200 in Tulsa, had made a deal with Oklahoma to add another 1,000 jobs by 2009.

In return, Big Blue would get $35.2 million in rebates over 10 years.

Calling it "great news for Tulsa and for all of Oklahoma," Gov. Brad Henry praised IBM as "a vital and valuable corporate citizen."

He said the deal "signifies good things for both IBM and Tulsa."

He was only half right.

Since the 2004 agreement, the Oklahoma Tax Commission has sent Big Blue more than $4.4 million in rebates.

Yet state figures show the company's job count is the same today as it was before the deal was signed.

This raises questions for the state of New York and Albany, where the ink is still drying on an agreement with IBM that will cost taxpayers $140 million for promises of job creation and economic development.

IBM employs hundreds at the University at Albany's College of Nanoscale Science and Engineering on Fuller Road, site of much of the company's cutting-edge computer chip research.

It also has a big office in downtown Albany on State Street, devoted largely to serving state government clients.

And while Big Blue is one of New York's largest employers, with 11,600 workers in Dutchess County and 20,000 across the Hudson Valley, Oklahoma's experience offers a cautionary note and reason to wonder if New York's investment is money well spent.

Economic development packages are great for politicians.

Jobs are promised, deals are signed, happy headlines are made.

But what happens after the hoopla?

Since the Oklahoma celebration, there appears to have been no follow-up or oversight by the state.

Last week, the marketing director for the Oklahoma Department of Commerce had no idea if IBM had kept its end of the bargain.

"I would imagine that they had," Beth Schmidt said.

"It's performance based -- if they meet the requirements and add those jobs."

Yet a January report from Schmidt's agency shows IBM Tulsa's payroll remains near 1,200, the same as it was before the agreement.

And in May, IBM announced 350 Tulsa accounting and finance positions were going to Argentina.

An IBM spokesman said all of the company's dealings have been above board.

"IBM has met the financial and employment benchmarks required under agreements with government organizations," said John Buscemi, North America director of communications.

Exuberance over IBM's presence, be it in Oklahoma or New York, is not unusual.

In Boulder, Colo., the city doled out a $100,000 tax rebate to IBM on top of state incentives worth $632,000 to get Big Blue to put a "green" data center there.

"The city's money was really an indication to IBM corporate that Boulder really cares about having this company here," Frances Draper of the Boulder Economic Council told reporters.

"That was an incredibly important part of their decision."

This year, IBM has slashed 400 jobs in Boulder.

And the dirty secret is no one wants to take on IBM for fear of losing jobs and hurting the local economy, especially in areas such as Dutchess County, where IBM is such a vital player.

"Nobody wants to throw the baby out with the bath water," Dutchess County Legislator Joel Tyner said.

And so New York went ahead with a pact with IBM, requiring a hefty donation from taxpayers, announcing it one day before Big Blue's second-quarter profit jumped a dizzying 22 percent to $2.77 billion, defying even Wall Street's expectations.

The agreement with the Westchester County-based technology giant, announced by Gov. David Paterson on July 15, calls for a $1.5 billion investment by IBM and $140 million by the state.

It includes $75 million from taxpayers for 1,000 new jobs -- 325 at UAlbany's NanoCollege and another 675 at an upstate facility that has yet to be sited.

The remaining $65 million will help finance the expansion and upgrade of IBM's East Fishkill plant, in return for IBM's pledge to retain 1,400 semiconductor jobs at the Dutchess County site.

Paterson said the arrangement is "what we are going to need to reignite the engine of the state's economy."

But to Frank Mauro of the Fiscal Policy Institute, a nonpartisan research and education organization in Latham, it brings a sense of deja vu.

Mauro recalls in 2000, then-Gov. George Pataki announced New York was bankrolling IBM with $660 million in state and local incentives.

In return, the company would invest $2.5 billion in East Fishkill to create the world's most advanced computer chip plant and 1,000 "permanent" jobs.

Eight years later, 1,400 people work at the East Fishkill plant.

But Mauro wonders why the state suddenly has to pay another $65 million to keep them there.

It "seems like double billing, since New York state and local taxpayers already paid an estimated $660 million for those 1,000 jobs," he said.

"It would be good to know ... how long IBM was required to maintain those 1,000 jobs."

But according to the state budget office, IBM never received the lion's share of the incentives because it was laying off workers.

"IBM didn't get the $475 million because they had job reductions elsewhere in the state," spokesman Jeffrey Gordon said.

Dutchess County, where IBM has invested more than $5 billion over the past 10 years, recently gave Big Blue a tax break for a possible $36 million upgrade of its Poughkeepsie plant.

The upgrade would give Poughkeepsie a competitive edge against IBM sites elsewhere, such as North Carolina and Colorado, said Michael Tomkovich, chairman of the Dutchess County Industrial Development Agency.

Tyner, the county legislator, called the breaks a "bad deal" for local taxpayers.

"It's time to end this economic battle between the states," he said.

"We need to remove the ability of these companies to hold us over a barrel."

In fact, Big Blue scored big in North Carolina by leveraging competition among states.

IBM is the largest private employer in Durham's Research Triangle Park, where 11,000 workers are on its payroll.

Last month, the company asked Durham County for $750,000 in up-front incentives to construct a "leadership data center."

The project would convert unused warehouse space on IBM's campus into a customer briefing center with support services, creating 10 new jobs.

After being told by a local IBM representative that Durham was competing with sites in New York and Colorado for the $362 million project, county commissioners unanimously approved the deal.

Asked where in New York state the data center might be built, an IBM spokesman said no such thing had been discussed.

"We have discussed the potential expansion of an existing data center at our Poughkeepsie site," Jeff Couture said, "but this is a separate project."

Asked why Durham was told it was competing against New York, he changed his answer.

"We're not disclosing the possible location in New York at this time," Couture said.

Two weeks after Durham commissioners approved the incentives, IBM laid off 30 workers in Durham.

Despite the tax breaks, Tyner says the number has steadily decreased over the years, and he fears the bleeding won't stop.

"I get frustrated, because people forget, if they ever knew, that corporations like IBM are paying half the taxes they used to," he said.

"And who's going to pay for it?"

"You and I."

Young is a reporter at the Times Herald-Record in Middletown. Contact her at cyoung@th-record.com.

Financial promises

GOV. PATERSON'S 2008 DEAL Will create up to 1,000 jobs upstate and help retain more than 1,000 jobs

IBM to invest $1.5 billion

State to invest $140 million

Supports IBM's nanotechnology chip computer activities

Expands IBM's operations at the College of Nanoscale Science and Engineering at the University at Albany

Creates a 120,000-square-foot semiconductor packaging research and development center somewhere upstate

Upgrades East Fishkill semiconductor plant

GOV. PATAKI'S 2000 DEAL

Created East Fishkill semiconductor plant

Created 1,000 jobs and Retained 5,048 jobs (Goal not met)

IBM invested $2.5 billion

State invested $475 million in tax breaks and incentives (Not paid because goal not met)

State pledged $28.75 million in grants and loans

State pledged $156 million in sales tax exemptions and local benefits and tax breaks

BUT THERE IS ABSOLUTELY NO TALK WHATSOEVER FROM BLIND GOVERNOR PATERSON ABOUT CUTTING OUT THE PORK ....

PATERSON IS A POLITICIAN THROUGH AND THROUGH ...

AND TO A POLITICIAN LIKE PATERSON, PORK IS SACRED ....

NOR IS THERE ANY TALK FROM THE POLITICAL SHILL GROUP, THE NEW YORK CITY-BASED "CITIZEN'S BUDGET COMMISSION", ABOUT CUTTING OUT THE PORK ....

BUT THEY ARE JUST SHILLS, AFTERALL ....

And so ...

"State faces tight times - Paterson to reiterate need for possibly drastic measures to make up for revenue shortfalls"

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

First published: Tuesday, July 29, 2008

ALBANY -- Later today, Gov. David Paterson turns up the volume on his message of bad economic news.

During a televised message scheduled for 5:10 p.m., Paterson is expected to lay out projected shortfalls in state revenues that may require cutbacks in spending, services and jobs.

Through the late spring and summer, the governor has been warning of hard times ahead -- he issued similar forecasts at least twice last week, and he's long spoken of a possible $5 billion gap next year.

But he's said little so far regarding how he expects to deal with budget shortfalls beyond calling for a 3.35 percent reduction among state agencies.

The governor's brief address will be followed on Wednesday morning by a press conference with Paterson and Budget Director Laura L. Anglin that will give a more detailed look at the situation.

Strictly by the numbers, state revenues haven't plummeted, although they've grown steadily weaker over the last year.

That has been the trend nationwide, according to the Rockefeller Institute of Government, which tracks such figures around the country.

Nationally, sales tax revenues did not grow during the last quarter for the first time in six years, according to the institute.

And considering inflation and increases in spending, state tax revenue actually dropped some 5 percent.

While state workers on Monday were buzzing with talk of possible hiring freezes, early retirement incentives or even layoffs, the best indication of what the governor is planning may have come earlier this month with a little-noticed bulletin he sent to state agencies titled "New Process To Better Prioritize State Spending."

The notice instructs the various state agencies to look at their core mission and evaluate the myriad programs they run to determine how necessary each might be.

"The governor believes in the midst of a fiscal crisis we have to separate the critical functions of state government from those that we can't afford," said Division of Budget spokeswoman Jeffrey Gordon.

"This is the first time in my memory that such a thing has been done," said Robert Ward, deputy director of the Rockefeller Institute.

Ward said such a approach makes sense, especially when it's compared with an across-the-board cut that would apply to all state agencies.

Even so, the governor's priority-setting could mean that specific agencies and programs may be slated for cuts.

With that in mind, here's a quick look at how the governor may be able to tighten the fiscal belt, which this year encompasses $121.6 billion in expenditures.

Raise taxes. Some groups and Assembly Democrats have proposed raising income taxes on the state's highest earners to help fund property tax rebates for low- and middle-income homeowners; the idea of an income or corporate tax "surcharge" has certainly come up during past budget crunches.

In the early 1990s, for instance, the state imposed a 15 percent corporate tax surcharge which was phased out later in the decade.

The governor could call legislators back for that.

Employee givebacks in pay, benefits or overtime. With public employee unions recently negotiating contracts, Paterson would have to convince union leaders to come back to the bargaining table, which would be difficult, say observers.

Moreover, there's been no indication the governor has sought to do so.

"So far, we've not heard from him," said Darcy Wells, spokeswoman for the Public Employees Federation, a major state union.

Cutbacks in aid to counties and school districts. This, however, could drive up local taxes, essentially passing the bill down the line.

Job cuts. The nuclear option, but one that the governor could choose if the options listed above prove to be politically unpalatable to lawmakers and unions.

But while the term conjures images of thousands of state workers out on the street, the reality probably wouldn't be that harsh: Job reductions frequently entail lots of "bumping," in which laid-off workers move into vacant, albeit lower-paying, jobs.

According to the state Department of Civil Service, for instance, there were 64,450 vacancies earlier this month out of 238,352 positions, allowing for lots of bumping into unfilled slots. (A note of caution: Not all of those unfilled positions are funded.)

Either way, there may be no way to avoid dealing with personnel when talking about the state's financial bind, since 67 percent of state operation dollars go to employee costs.

"It's hard to imagine how you're getting out of this fiscal mess without examining public employee compensation," said Elizabeth Lynam, deputy research director at the Citizens Budget Commission, which follows state finances.

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

"Paterson says deficit grows"

Associated Press

Last updated: 5:32 p.m., Tuesday, July 29, 2008

ALBANY -- Gov. David Paterson says the state deficit for 2009-10 fiscal year has so far increased more than $1 billion -- to $6.4 billion -- and hard choices including bringing the Legislature back for a special session are necessary now.

The Democrat says a hard look at the size of the state work force and spending is required to offset declining revenues in a worsening economy.

He made his comments in a rare televised address.

He says he will detail his proposals in coming days.

Paterson still isn't calling for some drastic measures other states have taken, including layoffs and cuts to health programs for the poor and to schools.

Senate Majority Leader Dean Skelos says he supports Paterson's plan to further cut spending in his agencies, but that cutting school aid would be totally inappropriate.

"Paterson calls for economic session of Legislature"

By MICHAEL GORMLEY, Associated Press

Last updated: 6:22 p.m., Tuesday, July 29, 2008

ALBANY -- Gov. David Paterson on Tuesday again said New York state government faces an economic crisis and as proof said the projected budget deficit for 2009-10 fiscal year has increased more than $1 billion -- to $6.4 billion -- since April.

So he's calling the Legislature back "from vacation" for a special emergency economic session on Aug. 19 to cut spending, stem falling revenues, and protect New Yorkers from rising property taxes and heating bills this winter.

"It's simple," Paterson said in a rare statewide televised address for a governor.

"Costs are rising steadily and revenues are dropping dramatically."

"These times call for action and today I promise you there will be action," Paterson said.

Paterson, however, didn't make any specific orders.

He also didn't call for some of the drastic measures other states have already taken, including layoffs and cuts to health programs for the poor and to schools.

He said he prefers to work with the Legislature to turn back the "crisis."

He said details will be released as soon as Wednesday.

"I think it's a good sign that he's talking tough," said Elizabeth Lynam of the independent Citizens Budget Commission.

However, she adds that the Legislature and Paterson, now in his fourth month on the job, "are behind the eight ball.

"There was volatility before, uncertainty and bad news," she said.

"They are behind the curve."

However, she said that by New York's standards, this action early in the first half of the fiscal year begun April 1 is a quicker start.

The drawback is that 2008 is an election year for the Legislature, and lawmakers usually take the time after the regular session, which ended in June, to campaign.

They are also unlikely to want to cut funding for the special interests that fund their campaigns.

Labor unions and special interests including those from health care and schools have already sought to blunt any proposals against them, saying they support the need to cut spending but not in their area.

"That's why this is really going to be a test of the governor's leadership," Lynam said.

Senate Majority Leader Dean Skelos said he supports Paterson's plan to further cut spending in his agencies and that all state spending should be reviewed.

But the Long Island Republican said he wouldn't touch the most politically sensitive big-ticket item: school aid.

State school aid is now more than $20 billion a year after a series of record increases, including a $1.8 billion increase in April.

"I think that would be wrong," Skelos said at a press event on Long Island.

"We made a commitment to our school districts, we made a commitment to our property taxpayers."

"Cutting school aid would be totally inappropriate."

"We were a free wheeling, runaway train for the last five or six years," said Senate Minority Leader Malcolm Smith of Queens, the successor to Paterson as leader of the Senate Democrats.

Earlier this year, Smith had called for Albany to make harder fiscal choices but got no support from Paterson or legislative majority leaders.

Smith had called for $2 billion in cuts through a hiring freeze, elimination of "nonessential" capital spending, taking cash from public authorities left over from the past fiscal year, and requiring technological efficiencies.

"I would probably call for less spending," Smith said.

"But I think the governor is doing the right thing."

"He's saying the candy store is no longer open."

"He's telling the Legislature to be tough with special interests who have been running Albany."

State Comptroller Thomas DiNapoli said Albany's support of politically popular programs that commit overspending for years is to blame, and it's exacerbated by the downturn.

He noted that New York City Mayor Michael Bloomberg, by comparison, paid off debt and created substantial reserves in good economic times to prepare for inevitable downturns.

"The state in flush times has spent and borrowed in response to requests," DiNapoli said.

"So we're not prepared, frankly, as the city is."

The state made midyear aid cuts in 1990, but that led to outrage by unions representing teachers and other public employees, all of which have become more powerful lobbyists and campaign contributors since then.

Assembly Speaker Sheldon Silver said education, health care for children and affordable housing programs can't be cut because they would harm lower and middle income New Yorkers.

He has previously supported a temporary income tax increase on millionaires to raise revenue.

"If it is our intention to ask working families to shoulder the burden of these cuts, we must ensure that our most affluent citizens share that burden," he said.

Paterson's latest warning and promise to act comes after a token trim in the increase to state agencies' spending in the current state budget adopted in April.

Thirteen states have already reduced their enacted 2008 budgets, according to a June survey by the National Association of State Budget Officers and the National Governors Association.

Despite Paterson's repeated calls for urgent action since he took office in March, New York has made only small cuts after annual increases in spending that have historically been nearly double the rate of inflation.

The current budget includes further increases sought by unions representing teachers and public workers.

In January, while Albany was still trying to figure out if hard times were ahead, Bloomberg ordered city agency heads to cut expenses by 2.5 percent this fiscal year and 5 percent the following year.

California Gov. Arnold Schwarzenegger called for a 10-percent cut in state agency spending.

By contrast, Paterson in April asked agency heads who work for him to trim their increased aid by 3.35 percent.

"Paterson seeks hiring freeze, spending cuts"

By MICHAEL GORMLEY, Associated Press

Last updated: 5:03 p.m., Wednesday, July 30, 2008

ALBANY -- Gov. David Paterson has frozen most hiring, ordered an additional 7 percent cut in agency spending and called on the Legislature to approve $600 million in additional cuts to shore up state finances in a New York economy that his budget director says is "officially" in recession.

Paterson on Wednesday proposed cutting state spending by a total of $1.23 billion in the current budget to offset a "mammoth" decline in revenues.

He projects there will be $26.2 billion in budget deficits over the next three years, a high figure even for a state government that routinely contends with deficits because of rising spending.

"We are now officially saying New York is in a recession," said Budget Director Laura Anglin.

She said New York's recessions have historically lasted 25 months, longer than national recessions.

Paterson said he will seek the Legislature's approval for $600 million in cuts spread throughout state programs, which may include midyear reductions to school districts.

But Paterson said he doesn't currently any tax increases, including a temporary income tax hike for millionaires pushed by Assembly Democrats.

He said the 7 percent cut in agency funding, on top of a 3.35 percent cut in the spring, shouldn't hurt services at parks, in state police, for highway maintenance, or support for schools and hospitals.

Paterson has also called the Legislature back to Albany for an emergency economic session on Aug. 19 to enact the $600 million in cuts that need the Legislature's approval.

That could include funding cuts to higher education, local hospitals and other programs as well as the leasing of state assets and services -- such as the lottery -- to private companies.

Those cuts, which could force higher local school tax bills, will contain most of the pain Paterson said is needed.

As for the $630 million in cuts Paterson can order alone within the executive branch, the Democrat said a "hard freeze" on hiring is now in effect.

That doesn't mean any layoffs, but each of the thousands of openings each month must now be deemed essential by the governor's office before it is filled.

Layoffs are possible if the Legislature doesn't meet its cost-savings target.

"It is up to all of us to disengage from a kind of self-absorption," Paterson said.

He referred to years of high spending in the Legislature, where he served for 20 years, that created budget deficits bailed out by Wall Street tax revenue.

"We have to wake up New York to the possibility that we all have to feel some pain."

Paterson's proposal to cut $1.23 billion from the $56.3 billion general fund in the state budget amounts to about 2 percent, if the Legislature agrees to its $600 million part.

But any cut in funding is rare in Albany, where special interests including public worker unions have great influence.

"It's a start, but it's only a start," said E.J. McMahon of the Empire Center for New York State Policy, part of the fiscally conservative Manhattan Institute.

"It's good that he's proactive."

"But the question is, could he be more proactive?"

State Conservative Party Chairman Michael Long likes the Democratic governor's tone, but called the cuts "a very small amount."

"While it may be baby steps, it at least is a beginning," Long said.

He said Paterson issued a rallying cry against high spending and taxes that drive employers and young New Yorkers out of state.

He said this election year, whether a lawmaker is "Republican or Democrat, liberal or conservative, they should go back and say, `My concern was about my children and your children.'"

"The time has come to spend within our means."

As for the Legislature, the Senate's Republican majority has already taken cuts in school aid off the negotiating table.

Meanwhile Assembly Speaker Sheldon Silver, a Manhattan Democrat, said his majority won't cut its highest priority health and education programs from pre-Kindergarten, school aid that has hired more teachers and reduced class sizes, and health care for the elderly.

"I would not support the layoff of state workers," said Senate Majority Leader Dean Skelos, a Long Island Republican.

"We don't balance the state budget by throwing people out on the street."

Instead, Skelos said the state can save money through efficiencies, such as ending special commissions and task forces that cost the state in travel expenses.

He also said the state should adopt the Senate Republicans' proposal to cap state spending at 4 percent, which he said would save about $2 billion a year.

While "everything is on the table," he said he won't cut the state's $20 billion in school aid, which received a historic increase in April of about $1.8 billion.

He also won't raise taxes or fees and said Paterson's idea of privatizing state assets and services through sale or lease won't work.

McMahon said the state has been here before.

"There are lessons to be learned here from history," McMahon said.

He said former Democratic Gov. Mario Cuomo, in 1990-91, addressed a fiscal crisis with "tax increases, borrowing one-shots and denial," which cost him his job.

His successor, Republican Gov. George Pataki, cut spending and taxes in 1995.

It cost him his early popularity, but was a key element in two successful re-election campaigns.

"Paterson certainly sounds like Pataki circa 1995," he said.

------

AP Writer Karen Matthews in New York City contributed to this report.

"Legal defense at public expense? - Taxpayers could end up reimbursing former public workers in the travel records scandal"

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

First published: Saturday, July 26, 2008

ALBANY -- Even if you're tired of the year-old travel records scandal, you might find this interesting:

New York's taxpayers might have to pay for even more of it.

Some observers and legal experts say there's a good chance former gubernatorial press secretary Darren Dopp, who has already run up a year's worth of high-caliber legal bills and faces more, could be reimbursed by the state.

He's not alone.

The scandal, in which aides to former Gov. Eliot Spitzer used State Police to gather information on former Sen. Joseph L. Bruno's travel schedule, has resulted in legal jeopardy for Preston Felton, who had been acting State Police superintendent, as well as Spitzer's Secretary Richard Baum and State Police liaison William Howard.

All four might find their legal bills covered because their actions, right or wrong, were done as part of their government jobs.

Spitzer might be indemnified as well.

Officials at the attorney general's office, which would field the initial reimbursement request, said state officials could have their legal bills paid retroactively if requests are deemed appropriate.

"If an application is made, we'll have to make a determination," said the attorney general's spokesman, John Milgrim.

"There's an argument that could be made that they should be indemnified," said Karl Sleight, executive director of the now-defunct state Ethics Commission.

The commission last year was folded into the new Commission on Public Integrity, which Thursday concluded Dopp and Felton violated the public officers law.

Both say they'll fight the charges and may ask for state reimbursement of legal costs.

Howard and Baum admitted to lesser charges.

Not everyone agrees the state should pay.

Errol Cockfield, a spokesman for Gov. David Paterson, said the officials investigated aren't entitled to reimbursement.

Public officers law allows for indemnification of state officers in civil actions or proceedings for acts done within their employment.

But under the same law, repayment isn't available when a legal defense involves proceedings brought "by or on behalf of the state."

Howard said he initially asked the governor's office about indemnification, but was told he wouldn't be reimbursed.

"We asked that question early on of (the governor's office) and were told no," said Howard, who added he might now ask the attorney general.

Meanwhile, Assembly Republicans Phil Boyle of Bay Shore and Thomas Kirwan of Newburgh called for Paterson to remove COPI Chairman John Feerick and Executive Director Herbert Teitelbaum, along with the commission's other Spitzer appointees.

The assemblymen want Paterson to install David Grandeau, former head of the Temporary State Commission on Lobbying, as chairman.

Boyle and Kirwan's remarks were prompted by reports that Albany County District Attorney David Soares had alerted Feerick that Teitelbaum supposedly leaked information about the investigation to some of Spitzer's inner circle.

Critics of the investigation say the commission whitewashed Spitzer's role in the scandal.

Teitelbaum, however, said "we went where the evidence took us," in their investigation.

He said the investigation could continue if other evidence arises, but he said the investigation didn't indicate Spitzer specifically knew his aides were working with State Police to compile travel records.

News Service contributed to this story.

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

"Tough talk for speech"

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

First published: Thursday, July 31, 2008

ALBANY -- Sitting in front of the Capitol on sunny Wednesday afternoon, state workers munched on gyros and hot dogs, licked fast-melting cones of frozen yogurt, and talked about one thing: Gov. David Paterson's plan to fix the state's financial woes.

For many, the prospect of layoffs, which the governor warned might be needed if his proposed cuts weren't enacted, was the most worrisome.

"I'm getting married in April; I can't afford to get laid off," said Will King, 26, who works for the state Office of Higher Education.

King has worked for the state since September 2001, and while he appreciates Paterson's efforts, he disagrees that cutbacks are the way to go.

"I think you gotta spend money to make money," he said.

"... The drastic cuts he's talking about -- in the long run, you're selling yourself short."

King's younger brother, 24-year-old Kelly King, just started working for the Department of Public Health.

He supports Paterson's plan.

"I don't want to lose my job, but I don't know what else he can do," the younger King said.

Terry McGraw, 35, took a different tack, suggesting the cuts should go downstate.

"That's where all the money is going anyway," said McGraw, who works for Higher Education.

"Albany (and) upstate always pays the price for what goes wrong downstate."

Jackie Carter, who works in the attorney general's office, said she thought her agency could weather the cuts "as long as it comes from the top down."

"Not everyone needs a BlackBerry, cellphone, laptop, computer and car," said Carter's lunchmate Karen -- a state employee who would only give her first name.

Karen applauded Paterson, but scoffed when asked if she thought the Legislature would be able to make the cuts the governor is asking.

"Make those guys come back to office," she said.

"If they do something, I'd be impressed."

"A call to act draws praise - Governor's budget warning lauded, but solutions elusive"

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

First published: Thursday, July 31, 2008

ALBANY -- A "hard" hiring freeze and possible privatization of state assets are among the cornerstones of Gov. David Paterson's plan to deal with what he called the fiscal emergency facing New York in 2009.

Other potential steps to reach Paterson's goal of trimming $1.2 billion from this year's budget include cutting school and Medicaid aid, or even layoffs of state workers -- although those are measures that would likely hit a roadblock in the state Legislature, lawmakers and union leaders said.

"Nothing is off the table right now," Paterson said during a news briefing Wednesday in New York City.

The session added a bit more detail on his plan, first disclosed during a televised speech Tuesday, to deal with a looming $6.4 billion deficit.

Under the "hard" hiring freeze, all new employees will have to be approved by the governor's budget office.

In addition to a previously announced 3.35 percent cut to state agencies, Paterson said he would trim another 7 percent for additional savings of $630 million.

The governor also wants lawmakers to sign off on another $600 million in cuts.

How that would be accomplished hasn't been specified, but school aid and Medicaid consume more than half the state budget and Paterson didn't rule those out.

For politicians and advocacy groups, Wednesday's presentation set the stage for a battle on Aug. 19, when the Legislature reconvenes to deal with the shortfall.

"No one wants to see families suffer during hard times."

"But taking jobs away from people only creates more hard times," said Ken Brynien, president of the Public Employees Federation, a major state union.

"I would not support the layoff of state workers," added Senate Republican Majority Leader Dean Skelos, who held a news conference in the Capitol two hours after Paterson went through his budget proposals.

While praising the governor for confronting tough financial issues, Skelos said senators, who are up for re-election in November, are unlikely to go along with cuts to schools and health care.

Many of the state's health and education dollars are spent in aid to localities.

Because that spending has already been set in this year's budget, cuts would require agreement from lawmakers.

Assembly Speaker Sheldon Silver has expressed concern about how cuts would affect services.

Budget officials are developing details of other plans such as "private-public" partnerships.

"The state has a lot of assets that could be valuable, and we are in the process of exploring how to unlock the value of those assets in creative ways," Division of Budget spokesman Jeffrey Gordon said.

The governor stressed that he doesn't plan to sell roads or bridges.

But past governors, including Paterson's predecessor, Eliot Spitzer, looked at long-term leases or other arrangements in which investors could get a recurring income stream from a given asset in return for up-front cash.

That was the concept behind Spitzer's plan to privatize the state lottery with an investor who would pay a lump sum for permission to operate the system for a set period of time.

Lottery privatization hasn't come up since Paterson took office, but Skelos nonetheless said he doesn't like the idea:

"I don't believe that works," he said.

Skelos did concede that other spending areas that have historically come under the protection of lawmakers -- such as "member items" and even prisons -- might be subject to renewed scrutiny.

Skelos echoed the governor:

"Everything is on the table," he said.

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

"Cancer map legislation in limbo"

By CATHLEEN F. CROWLEY, Staff writer, Albany, New York Times Union

Last updated: 5:25 p.m., Wednesday, July 30, 2008

ALBANY -- A proposed law that would let New Yorkers zoom to neighborhood-level data on cancer maps has lost direction.

The bill passed both the state Assembly and the Senate, but negotiations over the bill's requirements have broken off.

The bill would direct the state to publish the number of cancer cases at census block-level detail, as opposed to the current county-level data.

It also requires the state to create a map overlay of industrial sites to help identify polluters that may, or may not, contribute to cancer clusters.

"It will provoke more scientific inquiry and investigation,'' said Assemblyman Richard Brodsky, D-Westchester, who sponsored the bill.

"There's no reason on God's earth to keep this secret.''

Much of the information about individual cancer cases is already collected by the New York State Cancer Registry, but the registry does not publish the neighborhood-level information.

The registry's Web site discloses five-year cancer rates by county, though some of the more common cancers are reported by zip code.

"The theory always was that the state knows where there are cancer clusters but hasn't been telling anybody,'' Brodsky said.

"It's important to get the information out without overselling it.''

Concerns about the bill include privacy issues, reliability of the data, and fears that the public will misinterpret the information.

It takes a trained statistician to find clusters that are not random, according to Dave Momrow, senior vice president of cancer control at the American Cancer Society.

A handful of marbles dipped in paint and thrown against a wall will yield clusters of dots.

"It may not necessarily be due to the environment,'' Momrow said.

David Carpenter, director of the Institute of Health and the Environment at the University at Albany, also worries about reaction.

"Three people on the same street develop the same cancer and people tend to get excited by it,'' Carpenter said.

"But it's unwise to draw conclusions from just a few cases of cancer."

"I'm not sure the public in general would know how to use the data or would use it in a reasonable fashion.''

Negotiations among Brodsky; Sen. Tom Libous, R-Binghamton, the bill's Senate sponsor; and officials from the state departments of Health and Environmental Conservation broke off last week, Brodsky said.

He said he is willing to talk, but will send the bill to the governor if negotiations do not resume.

The Health Department, DEC and the governor's office all declined to comment Wednesday on pending legislation.

Carpenter and Momrow both said they support cancer mapping.

Carpenter, especially, would like more access for researchers.

"I have been told there is no way I can get access to the (full) cancer registry data,'' said Carpenter, who studies the influence of environment on disease.

"In my judgment, they don't use it anywhere near to the power that that information has.''

Cathleen F. Crowley can be reached at 454-5348, or by e-mail at ccrowley@timesunion.com.

"State: School district mishandled taxpayer money"

Associated Press

Last updated: 9:22 a.m., Thursday, July 31, 2008

SYRACUSE, N.Y. -- State auditors say a suburban Syracuse school district mishandled $250,000 in taxpayer money and equipment.

State Comptroller Thomas DiNapoli says there was a "complete breakdown in financial controls" in the Liverpool School District from 2000 to 2007.

Auditors say thousands of dollars raised by student groups were used to pay for a high school principal's personal cell phone, jackets and shirts for administrators and furniture for high school staff.

The district also couldn't account for 32 laptops.

And the investigation revealed that 57 wireless Internet routers disappeared from Liverpool only to show up a few years later in Syracuse Catholic Diocese schools.

The district says it has made changes to deal with many of the problems outlined in the audit.

"State panel says NY foreclosures up 14 percent"

By MICHAEL GORMLEY, Associated Press

Last updated: 3:42 p.m., Thursday, July 31, 2008

ALBANY -- The State Commission of Investigation reported Thursday that mortgage fraud is on the rise in New York and has hit hardest in New York City, Long Island and the Rochester area, regions where subprime loans are most common.

But the commission also notes many homeowners with poor credit share the blame for losing their homes through defaulting on mortgages.

"It is clear to the commission that, from approximately 2003 through 2006, many New Yorkers who lacked sufficient financial means were put into homes that they could not afford," according to the panel's report.

"Credit was readily available, perhaps to a greater extent than it should have been, and lenders, mortgage brokers, real estate brokers and appraisers all profited from the purchase, sale and financing of houses," the report stated.

The commission reported that foreclosures statewide were up 14 percent in the first quarter of this year compared to the same period in 2007.

"To be sure, the overwhelming desire to own a home may have clouded their judgment, causing them to ignore commonsense and basic instinct regarding the affordability of their mortgages," the commission said of homeowners caught in the national credit crisis.

"Owning a home was, perhaps, something they had dreamed of for a long time but could not otherwise have afforded under stricter lending standards."

The report identifies tactics unscrupulous real estate agents and mortgage brokers used to prey on prospective homeowners who weren't financially savvy.

Worse, the report found as many as 10 percent of the thousands of homeowners burdened with subprime mortgages might have qualified for a less expensive, less volatile standard mortgage.

But greedy real estate workers steered them to subprime loans at a higher rate.

The panel recommended changes in state law to strengthen protections for consumers.

It called for licensing mortgage brokers and real estate appraisers to combat fraud and making it easier for prosecutors to prove fraud.

In June, the state Legislature and Gov. David Paterson created a 90-day "safety" period for homeowners facing foreclosure to meet with lenders and get information about how to cope with their debt and more fully understand their options.

The new law also criminalizes some of the loan practices that contributed to the loss of more than 50,000 homes in New York so far.

The state estimates another 38,000 homes could face foreclosure this year.