NEW YORK STATE IS AN ENGINE OF FRAUD IN THE PRODUCTION OF ECONOMIC DEVELOPMENT IN THE NATIONAL AND INTERNATIONAL ECONOMY ....

ITS CORRUPTION IS A NEGATIVE FACTOR ...

AND AS THE FISCAL PROFLIGACY OF THE CORRUPT STATE OF NEW YORK CATCHES UP WITH US ON GOVERNOR DAVID PATERSON'S WATCH, WE HAVE ...

"Paterson warns of $47 billion deficit by 2012 - Governor says budget-cutting will take tough bipartisan effort"

By RICK KARLIN, Albany, New York Times Union

Last updated: 12:52 p.m., Tuesday, October 28, 2008

Citing an economic downturn that in some respects hasn't been seen since the Great Depression, Gov. David Paterson said this years budget deficit has ballooned to $1.5 billion for this fiscal year with the gap growing to an eye-popping $12.5 billion next year, and $47 billion over the next four years.

To stanch the flow of red ink, Paterson said that almost all sectors of state government will be hit by budget cuts.

"There is no segment of this budget that will not be cut,'' the governor warned during a press conference from his New York City office.

Alluding to a post-election special emergency budget-cutting session he called for Nov. 18, the Democratic governor stressed that lawmakers on both sides of the aisle will have to work together.

"We have one more week until the election, and thats fine, but after that well have to address (the budget)," said Paterson.

Joining him was Budget Director Laura Anglin, who spoke of the "reverse wealth effect," in which consumer spending is falling due to New Yorkers paper losses in stocks, 401Ks and other investments.

Paterson earlier said the state is bracing for 160,000 job losses, driven by Wall Street's crash, a housing market that is expected to stagnate for another year and the general drop in consumer spending.

Any solution to the state's shortfall won't come from New York alone.

Tomorrow, Paterson is heading to Washington, D.C., to seek federal assistance.

Congress is looking at a national stimulus plan, and Paterson plans to testify on the state's behalf.

His argument: As the nation's financial center, New York has been hit especially hard by the downturn, and its important to help it in order to get the large economy moving again.

The state, Paterson said, "is a vital engine in the production of economic development in our national economy."

"New York is not alone,'' added Anglin, who noted that lawmakers in California lawmakers - one of 27 states recording midyear shortfalls - are also coming back for a special budget-cutting session.

For more information go to the Capitol Confidential blog at http://blogs.timesunion.com/capitol

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

"Highway chief ousted over gravel scandal"

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

Last updated: 1:33 p.m., Tuesday, October 28, 2008

STEPHENTOWN — Neil Gardner, who has served as the town highway superintendent for more than 20 years, was removed from office for covering up illegal gravel purchases for the town.

The move by the Town Board came after Gardner stood stunned Oct. 17 in Rensselaer County Court as Judge Robert Jacon found him guilty of two dozen felony counts for offering forged documents to cover up illegal gravel purchases.

Gardner's attorney, Thomas Spargo, plans an appeal and could not be immediately reached for comment on his client's removal from office.

Despite the likely appeal and the fact that Gardner, 52, has yet to be sentenced, the town's legal counsel advised elected officials to oust Gardner, town officials said.

Gardner, a Republican first elected in 1985, was asked to turn in his keys to town buildings and surrender his town pickup truck, officials said.

He has yet to be replaced.

The prosecutor on the case, Assistant Attorney General Nancy Snyder, said Gardner faces up to seven years in prison when sentenced in December.

Gardner was found guilty of 12 counts of criminal possession of a forged instrument and 12 counts of offering a forged instrument for filing, both low-level felonies.

In October 2006, state Department of Environmental Conservation investigators took records from offices of the town clerk, Gardner and Russ Freeman of Russ Freeman Excavating, Nassau.

Freeman's firm regularly performed work for the Stephentown Highway Department.

The investigation started after information surfaced that the town was mining gravel from an unpermitted site on the property of Anthony Cormier.

Cormier was building a home and barn on the site and had asked Gardner if the town wanted to buy gravel he needed to get rid of to level his land for construction.

After that allegation surfaced, the town asked Gardner to get Freeman, whose company participated in the mining, to produce load slips verifying the purchases before Cormier could be paid.

The load slips noted the gravel came from a Troy Sand and Gravel mine, not the Cormier property, which led to the felony charges against Gardner and Freeman.

Gardner testified that Freeman handed him an envelope, which he pushed under the door of the town clerk's office.

He said he never looked at the slips and was unaware of the alteration.

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.

Gardner is free on his own recognizance until sentencing.

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

"Retirement fund for NY state workers loses 20 pct."

By MICHAEL VIRTANEN, Associated Press

Last updated: 4:36 p.m., Tuesday, October 28, 2008

ALBANY -- New York's public worker pension fund has lost about 20 percent of its value -- almost $31 billion -- since April 1, state Comptroller Thomas DiNapoli reported Tuesday.

Despite the sharp decline in New York State Common Retirement Fund assets, DiNapoli said benefit and employer contribution rates are set through March 2010 and won't be affected.

The fund, with major stakes in the declining stock market, was valued at $154 billion as of March 31, near its historic high.

It had 677,321 active members and 358,109 pensioners and beneficiaries, paying out some $6.8 billion in benefits in the 2007-08 fiscal year.

"Like every investor, the fund has felt the impact of the global credit crisis," DiNapoli said.

"The fund is built to survive fluctuations in the market, even ones as severe as the current downturn."

The fund lost about $30 billion within three years after the Sept. 11, 2001 terrorist attacks in Manhattan, falling to $95.6 billion in 2003 before recouping that lost value over the next two years.

Domestic equities constitute about 37 percent of the portfolio, international equities 17 percent, real estate 6 percent, private equity 8 percent, hedge fund investments 3.5 percent, and fixed-income assets 28.5 percent.

"Equities are the largest component," said Robert Whalen, spokesman for the Comptroller's office.

The investment strategy is long-term, also intended to benefit new workers who won't retire for decades but are looking for market opportunities now, he said.

DiNapoli announced in early September that the average contribution rate for state and local government employers would be 7.4 percent of payroll in 2010, down from 8.5 percent in 2009.

The rate for police and fire departments would fall to 15.1 percent of payroll in 2010 from 15.7 percent in 2009.

The New York State Teachers Retirement Fund saw assets decline to $88.5 billion as of Sept. 30 from $95.8 billion three months earlier, spokeswoman Heidi Brennan said.

The fund has about 400,000 members and beneficiaries.

Its targets are 42 percent domestic equity, 15 percent international equity, 10 percent real estate, 7 percent private equity, 18 percent domestic fixed-income investments, and 8 percent mortgages.

The performance of New York's funds is on a par with other states.

"That seems to be in the range of what a lot of the pension funds are reporting," said Stacey Mazer, senior staff associate of the National Association of State Budget Officers.

She noted a Washington Post report showing similar declines in the public pension funds in Virginia, Maryland and California, like New York with a majority of their funds in stocks.

Keith Brainard, research director for the National Association of State Retirement Administrators, said the benefit of the big pension funds over individual 401K funds is that they pool assets, lower costs, and take more chances than an individual can, spreading risk over a larger group with a range of ages.

Short-term results like those reported Tuesday are less important, he said.

"Over time each asset class has an expected return."

"What these public pension plans do is identify an acceptable level of risk and try to generate an investment return within that acceptable level or risk," Brainard said.

"It's reasonable to expect returns from public equities, of course, that are going to vary widely from one year to next."

"Lawyer: 'Scared to death' by FBI - John M. Hogan Jr. tells of his work for clients on trial in fraud scheme case"

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

First published in print: Wednesday, October 29, 2008

ALBANY — A Saratoga Springs attorney testified in federal court Tuesday that he was ''scared to death'' and had asked for an immunity-from-prosecution deal when FBI agents confronted him three years ago about his legal work for a group of alleged financial scheme artists.

''I'm still scared today,'' said John M. Hogan Jr., 71, who has a practice on Broadway.

''I just said I would like to get immunity.''

Hogan became a target in the FBI investigation three years ago for work as an attorney for a Saratoga County couple, Ronald and Esther Persaud, who are on trial for charges including wire fraud, conspiracy and bankruptcy fraud.

Hogan was never charged.

But he was called as a government witness Tuesday in the trial of his former clients, who were indicted in 2005 on charges including wire fraud, conspiracy and bankruptcy fraud.

The charges relate to a series of schemes in which investors from around the country paid hundreds of thousands of dollars to secure millions of dollars in funding from overseas banks.

The banks, prosecutors said, were nothing more than paper fronts set up by the Persauds to dupe investors into believing their funding for development projects would be coming.

Before taking the stand Hogan and federal prosecutors struck a limited ''testimonial immunity'' deal that prevents from Hogan from being charged with any crimes related to his testimony, as long it was truthful.

The couple's son, Shawn Persaud, an Albany Law School student, is on trial with his parents.

He is accused of aiding his parents when they used the names of family members and third parties to buy homes and luxury vehicles with the proceeds of their alleged schemes.

Many of the money laundering transactions were funneled through the escrow accounts of attorneys, including Hogan, according to prosecutors.

Hogan, who served as the Persauds' business attorney, admitted during testimony that three alleged victims had wired $275,000 to his personal bank account in September 2004.

Some of the money — $75,000 — was wired to a Latvian bank that had been chartered by Esther Persaud.

Hogan used the remaining funds to pay his mortgage and taxes.

He also used the money to fly his wife and secretary to Switzerland for a three-week stay for business closings related to the alleged scheme.

Hogan also testified about his role helping the Persauds solicit funds from their alleged victims, including serving as the attorney for at least two of the shell banks.

Court records show the wire transfers into Hogan's personal account took place several months after he helped Ronald and Esther Persaud file bankruptcy petitions.

The bankruptcy filings made no mention of the couple's interests in foreign banks, which federal authorities say were set up to lure victims and help launder money.

While the bankruptcy cases were pending, though, Hogan was working for the Persauds and helping them close deals with the investors who prosecutors said were duped out of more than $1.5 million, records show.

Assistant U.S. Attorney Thomas Capezza showed Hogan a document Tuesday from Sweden that listed him as a member of the board of directors of one of the overseas shell banks, United Savings and Loan of Scandinavia.

Hogan said the document, which included a copy of his passport, appeared to have a forgery of his signature.

Under cross-examination from Donald T. Kinsella, who is Ronald Persaud's attorney, Hogan confirmed his secretary had notarized the document.

As Hogan testified, an official with the Appellate Division's Committee on Professional Standards, which disciplines lawyers, sat in the back of the courtroom taking notes.

Hogan has been disciplined by the committee at least four times since 1996 for mishandling client funds, according to records filed as trial exhibits.

ALL THE LOOTERS ARE NOW BEGGING FOR HANDOUTS OF OUR FEDERAL TAX DOLLARS ....

GIVE US MONEY NOW ...

WE'LL CLEAN UP OUR ACT TOMARROW ...

And so ...

"Paterson calls on Congress to aid states - Governor presses House committee for second economic stimulus package"

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

Last updated: 1:06 p.m., Wednesday, October 29, 2008

Gov. David Paterson is in Washington, D.C., today, pressing House members to pass a second economic stimulus package that would "reignite the engine of our economy" by sending billions of federal dollars to New York and other states.

"The great states of this country are facing huge deficits, without the resources to affect them," Paterson said in testimony before the House Ways and Means Committee.

States "need to put our houses in order," Paterson acknowledged, but, at the same time, he said, the problem "needs to be addressed holistically by the federal government investing in the states."

Congress passed and Bush enacted a $168 billion stimulus bill earlier this year, which delivered tax rebate checks to low- and middle-income taxpayers.

"Gov. Paterson outlines more budget woes - State deficit now pegged at $47 billion over four years."

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

First published in print: Wednesday, October 29, 2008

New York's budget deficit is expected to mushroom to $47 billion over the next four years, Gov. David Paterson said Tuesday.

That's an eye-popping increase from the $26.2 billion shortfall for the same period that was projected in July.

Similarly, this year's deficit now stands at $1.5 billion, up from earlier predictions of $1.2 billion.

Paterson had said, however, he would like to cut $2 billion when the Legislature returns to Albany on Nov. 18.

He said the $2 billion figure is needed for a cushion.

Paterson also warned of growing problems in the 2009-10 budget, addressing a likely $12.5 billion deficit, which represents cutting 22 percent of a $56.1 billion general fund.

The fund contains tax money raised in the state.

"These are going to be very hard cuts," Paterson said, adding that no sector will go unscathed.

"We are really going to feel the pain."

Paterson is scheduled to appear before a House Ways and Means Committee meeting today to make a case for special federal help for states.

The governor will cite New York's pivotal role as the nation's financial center as a key reason why aid is needed.

In a Tuesday news conference from his New York City office, Paterson said he expects legislators to put politics aside when they return for an emergency economic session on Nov. 18:

"To do this, we'll need the full cooperation of our Legislature."

"We have one more week until the election, and that's fine," he said, adding that election-year "poetry" will have to give way to the harsher "prose" of grappling with the state budget.

On one level, the state's predicament is simple: Wall Street's tumble and the malaise affecting the broader economy have sharply reduced the state's tax coffers.

Echoing a theme he's repeated since early summer, Paterson noted the housing slump is expected to last for 15 months — longer than the similar housing downturn during the Great Depression.

Combine that with a drop in consumer spending that hasn't lasted this long since World War II, and Paterson said the state will likely lose 160,000 jobs in the near future.

As a result, general fund revenues are expected to fall 5.8 percent next year, while spending is projected to grow at 11.9 percent, based on current commitments.

Paterson has his work cut out for him — not only in deciding where to cut, but in convincing lawmakers to go along.

Shortly after the governor's remarks, Senate Republican Majority Leader Dean Skelos reiterated his opposition to cuts in school aid, which he said would amount to "offloading" expenses to local school districts and could raise property taxes.

Senate Republicans, who are fighting to retain their one-seat majority, said earlier this month they wouldn't go along with cutting aid to local school districts, a sum budgeted for $21.4 billion this year.

Education and health care were largely spared during an earlier special session in August that resulted in cuts of $1.2 billion.

As lawmakers suggested they wouldn't cut school aid, a coalition of 90 nonprofit, education and health care groups renewed their call for a tax increase on those earning more than $1 million.

Assembly Democrats called for a so-called "millionaires tax" last summer, although Assembly Speaker Sheldon Silver backed away from the proposal earlier this week — at least as a possible item for the Nov. 18 session.

"We must ensure that the burden of New York's fiscal crisis is not borne exclusively by working families and the middle class," Silver said Tuesday.

"To take money out of the classroom or out of the services children need in their homes without even proposing that the wealthiest New Yorkers pay their fair share in these trying times would be unconscionable," added Geri Palast, executive director of the Campaign for Fiscal Equity, which is closely aligned with the state's powerful education lobby.

Others suggested trimming next year's School Tax Relief (STAR) exemption, and this year dipping into the state's $1 billion-plus Tax Stabilization fund, a "rainy-day" resource intended to settle unplanned deficits at the end of the fiscal year.

"Obviously, it's raining," said Ron Deutsch of New Yorkers for Fiscal Fairness, which is also pushing the millionaires tax.

Tapping the fund is seen as a last resort, said Matt Anderson, a Division of Budget spokesman.

"What we have to focus on right now is reducing spending."

State Budget Director Laura Anglin spoke of the "reverse wealth effect," in which consumer spending is falling due to their paper losses in stocks, 401(k)s and other investments.

The governor's office wasn't the only source of bad news on Tuesday.

Comptroller Thomas DiNapoli announced the state retirement fund has lost 20 percent of its value or about $30 billion since April 1, when it was at $153.9 billion.

He stressed retirement benefits are not in danger, and local governments through 2010 shouldn't be see any change in contributions.

"Like every investor, the fund has felt the impact of the global credit crisis," DiNapoli said.

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

Red ink rising

The economic reversals recent weeks have caused the state Division of the Budget to radically revise its deficit projections:

July:

Current fiscal year (ending March 31, 2009): $1.2 billion

2009-2010 fiscal year: $10 billion

Total deficit by 2012: $26.2 billion

Today:

Current fiscal year (ending March 31, 2009): $1.5 billion

2009-2010 fiscal year: $12.5 billion

Total deficit by 2012: $47 billion

"Chip-fab district draws Assembly cash - Parties battle over open seat in 112th district as area awaits AMD project"

By DENNIS YUSKO, Staff writer, Albany, New York Times Union

First published in print: Friday, October 31, 2008

MALTA — Both political parties are pouring small fortunes into the race for the 112th Assembly District, a mostly agricultural area that is the planned home of a $4.6 billion AMD computer-chip factory.

Democrat Ian McGaughey of Wilton and Republican Tony Jordan of Jackson are squaring off in the Republican-dominated district, which hasn't elected a Democrat in memory but may be in play this year because of the political climate.

The seat unexpectedly opened up this summer when Republican Roy McDonald opted to run for state Senate.

Republicans plucked Jordan, a 44-year-old Washington County attorney, to run against McGaughey, a small business owner and Wilton councilman.

In the battle for the open seat, McGaughey, who is predicting a victory, raised a surprising $340,984 by this week and spent most of it.

Jordan had $235,612 and spent $217,595.

McGaughey, 38, received at least $300,000 from the Democratic Assembly Campaign Committee.

The Republican Assembly Campaign Committee gave at least $151,500 to Jordan's candidacy, the state Board of Elections said.

"It's important for us to hold this seat," said Adam Kramer of the Republican committee.

"They are outspending us with New York City special-interest money."

Democrats have contributed big resources because McGaughey is a very competitive candidate, said Assemblyman Ronald Canestrari, of Cohoes, the chairman of the Democratic committee.

"We're very excited about his candidacy and the race he's running," Canestrari said.

The support enabled both candidates to buy TV ads.

Jordan's ads attack his opponent for "misleading" claims, while McGaughey's ads emphasized his independence.

Both candidates stressed fiscal conservatism.

"What New York really has is a spending problem," said Jordan, who supports a tax cap and circuit breaker to control taxes.

This week, he unveiled an economic team that includes Democrats and even Green Party members.

Jordan has criticized McGaughey for saying in a radio spot that he eliminated Wilton property taxes when they were phased out many years ago.

The Democrat ceased running the ad.

McGaughey supports a circuit breaker.

He has promised to visit every community in the district, donate his $79,500 salary to local charities and work across party lines if elected.

"The politics of yesterday need to be put behind us," he said, adding that Jordan ran a "negative" campaign.

"I'm feeling 100 percent confident that I'm going to win this election and I'm thrilled," McGaughey said.

The district consists of all Washington County and parts of Rensselaer and Saratoga counties, including suburban Malta and the Luther Forest Technology Park, where the state has pledged $1.2 billion in incentives to build a new Advanced Micro Devices Inc. chip-fab factory.

Both Jordan and McGaughey said the challenge for the district's new assemblyman will be to balance the project with the residents' desire for open space.

Dennis Yusko can be reached at 454-5353 or by e-mail at dyusko@timesunion.com.

SOME MORE GOOD REASONS FOR YOUNG PEOPLE TO GET THE HELL OUT OF THE CORRUPT STATE OF NEW YORK WHILE THEY STILL CAN ...

"Paterson builds base of support"

Albany, New York Tims Union

First published in print: Sunday, November 2, 2008

When the Legislature comes to town for another special session on Nov. 18, Gov. David Paterson wants lawmakers to come up with $2 billion in cuts to the current state budget.

That's a staggering, unprecedented amount to excise in mid-budget.

But the governor made it clear to the Times Union editorial board on Friday that closing the gap on this year's now projected $1.5 billion shortfall because of the collapse of Wall Street, plus extracting another half billion to get a leg up, is only the beginning of a long downward spiral of a fiscal journey for New Yorkers that will take many years.

We're looking at a black hole $47 billion deep over the next 3 1/2 years.

Paterson said that regardless of what we've heard from other government leaders on the subject, nothing is off the table in terms of actions needed to close the deficit.

Not layoffs of the state work force, not deep cuts to sacred cows like Medicaid and education.

Revenues have fallen off the cliff.

Something has to give.

Lots of somethings.

We don't know yet how bad it's going to be even for this year because the drop in fourth quarter taxes on capital gains and Wall Street bonuses, which represent 30 percent of state revenues for the period, remains unknown.

But how can that news be anything but dismal?

Well, almost nothing is off the table.

The governor said that for now he's ruling out any tax increases.

For two reasons.

One, any increase, even for the wealthy, will likely chase more people out of New York.

He's loathe to do that for the long-term health of the state and because it's his opinion an increase would put New York in a bad position with the feds, whom he's petitioned for help in very specific areas.

From upping Washington's share of the bill for Medicaid by 5 percent to paying for repairs to roads, bridges and wastewater treatment facilities.

"And we won't get through this without federal assistance," he said.

Clearly Governor Patterson came to our newspaper, as he will to many others I'm sure, to sound the alarm, spread the word, prepare the public for what's coming.

And to gain allies for the inevitable wars ahead with the Legislature.

To his great credit, he did a darned good job clanging the cymbal.

He mentioned a recession as a given, and a depression as not a possibility to be ruled out.

Startling concepts for sure.

But he said this crisis gives us a unique opportunity to fundamentally reshape state government, and finally come to grips in the budget process with our historical addiction to over-spending.

We just don't have it to spend.

Nor did he soften the blow on the question of possible state layoffs, either.

"I'm not declaring there will be layoffs."

"That's certainly not a first choice," Paterson said.

But he then went on to say without hesitation that in the past, when the state was as bad off as projections suggest it will be again, there were layoffs, a spike in the homeless on our streets and cuts in school aid during the middle of the year.

In the time he was with us, he covered the waterfront in terms of bad news ahead.

What he pointedly didn't do was attack or goad the Legislature, which would have been an easy target.

"I need the Legislature," he answered when asked if he could accomplish the cuts to the budget unilaterally.

So as a strategy, the governor is remaining serenely non-confrontational with legislators until the election is over, when, as he put it, "the poetry is no longer in motion."

If he were to push them now for suggested cuts, he would get stupid stuff playing to special interests like Senate Majority Leader Dean Skelos' prohibition on any cuts to education aid.

Paterson dismissed the Skelos stance as election rhetoric, not to be taken too seriously.

But, said Paterson, if Skelos takes the same position after Wednesday ...

What the governor learned when he got the legislative leaders together to discuss the budget cuts is that they want to be included from the beginning.

So that's what he's doing, inviting them each to propose cuts.

"But I know in the end, the legislative leaders will have a hard time coming up with them," Paterson said.

He's also aware that the state constitution makes it clear that the governor is responsible for introducing budget cuts, and he will be ready.

And the same applies whether the Senate stays Republican or becomes dominated by Democrats, he added.

Because, either way, what has to be done doesn't change.

"Now is the time to put party differences aside and lead," Paterson noted.

A noble thought, certainly.

But my guess is we are in for a battle royale over these cuts, and Governor Paterson wisely has decided to assure, with visits like ours, he has the public firmly in his corner.

We'll see how that plays out.

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

"More GOP losses in NY would make history"

By DEVLIN BARRETT, Associated Press

Last updated: 12:55 p.m., Sunday, November 2, 2008

WASHINGTON -- To see the future of New York's congressional delegation, you may have to go way back in the history books.

All the way to the 1850's.

Never in the history of the Republican Party -- going back to before the Civil War -- have there been so few members of the GOP representing the Empire State in Congress.

Currently, there are six New York Republicans in the House of Representatives and 23 Democrats.

After the election on Tuesday, the number of Republicans is expected to dwindle further.

With four GOP seats at risk of Democratic takeover, the state could be left with as few as two Republican lawmakers.

The last time the state's representatives in Congress were that lopsided was 1851, when 32 Whigs outnumbered a lonely Democrat and a member of the Free-Soil Party.

It was also the year Moby Dick was published.

Dan Maffei, a Democrat favored to win the seat now held by retiring Republican Rep. James Walsh in the Syracuse area, said the region has kept the same moderate political bent, while the nation's has shifted.

"I don't think it's central New York's view that's changed, I just think the Democratic party has become more moderate and the Republican party has become more extreme," said Maffei, who added there is a potential pitfall.

"I am concerned that the entire Northeast has become very much one party and I do believe in a two-party system, and I think the Republicans have to get their act together or the Democrats will be in danger of playing more to the extreme," he said.

Jeff Koch, a professor of politics at SUNY Geneseo, said the GOP's problem in New York goes beyond a bad economy, an unpopular war, and the end of the Bush administration.

"It's really a phenomenon that's not limited to New York."

"Throughout New England and the mid-Atlantic states, it's been very much trending for the Democrats," said Koch.

"Social issues like abortion, gay marriage, stem cell research, creationism -- in this part of the country, those issues have hurt the Republican party, whereas in other parts of the country, they've helped them."

From the western edge of the state to the south shore of Staten Island, reliably conservative congressional districts are near a tipping point.

Chris Lee, a Republican businessman, is running to succeed retiring Rep. Tom Reynolds, in a district that reaches from the Buffalo suburbs to the outskirts of Rochester.

In the final days before the election, Democrats poured hundreds of thousands of dollars into the race to try to win the seat for Alice Kryzan, an environmental lawyer little-known before her upset victory in the party primary over Jon Powers and Jack Davis.

Democrats have also invested heavily in Eric Massa, who is making his second attempt to unseat Republican Rep. Randy Kuhl in the Southern Tier section of the state.

The driving issue of the race last time was the Iraq war, and Massa leaned heavily on his resume as a retired Navy commander in seeking crossover votes.

Now, with the economy as the top concern, those credentials may not matter as much.

Retired Gen. Wesley Clark, a longtime Massa supporter, said Friday that he thought the U.S. military still matters with voters.

"Even though the Iraq issue's not as prominent as it was, I can tell you once Congress reconvenes in January, the military issue's going to be front and center," said Clark.

The GOP's best chance at taking back a seat is along the state's eastern border, where first-term congresswoman Kirsten Gillibrand is facing a well-funded challenge from former state Republican party chairman Sandy Treadwell.

But even if Republicans win all three of those contests, the party may well end up with a net loss in seats, after the votes are counted in Syracuse and Staten Island.

On Staten Island, New York City Councilman Mike McMahon is favored to win the seat held by retiring Rep. Vito Fossella.

Fossella's seemingly safe seat became imperiled after he was arrested for drunken driving in May, leading to revelations he had fathered a child through an extramarital affair.

"Lawyer says he didn't know of accounts use - Attorney testifies about hiding client's Porsche purchase from creditors"

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

First published in print: Tuesday, November 4, 2008

ALBANY — A well-known Clifton Park real estate lawyer testified Monday he did not know a family of suspected scam artists had used his escrow accounts to allegedly launder money from an international investment scheme.

Anthony R. Ianniello, 64, testified at the criminal trial in U.S. District Court of his former clients, Ronald and Esther Persaud, and their son, Shawn, an Albany Law School student.

The Persauds were indicted three years ago on charges of bilking numerous investors of more than $1.5 million in an elaborate ''fees for funding'' scheme.

The investors paid hundreds of thousands of dollars to attorneys for the Persauds in hopes of securing financing for major development projects.

The money was funneled through attorney accounts and used by the Persauds to buy a luxury home, sports cars and to finance a lavish lifestyle, the indictment alleges.

Their defense attorneys are blaming, in part, at least three attorneys who were involved in nearly all of the transactions.

Ianniello said that he had done business with the Persauds beginning about seven years ago when the couple, who are divorced but live together, worked in the mortgage business at the height of the sub-prime real estate explosion.

The FBI interviewed Ianniello last year about his work helping Ronald Persaud purchase an $890,000 home in the name of Persaud's current wife, Indranie.

Ianniello said he also allowed Ronald Persaud to conceal his interest in the purchase of a $135,000 Porsche coupe.

Both transactions were illegal, according to the indictment.

The car was purchased outright by Ronald Persaud with a check paid from Ianniello's attorney escrow account.

But the vehicle was then titled to a business partnership of Ianniello's to allow Ronald Persaud to ''lease'' the vehicle from an overseas shell bank in Scandinavia.

That bank was chartered by Esther Persaud and was not a legitimate financial institution, according to the government.

When pressed about the Porsche deal during his testimony, Ianniello said the leasing deal was set up to shield the car from creditors who had obtained financial judgements against Ronald Persaud, who filed for bankruptcy a year before he bought the car.

Donald T. Kinsella, Persaud's attorney, asked Ianniello whether he was familiar with state laws that may make it a crime to conceal assets from creditors.

Ianniello responded that he was not.

''He came to see me about structuring the transaction,'' Ianniello said.

''It was never intended for him to be the owner, just the driver and registrant.''

Ianniello also testified that he never reviewed the financial background of Ronald Persaud's estranged wife, Indranie, when she purchased an $890,000 home in Saratoga Springs in 2004.

Indranie Persaud, a $40,000-a-year postal worker, pleaded guilty two months ago to federal fraud charges in connection with the home purchase and with helping her husband launder money.

RE: INTEGRITY OR LACK THEREOF OF ALBANY COUNTY DA DAVID SOARES

http://www.cbs6albany.com/video/?bcpid=113...ctid=1890030547

"OTB handle down $7M over last year - Officials say the figures reflect weak economy and sluggish racing industry"

By CAROL DeMARE, Staff writer, Albany, New York Times Union

First published in print: Tuesday, November 4, 2008

ALBANY — Not surprisingly, betting at Capital OTB parlors is down this year — a sign of not only a weakening economy but of a sluggish racing industry, officials said Monday.

OTB's handle — the amount wagered — is down 4 percent or $7 million over this time last year, President and CEO John Signor said.

A year ago, the handle was $173 million, and it dipped to $166 million this year.

Statewide, the scenario is repeated, with all six OTB corporations showing a total decline in handle of $86.8 million, Signor said.

New York City OTB, alone, which is now being run by the state, is down $60 million.

Signor called that "a positive thing, because now the state can see firsthand how the issue of the economy and off-shore Internet sites are impacting wagering in New York state."

OTB executives met with the administration of Gov. David Paterson "and they appear to agree that action must be taken to protect New York's horse racing market from out-of-state Internet sites,'' he said.

On the bright side, last month's Breeders Cup handle was up $17,000 over 2007.

Bettors wagered more than $2.7 million over two days at OTB parlors on top thoroughbreds racing at Santa Anita Park in California, Signor said.

But the OTB handle during the summer Saratoga meet dropped from $21.3 million last year to $18.9 million this year, he said.

Rain during the first two weeks hurt the handle at the Saratoga Race Course and OTB, he said.

To compensate, Capital District Regional Off-Track Betting Corp., which operates parlors in 16 counties and the city of Schenectady, has slashed expenses.

Through September, spending was cut by $750,000 and over four years by $2 million.

The quasi-public corporation continues to provide amenities to attract patrons.

Its Internet wagering site, which began last December, has proved successful with $8 million in wagers through October, which Signor called "very strong."

Also doing well is the Winners Circle at the Teletheater on Central Avenue in Albany.

It offers a private wagering area with large flat screen TVs, parking and a private entrance.

Currently, 35 individuals have joined at a $500 annual membership fee, Signor said.

"It's clear the economy is having a negative impact at OTB as it is among many sectors of government and businesses across the state and country," Signor said.

"In addition state mandates have added costs to OTB's bottom line, and the ability of out-of-state and off-shore Internet sites to operate in the New York market is taking hundreds of millions of dollars in handle out of state with no benefit to the state," he said.

In one state mandate, Capital OTB pays Saratoga Harness $3.2 million annually on a $3.7 million handle, he said.

"The track is getting 86 cents on every dollar wagered at Capital OTB," he said, calling that "outrageous" and suggesting the state change the hold-harmless law that mandates county taxpayers subsidize privately owned harness tracks, many of which operate video lottery terminals.

Carol DeMare can be reached at 454-5431 or cdemare@timesunion.com.

"'Gang of Four' Democrats key to NY Senate control"

By MICHAEL GORMLEY, Associated Press

Last updated: 6:06 p.m., Wednesday, November 5, 2008

NEW YORK -- The fight for control of New York's Senate that Democrats thought they won in historic fashion Tuesday could go on for weeks with a group of four maverick New York City lawmakers essentially holding the key to the balance of power.

The four Democratic senators met Wednesday with GOP leaders who hold the Senate majority at least until Jan. 1, according to Republicans and Democrats familiar with the meeting.

The meeting was to discuss how the four might serve the GOP and what's in it for them should they defect, according to the officials who spoke on the condition of anonymity because leaders wouldn't confirm the talks.

Jude Engelmayer, a spokesman for the newly formed independent caucus, denied that the four had met with Republicans or Democrats Wednesday.

He said the group only met with each other and they are forming an agenda, but Engelmayer declined to provide further details.

The four independent-minded Democrats -- often called the "Gang of Four" -- historically have not been afraid to break ranks and support Republicans.

They also have clashed at times with Sen. Sen. Malcolm Smith of Queens, the presumptive next majority leader, and reportedly refused to attend a Democratic conference Wednesday called by Smith.

"I'm very proud of them," Smith said Wednesday evening after the conference in Albany.

"We have an upstate caucus, we have a women's caucus, we have a council of black senators, we have an urban caucus and now we have an independent caucus."

"That's what the Democratic party is all about."

The senators are Ruben Diaz Sr. and Pedro Espada Jr., both of the Bronx; Carl Kruger of Brooklyn; and Hiram Monserrate of Queens.

Democrats knocked two Republican incumbents out of the Senate on Tuesday to take a 32-30 advantage in the chamber, the first time in 40 years Democrats have controlled the Senate.

It also put Democrats in charge of the governor's mansion and full Legislature for the first time since 1935.

On the table at Wednesday's meeting was a possible power-sharing agreement by Democrats and Republicans or a kind of hostile takeover of the Senate by Republicans using the swing Democrats to maintain control when a majority leader is elected in January.

If Republicans kept majority power, they could then reward the four Democratic defectors with lucrative committee chairmanships.

Republicans said no deals were struck in the meetings.

Meanwhile, Democrats privately said that Democratic Gov. David Paterson has intervened.

They say he struck at least a tentative deal with enough of the so-called "Gang of Four" Democrats to preserve the Democratic majority for at least a year under Smith.

The Democratic mavericks, however, would be free to vote their conscience on specific bills even if that is contrary to the Democratic line.

Smith appeared confident he would remain the leader after more than 25 Democrats -- although members of the new independent caucus were not among them -- voted Wednesday to reaffirm their support for him.

"Right now, we have united," he said.

Both sides said the balance of power might not be resolved for weeks.

In the meantime, a race too close to call Tuesday could be pivotal, if the Republican incumbent loses his narrow margin when the votes are canvassed and when absentee ballots are counted.

Sen. Frank Padavan had 50.4 percent of the vote Tuesday in his Queens district, which is now dominated by Democratic voters.

If Padavan loses to James Gennaro, the Democratic majority would increase to a more formidable three seats, which would require agreement by all four of the runaway Democrats for Republicans to choose a GOP majority leader.

Senate Republican leader Dean Skelos and Paterson refused to comment Wednesday.

------

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

"Upstaters fret over NYC dominance of Albany"

By BEN DOBBIN, Associated Press

Last updated: 5:15 p.m., Wednesday, November 5, 2008

ROCHESTER, N.Y. -- Raymond Russo looks at the prospect of the state's political power concentrated in New York City, and he doesn't like it one bit.

"It shouldn't be allowed," griped Russo, 42, who works for a home security firm in Syracuse.

"There should be a rule or a law that upstate and downstate have to share leadership positions."

"Monopolies usually lead to abuses of power."

"When you add politics to that mix, I think you're asking for trouble."

Worries about New York's power center shifting to the Big Apple were more acute than usual Wednesday after Democrats won a slim majority in the state Senate.

Led by three New York City natives, the party would command the governor's office, Assembly and Senate for the first time since the 1930s New Deal.

David Paterson represented Harlem for 20 years in the Senate before landing in the governor's mansion this year.

Manhattan's Sheldon Silver has been Assembly speaker since 1994.

And Malcolm Smith of Queens, provided he keeps his caucus unified, is poised to become the new majority leader in the Senate in January.

As usual with New York's regional divisions, upstate reactions revolve around economics -- especially the extra difficulties of finding good jobs in faded manufacturing hubs from Binghamton to Buffalo or, more so, in the small towns and agricultural hinterland stretching from the Southern Tier to the North Country.

"Look at the job situation upstate," Russo said.

"It's been bad here for years but Albany doesn't do anything about it."

"If New York City had the same problem, I bet they'd find a way to fix it pretty quick."

Downstaters think "only of what's going on down in their neck of the woods and have little regard for the impositions that they place on us," echoed Buffalo developer Carl Paladino, a frequent critic of state government.

Under Albany's topdown system, leaders of the majorities control which communities get millions, which businesses get tax breaks, even which bills get debated.

Newly departed Republican Senate leader Joseph Bruno played the system extremely well, steering pork by the barrel to his Albany-area district.

"You could see the writing on the wall, and I think that's why Bruno left," said June Howard, a retired teacher in Albany.

"I think we've seen the last of any kind of prosperity up north and out west."

"It'll all be in New York."

Tensions become especially jagged at budget time, when upstate lawmakers have often formed alliances with Long Island counterparts to muscle school-spending spoils on a par with aid to New York City schools.

"A lot of upstate and small-town districts fear the Legislature looks awfully downstate," said Doug Muzzio, a public affairs professor at Baruch College in Manhattan.

"There is the fear and also the expectation that you will have a shifting of priorities to those folks -- while people in New York City would see this as a plus."

In Mark Wilcove's ideal political world, there would always be a carefully engineered balance of viewpoints represented in the actions of state government.

"I believe that people have an obligation to other people in the community and, as such, I would lean toward policies that support that," said Wilcove, 50, a technical writer and registered independent in suburban Rochester who associates Albany with super-partisanship, cronyism and "an utter lack of transparency."

No matter who rules the roost, he said in disgust, state lawmakers vote along party and even geographic lines "rather than voting on the issue."

Gerald Benjamin, a political scientist and dean at the State University of New York, New Paltz, said the Senate's Republican majority was New York's "upstate and Long Island voice."

But Smith, the Senate Democratic leader, has given greater attention to upstate concerns in recent years.

He formed an upstate caucus within his delegation to draw up laws and programs to help those lawmakers' regions, proposed revamping economic development programs aimed at upstate to make them more effective and sought the hardest cap on property tax growth.

"Just because it's Democratic controlled doesn't mean it's liberal control," said Steven Greenberg of the Siena College poll, noting that a narrow Senate Democratic majority can't afford to lose any upstate Democrats.

Democrats clearly know the potential power of an upstate vote.

Brooklyn-born Democrat Sen. Charles Schumer and Westchester County resident Sen. Hillary Rodham Clinton often travel upstate to talk about the likes of apples, dairy farming and rural truck traffic.

------

Associated Press Writers William Kates in Syracuse, Carolyn Thompson in Buffalo, Michael Gormley in New York City and Richard Richtmyer in Albany contributed to this report.

"NY prosecutors will not charge Eliot Spitzer"

By TOM HAYS, Associated Press

Last updated: 3:46 p.m., Thursday, November 6, 2008

NEW YORK -- Federal prosecutors announced Thursday that they will not bring criminal charges against Eliot Spitzer for his role in a prostitution scandal, removing a legal cloud that has surrounded the former governor since his epic downfall eight months ago.

Manhattan U.S. Attorney Michael Garcia said that investigators found no evidence that Spitzer or his office misused public or campaign funds for prostitution.

Federal prosecutors typically do not prosecute clients of prostitution rings.

"In light of the policy of the Department of Justice with respect to prostitution offenses and the longstanding practice of this Office, as well as Mr. Spitzer's acceptance of responsibility for his conduct, we have concluded that the public interest would not be further advanced by filing criminal charges in this matter."

A remorseful Spitzer issued a statement in which he expressed relief that he will not face charges.

"I appreciate the impartiality and thoroughness of the investigation by the U.S. Attorney's Office, and I acknowledge and accept responsibility for the conduct it disclosed."

"I resigned my position as Governor because I recognized that conduct was unworthy of an elected official."

"I once again apologize for my actions," Spitzer said.

Spitzer was out of town and unavailable for further comment.

Four people pleaded guilty in recent months to running the prostitution operation that led to Spitzer's demise.

Spitzer resigned March 12 after it was disclosed he was referred to in court papers as "Client-9," a man who met a prostitute known in a Washington, D.C., hotel.

Garcia said that Spitzer later revealed to investigators that on multiple occasions he arranged for women to travel from one state to another state to engage in prostitution.

The scandal ruined a promising political career for Spitzer, who won a landslide election in 2006 with a vow to clean up corruption.

------

Associated Press Writer Adam Goldman contributed to this report.

"Saratoga County builder faces more charges"

By DENNIS YUSKO, Staff writer, Albany, New York Times Union

Last updated: 1:25 p.m., Friday, November 7, 2008

SARATOGA SPRINGS — This time, a friend bailed out Mechanicville custom home builder James McLagan.

State and city police arrested McLagan this week on four new grand larceny charges for allegedly failing to pay two area companies more than $70,000 for work on homes he contracted to build in the city and Town of Saratoga, court records say.

Special prosecutor Christopher Belling also accused McLagan of scheming to defraud, a misdemeanor, relating to earlier cases filed against him.

The 55-year-old builder was arraigned Wednesday in City Court.

Joseph Raccuia, president of SCA Paper in South Glens Falls, posted $10,000 cash bail for McLagan to get out of jail, according to court records.

In February, authorities charged McLagan with allegedly bilking more than $215,000 in down payments from clients for homes he never built in the city and Stillwater.

He has pleaded not guilty.

Mayor Scott Johnson posted $16,000 bail for him, saying his son was friends with McLagan's children.

The latest charges accuse McLagan of not paying Harbrook Associates, an Albany window and door supplier, $60,000 for work and materials, and a Wilton plumbing contractor, Highland and Co. Associates, nearly $12,000 in labor costs, court records say.

"Consumer confidence falls to new low"

November 7, 2008 at 10:44 am by Chris Churchill, Business writer, Albany, New York Times Union

New York’s state consumer confidence index fell to a record low in October, according to a survey released this morning by the Siena Research Institute in Loudonville.

The institute described the current willingness to spend on big-ticket items — which is what the index attempts to measure — as “dismal.”

Buying plans were down for cars and trucks, computers, furniture, and homes and home-improvement products, the survey found.

The statewide consumer confidence index was 51.6, below the nation’s index of 57, as measured by the University of Michigan.

An index of 100 is considered the average, or benchmark, level of confidence.

Included in the survey of 963 New Yorkers, conducted by telephone during the month of October, were questions on the impact of gas and food prices.

And despite recent fuel-price declines, 60 percent of respondents said gas prices are having a very serious or somewhat serious impact on their finances, while 69 percent said grocery costs are having a serious or somewhat serious impact.

"Spitzer hoopla has faded"

Albany, New York Times Union

First published in print: Sunday, November 9, 2008

Client No. 9 will not be prosecuted by the feds after all for his payments to the Emperors Club VIP, a wise and compassionate decision.

If you had to think for a second as to who and what this refers to, consider what that in itself suggests.

As stunning as the scandal was when Gov. Eliot Spitzer was caught in a prostitution sting — the world was staring at us because of it — how stale and inconsequential that tawdry business seems now.

That was only nine months ago, but it's all a matter of perspective.

The runaway freight train of events since, particularly relating to the collapse of Wall Street and our sudden plunge into a deep recession, has revealed what's really important, and truly big news.

And it isn't the very human failings of a man who happened to be our governor at the time.

Most certainly he disgraced himself, brought shame on his family and was deservedly forced to resign as governor.

He was shown to be a bald-faced hypocrite.

But in retrospect, was what he did so overwhelmingly awful?

He patronized a prostitute.

Big deal, even if it is a crime.

He didn't sell his office, or start a needless war with lies and deceptions — really bad stuff.

He paid for sex.

So what?

He even used his own money.

That would have been the only solid reason to prosecute, if he had used campaign or public money, or engaged in an illegal transfer of funds to try and cover his tracks.

But U.S. Attorney Michael Garcia gave Spitzer a clean bill on those possibilities with Thursday's announcement that there would be no prosecution.

He has paid dearly enough.

Even his state Republican Senate tormenters now are saying let it go.

Of course, at the time they were trying to ride that hobby horse into continued domination of the Senate.

But all that hoopla is quickly fading in our minds as well.

What he knew about sticking it to another politician and when he knew it has taken on far less significance now that we face a staggering $47.5 billion shortfall in state revenues over the next 31/2 years, umemployment is going through the roof and, oh, control of the state Senate is no longer on the line.

Which strongly suggests all that posturing by Senate Republicans over Spitzer's human failings was mostly that, politics and not much more.

There are all sorts of lessons that squiggle out of the Spitzer affair that might serve as cautions as the freight train of new events and horrors keeps gaining speed on us.

Remember when we elected Eliot Spitzer as the great hope for reforming Albany?

Democrats, Republicans, we were all elated that finally a champion was among us who could solve all our problems.

That was just two years ago.

Long before he left office in disgrace this March, it was crystal clear he was getting nowhere with reforming Albany.

We need to be careful with our instant elevation of expectations for President-elect Barack Obama, as well.

He is only one man, no matter how extraordinary, no matter how historic his election is.

The world he is inheriting is an unprecedented mess of issues and problems.

He can't solve them all, maybe only some.

Maybe fewer than we hoped.

But we mustn't forget, as I strongly suspect we will, the context of the dire situation he is stepping into.

No matter how many banners we wave to swear we won't, we as a people tend to forget in no time the way it really was because we become so focused on the new threats of the moment.

We're so easily distracted.

According to CNN on election night, only 9 percent of those who voted on Tuesday considered terrorism a major issue.

Only 10 percent, the Iraq war.

The terrorist attack on the World Trade Center was a mere, but biblical, seven years ago.

Believe it or not, the Iraq war is ongoing.

All of this suggests that Sen. Hillary Clinton, so vital and almost there a few months ago, is finished as a presidential candidate.

I'm sorry to admit it, but her moment has passed.

Her overpowering image in our minds is already beginning to go pale and distant.

Who knows where the sweep of history will take us over the next four or eight years, but I have a hunch the notion of Hillary for president in 2012 or 2016 will be somewhere between quaint and ridiculous.

She deserves better, but the sad reality is that history doesn't really care.

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

"Update: Gang of Four member backs Smith in Senate"

Associated Press

Last updated: 3:24 p.m., Saturday, November 8, 2008

ALBANY - New York Sen.-elect Hiram Monserrate broke away from the so-called "Gang of Four" dissident Democrats Saturday and said he will support Senate Democratic leader Malcolm Smith for majority leader.

Monserrate's support helps seal Democratic control of the Senate on Jan. 1 and improves Smiths chances of running it.

"It is my belief that we need leadership in our state Senate, and that leadership needs to be Democratic leadership and I am proud to support Malcolm Smith as majority leader because I believe he has the issues necessary to move this conference forward," Monserrate said in an interview.

Monserrate said he expects to be named chairman of a committee, which includes stipends of about $12,500, but he hasnt yet been told what committee it will be.

Monserrate is one of a group of four Democratic senators who have flirted with siding with Republicans, who no longer have a majority of members in the Senate.

Democrats won a 32-30 majority on Tuesday, ending more than 40 years of Republican control of the Senate.

The dissident Democrats are Pedro Espada Jr. and Ruben Diaz Sr., both of the Bronx; Carl Kruger of Brooklyn; and Monserrate of Queens.

Their power play boosted their chances of getting committee chairmanships that come with lucrative stipends and the power to steer legislation, as well as a stronger voice in Latino issues.

Monserrate denied he ever considered switching parties or opposing the Democratic conference and said he believes Smith will be the majority leader.

He said he has spoken with the other dissident Democrats but is unsure if they will choose to support Smith.

"I am proud to receive the support of Senator-elect Monserrate for majority leader of the state Senate," Smith said in a statement.

"I look forward to working with him as we bring a new vision to Albany that will get New York working again."

On Wednesday, the four dissidents didn't attend Smith's first meeting since winning a 32-30 majority in Tuesday's elections.

Espada and Diaz have clashed with Smith over political endorsements in recent years and Diaz and Kruger have been frustrated their conservative proposals get little attention among Senate Democrats.

In Wednesday's meeting, the other senators supported Smith, 28-0, to lead the conference.

Adding Monserrate would give Smith 29 supporters for majority leader.

However, if the remaining three dissidents side with Republicans, the GOP would have a majority of votes.

The GOP could still force a tie in choosing a majority if just one of the dissidents sides with Republicans in the 62-member chamber.

The remaining dissidents could help Republicans elect a GOP majority leader, or Republicans could help the dissident Democrats choose a Democrat other than Smith - perhaps even one of the dissents - to run the Senate.

But Smith's strength is growing, apparently helped by intervention by Democratic Gov. David Paterson who privately persuaded the four dissident Democrats to remain in the fold.

Sen. Jeffrey Klein of the Bronx - long seen as Smith's strongest rival to run the conference - made Wednesday's motion to support Smith as leader.

And Smith said, after talking with the dissidents, that he expects them to stay in the Democratic conference.

Monserrate is a former police officer and was backed by the Working Families Party, a group of labor and other interests pushing a more socially liberal agenda that is closely aligned with the Democratic Party.

Tensions among some Democrats have been rising in Albany since the Republican-Democratic split narrowed in the Senate over the last several years.

Republicans have made it clear they would be supportive to Democrats who sided with them by offering leadership position stipends.

In May, Smith publicly supported Sen. John Sabini of Queens when Monserrate was considering a primary challenge to the incumbent.

Smith defended his member even against the powerful Queens County Democratic Party, which backed Monserrate.

Although Democratic Gov. David Paterson avoided a bigger clash by appointing Sabini to an administration job as a racing regulator, the dispute reflected a deeper concern.

Smith was making a stand for his member.

Senate Democrats have bristled at how city council members, now term limited in their city jobs, are increasingly looking to continue their political careers in Albany.

City council members' interest in the state Senate rose as the Democrats got nearer to taking a majority, which provides increased clout, exposure and pay.

In 2002, Espada threatened to switch to the Republican party.

He didn't follow through on that threat but did sit in caucus with the Senates Republican majority.

In this years Democratic primary, Espada won back his Bronx seat by beating incumbent Sen. Efrain Gonzales Jr., who was backed by Smith and the Democrats.

Kruger became the first Democrat given a committee chairmanship by the Republican majority when he took the post in 2007, along with its $12,500 stipend.

And Diaz, a minister who is far more conservative on social issues than most of his Democratic colleagues, ran as a Democrat and Republican Tuesday.

It doesn't always work.

Sen. Olga Mendez of the Bronx, who long worked with Republicans and eventually switched to the GOP party, lost her seat two years ago.

"Ex-school counselor charged with faking job credentials"

By DENNIS YUSKO, Staff writer, Albany, New York Times Union

Last updated: 2:53 p.m., Monday, November 10, 2008

A former social worker for Burnt Hills-Ballston Lake schools has been arrested on three felony charges for allegedly lying about her credentials to get the job, state Attorney General Andrew Cuomo announced this morning.

Cuomo alleges Maria Geizer, 38, falsely claimed she held a master's degree in psychology and was licensed by the state Education Department when she applied in 1999 to be a social worker with Community Human Services of Glenville, which contracts with the Saratoga County school district.

Geizer, of Grand Avenue, Saratoga Springs, worked as a counselor at Charlton Heights Elementary School from 1999 to 2003 and at Richard O'Rourke Middle School from 2003 to 2007.

During a 2006 state and district audit, she allegedly altered her husband's master's degree certificate from the University at Albany and his state Education Department license to bill Medicaid for counseling services by putting her name on them, Cuomo said.

Geizer was arraigned Thursday in Glenville Town Court.

She was charged with unauthorized practice, grand larceny and criminal possession of a forged instrument, all felonies.

She was released pending a court date.

"Those who work in our educational system must meet the required criteria that the law has put in place," Cuomo said.

"We trust educators and other school personnel to be qualified and trained in order to properly interact with our children."

"Any breach of that trust not only violates New York state law, it may deprive our children of the care and quality services to which they are entitled."

"Ex-Niagara Falls mayor answers corruption charge"

Associated Press

Last updated: 3:15 p.m., Monday, November 10, 2008

BUFFALO, N.Y. -- A former Niagara Falls mayor has pleaded not guilty to federal corruption charges.

Vincenzo Anello appeared before a U.S. District Court judge in Buffalo Monday.

He is accused of accepting $40,000 during and after his 2003 mayoral campaign from a businessman who was awarded a city contract months later.

Federal authorities unsealed an indictment against Anello on Friday, soon after the businessman in the case, Joseph Anderson, pleaded guilty to a felony charge.

Authorities said Anderson gave Anello three no-interest loans that were never repaid.

Anello's lawyer, Joel Daniels, said there was never any deal between Anderson and the one-term mayor and that Anello always acted in the best interest of the city.

Anello is charged with conspiracy and scheming to deprive Niagara Falls of the right to honest services from a public official.

IF YOU ARE NOT "HOOKED UP" WITH SOME POLITICIAN OR POLITICAL PARTY, YOU ARE NOT GOING TO GET A STATE JOB IN NY AS A DISABLED VETERAN ...

IF YOU WANT ONE, PONY UP ...

THAT HAS BEEN MY EXPERIENCE OF IT, ANYWAY ...

And so ...

"State jobs for veterans, but not enough - Program authorized 500 slots for disabled vets; only a fraction get filled"

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

First published in print: Tuesday, November 11, 2008

ALBANY — With wounded veterans returning to New York from Iraq and Afghanistan, lawmakers earlier this year passed a bill to help more of them find jobs in state government.

One of its provisions raised the number of entry-level state positions that could go to disabled veterans from 300 to 500.

"The state can set an example for employers everywhere," read a memo accompanying the measure, which received bipartisan support.

The legislation paralleled an attempt to streamline the process by which veterans could find jobs: While placement efforts used to be the province of the state Department of Civil Service, now the Department of Labor and the Division of Veterans Affairs have joined in.

The result is a small army of bureaucrats tasked with finding jobs for wounded veterans.

What was the result of all this?

As of last month, only 95 veterans, less than one-fifth of the possible total, were employed under the so-called 55c program.

That number has rarely risen past 100 — a shortfall that veterans' advocates and some increasingly vocal insiders chalk up to a combination of turf battles and bureaucratic inertia.

"The returning Iraq (and Afghanistan) veterans are not just being underserved, they are being very badly served," said George Swiers, a Vietnam veteran and an outreach coordinator with the Civil Service Department.

Swiers said he's never understood why the job of finding openings for wounded veterans was shifted in part to the Department of Labor, an agency with little experience in that area.

"That program is an absolute lifeline for some of these veterans," said Frank Merges, a retired veteran who had worked with both the state and federal Department of Labor.

"They've hung in there and now are asking for their opportunities, and I question whether they are getting their opportunities."

The 55c program, which began during the post-Vietnam era, was designed to give wounded veterans assistance in finding entry-level jobs with the state.

Under today's program, state agencies can hire someone without getting the waivers currently needed for most hires due to the state's budget crisis.

But there's no extra money available to hire people, so the situation becomes a Catch-22.

"A department has to have the funds to actually hire the staff," said Russell Oliver, the Department of Labor bureau director who works on veterans' issues.

Also, the number of people in the program might simply appear to be low because once someone is promoted out of their entry-level job, they're no longer counted.

Supporters of the changes say that bringing in the Labor Department as well as the Division of Veterans Affairs makes sense since the agencies can now share lists of job openings and qualified veterans.

"There are lots of job titles out there," said Cynthia Picunas, the Department of Labor's deputy veterans program administrator.

Still, even those have successfully navigated the 55c process see room for improvement.

"They had my resume for over a year," recalled one Iraq War veteran, a former Marine who wished to remain anonymous for fear of professional retaliation.

The veteran said a Department of Labor adviser "sat me in front of the civil service Web site."

"They showed me state jobs."

But the veteran had already looked at that site at home.

Then the Labor adviser kept suggesting the veteran, who had been injured in a Humvee crash, should apply for mechanic jobs – even though he was a college graduate with no mechanical training in the field.

Eventually, the veteran landed a good job after Swiers heard about an opening at one of the state agencies and "hand-walked" the man's resume over.

"Any monkey can sit behind a computer and say, 'These are the jobs that are available on the state Web site,'" said the veteran.

But at least the agencies are trying to coordinate their efforts, said Jim McDonough, director of the Division of Veterans Affairs.

One of Veterans Affairs' tasks is to visit places like Fort Drum in northern New York and meet with veterans in the process of being categorized as disabled, which entails doctors' evaluations and can take up to 18 months.

"Now we can match resumes and openings," said McDonough.

Despite the relatively low number of vets working under 55c, McDonough said he wasn't against raising the number of slots.

"We're in the middle of a war."

"That's why the denominator has been expanded," he said.

Problems facing the 55c program are likely to come up Wednesday during Assembly hearings.

In the meantime, disabled veterans got a piece of good news last week when New York voters approved a statewide measure that gives them extra points on civil service exams even if they weren't collecting disability benefits.

Prior to the amendment, injured veterans who weren't getting benefits didn't receive the extra points.

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

Vets wanted

The state Department of Labor sponsors a veterans' career fair 1 to 5 p.m. Thursday at Joseph E. Zaloga Post No. 1520, 4 Everett Road, Albany.

Call (888) 4-NYSDOL.

"State says East Greenbush finances sliding"

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

Last updated: 3:34 p.m., Wednesday, November 12, 2008

EAST GREENBUSH — State auditors warned town officials Wednesday that they have to reverse continuing budget deficits.

Auditors, at the town's request, recently reviewed the town's $15.4 million general, highway, water and sewer budget for the 2009 fiscal year.

They found the significant revenue and expenditure projections reasonable, according to the audit.

However, reviewers warned that the town likely will have to borrow to meet operating expenses through the end of 2008 as a result of prior years' budget practices.

"One of the problems is we have not significantly raised taxes in six years,'' said Town Comptroller Kate Bennett.

Auditors said the 2009 budget should include a plan to address the repayment of short-term borrowing needed to eliminate the accumulating deficit, auditors wrote in the report.

According to audit findings, the town's general fund balance has decreased from a positive position of $112,436 in Dec. 2005 to a deficit of $859,087 as of Dec. 2007.

The highway fund balance has decreased from a reported deficit of $623,152 in Dec. 2005 to a deficit of $902,644 by Dec. 2007, for a current combined deficit of $1,761,731.

Auditors estimate that the deficit will increase by more than $700,000, to $2.5 million, by the end of this year.

State officials suggested the town develop a long-range financial or capital plan to control deficits.

Bennett said town officials agree with the findings.

''It just caught up with us, so now we will be looking at some short-termed borrowing to close the gap, and the board will be examining ways to cut expenses,'' Bennett said.

"Edinburg town justice charged with felony DWI"

By CHRISTEN GOWAN, Staff writer, Albany, New York Times Union

Last updated: 10:20 a.m., Wednesday, November 12, 2008

SARATOGA SPRINGS - The newly-elected Edinburg town justice was arrested Tuesday on a charge of felony driving while intoxicated.

Brian Kedik, 32, was stopped about 1 p.m. by State Park Police who said he was speeding on the Avenue of the Pines.

He was later charged with felony driving while intoxicated and aggravated unlicensed operation of a motor vehicle, also a felony.

Kedik was elected town justice of Edinburg last Tuesday.

After being arraigned in Saratoga Springs City Court, Kedik was sent to the Saratoga County Jail in lieu of $1,500 cash or $3,000 bond.

The town justice was also recently indicted in Schenectady County Court on grand larceny and forgery charges for allegedly stealing a check from his former mother-in-law in 2004.

"Union cash at issue in DA race - Filings show that both Soares and Cusick exceeded campaign contribution limits"

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

Last updated: 12:03 p.m., Thursday, November 13, 2008

ALBANY -- District Attorney David Soares and Integrity Party opponent Roger Cusick violated election rules by accepting over-the-limit campaign contributions from top labor unions, state filings show.

The pair were limited to $9,200.95 from any single contributor over a four-year election cycle yet both exceeded that threshold, according to state Board of Elections records.

Soares, a first-term Democrat, received $15,000 from the New York State Laborers and another $9,747 from the state's largest health care union, while Cusick took $12,127.92 from Council 82, the parent union for rank-and-file Albany Police officers and 70 other unions, the records said.

And campaign filings show additional aid to Cusick that, while not in violation, appeared to skate by the spirit of election limits.

Council 82 contributed another $10,000 to the Albany County Republican Committee on Oct. 10.

Four days later, Cusick transferred $10,000 into his campaign from the committee, records show.

Nothing legally prevents a political committee from spending contributions as it wishes.

But candidates and contributors can face misdemeanor charges if they knowingly exceed limits, said state Board of Elections spokesman Robert Brehm.

He said typically, a wrongly reported figure needed gets corrected or a refund is given.

"We're confident we followed the letter of the law," said Cusick campaign spokesman Dan Farrell.

"If we do discover any errors or discrepancies, it will be rectified on our last filing."

Cusick, a Republican from Loudonville, entered the race under the Integrity Party banner in August.

When asked about contributions to the county GOP, Council 82 president Christian Mesley said it was "up to them" to spend money.

He said he was unaware of donations exceeding the limit, but said, "We'll check into it."

Campaign contributors had limits on what they could spend on the DA's race: No more than five cents per registered active voter in Albany County, according to the Albany County Board of Elections.

As of Nov. 1, that figure was $184,019, the highest it has been in the four-year election cycle for the race, records show.

As a result, the contribution limit for the race was $9,200.95 from any one source, not including political parties.

Yet the New York State Laborers union gave $1,500 to Soares' campaign in September 2006, $5,000 more in June 2007, an additional $5,000 last March and another $3,500 in May.

James Long, an election lawyer for Soares, said the DA was arranging to either refund the money or donate it to charity.

Soares accepted $9,747 from the New York State Political Action Fund of SEIU 1199 in July 2007.

Long called it a "guestimate" based on apparent limits.

The prior April, the state Board of Elections Web site was lumping "inactive" and "active" voters together -- even though only active ones count toward contributions.

Based on the Web site total, the limit would have been exactly $9,747.

"I think it's fair to say we felt it was within the limits of what the law allowed," said Local 1199 spokesman Dick Farfaglia.

Neither the Laborers nor Albany County Republican chairman John Graziano could be reached Wednesday.

Council 82 gave Cusick $9,378 on Sept. 23, by itself over the limit.

Cusick's filings show the union provided him with "in kind" donations of $744.77 on Sept. 16 and $802.06 on Sept. 29.

It paid for "office space" on Colvin Avenue, where Cusick's campaign and the union were both based, the filings showed.

Council 82 expensed an additional $1,203.09 for the candidate's rent on Oct. 20.

That figure, as well as the Sept. 29 payment, were listed on the union's expenditure list as a contribution to Council 82's "operating fund," under the explanation: "Rent - Cusick for DA."

It is not the first time the Albany County DA's race and contributions have fallen under scrutiny.

When Soares first ran, a judge ruled in October 2004 that the Working Families Party violated election law in spending more than $121,000 to promote his Democratic Party campaign against then-DA Paul Clyne.

Justice Bernard J. Malone Jr.'s 15-page decision also dismissed allegations of wrongdoing against Soares as unfounded.

A mid-level appeals court overturned the decision, in favor of the Working Families party, in July 2006.

Robert Gavin can be reached at 434-2403 or rgavin@timesunion.com

"Kaye: 'Sickens me' to sue lawmakers - Retiring state judge uses last major speech to outline concerns"

Associated Press

First published in print: Thursday, November 13, 2008

NEW YORK — After 15 years of running the state's top court system, Chief Judge Judith Kaye used her last major speech Wednesday to highlight her concern about children in the court system, rising mortgage foreclosures and the Legislature's failure to boost judicial pay.

The 70-year-old Kaye, who must leave office Dec. 31 because of her age, said her 25 years on New York's highest court has been "the role of a lifetime."

But her role as "chief plaintiff" in a lawsuit filed against legislators in Albany earlier this year for denying raises to state judges "saddens and sickens me," she said.

Kaye, believed to be the only state chief judge to have filed such a suit, said it is "heartbreaking, frustrating and demoralizing beyond description" that the state's judges have not had a pay raise in 10 years.

As the state's top judge, Kaye earned $156,000 annually or only $4,800 more than her associates on the court.

Besides presiding over the seven-member New York Court of Appeals, Kaye has responsibility for the state's sprawling judiciary, which handles 4 million cases a year at 363 courthouses with a $2 billion budget.

Democratic Gov. David Paterson will nominate a replacement to the Court of Appeals pending Senate confirmation.

During the State of the Judiciary speech at New York University, Kaye praised steps the court system has taken to reform matrimonial procedures.

Under her tenure, commissions and administrative judges have revised rules for matrimonial law, housing courts, commercial litigation and community and drug courts.

"Free ride from tickets - 'Bull's-eye' stickers from Albany police union give 'pass' on fines to hundreds"

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

First published in print: Saturday, November 15, 2008

ALBANY — An untold number of ''ghost'' parking tickets that carry no fines have been issued to the private vehicles of Albany police officers, their spouses, friends and civilians employed by the city under an informal practice that dates back years and involves a secret system of coded windshield stickers, the Times Union has learned.

Several police officers and other people familiar with the matter said the system was developed more than 15 years ago as a way to provide free on-street parking to police officers attending court hearings in their personal vehicles.

But over the years, they said, the practice has expanded and arguably been abused as many people who are not police officers, including bar owners and friends of officers, have been provided the secret, red and blue ''bull's-eye'' stickers that are affixed to a vehicle's windshield just above the registration.

''The old joke was membership has its privileges,'' said an officer who is a member of the Albany Police Officers Union.

''It's been wink-winked the whole time.''

The city has no written policy on the practice of issuing ''no fine'' tickets to parking violators and police officials could not immediately provide a breakdown of how many such tickets have been issued in recent years.

The Times Union's examination of the secret practice comes as revenues from parking ticket fines declined about $500,000 last year from 2006, to $2.38 million.

That figure fell well short of the $2.7 million the city budgeted for anticipated revenues from parking fines.

The city's 15 or so parking enforcement officers, who are employed by the police department, routinely issue ''no fine'' tickets to vehicles that have the bull's-eye stickers, which several department sources said were distributed through the Albany Police Officers Union and handed out by union delegates or other union officials.

Christian P. Mesley, president of the Albany Police Officers Union, declined to comment.

A Times Union investigation over the past month found instances in which private vehicles registered to police officers, their spouses, girlfriends and several people not employed by the city were issued so-called ''courtesy'' or ''ghost'' tickets by parking enforcement officers.

The tickets are left blank in the area where fines and surcharges are listed, and the recipients may simply discard them without penalty.

In general, fines and surcharges on a ticket for parking at an expired meter run about $40.

Albany City Treasurer Betty Barnette, whose office oversees collection of parking fines, did not respond to repeated requests for comment for this report.

It's unclear how many ''free'' tickets are being issued annually and at what cost.

Twelve years ago, a state comptroller's audit of Albany cited numerous accounting breakdowns in the city's Parking Violations Bureau, including ''no formal criteria for canceling parking tickets'' and a failure to document why many tickets were ''cancelled,'' which amounts to them being dismissed.

''The mayor and treasurer, each of whom oversee different aspects of the operations, should adopt a comprehensive written policy addressing parking ticket issuance, cancellation, collection and enforcement,'' the state audit concluded.

It's unclear whether such a policy was adopted or implemented.

Mayor Jerry Jennings was out of town Friday and could not be reached for comment, a police spokesman said.

In an interview two weeks ago, then-city Comptroller Thomas Nitido said he was unaware of the practice of writing ''ghost'' tickets or of the stickers issued through the police union.

''You can't have an informal system where people get stickers and get to violate the law,'' Nitido said.

''If people who write the tickets are part of that then it becomes a possible conspiracy."

"... You can't have a class of people who get to ignore the law.''

Albany police officers and the people to whom they give the bull's-eye stickers are not the only ones who benefit.

Spot checks of vehicles parked on city streets near the Albany County courthouse, Family Court and City Hall showed that ''courtesy'' parking tickets are routinely issued to private vehicles of people who work for the district attorney's office and the sheriff's department.

Many of those vehicles have dashboard placards indicating they are affiliated with a particular law enforcement agency.

Still, the ''free'' tickets are not being issued only to law enforcement officials, and not always to cars parked near a courthouse.

For instance, a vehicle that state records show is registered to the wife of an Albany police officer had several ''no-fine'' tickets affixed to its windshield over a period of several days two weeks ago.

The vehicle, which has a bull's-eye sticker in the windshield, was parked near Broadway in front of an expired meter.

In an interview on Thursday, Chief James W. Tuffey requested the license plate number of that vehicle from the Times Union and said he intended to investigate that particular case.

Tuffey said he was unaware of the bull's-eye stickers, which are visible on the windshields of dozens — if not hundreds — of cars around the city, including many vehicles parked at police headquarters.

''There's no policy here on that, I can tell you, that I know about,'' Tuffey said.

''If there's something out there that's been abused I'm going to deal with it.''

On Friday, the chief confirmed the stickers had been issued through the police officers' union.

He also said that next week he will be issuing a department-wide notice that the stickers are not sanctioned by the department.

A new system of departmental-issued placards will be developed for officers who need to park their vehicles for official duties, the chief added.

Tuffey had said the bull's-eye sticker system apparently had its origins in a practice in which parking officers issued ''no fine'' tickets to vehicles registered to law enforcement agencies and that were parked near courthouse facilities.

''The press gets courtesies, too, put that in the story,'' Tuffey said.

''This is not an abuse of the system ..."

"This is an issue that comes up in urban areas where you have this congestion around the courthouse when you have people who need to go there.''

Nitido, who left his city comptroller's post last week to take a job with the state comptroller's office, said he never audited the parking enforcement bureau or the city treasurer's office in relation to so-called ''ghost'' tickets.

''I didn't have a particular indication there was wrongdoing going on,'' Nitido said.

''It's clearly way outside what's proper or legal."

"Otherwise, why would it be a secret?''

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

"Crooked Brunswick builder stops restitution payments"

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

Last updated: 1:42 p.m., Tuesday, November 18, 2008

TROY — A builder who admitted cheating 11 people out of more than $300,000 two years ago has stopped paying restitution and could face prison for the violation.

In March, 2006, Scott Marchand, president of now defunct Wedgewood Builders, was sentenced to six months in jail and ordered to pay restitution to the families.

In most cases, he took money from people then failed to do the work.

He also failed to pay subcontractors, who then slapped liens on properties on which people wanted to build their dream homes.

As part of a plea agreement, Marchand was put on five years probation and agreed to repay $313,801 over that period of time.

His monthly payments exceeded $5,000.

Marchand, who is unemployed, was jailed last week for the probation violation.

He appeared before Judge Robert Jacon in jail garb this morning and his attorney James Long entered a motion to amend the restitution to lower payments.

The matter was adjourned for a hearing on the motion in early December and Marchand was released with a warning.

"Between now and then, Mr. Marchand, find a job," Jacon said.

In January 2006, Marchand pleaded guilty to third-degree grand larceny, admitting he stole from his own Brunswick business.

Marchand, prosecutors said, cashed checks from his customers but did not use the money to pay the contractors and suppliers his construction firm relied on to build houses.

Work on some houses was not completed.

Others were not even started.

On September 9, 2005, the U.S. Marshals captured Marchand in Florida and brought him back to Rensselaer County to face charges for fleecing his customers.

"Purchase of Turkish carpet takes taxpayers for a ride? - Amid crisis, state pays $21,000 for mansion rug"

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

First published in print: Thursday, November 20, 2008

ALBANY — Gov. David Paterson's energetic response to the state budget crisis has been the hallmark of his tenure, but even as he was ordering state agencies to cut their spending and warning of even tougher times ahead, his Office of General Services was buying a $21,000 custom-stitched 10-foot-by-15-foot antique carpet for the governor's mansion.

News of the purchase, from a New York City firm that had contributed at least $8,000 to the Spitzer/Paterson campaign, was seized upon by critics who have questioned some of the governor's budget-cutting plans.

"They should cut the waste first before they come and ask us for concessions," said Darcy Wells, spokeswoman for the Public Employees Federation, a state workers union.

Paterson wants state workers to forego next year's 3 percent raise and accept a "lag pay" plan in which they give up five days salary until retirement; Paterson has warned the eventual deficit could swell to $15 billion over the next 14 months.

The rug, ordered from Stark Carpet on Third Avenue in New York City, was shipped July 31, according to payment records and invoices.

Earlier that week, Paterson ordered a second round of cuts for state agencies, bringing the reduction to 10 percent.

In a statement, OGS spokesman Brad Maione noted the building, also known as the Executive Mansion, is a kind of museum as well as the residence for Paterson and his family when they're not in New York City.

"It serves as a public space that in many ways is a museum — open to thousands of visitors and school children each year," said Maione, who added that more than 6,000 people have visited the mansion during the past few years.

"This historic landmark requires ongoing maintenance and upkeep," said Maione, who added that a total of four rugs were purchased for the building this year at a total cost of $37,741.

That's not to say that people can wander into the 19th-century mansion as if it were the State Museum: When the Times Union on Wednesday asked permission to get a photograph of the carpet, the request was denied — with Paterson spokesman Morgan Hook citing security reasons.

Unless there is a designated event, the Eagle Street mansion is generally off-limits to the public, and guarded by State Police officers.

Blair Horner, legislative director for the New York Public Interest Research Group, said the mansion may have needed a new rug — but the larger question centers on the symbolism of such a purchase.

"Does this send the wrong signal?"

"I think the answer is a resounding yes," Horner said.

"When the state is tightening its belt, I think that should apply to expensive rugs, no matter how useful."

"At the same time that the governor is proposing cuts to education and health care, the symbolic decision is a bad one."

Described as a "Turkish patchwork collection (made of antique rugs in Turkey)" the carpet sold for $16,811.25, according to an invoice obtained from the state Comptrollers Office.

There was an additional $4,350 for labor, supplies and decorative stitch work.

Stark Carpet Corp. contributed $3,000 to the Spitzer/Paterson gubernatorial campaign in 2005 and 2006.

The firm also gave $5,000 in 2003, according to state records.

While stressing that she was not familiar with the mansion's rug, Lucille Laufer of the Oriental Rug Importers Association, a New Jersey-based trade group, said that Turkish rugs have been in vogue lately.

"It's a warm look, and people are really migrating toward that now," she said.

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

I WONDER HOW MANY MORE FANCY RUGS PATERSON NEEDS TO BUY FROM HIS POLITICAL SUPPORTERS AS PAYBACK TO THEM FOR MAKING NICE TO HIM LAST ELECTION ...

"Paterson asks Washington for aid - Governor, other top state Democrats urge help for state; 21,000 jobs tied to fate of auto industry"

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

First published in print: Thursday, November 20, 2008

WASHINGTON — New York Gov. David Paterson and other Empire State leaders on Wednesday appealed to federal lawmakers for financial aid, following the state legislature's failure to close a projected $1.5 billion budget deficit.

The appeals by Paterson, New York State Assembly Speaker Sheldon Silver and state Senate Minority Leader Malcolm Smith came in a series of closed-door meetings with top congressional leaders, one day after state talks on budget cuts broke down.

"We know that New York state has real trouble," said Sen. Charles E. Schumer, D-N.Y.

And, he said, it's clear "how much we need this kind of help in New York."

Specifically, the group was urging congressional leaders to include help for automakers in a stimulus package, in light of an estimated 21,000 New York jobs tied to the auto industry.

They also are seeking funding for infrastructure projects, including 40 programs that Paterson has described as "shovel-ready."

And, they are asking the federal government to deliver more in matching funds to help reimburse states for Medicaid services.

Paterson said he hoped a new federal stimulus bill would help close the gap between what New York residents pay in federal taxes and the federal dollars now spent on the state — a difference he said was $86.9 billion.

"We are hopeful that with a new president (and expanded Democratic majorities in the House and Senate) we will be able to receive greater funding from Washington," Paterson said, adding that "is not really a handout as much as it is a hand back."

Rep.-elect Paul Tonko, D-Amsterdam, was part of the discussions Wednesday.

Tonko said he wanted to see Congress move quickly to address "urgent, immediate needs," and then, on a long-term basis, promote cost-saving energy efficiency plans and invest in planned infrastructure projects.

Rep. Kirsten Gillibrand, D-Greenport, told Gannett News Service that Paterson's trip was worthwhile despite the slim odds of getting help this year.

"The point was to emphasize the very grave financial crisis the state is in and that he is going to need very strong federal partners to turn things around," she said.

"NY releases employment data amid cuts across state"

By RICHARD RICHTMYER, Associated Press

Last updated: 4:46 p.m., Thursday, November 20, 2008

ROUSES POINT, N.Y. -- New York lost nearly 14,000 private sector jobs in October, but the seasonally adjusted unemployment rate in New York City and across the state dipped slightly to 5.7 percent.

That's a drop from 5.8 percent in September, but up from 4.6 percent in October 2007.

Outside New York City, St. Lawrence County had the highest unemployment rate last month at 6.9 percent.

Nationally, the rate was 6.5 percent in October.

The latest numbers were released by the state Labor Department on Thursday, a day after HSBC Mortgage Corp. said it was cutting 225 jobs at its Buffalo-area headquarters.

Since October 2007, the largest losses have been 17,400 jobs in manufacturing and 16,500 in the financial industry, followed by 11,000 in trade, transportation and utilities, according to state data covering both the public and private sectors.

Jobs in education and health services grew over that time by 30,200 and 11,200 more workers were employed in government.

The total of private sector jobs dropped 14,100 from 7,254,000 to 7,239,900 over the year.

Gov. David Paterson said in late October that jobs lost to turmoil on Wall Street would eventually top 45,000.

Rod Fortran, a labor department analyst, said Thursday there are more cuts to come in the financial sector that aren't reflected in the latest employment numbers.

While job cuts have been concentrated around New York City and western New York, the effects of the state's economic slowdown have been far reaching.

One of the North Country's biggest private employers -- Wyeth Pharmaceuticals -- announced plans this week to lay off 118 of the 725 remaining workers at its plant in Rouses Point.

"It's just a sign of the times," said George Rivers, mayor of the village on the Canadian border, who noted that about 1,200 people worked at the plant two years ago.

"But it's not so bad compared to what's happening around the country."

"They're laying off thousands in the banking industry."

Rouses Point is a small village of 2,500 on the banks of Lake Champlain bordered on the north by Quebec and Vermont to the east.

The Wyeth plant -- a sprawling, tightly guarded industrial complex -- is just a few blocks from the main street, where some business owners are worried about its shrinking work force.

"There's been nobody around," said Binnie Munnik, who stopped Thursday for a coffee at a cafe a few doors down from the antique shop she has run since 1993.

Beefed up border patrol budgets in recent years have brought some new people to the area, but Munnik said she's still having trouble finding a buyer for her lake front house.

"I've had it up for sale for years," she said.

Just last August, North Country business boosters and government officials were celebrating the salvation of the plant, which Wyeth had planned to close but recently sold to Akrimax Manufacturing, a privately owned pharmaceutical company based in New Jersey.

Wyeth is shifting its manufacturing out of the plant, and Akrimax plans to fully take over by the end of next year.

The company said it plans to bring additional business to the plant through contract manufacturing agreements with other drug makers but hasn't provided specific projections.

"It's disappointing, but it's only temporary," Plattsburgh-North Country Chamber of Commerce president Garry Douglas said of the job losses.

Douglas said some of the area's small businesses likely have cut jobs, but so far none of the North Country's major employers aside from Wyeth have done so.

He also pointed to some developments -- including a bus manufacturer's plan to build an assembly plant expected to employ about 300 people in Plattsburgh by 2011 -- as reasons to be optimistic.

Like Douglas, coffee shop owner Kris Duus remains upbeat even as several shops and buildings along Rouses Point's small main strip sit vacant.

Locals and the additional border patrol staff make up most of her shop's business, she said.

"It's a very walkable downtown, and that helps," said Duus, who opened the shop a little over a year ago.

------

On the Web: The state Labor Department, http://www.labor.state.ny.us

"Home sales remain at low levels"

November 24, 2008 at 10:45 am by Chris Churchill, Business writer, Albany, New York Times Union

Amid fears of a deepening national real estate recession, the Capital Region’s residential real estate market remained slow in October, with the overall number of single-family home sales down 16 percent from a year ago in the 11-county area covered by the Greater Capital Association of Realtors Inc.

In October 2007, there were 909 closed residential sales.

This year, there were 760, according to numbers released this morning by the association.

Median sale prices in the region were down a bit, compared to the prior year, with the average October price falling from $190,000 in 2007 to $189,700 this year.

In Albany County in October, closed sales fell 17 percent while the median price increased by 1 percent, to $196,800.

Schenectady County saw big declines in October, with closed sales falling 20 percent and the median sale price declining 4 percent to $168,578, compared to the prior year.

In Saratoga County, closed sales sank by 10 percent while the median price declined 1 percent to $252,200.

And in Rensselaer County, closed sales fell 4 percent, year over year, while the median price dipped 1 percent to $178,000.

The numbers include only single-family home sales made by real estate agents who are members of GCAR.

They do not include condominiums and multifamily housing, or “for sale by owner” homes and person-to-person transactions.

As poor as the Capital Region’s numbers are, they compare favorably with the national picture.

The National Association of Realtors released dismal statistics today, reporting that the October median sale price fell by the most on record, leading to fears that the nation is entering a deep housing recession.

The national median price fell a staggering 11.3 percent to $183,000, the largest year-over-year decline since the NAR began keeping such records in 1968.

Purchases of existing homes nationally fell 3.1 percent.

In a press release that accompanied the statistics, GCAR stressed the difference between the local and national markets, and repeated its belief that the Capital Region housing market is weathering the economic storm better than other areas.

“But it’s the other parts of the country that get the media’s attention, when it should be our market and others like it that are put in the national spotlight,” said James Ader, chief executive of the association.

“Bad news is often a self-fulfilling prophecy."

"Let’s broadcast the good news as well.”

WE ARE STUCK WITH A BUNCH OF SPOILED LITTLE CHILDREN IN POWER IN GOVERNMENT UP HERE ...

"County budget spurs dispute - Rensselaer lawmakers accuse each other of playing politics"

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

First published in print: Monday, November 24, 2008

TROY — Rensselaer County's proposed 2009 budget continues to be a political battleground for Republican and Democratic county legislators.

While the Republican majority is backing fellow Republican County Executive Kathleen Jimino's tentative $287.7 million budget, the Democratic minority finds fault with the way it was put together and its take on tax rates.

"They keep saying there's no tax increase when people are paying more,'' said Legislator Flora Fasoldt, D-Sand Lake.

"Under the county executive's proposed budget, Troy taxpayers will suffer the highest tax increase in the county, 13%, all the while being assured that there's no increase in the tax rate,'' Legislator Peter Grimm, D-Troy, said.

Jimino's proposed budget keeps the county tax rate at $5.23 per $1,000 of true assessed value.

The tax rate in each community varies based on differences in equalization rates and assessments.

"It is pretty clear the Democrats are playing politics with the tax rate and trying to confuse residents because of the problems their party is having dealing with state fiscal issues,'' legislator Richard Salisbury, R-Schaghticoke, vice chairman for finance.

"The Democrats themselves have acknowledged the county property tax rate is not increasing, and they know equalization and assessment rates are set by the state,'' Salisbury said.

The Republicans and Democrats have each issued reports on the budget.

A public budget hearing will be held at 5:30 tonight in the County Legislature chambers.

The Republican report concurred with Jimino's budget and stressed the expense of dealing with unfunded state mandates.

Fasoldt said the Democrats came up with numerous recommendations to trim the budget.

"We did a really thorough look at the budget,'' Fasoldt said.

The Democratic report recommended imposing a 0.9 percent spending cut on all departments; rescinding pay raises for elected officials adopted in 2006; forming a committee to reduce the size of the legislature; selling county-owned property; using the surplus to end year-end borrowing; eliminating new, non-mandated positions; and other changes.

"The budget report and recommendations submitted by the minority legislators show either a complete failure on their part to understand budgeting or an attempt to play politics with the sound fiscal footing we currently stand on,'' said Stacey Farrar, the county budget director.

Fasoldt said that everything that the minority does is being unnecessarily politicized by the Republicans.

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

"DiNapoli predicts heavy job losses - Two-year forecast finds Capital Region could get off relatively easy as state loses 225,000 jobs"

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

First published in print: Tuesday, November 25, 2008

Wall Street's collapse could cost the Empire State an estimated 225,000 jobs during the next two years, Comptroller Thomas DiNapoli said on Monday.

That's even gloomier than Gov. David Paterson's prediction last month that 160,000 jobs would disappear during the next two years — although Matt Anderson, a spokesman for the governor's budget office, said their numbers will be updated next month when they propose the 2009-2010 budget.

Due to the global credit crisis, a number of investment banking firms have moved to become regulated banks, which means that the era of mega-bonuses and stratospheric salaries — and the state tax receipts that go with them — is drawing to a close.

Historically, Wall Street has generated 20 percent of state revenues.

Much of the job loss is focused downstate, with New York City expected to lose 175,000 of the 225,000 jobs, DiNapoli said during a conference call.

"The farther away you get from downstate, the less of an impact,'' he said.

So far, the Capital Region has dodged the worst of the economic crisis hitting New York City and other parts of the nation.

That's thanks to the region's role as a center for government, higher education and health care, noted Leif Engstrom, a program manager at the Capital District Regional Planning Commission.

"We have a very stable economy."

"We don't experience the highs and we don't experience the lows,'' said Engstrom.

If tax revenues continue to sag, however, the region could suffer from government spending cutbacks.

The securities industry has already lost more than 16,000 jobs in New York City and could shed a total of 38,000 by October 2009, DiNapoli said.

That translates into the loss of $6.5 billion in tax revenue over the next two years.

"We know that Wall Street is going to look different from before we went into this," said DiNapoli.

While a shrunken Wall Street may mean lower tax receipts in future years, DiNapoli said it also may ease the boom-and-bust cycles that state coffers have been subject to.

"The stability may not be such a bad thing," he said.

DiNapoli's findings also exceeded New York City Comptroller William Thompson Jr.'s earlier prediction that the city would lose 165,000 jobs in the next two years.

"We are confirming what everybody knows,'' DiNapoli said.

The comptroller joined the chorus of Capitol observers and pundits who decried lawmakers' failure last Tuesday to act on Paterson's call to cut $2 billion from this year's budget.

"It certainly, from my point of view, was a lost opportunity," said DiNapoli, who like Paterson and others said New York state and city may need federal help to get out of the current budget mess.

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

"Files of North Greenbush officials ordered opened"

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

Last updated: 4:33 p.m., Tuesday, November 25, 2008

TROY -- Files of an investigation of possible criminal wrongdoing of a former North Greenbush town attorney and a planning board member were ordered open for review this morning in a federal lawsuit brought by them against the town and others.

In June 2006, former town attorney Linda Mandel-Clemente and planning board member Jim Reid faced misdemeanor charges of attempted petit larceny for removing 17 boxes of litigation files from offices of the town attorney.

On Dec. 31, 2005, Town Clerk Kathryn Connolly said she was in Town Hall setting up for a swearing-in ceremony after the election that toppled Republican Supervisor Paul Tazbir.

Connolly said she saw Mandel-Clemente, who was a planning board member and a former town attorney during the Tazbir administration, and Reid, who also served on the planning board at the same time, removing boxes from Town Hall, leaving incoming Supervisor Mark Evers with no records of legal matters involving the town during the previous administration.

Connolly called town police, who followed the group to Mandel-Clemente's office and seized the boxes as well as other town documents she already had at her private office.

The case against Mandel-Clemente and Reid was later adjourned in contemplation of dismissal and the investigative records sealed.

The pair then filed a federal lawsuit against the town and others claiming, among other things, that they did nothing wrong and the criminal charges were drummed up to defame them.

A lawyer for the respondents named in that on-going lawsuit, which include town and other officials, asked County Judge Robert Jacon Tuesday to unseal investigative records and grand jury minutes pertaining to the case.

A grand jury heard evidence but the pair were never formally indicted.

"Ms. Clemente is alleging that false information provided by my clients led to the charges against her and violated her civil rights," Claudia Ryan, attorney for the respondents, told Jacon.

"'We need access to the records to properly defend our clients."

No one representing the plaintiffs appeared in court to argue against the motion.

Jacon then granted access to investigative records but denied access to the grand jury minutes, which are deemed secret.

"You have not made the burden of proof to open grand jury minutes," Jacon told Ryan.

"But if, during your discovery, you come upon something that would change my mind, you can refile the motion."

"Bruno probe sees a flurry - Federal prosecutors said to have sent out several subpoenas recently"

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

First published in print: Saturday, November 29, 2008

ALBANY - Federal investigators pursuing a criminal probe of former Senate Majority Leader Joseph Bruno have called people familiar with details of his activities to testify before a grand jury here in recent weeks.

The actions of the United States Attorney for the Northern District's office suggested to at least one of the parties subpoenaed that prosecutors in the roughly three-year-old case are authenticating documents produced by witnesses for the FBI.

Several subpoenas were issued in recent weeks and shortly before the November elections, according to recipients and people close to individuals receiving the orders, which required secret testimony at the U.S. Courthouse in Albany.

Jack Werk, a thoroughbred horse expert from California, said Friday he flew here in September to testify.

He said his request to appear before the grand jury came more than a year after he produced documents and other information for the federal probe.

He declined to discuss his testimony.

He has told the Times Union previously that he prepared an analysis for a proposed thoroughbred horse transaction involving Bruno and former New York Racing Association trustee Earle Mack, an avid horseman whose wealth grew from downstate real estate holdings.

Mack sold Bruno two breeding mares for Bruno's breeding business in Brunswick.

Offspring later sold well above the sums Bruno paid for the mares.

Mack purchased one of the yearlings.

Also, lobbyists and former public officials have been called to testify, according to people close to those witnesses.

Paul Holstein, a spokesman for the FBI, said his office would have no comment.

Bruno's lawyer, William Dreyer, did not respond to a message left at his office.

Bruno has said he has done nothing wrong.

A person familiar with the probe said it appears the federal government is building toward a climax in the case.

Mack had secured Werk to write a letter confirming that the sale of the mares to Bruno was fair to the buyer.

A previous subpoena to Werk showed the FBI's broad interest in horse deals involving Bruno and his friends dating to Jan. 1, 2001.

Documentation sought from Werk involved 15 related people, business entities or horses, including Bruno and his breeding farm.

Those named include Bruno associate Jared Abbruzzese and his partner Wayne Barr, both of whom are Capital Region businessmen and thoroughbred owners.

Barr was a Bruno appointee on the New York Racing Association board until last year.

He had replaced Mack as an NYRA trustee.

Bruno had also appointed Mack.

The subpoena also sought information about: Bazaguma, a partnership controlled by Abbruzzese and named after his four children; Weatherwatch Farm and Weatherwatch Equine Training Center, which are owned by Abbruzzese or his wife, Sherrie; Jerry Bilinski, Bruno's close friend and a veterinarian from Columbia County; Bilinski's Equine Medical Center in North Chatham; Barr's Willow Rock Stables; Mack and Mack's Rising Son Farm; Ladies Night In and You're The Top, the two mares Bruno got from Mack.

The federal investigation involves many aspects of Bruno's public and private life.

The former Republican leader, now leading a consulting company in Latham and registered as a lobbyist, had operated his own consulting business, served a Connecticut investment house and bred horses during his tenure in the state Senate.

Besides the horse transactions, federal prosecutors have been interested in union funds from New York labor groups invested with Wright Investors Service of Milford, Conn., a firm that employed the senator for more than a decade.

The probe has also looked at land deals involving Bruno and economic development grants he arranged.

In July, Bruno stepped down from the Senate after 32 years in office.

James M. Odato can be reached at jodato@timesunion.com or 454 5083.

"Future uncertain for MTI MicroFuel Cells - Company says it can fund operations only through January"

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

First published in print: Saturday, November 29, 2008

COLONIE — The future of MTI MicroFuel Cells Inc. may be decided in the next few months.

The Colonie-based company, a subsidiary of Mechanical Technology Inc., recently told shareholders in a regulatory filing that it has "adequate resources" to fund its operations only through the end of January.

MTI Micro is developing a line of small fuel cells, named Mobion, for handheld electronic devices such as cell phones and digital cameras.

The company, which has received funding from Samsung, is hoping to commercialize Mobion by next year.

Parent company MTI has had trouble raising money to support that commercial launch.

And the company's stock holdings in another local fuel cell company, Plug Power Inc., have dropped in value with the market's sharp decline.

MTI uses the sale of Plug shares to fund its operations.

Although MTI Micro has not started producing revenue yet, another division called MTI Instruments sells high-end test and measurement devices and brings the company revenue.

MTI noted in a Nov. 14 Securities and Exchange Commission filing that it had $3.44 million in cash and marketable securities as of Sept. 30, enough to get the company through to the end of 2009 as long as it stops advancing funds to the fuel cell division.

In the meantime, MTI Micro will be looking to either further reduce its expenses or get government or stock market funding. Under the current economic climate, both sources could prove difficult.

However, Walter Robb, an MTI board member and significant investor in the company who also recently provided the company with additional funding, said MTI Micro will be fine.

He said that the SEC filing was extremely conservative.

"It isn't quite that bad," he said Monday.

He rejected any notion that the company was in jeopardy of going out of business early next year.

"No, absolutely not," he said.

"We've cut the burn rate."

MTI Chief Executive Officer Peng Lim could not be reached for comment.

However on Tuesday, MTI Micro issued a press release touting Mobion, saying it was able to achieve 5,500 hours of continuous operation in lab testing and that the company had filed its 110th patent for Mobion.

MTI, which has offices and research and development for its fuel cell business on New Karner Road in Colonie, has been cutting jobs in an effort to reduce expenses.

It eliminated 29 jobs in September after previously employing more than 100 between its Colonie location and the MTI Instruments office and assembly lines in Albany.

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

"Probe tied to Bruno nears an end - Charges possible; ex-state Senate majority leader has said he's confident no laws were violated"

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

First published in print: Sunday, December 7, 2008

ALBANY – Federal criminal charges are being contemplated in connection with an exhaustive FBI investigation surrounding the business dealings of former Senate Majority Leader Joseph L. Bruno.

It's not known whether Bruno, 79, of Brunswick, will, in the end, be charged in connection with the federal grand jury probe.

However, in interviews over the last two weeks, three people familiar with the investigation said federal prosecutors are wrapping up their case and that charges may be filed.

If no charges are handed up, Bruno could receive a letter from the Justice Department clearing his name.

Bruno has never been publicly identified as a target of the investigation.

Bruno and his attorney, William Dreyer of Albany, a former federal prosecutor with experience in white-collar crime defense, did not respond to requests for comment made through Dreyer's office.

Officials for the FBI and the U.S. Attorney's office both declined to comment.

Copies of some of the subpoenas, and interviews with witnesses who have testified before the grand jury, show the criminal investigation has been broad.

The investigation has drilled deeply into Bruno's real-estate dealings, investments, political decision-making, his ownership and breeding of thoroughbred horses, his ties to labor unions, and his work as a business consultant for an unknown number of private clients, including a Connecticut investment firm, according to interviews with people close to the case and copies of subpoenas obtained by the Times Union.

Bruno abruptly resigned from that firm, Wright Investors Service of Milford, Conn., last year.

He has declined to disclose how much he was paid as their consultant over an approximately 10-year period.

Still, the FBI has continued to look closely at Bruno's role in helping Wright secure contracts for investments from New York labor union pension and benefit funds.

In September, several New York labor union officials were summoned before the federal grand jury in Albany and peppered with questions about their interaction with Bruno as it related to Wright Investors.

Their appearances were part of a flurry of grand jury testimony before the federal panel over the past four months, including as recently as Friday.

''They wanted to know did Bruno recommend them (Wright) and did he disclose that he had an interest,'' an attorney for some of the labor officials, who testified before the panel in September, said.

''He didn't disclose his interest, but he didn't really push."

"He put in a word for them the same way you might recommend someone try a restaurant.''

The investigation began three years ago, when FBI agents from a white-collar crime unit in Albany began examining a series of private jet flights provided to Bruno by people with whom he did business both politically and privately, a source close to the case said.

The chartered jet flights, in some cases worth thousands of dollars per hour, ferried Bruno to private vacations in South Florida, political fund-raisers, government functions and at least once to Kentucky horse country.

The FBI's interest in the flights was triggered, in part, by a related inquiry by the state's now-defunct lobbying commission, according to a source familiar with the investigation.

The FBI's examination quickly expanded and agents began sifting through bank records related to a private consulting firm Bruno ran from his Brunswick home.

At least one of Bruno's consulting customers included Loudonville resident Jared Abbruzzese, a wealthy businessman and horse racing enthusiast who also was behind a consortium that had vied to manage three of New York's storied but financially troubled horse racing tracks, including Saratoga.

Abbruzzese, a close friend of Bruno's, bankrolled some of the jet flights, and his name also was listed in federal grand jury subpoenas that have been sent out over the past two years in the probe.

Other horse racing enthusiasts and associates of Bruno's were listed in the subpoenas, which sought business records dating to January 2001.

The former senator, now CEO for a Latham-based technology firm, CMA Consulting Services, has declined to disclose his income or clients of his home-based private business, Capital Business Consultants.

Bruno also has declined to say whether any of his private clients had an interest in state government contracts or funding.

The impending conclusion of the 3-year-old investigation has stoked some speculation in federal law enforcement circles that the timing may be tied to next month's change of administration in Washington, D.C., as the Bush era ends and President-elect Barack Obama revamps the Justice Department's leadership.

Glenn T. Suddaby was the U.S. Attorney in New York's Northern District for most of the investigation.

Suddaby recently was appointed a federal judge and his Justice Department post was filled by acting U.S. Attorney Andrew T. Baxter.

A source briefed on the investigation previously told the Times Union the FBI was building a case around the ''honest services'' provision of federal statutes, a one-sentence amendment Congress inserted into federal law 20 years ago to close a loophole in its laws defining mail fraud and wire fraud.

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

Five months ago, Bruno resigned from the Senate seat he held since 1976.

To many, he left a legacy as an iconic Capital Region politician who rose from an impoverished childhood to become one of the three most powerful elected officials in state government.

Yet over the past two years Bruno, a Korean War veteran who gained a reputation in the Senate as a hard-nosed fighter, has been dogged by the FBI probe.

His former political aides were defensive at times when asked about the investigation, including Bruno's use of private jets.

Bruno has repeatedly said he has done nothing wrong.

Two years ago, Bruno publicly acknowledged the FBI probe in a hastily called news conference at the Capitol after reporters began asking questions about it.

He said he was not a target, that it involved his outside business dealings and that he was cooperating fully.

Then, before leaving public office five months ago, he again said he was not concerned by the grand jury investigation and that he's done nothing wrong.

''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,'' Bruno said in July.

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

"Yes, that would be very, very nice.''

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

"AMD stake in Foundry Co. shrinks"

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

Last updated: 11:11 a.m., Monday, December 8, 2008

Advanced Micro Devices Inc. said this morning it now will have a smaller stake in the new joint venture being created to operate its chip-making factories.

Under the amendments, it will own 34.2 percent of the joint venture, known as The Foundry Co., while Advanced Technology Investment Co. of Abu Dhabi will own 65.8 percent.

Previously, AMD was to own 44.4 percent of the company, under a deal reached in early October.

The change in ownership share results from a decline in the value of the assets that AMD is contributing to the venture.

AMD is contributing its factories in Dresden, Germany, as well as its planned chip fab in Malta, Saratoga County.

ATIC will still invest $2.1 billion for its stake in the venture, $1.4 billion of that going to the venture and the remaining $700 million to AMD.

AMD and ATIC will continue to have equal voting rights in the spinoff.

"NY gov seeks redistribution of Medicaid spending"

By VALERIE BAUMAN, Associated Press

Last updated: 5:05 p.m., Monday, December 8, 2008

ALBANY -- New York state health officials say Gov. David Paterson's budget plan for next year will include moving more funding and patients to less expensive outpatient care instead of long-term hospital stays.

New York Health Commissioner Dr. Richard Daines said the proposal will help prevent serious illness by promoting preventive care and discouraging unnecessary, expensive hospitalizations and emergency room visits.

The changes would also expand access to care for New Yorkers, encouraging more clinics to remain open longer and on weekends to serve the working poor who can't afford to take time off work, he said.

Paterson's proposal would also cut Medicaid spending to hospitals, nursing homes and pharmacies.

New York spends $2,283 per patient on Medicaid -- more than any other state in the country and more than twice the national average of $1,026.

But it wouldn't cut eligibility or coverage.

It would change the Medicaid payment system to reimburse physicians and hospitals based on the care a patient needed and the severity of the problem.

Some hospitals oppose the timing of the changes, saying they can't afford additional cuts, or shifts in reimbursement during the current fiscal crisis.

"You don't go out and fix the roof in the middle of a hurricane," said William Van Slyke, a spokesman for the Healthcare Association of New York State.

But health officials said the changes are more urgent now than ever.

"A real reform works in a time of crisis," Daines said.

"If you call it reform but it only works when you've got a lot more money flowing into the system, it's really not reform -- it's spending more money."

New York started in this direction in 2007 under former Gov. Eliot Spitzer, redirecting about $154 million in inpatient care spending to primary care reimbursement.

The exact numbers for the next fiscal year's redirected funds are still being negotiated by the state Division of Budget.

The governor plans to allocate nearly $100 million to help hospitals provide more ambulatory treatment.

Daines said New York spends too much on inpatient care and too little on outpatient and preventive care.

It's forced some outpatient clinics to close because it's more profitable to deal with long-term care patients.

The Interfaith Medical Center in Brooklyn closed five outpatient clinics in 2004 for various reasons, including the reimbursement structure of Medicaid.

"The cost of running the clinics far outweighed the reimbursement for the outpatient services," said Ebone McIntosh, vice president of hospital administration.

Advocates argue the disincentives resulted in unnecessary illnesses because things that could have been prevented -- like diabetes -- are not addressed early on.

"If you want to get people into the system earlier before they need intensive inpatient care, they have to shift where the money is," said Arthur Levin, executive director of the Center for Medical Consumers.

New York officials are still seeking help from the federal government, but health officials say that doesn't preclude the need for tough decisions.

------

On the Net: http://www.health.state.ny.us/health--care/medicaid/

"Rensselaer County budget passed - Legislature spars over $287.7M plan, rising costs; tax rate the same"

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

First published in print: Tuesday, December 2, 2008

TROY — In a 12-6 party line vote Monday night, the Rensselaer County Legislature approved a $287.7 million county budget for 2009.

The Republican majority and Democratic minority continued sparring over the budget originally presented by County Executive Kathleen Jimino in October until they voted.

"I don't envy the minority for the task of attempting to punch holes in it."

"This is a budget that increases spending less than 1 percent,'' Legislature Chairman Neil Kelleher, R-Troy, said.

The approved budget maintains the county tax rate at $5.23 per $1,000 of true assessed value.

A home assessed at $100,000 will have a county tax bill of $523.

The Democrats took issue with this since the budget was introduced.

Minority Leader Virginia O'Brien, D-East Greenbush, said the tax levy, which goes to $54.6 million in 2009 from $51.7 million, is a better indicator of the monetary impact on county taxpayers.

"There are a lot of signs we're in a weakening economy,'' O'Brien said.

"What we need to show is fiscal discipline."

"I don't think we're doing that.''

The Democrats introduced a resolution to trim the tax levy by 1.5 percent, or $657,313, by cutting the county Legislature's chamber repair fund by $650,000 and eliminating $7,313 in raises for three of Jimino's staff.

This was defeated in the Rules Committee.

Jimino issued a statement after the vote saying, "I commend the Legislators who supported this budget that calls for no increase (in the tax rate) but relies on ... efforts to attract families and business that grow the county's tax base and offset the ever increasing cost burden of state and federal mandates.''

"Paterson asks Cuomo to look into judicial nominations - Lack of diversity cited by governor in list for new chief judge"

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

Last updated: 12:51 p.m., Wednesday, December 3, 2008

Gov. David Paterson has asked Attorney General Andrew Cuomo to examine whether or not he's legally obligated to select the next chief judge of the New York Court of Appeals from a list that he finds insufficiently diverse.

Paterson has expressed his displeasure that the list, compiled by the Commission on Judicial Nomination, includes no women and only one member of a minority.

The current chief judge, Judith Kaye, will retire at the end of the month.

The nomination process for state Court of Appeals chief judge is starting to morph into a political battle.

On Monday, the governor's aides said they were exploring options for coping with the list, such as requesting more names from the nominating committee, which is bipartisan but headed by former Pataki confidant John O'Mara.

At the same time, state Senate Democrats — who are about to take control of the chamber next month and who have been at a retreat in Saratoga Springs to lay out political and fund-raising strategies for next year — are starting to complain about the nominations as well.

"I am profoundly distressed by the list of candidates recommended by the Committee on Judicial Nomination," said Sen. Ruth Hassell-Thompson, ranking Democrat on the Senate Judiciary Committee, in a statement.

"Without impeaching the qualifications of those on the list, I find it incomprehensible that not a single woman, nor a single Latino candidate appears on the list."

The nomination controversy has ramifications for the lingering question of how a handful of rebellious senators will vote to elect the chamber's leadership.

Those senators — Pedro Espada, Ruben Diaz Sr. and Carl Kruger — have made the lack of Latinos in leadership positions throughout the state a major component of their unwillingness to express support for current Senate Minority Leader Malcolm Smith.

"Plan for AMD plant clears hurdle - Approval to transfer state incentives gets OK from state board"

By ERIC ANDERSON, Deputy Business Editor, Albany, New York Times Union

First published in print: Tuesday, December 2, 2008

The plan to build a $4.6 billion semiconductor fabrication plant in Saratoga County cleared another hurdle Monday when the board of the Empire State Development Corp. unanimously approved the transfer of $1.2 billion in state incentives from Advanced Micro Devices Inc. to a joint partnership between AMD and the Emirate of Abu Dhabi.

AMD is spinning off its manufacturing operations to the new entity, which has been temporarily dubbed The Foundry Co.

The package of incentives was first granted in 2006.

The plant is planned for Luther Forest Technology Campus in Malta.

The project will be the focus of a public hearing Dec. 10 at 1 p.m. at the Technology Campus.

After that, the state Public Authorities Control Board also must approve the transfer.

A spokeswoman for the state comptroller's office could not say Monday whether the control board might consider the transfer at its next meeting, scheduled for Dec. 17.

The package of incentives includes $650 million in cash.

Abu Dhabi is providing $7.2 billion to the joint venture, and plans for the factory have begun moving ahead.

The Foundry Co. also will operate existing AMD chip factories in Dresden, Germany.

AMD has struggled to make money, losing $5.6 billion over the past two years, according to an Associated Press report.

Last month, it said it would cut 500 jobs, or 3 percent of its global work force.

AMD was slated to open an office by Monday at the Saratoga Technology & Energy Park in Malta that would occupy 9,000 square feet and initially employ a dozen people.

The park is adjacent to Luther Forest.

Efforts to reach AMD for comment on Monday were not successful.

"Flood of unemployment claims jams state call centers - State adding staff to deal with deluge of jobless claims"

By PAUL GRONDAHL, Staff writer, Albany, New York Times Union

Last updated: 3:09 p.m., Tuesday, December 9, 2008

ALBANY — An endless busy signal is often the final indignity for the newly unemployed.

Laid-off New Yorkers who have faced days and even weeks of frustration trying unsuccessfully to reach a claims representative on the phone to discuss their unemployment claim may find some relief soon.

State labor officials, swamped by an unprecedented deluge of calls in November, are scrambling to alleviate long delays by doubling the number of claims reps at its two call centers.

They're also going to extend hours.

"It's no secret the surge of calls has led to long, frustrating wait times," said Leo Rosales, a spokesman at the state Department of Labor.

"We've received complaints and we're responding to them," Rosales said.

"This is our top priority."

The state labor department currently employs 156 claims reps at its call centers in Troy and Endicott, Broome County.

They received 826,000 calls about unemployment insurance claims last month, compared to 322,000 in November, 2007.

The department plans to hire 150 more claims reps by the end of this month and four weeks of training has been cut to two to speed up the process.

Each claims reps handles 40-50 calls per day and spends on average of eight minutes with each caller.

"It's a very tough job because the callers are frustrated and distraught over being unemployed with the holidays coming up," Rosales said.

In an attempt to help ease long delays, the call centers' current weekday hours from 8 a.m. to 5 p.m. will be extended, by adding hours in the evening and perhaps by opening on Saturdays.

The amount of additional hours will depend on the department's ability to re-allocate scarce federal funding from other areas.

This recent spike in claims hadn't been seen in the state since just after the 9/11 terrorist attacks.

Since 2001, U.S. Dept. of Labor funding has been cut steadily and New York has responded by trimming 30 percent of its claims reps.

Nationally, 533,000 jobs were lost last month, the most in three decades, and the national unemployment rate rose to a 15-year high of 6.7 percent.

New York's unemployment rate was 5.7 percent in October, compared to 4.6 percent in October, 2007.

Forecasts are for the state's unemployment rate to climb above 6 percent by the end of this year and possibly much higher in 2009.

Congress approved a seven-week extension of emergency unemployment benefits, starting Nov. 30.

It's not necessary to file a new claim to collect that.

Athough it has 30 regional offices, the state labor department has done away with having people wait in lines to file unemployment insurance claims.

It now directs everyone to its Web site to file a claim online.

If a person needs help or has an unanswered question, he or she is directed to the toll-free call center.

That's where the long delays have come.

Paul Grondahl can be reached at 454-5623 or by e-mail at pgrondahl@timesunion.com.

"MapInfo cutting jobs"

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

Last updated: 2:16 p.m., Wednesday, December 10, 2008

Pitney Bowes MapInfo, based in Rensselaer Technology Park in North Greenbush, is cutting 128 jobs worldwide, including some in the Capital Region.

The company said today employees were notified of the cuts Monday.

Some were immediate, while other positions will be phased out over coming weeks, spokesman Matt Broder said.

About 10 percent of the job cuts came in North Greenbush.

The cuts are permanent.

Broder blamed the economic slump for the move.

"There is a bit of a business pulllback going on," he said.

"The business climate is obviously very challenging for a whole range" of businesses.

Pitney Bowes MapInfo produces what it calls location intelligence software that might be used, for example, to determine an optimal location for supermarket or retail store.

The reductions represent about 8 percent of Pitney Bowes MapInfo's 1,600 employees.

About 300 are local, as part of an overall Pitney Bowes work force of 450 in the Capital Region.

"Indictment: Former justice Spargo solicited $10,000"

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

First published in print: Thursday, December 11, 2008

ALBANY — A former state Supreme Court justice from Albany County was indicted Wednesday by a federal grand jury on attempted extortion and bribery charges in connection with a scandal that led to his removal from the bench two years ago.

The felony indictment alleges that Thomas J. Spargo, 65, of East Berne, pressured an Ulster County attorney who had cases before him to give Spargo $10,000.

The money, solicited in 2003, was intended to help defray Spargo's legal bills in connection with a state judicial panel's years-long effort to have him removed from the bench, records show.

"The indictment further charges that Spargo solicited the money by causing the attorney to fear that Spargo would use his official acts and influence to harm the attorney if he was not paid and, conversely, to help the attorney if he was paid," states an FBI release announcing the indictment.

The investigation of Spargo was first publicly disclosed by the Times Union in Wednesday's editions.

The case is being handled by the Justice Department's Public Integrity Section in Washington, D.C., and the FBI's Albany division.

"This case should demonstrate that the FBI will pursue all allegations of judicial corruption vigorously, as public corruption violations are among the most serious of all criminal conduct and can tear at the fabric of a democratic society," said John F. Pikus, special agent in charge of the Albany division, in a prepared statement.

It's unclear why the case is being prosecuted by the Public Integrity Section of the U.S. Department of Justice rather than by federal prosecutors with New York's Northern District.

E. Stewart Jones, Spargo's attorney, could not be reached for comment.

Late Tuesday, Jones had declined to comment on the investigation.

Spargo is scheduled to appear in U.S. District Court in Albany next week on the indictment.

In May 2006, Spargo, an attorney in private practice, was removed from the bench following an approximately three-year investigation by the state Commission on Judicial Conduct.

The Court of Appeals later affirmed the commission's determination that Spargo be removed.

The commission's probe centered on Spargo's alleged shakedown of at least one attorney; by the fall of 2003, Spargo's legal bills to fight a removal action against him had mounted to more than $140,000, records show.

Spargo, an expert in state election law, won an election for Berne town justice in the late 1999 and used the victory to buoy his successful bid for state Supreme Court in 2001.

His victory in that election was buttressed by a cross-endorsement from the Republican and Democratic parties, which secured his name on both lines in the seven counties of the Third Judicial District.

But Spargo's tenure on the bench almost immediately became clouded as the state judicial panel began examining a series of misconduct allegations.

The panel determined Spargo should be removed for doling out coupons for gas and coffee and buying drinks for voters during his 1999 campaign.

The panel determined this was an effort to "buy votes."

Another charge sustained by the commission is that Spargo, while sitting as a town court justice, had presided in cases involving the Albany County District Attorney's Office without publicly disclosing that then-District Attorney Paul Clyne had been his client in an election law case, and still owed him $10,000.

Still, "The commission's emphasis in removing Judge Spargo was on the money transactions, the attempt to get the lawyers to give him money," said Robert H. Tembeckjian, administrator and counsel for the Commission on Judical Conduct.

The two-page indictment handed up Wednesday does not identify the attorney Spargo is accused of attempting to extort a bribe.

But the judicial panel's files indicate Spargo explicitly pressured an attorney named Bruce Blatchly.

"While they were alone in chambers, respondent told Mr. Blatchly that the legal expenses associated with his litigation against the commission were rising, that he was going to be raising funds, and that he was looking for $30,000 from attorneys in Ulster County," the commission's 2006 report states.

"(Spargo) further told Mr. Blatchly that rather than solicit a number of lawyers for small contributions, he had decided to go to three attorneys who were often in court, Mr. Blatchly, Mr. (Alfred) Mainetti and Maureen Keegan, and that he would be asking for $10,000 from each of them," the report continued.

Spargo, a former counsel to the state Republican Party, came under scrutiny in the mid-1980s when as an attorney for the Pyramid Company development firm he allegedly funneled more than $750,000 into a Poughkeepsie Town Board race for candidates who were supportive of a shopping mall project.

Spargo invoked his Fifth Amendment right against self-incrimination during testimony before a state panel in that matter, and was never accused of wrongdoing.

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

"Deal for Senate control is in tatters - Malcolm Smith suspends negotiations with 'Gang of Three'"

Capitol bureau, Albany, New York Times Union

Last updated: 3:40 p.m., Wednesday, December 10, 2008

Less than a week after it was negotiated, the deal to secure Democratic control of the state Senate has fallen apart.

This morning, Senate Democratic Leader Malcolm Smith announced that he was suspending negotiations with the so-called "Gang of Three" — senators Carl Kruger and Ruben Diaz Sr. and Sen.-elect Pedro Espada.

" ... To do so otherwise would reduce our moral standing and the long-term Senate Democratic committment to reform and change," Smith said in a statement shortly after he, joined by Liz Krueger and Neil Breslin, announced the collapse of negotiations.

"We would rather wait two more years to take charge of the Senate than to simply serve the interest of the few."

"Throughout this process, Malcolm Smith has proved to be the not-ready-for-prime-time leader," Espada said.

"I will not sit in the room with him again unless he's got the total support of his own conference."

Since Election Day, the breakaway Democrats have threatened to withhold their support from Smith's leadership.

Last week's deal seemed to shore up his support by granting the three powerful posts in the new majority.

"Empire Zone reforms would require $12B from The Foundry Co."

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

Last updated: 12:50 p.m., Wednesday, December 17, 2008

The reforms call for Empire Zone participants to produce $20 in investments and wages for every $1 of state benefits.

That means the $600 million in zone benefits that The Foundry Co. would receive to build the semiconductor plant in Saratoga County would require it to spend $12 billion.

It wasn't clear how quickly the company would have to spend that money.

WE ARE NOW SPENDING OUR STATE TAX DOLLARS TO SUPPORT AN OIL-RICH ARAB EMIRATE ...

"Another state OK for AMD incentives"

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

Last updated: 3:25 p.m., Wednesday, December 17, 2008

The state's Public Authorities Control Board today approved the transfer of $650 million in cash promised to Advanced Micro Devices Inc. for a $4.6 billion computer chip factory in Saratoga County.

Now, the money will go to a joint venture between AMD and the Emirate of Abu Dhabi.

The PACB, a state oversight board that must approve such incentive packages, approved the spending two years ago.

But AMD, which has been suffering losses, decided to spin off its manufacturing and get a major investment from the oil-rich Persian Gulf city-state in order to strengthen its balance sheet and the project's prospects.

The $650 million is coming from Empire State Development Corp., the state's economic development unit.

The majority of the money -- $500 million -- will pay for construction of the fab building at the Luther Forest Technology Campus in Malta, while $150 million will be used for research and development of chip technology.

"Spargo's lawyer raps 'timing' - E. Stewart Jones says there's no truth in charges against former state judge"

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

First published in print: Wednesday, December 17, 2008

ALBANY – An attorney for Thomas J. Spargo, a former state Supreme Court justice who was removed from the bench two years ago, lashed out at federal authorities Tuesday for pursuing criminal charges against his client related to a scandal that took place five years ago.

Spargo, 65, an East Berne attorney who specializes in election law and once was counsel to the state Republican Party, appeared in U.S. District Court Tuesday for his arraignment on charges of attempted bribery and attempted extortion.

The two-count felony indictment was returned by a grand jury in Albany last week, just days before the statute of limitations was to expire.

The case centers on allegations that in December 2003 Spargo pressured an Ulster County attorney who had cases before him to donate $10,000 to a fund set up to defray Spargo's legal bills.

At the time, Spargo had run up a $140,000 tab from a years-long fight with the Commission on Judicial Conduct.

The state panel concluded Spargo had attempted to extort money from the attorney, and in 2006 it ruled he should be removed from the bench.

The Court of Appeals later affirmed the decision.

Spargo pleaded not guilty to the criminal charges Tuesday.

He declined to comment as he left court after being released on his own recognizance by U.S. Magistrate Judge George H. Lowe.

Before the brief proceeding, Spargo shook hands with two FBI agents and politely introduced himself to the government's trial attorney, M. Kendall Day.

Outside court, Spargo's attorney, E. Stewart Jones, who also represented Spargo during his four-year battle with the judicial commission, questioned why now.

''The timing of this is inexplicable, on the eve of the expiration of the statute of limitations, years after the decision by the Court of Appeals and the Commission on Judicial Conduct,'' Jones said.

''I don't understand it.''

Jones said they do not know why the case is being handled by the Justice Department's Public Integrity Section in Washington, D.C., rather than by federal prosecutors in New York's Northern District.

The Public Integrity Section, which was set up, in part, to investigate public corruption cases, was intended to be impervious to outside political influences.

It is the same division behind last summer's raid on the State Street offices of former state GOP Chairman William Powers, now a lobbyist.

That probe centers on the campaign and political dealings of former U.S. Rep. John Sweeney of Clifton Park, and includes an examination of Sweeney's ex-wife, Gaia "Gayle" Ford, who worked at Powers' State Street firm when Sweeney was a congressman.

Spargo and Powers know one another but it's unclear if the two investigations are connected.

A spokesman for the FBI in Albany did not respond to a request for comment.

''I find the entire process bizarre because it's begun here in the fall of 2008,'' Jones said.

''We are now facing federal charges that are brought by a governmental agency that has absolutely no connection to this case until now, and no connection to this district until now."

"But the bottom line is whoever has it doesn't have the facts, doesn't have the proof and doesn't have the truth.''

Spargo, a widely known attorney in Albany's political circles, began his rise to the bench when he won an election for Berne town justice in 1999.

Two years later, he received a coveted cross-party endorsement during a successful bid for a state Supreme Court post in Albany.

During his tenure Spargo presided over cases across the seven counties of the Third Judicial District.

Still, Spargo's tenure on the bench almost immediately became clouded as the state judicial panel began examining a series of misconduct allegations that dated to his initial campaign for town justice.

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