"SEC examining AMD's ties to Iran and Syria"

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

Last updated: 11:20 a.m., Wednesday, August 12, 2009

The Wall Street Journal first reported today that the Securities and Exchange Commission is investigating the possibility that Advanced Micro Devices Inc. is making computer chips for Iran and other Middle East companies that have ties to terrorism.

The story is based on a May 8 letter that the SEC sent to AMD, asking the company to clarify its business relationships with Iran, Syria and Sudan, all of which are identified as state sponsors of terrorism by the U.S. State Department.

That letter also mentions a December 2007 news report that talks about Iran using AMD chips to build a modest supercomputer.

An AMD spokesperson has not yet responded this morning to a Times Union inquiry into the letter.

AMD, of course, is one of the owners of GlobalFoundries Inc., the Sunnyvale, Calif., company building a $4.2 billion computer chip fab in Malta.

AMD is GlobalFoundries' largest customer, and it is possible that AMD chips would be made in Malta, although GlobalFoundries has been adding new customers.

The largest shareholder of GlobalFoundries is the Advanced Technology Investment Co., a government-run fund in Abu Dhabi.

"Senate coup participants raking it in - Espada's son gets $120K job with Senate majority; Hiram Monserrate gets new workers"

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

First published in print: Wednesday, August 12, 2009

ALBANY -- In the weeks since the Senate stalemate ended, the chamber's Democrats have showered rehabilitated turncoat Sens. Pedro Espada Jr. of the Bronx and Hiram Monserrate of Queens with hundreds of thousands of dollars in pay raises and new staff, including a newly created $120,000 job for Espada's son.

Pedro G. Espada, a former New York City councilman and state Assemblyman, took a position last week as deputy director of intergovernmental relations, a new position that will be based in the Senate's Manhattan offices.

Espada's hiring was approved by Democratic Conference Leader John Sampson, who is one of three senators with claim to the majority's leadership.

The other two are Senate President Pro Tempore Malcolm Smith and the elder Espada, who is Senate majority leader.

According to two Senate Democratic sources, Sen. Espada tried to hire his son directly, which would have been illegal.

A provision in the state's public officers law enacted in 2007 expressly forbids elected state officials from directly hiring family members.

The Senate Democratic leadership was informed of the legal conflict, but "it appears they found an alternative solution," the source said.

The law does not prohibit a family member from being hired by another senator or for another office.

A number of family relatives of Democratic and Republican senators work for the chamber.

Sampson spokeswoman Selvena Brooks said in a written statement that Espada's new position was part of the "leadership transition" in the Senate, and that "candidates have been interviewed for a number of positions, including for intergovernmental operations."

Espada's son was hired "based on his experience as a former legislator and private sector entrepreneur," said Brooks.

Espada vehemently denied that his son's new position was related to his return in the Democratic conference.

"This is not the result of a quid pro quo or a contingency to my ending the Senate stalemate," the senator said in a statement.

"If my son did not qualify for this position, he would not have gotten the job."

"He interviewed with Senate personnel and was hired by the Senate -- not by me -- on his own merits, qualifications, experience and background as a former public servant and successful entrepreneur," he said.

"He has been expressing a desire to return to government service in some capacity and saw this opportunity."

"I encouraged him to pursue it."

"That was the extent of my involvement."

"This wouldn't even be a story if it were someone else hired to the position."

"End of story," added Espada.

The hiring of Espada's son is only the latest in a string of new hires and staff raises for Espada and Monserrate, whose decision to join the Senate's 30 Republicans on June 8 kicked off a monthlong legislative stalemate.

Ultimately, both men returned to the Democratic fold.

Steve Pigeon, an Espada friend and one of the coup's architects, was hired as Espada's counsel effective July 9, the day Espada returned to the Democrats.

Pigeon, who formerly worked as a political operative for billionaire Tom Golisano, will receive an annual salary of $150,253, making him one of the most highly paid staffers in the Senate.

Several Monserrate staffers received significant raises: Edward Irizarry, his committee counsel, received a post-coup raise of $15,040 to boost his salary to $95,260; Constituent Liaison Roger Davila received a post-coup raise of $12,017, taking his annual pay to $49,118.

Monserrate was also able to take on new staff members.

On July 13, Silvia Miranda was hired to be Monserrate's office manager with a salary of $77,000.

Stanley Helivert was hired on July 27 as a tenant organizer with a $45,000 salary.

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

Wins of war

Sens. Pedro Espada Jr., at left, and Hiram Monserrate have reaped the spoils of their return to the Democratic conference.

Here's what each has received:

Espada:

Promoted to the position of Senate majority leader.

Given additional office space.

His son, Pedro G. Espada, was hired by the Senate to a newly created $120,000 job.

He hired friend and fellow coup conspirator Steve Pigeon as his $150,253 counsel.

Monserrate:

Reinstated as Chair of the Consumer Protection Committee. (Monserrate was stripped of the title after being indicted for allegedly slashing his girlfriend with a broken glass. He received its $12,500 stipend in July.)

Awarded staff raises and hired two new staffers, costing the state an estimated additional $150,000 a year.

"Senate Democrats hire 'irresponsible' aide, give him raise - Senate Democrats find job for man labeled 'irresponsible' in report"

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

First published in print: Thursday, August 13, 2009

ALBANY -- As part of a glut of hiring and salary raises enacted since the Senate coup, the chamber's Democrats hired a former Paterson aide who was fired earlier this year after the state Inspector General called him "immature," "irresponsible" and "ill-suited" to represent the governor.

Khari Edwards was hired on July 21 as "special assistant" to Senate Democratic Conference Leader John Sampson, pulling down an annual salary of $75,204.

Previous to his employment with the Senate, Edwards held a $70,000 job with the governor's office.

Khari was dismissed after Inspector General Joseph Fisch excoriated his conduct during an investigation of former Paterson aide Carl Andrews, who resigned last December after being accused of applying improper political influence over a State Liquor Authority vote on liquor licenses.

Edwards, who was Andrews' deputy, gave contradictory evidence to the IG about his contact with an SLA commissioner, conduct that Fisch called "improper and incompatible with his duties" in a report released on Feb. 21.

"Edwards did not testify truthfully to the Inspector General when questioned under oath regarding this communication."

"The Inspector General finds that Edwards is ill-suited to serve as a representative of the Governor's office, and recommends that his employment be terminated," said the IG report.

The report called into question Edwards' credibility as a witness:

"While Edwards is the primary source to explain his motivations, his changing and implausible testimony, all of which was fully investigated by the Inspector General, renders him incredible as a witness."

"Khari Edwards' testimony showed him to be immature and irresponsible."

"The Inspector General found Edwards devoid of any appreciation of the seriousness of the Inspector General's proceedings," continued Fisch.

Sampson spokeswoman Selvena Brooks defended the hiring.

"Khari Edwards was hired on the merits."

"He has learned from experience, and will make the most of the opportunity to again serve the people of New York," she said.

Other Senate Democratic staffers were dismayed by Edwards' employment with the Senate.

"Hiring someone that got the boot from the governor's office just confirms that the Senate is in a race to the bottom," said one staffer.

Edwards' job is one of many new positions and pay raises authorized by the three-member Senate Democratic leadership since the Senate coup, which will cost taxpayers more than half a million dollars in recurring annual costs.

Hires and pay raises authorized for Sampson, Senate President Pro Tempore Malcolm Smith and Senate Majority Leader Pedro Espada total $569,000.

But that sum does not include retroactive payments for backdated pay raises and new hires and pay raises for the staff of Sen. Hiram Monserrate, who briefly joined Espada in defecting to the GOP, setting off a month-long stalemate.

Those expenses add up to at least $100,000 in additional costs to taxpayers.

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

"Espada's son quits job"

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

First published in print: Thursday, August 13, 2009

ALBANY -- After two days of public scrutiny and a review by the state attorney general of his hiring, the son of Senate Majority Leader Pedro Espada Jr. has resigned from a newly created $120,000 job in the state Senate.

In a statement issued late Wednesday, Sen. Espada announced his son would leave the post today.

"Although his appointment was consistent with Senate hiring practices in the past, it doesn't mean these practices should continue," said Espada.

Espada's resignation was announced after Attorney General Andrew Cuomo's office began having conversations with Senate staff about Espada's hiring, according to a senior Cuomo aide.

Wednesday afternoon, Sen. Espada called Cuomo's office to inquire about the office's interpretation of a provision of the public officer's law that bans elected officials from hiring family members.

That law states:

"No statewide elected official, state officer or employee, member of the Legislature or legislative employee may participate in any decision to hire, promote, discipline or discharge a relative for any compensated position at, for, or within any state agency, public authority, or the Legislature."

The attorney general office's view was that if there was any involvement at all by Sen. Espada in the decision to hire his son then it would violate the law, said the senior staff member.

A Senate spokesman could not confirm whether Espada would be paid for days worked since his hiring last week.

But it appears that Espada's resignation will likely quell any ongoing investigation into the matter.

HARD ECONOMIC TIMES ARE HERE FOR THE COMMON FOLKS ....

AND AT THE SAME TIME, THESE FISCALLY PROFLIGATE DEMOCRATS ARE SPENDING PUBLIC MONEY LIKE THERE IS NO TOMARROW ...

THEY ARE EATING FROM THE PUBLIC TROUGH AND FEEDING THEIR SNOUTS WITH BOTH HANDS AT ONCE ....

THE DEMOCRAT LOOTERS ARE OUT IN FULL FORCE ...

AND THEY ARE GOING STICK IT TO THE NEW YORK STATE TAXPAPYERS AS FAST AND FURIOUS AS THEY CAN AS THEY GRAB THEIRS ...

And so ...

"Espada taps $350,000 - Senate Democrats OK hiring of loyalists from majority leader's nonprofit amid flap over son"

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

First published in print: Wednesday, August 19, 2009

ALBANY -- As Sen. Pedro Espada Jr. fended off scrutiny over his son's short-lived Senate job, the chamber's Democrat leaders authorized $350,000 in pay raises and new hires for their new majority leader.

The new hires include employees of Soundview Health Care Network, the Bronx nonprofit Espada founded and runs, as well as the son of a former Soundview executive who pleaded guilty to funneling state dollars to Espada's campaign.

In total, the Senate's Democratic leadership has authorized more than $500,000 in pay raises and new staff for Espada since he returned to the Democratic conference at the end of the chamber's June stalemate, according to payroll records from the state comptroller's office.

Among the new hires is Jerry Love Jr., the son of Sandra Love, a Soundview officer who in 2004 pleaded guilty to steering state funds intended for family care and AIDS treatment to Espada's political campaign.

Three other Soundview officials also pleaded guilty in that case.

In a separate trial in 2000, Espada, Sandra Love and another former Soundview official were acquitted of charges that they misappropriated money in 1996 from a health plan for low-income patients to pay off campaign expenses.

Jerry Love Jr. will be paid $40,100 as a special assistant to the housing committee, which Espada serves as chairman.

His mother remained on Soundview's payroll after pleading guilty, and is currently a clinic site manager.

Her son left Soundview effective Aug. 7, Espada said.

Also on the Senate payroll is Soundview general counsel Alexander Fear, who will be paid $35,096 as special counsel to the housing committee.

Earlier this spring, Fear served as designated spokesman for Green ECO Energy Inc. and Bronx Human Services Council Inc., two non-profit organizations that would have been the beneficiaries of $1.9 million in member item requests by Espada.

Senate leaders rejected the requests when it was discovered the newly created organizations were run by members of Espada's legislative and Soundview staffs.

Fear will no longer be employed full-time at Soundview, Espada said.

Fear joins a team of attorneys already under Espada's employ in the Senate.

Daniel Pagano is paid $50,136 annually to serve as part-time counsel; since January, Pagano has separately been representing Espada to resolve more than $75,000 in campaign fines levied by the New York City and state boards of election.

Steve Pigeon, the political operative credited with orchestrating the June 8 leadership coup, was hired as Espada counsel in July at an annual salary of $150,410.

Marzetta Harris, Soundview's marketing outreach coordinator, is paid $60,164 by the Senate to serve as outreach director, effective Aug. 6.

As a part-time $20,055 Senate employee for the first half of 2009, Harris carried out her legislative duties out of her Soundview office, according to a Senate source.

Harris has been a close ally to Espada for years, and worked for him when he was a New York City councilman.

Harris left the Soundview payroll effective Aug. 7, Espada said.

Legislative aide Curtis Tucker received a promotion and a $36,000 pay raise.

He will be paid $120,327 as director of legislative policy to the majority leader.

A Senate spokesman explained Tucker was previously collecting a state pension while receiving his $84,100 annual Senate salary.

Tucker temporarily resigned when he hit the $30,000 salary limit for pension recipients, and was subsequently reinstated, without his pension income, at the $120,327 salary "to make him whole," Espada spokesman Steve Mangione said.

Sigfredo Gonzalez has been hired for $30,082 to do community outreach.

Gonzalez traveled to Albany in June to rally in support of Espada during the Senate stalemate.

Onix Sosa has been hired as Espada's $60,164 deputy chief of staff; Bienvenido Toribio as a $50,137 education liaison; Maria Rodriguez as the $50,137 deputy director of outreach; and Yocasta Polanco as a $21,900 receptionist.

The Senate has added $514,371 in spending on Espada's personnel since the Senate stalemate ended.

But that is only half of the more than $1 million spent by Senate leaders on new staff and raises since the coup began June 8.

Espada explained the hiring is to staff his newly opened district office and to support his new duties as majority leader.

He insisted his newfound resources did not constitute a quid pro quo for his return to the Democrats.

"Adequately staffing the district office has nothing to do with the coup," Espada said in an e-mail.

"It has to do with being responsive to and serving the constituents of my district."

Hires and pay raises authorized for staff of the two other Democratic Senate leaders -- Conference Leader John Sampson and President Pro Tempore Malcolm Smith -- have cost an additional $419,000 in annual payroll costs.

That sum does not include retroactive payments for backdated pay raises and new hires.

Nor does it include pay raises for the staff of Sen. Hiram Monserrate, who briefly joined Espada in defecting to the GOP, setting off a month-long stalemate.

Those expenses add up to at least $100,000 in additional cost to taxpayers.

On Friday, Sampson announced all future staff appointments would be vetted by a committee of the Senate's top staff.

Espada's new staff was hired before the committee was created and a Senate spokesman could not say whether there will be a retroactive review.

The personnel changes have further damaged already dismal morale among Democratic Senate staffers since the stalemate.

"Leadership is supposed to lead the way, not look the other way, when poor decisions are being made," said one Senate Democratic staffer.

News Research Director Sarah Hinman contributed to this report. Staff writer Irene Jay Liu can be reached at 454-5081 or iliu@timesunion.com.

"Paterson says much criticism of him is based on (uh-oh) race"

August 21, 2009 at 3:14 pm by Casey Seiler

Albany, New York Times Union

In a radio interview with Daily News columnist Erroll Lewis, the governor said that much of the criticism of his performance and of similarly complexioned elected officials including Massachusetts Gov. Deval Patrick, President Barack Obama and state Senate leaders John Sampson and Malcolm Smith.

“We’re not in the post-racial period,” Paterson said.

” … The reality is the next victim on the list, and you can see it coming, is President Barack Obama, who did nothing more than trying to reform a health care system.”

http://blog.timesunion.com/capitol/archive...-on-uh-oh-race/

THE NEW YORK POST

"ALBANY, I GIVE UP - STATE GOVERNMENT HAS NEVER BEEN SO CLOWNISH, SO EVIL, SO IRRELEVANT"

By FREDRIC U. DICKER

Posted: 2:42 am

July 5, 2009

Having witnessed the anarchy, chaos and lack of leadership that has engulfed the state Capitol during the past month, I have a painful confession to make.

After three decades as a journalist covering state government, if I had to do it all over again, I'd find another job.

I've covered Govs. Hugh Carey, Mario Cuomo, George Pataki, Eliot Spitzer and David Paterson and for New York to wind up like this after 35 years of modern leadership, it's clear to me that my real job has been to chronicle the devolution -- the decay and decline -- of New York state.

We're going backwards, not forwards, and of late we've even been falling apart.

The Empire State -- once a beacon of progressive state government to the nation -- is on the brink of ruin.

And it doesn't look like anything can be done to stop it.

In two words: We're doomed.

Hapless Gov. Paterson and the street-fighting leaders of the state Senate have, as everyone knows, turned state government into a national laughingstock.

Within the Capitol itself, where knowledge of the disaster is more acute, the assessments are far harsher and more personally painful.

They are disbelief, disgust, and even despair.

I've had a dozen low- to mid-level staffers -- hallway cleaners, messengers, guards, sergeants at arms, researchers, and lawyers -- buttonhole me in recent days and, in a hushed voice, make comments such as, "I'm ashamed to work here,'' "I've given my life for this?'' and "I feel like I work for morons."

The GOP-led Senate coup attempt that began June 8 has paralyzed state government and transformed a Senate once known for a gentility and friendliness rooted in a rural upstate sensibility into a frighteningly unrecognizable doppelganger of the fisticuffs-prone South Korean parliament.

Under the Democratic control that began in January, the Senate's traditional civility gave way to a crude, rude, nasty and thuggish style that has long associated with late-night New York City community board meetings, or some outer borough Democratic caucuses.

The failed coup attempt has made it worse and the Senate today stands as not just a house divided between the two major parties but as a house divided within one of the major parties as three separate Democratic factions angrily and nastily battle for control.

The most glaring example of the thug-like behavior occurred on the Senate floor Wednesday as several burly, thick-necked men suddenly began flanking the podium in an apparent attempt by Democrats, who claim to control of the chamber, to block Republicans from rushing up.

The move was shocking because the Senate already has several professionally trained and experienced sergeants at arms, many retired state troopers, who do a fine job keeping order.

Several Democratic senators including Pedro Espada of the Bronx, John Sampson of Brooklyn and Malcolm Smith of Queens have also appeared with bullish bodyguards and other "body men'' for the first time ever.

One Democratic faction, loyal to Sampson, has begun spying on members of the faction loyal Smith, and even preparing reports on their activities.

Journalists like myself have always been granted free access to the Senate but two weeks ago Democrats sought to bar journalists from the chamber, only backing down in the face of the protests from several angry scribes.

During the long years of Republican control, the all-white GOP "conference" would regularly bemoan its lack of diversity, and make extra efforts to recruit minority Senate candidates and hire minority staff.

During the first five months of this year, with the Senate under the control of its first African-American majority leader, Smith, top Democrats bemoaned the lack of minority Senate staffers.

But instead of trying to recruit new hires, they fired nearly 200 almost exclusively white workers and replaced them with a large number of minority employees, many of whom were seen by their fellow workers to be unskilled at their new jobs.

The move produced severe racial tensions, made worse by the fact that, as a high-level Democratic staffer confided, "We've been told to only hire minorities.''

We have an accidental governor widely seen as weak and irrelevant and, in recent days, he's become a latter-day Chicken Little issuing false warnings of disaster as the June 30 deadline approached for the expiration of mayoral control of city schools.

Even members of his own Democratic Party didn't take the deadline serious and when it passed, no one could tell the difference.

Paterson has been publicly insulted in recent days by his fellow Democrats in a way no other governor ever was in recorded history, and he's refused to respond.

We saw the governor do flip-flops right before our eyes on a key issue related to the Senate dispute, confirming the now-common belief that his stands merely mirror the views of the last person he speaks with.

I first came to New York's magnificent Capitol building in the wake of the state's fiscal crisis in 1977, when Carey, a World War II battle hero, was still winning plaudits for rescuing the city and state from the fiscal crisis.

The scrappy Carey was considered a national class political figure -- as befitted a state that had produced other national class 20th century governors such as Theodore and Franklin Roosevelt, Al Smith, Tom Dewey, Averell Harriman and Nelson Rockefeller.

Mario Cuomo, whose fame as an intellect and great orator spread nationally, followed Carey.

Republican Pataki promised sweeping reforms but quickly retreated in the face of a resistant Legislature and powerful special interests.

After 12 years of Pataki, New Yorkers yearned for change, which is why Spitzer's colossal political and moral failures were such a tragedy.

Paterson, Spitzer's unexpected successor, talked like a reformer when he took office in March 2008, but his collapse as a leader has been so sweeping as to be unlike anything seen in the history of New York.

He's now the least popular governor in the United States.

Is any more proof needed that New York has gone down the drain?

Fredric Dicker is The Post's state editor.

http://www.nypost.com/seven/07052009/posto...7689.htm?page=0

"Did Espada lie for $3M? - Bronx Democratic senator is under investigation for statements he made in a state grant application for his health care company"

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

First published in print: Thursday, August 27, 2009

ALBANY --- The attorney general's office is investigating if Senate Majority Leader Pedro Espada Jr. submitted false statements in a grant application seeking $3 million from the state for his health care company.

The state Department of Health confirmed Wednesday it referred concerns about the Espada organization to Attorney General Andrew Cuomo's office after reviewing the vendor responsibility questionnaires signed by the Bronx Democrat and notarized by Alexander M. Fear, his lawyer.

DOH spokeswoman Claire Pospisil declined further comment.

Conflicts in answers on the questionnaires and disclosure of numerous tax liens against Espada's organization were reported in the Times Union in June, leading to a freeze on the $3 million grant and a review of the contract award.

The questionnaires, one from April 16, 2008 at the start of the grant application process and another from March 27, stated that Comprehensive Community Development Corp. had no substantial tax problems.

State officials and public records suggest the not-for-profit company, which uses the trade name Soundview Health Network, suffered from chronic tax delinquency.

The vendor documents warn that submission of false or misleading information can be a crime punishable by a fine, imprisonment of up to five years and contract termination.

The Health Department awarded a $3 million grant to Espada's company to build a new diagnostic health center in the Bronx.

But the grant was frozen when the state comptroller's office rejected the proposed contract with the department on June 26 amid disclosures of the substantial taxes owed to state and federal authorities contained in public records.

Espada and Fear maintain the tax problems had been cleared up by the time of the application process, although state officials and public records do not support their claim.

Fear and Soundview Chief Financial Officer Kenneth Brennan have said some tax problems surfaced because of cash flow issues tied to the lengthy wait for Medicaid reimbursements.

Contacted Wednesday, Fear said he was unaware of an investigation started by the Cuomo's office and was not up to date on discussions with the Department of Health to resolve the outstanding questions about overdue taxes.

The new investigation by the attorney general's office is separate from ongoing probes involving Espada's campaign and the Soundview organization, which has paid him as much as $460,000 in compensation annually.

Cuomo's office is looking into whether Espada improperly benefitted in his successful primary election last year by allegedly using Soundview employees and resources for political activities.

Questions about Espada's residency and his failure to file complete campaign disclosures are also under investigation.

Espada's organization was in the news earlier this month after four Soundview employees, including Fear and Pedro G. Espada, the senator's son, were hired by the state Senate.

An uproar about the son's appointment to a $120,000 intergovernmental relations job led to his abrupt resignation.

On the questionnaires, Espada checked "no" on whether in the past five years there were liens, claims or judgments above $15,000 that remained undischarged or unsatisfied for more than 120 days.

He also checked "no" when asked if during the past three years the company had failed to file or pay any tax returns required by federal, state or local tax laws.

Comprehensive Community Development Corp., doing business as Soundview HealthNet, provides a "broad range of health services to the medically underserved population in the Bronx and New York City," according to its IRS filings.

Espada is chief executive officer.

It has a total revenue of about $15 million a year.

State tax officials say the Espada company has had several tax liens over the years and has two open claims from this year, totaling $73,842 for employee withholding taxes, and a warrant from last June for $88,476 for unemployment taxes.

A $185,000 IRS debt was filed in April.

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

"Group taking aim against incumbents - Problems in state Senate stoke interest in Primary Challenge's efforts"

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

First published in print: Sunday, August 30, 2009

ALBANY -- "You're fired!"

That's the message some area residents want to send to their elected officials.

All of them.

More than 20 people gathered Saturday at the Albany Public Library to hear from Primary Challenge, a group that advocates tossing incumbents of both major political parties.

Formed in 2005, the group has received renewed interest in the wake of this year's controversies in the state Senate.

At the back of the room, a table contained hats and bumper stickers with messages like "It is broke, fix it!" and "NYS Government: You're Fired!"

Leonard Roberto, who has run once each for state Assembly and state Senate, said he started the organization in 2005 in Erie County.

"We're trying to educate people about the importance of the political process," he said.

"The political process has been confiscated by the political elite."

Roberto told his audience that he had been part of the foundation of the Independence Party, but that did not work out as he had hoped.

"There are good Democrats and good Republicans," he said, "but there are worthless people in both parties, many of them in public office."

His organization is trying to educate people about how to get on the ballot and to avoid having their petitions tossed for technicalities.

"It is not enough to go to the polls and vote for someone you know nothing about," he said.

"There is a labyrinth of obstacles for people to run."

"You cannot afford the luxury of not voting."

"You have to vote not just in every election but in every primary."

Tom Chandler of Guilderland is hoping to expand Roberto's effort into the Capital Region.

He organized Saturday's meeting.

He said this year's power struggle in the state Senate has created renewed interest in challenging political incumbents.

"We'd like to help train political volunteers so if someone needs to get petitions, they know how to get enough to get it done," he said.

"We're open to people of all political stripes."

The local chapter does not yet have contact information, he said.

Roberto's organization has a Web site at http://www.primarychallenge.org.

"A power tiff over state jobs"

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

First published in print: Monday, August 31, 2009

Gov. David Paterson and Civil Service Commissioner Nancy Groenwegen briefly seized a new power to let agency heads appoint people they wanted to hundreds of jobs.

But State Judge Joseph Teresi's July 25 order in a lawsuit shot down their move to reclassify professional titles to be exempt from civil service list hiring.

The action, dealing with 29 medical titles held by 1,700 people, would have "opened the floodgates for the placement of many other titles which require licensure," said Public Employees Federation President Kenneth Brynien, who sued Groenwegen, Paterson and Civil Service.

Teresi didn't go along with Groenwegen's argument that it is difficult to recruit from the civil service test list to hire physicians, psychiatrists, dentists and veterinarians so the posts should be reclassified as "noncompetitive," meaning no one would have to take a test and qualify based on their scores.

The judge ruled the change would "have broad implications" allowing for "reclassification of essentially all licensed and certified professionals."

Groenwegen has been passionate about the matter and is considering appeal.

"We clearly believe the decision was wrong," she said.

"This does raise a fundamental question of how do you define a merit system in 2009?"

She said she respects PEF's concerns about the dismantling of the traditional merit system but the constitution allows for alternatives to tests to promote nimbleness and flexibility in hiring.

Insiders say she's sought the changes as a good way to ensure minority hiring and greater diversity in the state work force, but she says that's not the motivation.

The key reason is that a civil service exam isn't the best way to find the best people and is redundant because the doctors already proved their qualifications by gaining licenses and graduating from academic institutions, she said.

The commissioner is up against a lot of skeptics.

Darcy Wells, a spokeswoman for PEF, said if the jobs became noncompetitive it "would open the doors to cronyism."

Paterson signed the rule change in November over the objections of PEF and the Civil Service Employees Association.

The unions said the switch would undermine the constitutionally mandated merit and fitness system "which instills public trust."

Merton Simpson, president of the Albany chapter of Blacks in Government, said:

"The reason why they want to put these positions in the non-competitive class is so they can make patronage appointments."

Reach Odato at 454-5083 or by e-mail at jodato@timesunion.com.

HERE ARE SOME "GREEN SHOOTS", ALRIGHT ...

THE "GREEN" SHOOTS OUT OF OUR POCKETS AND INTO THE GRASPING HANDS OF THE TAXMAN .....

SO MUCH FOR RENEWED CONSUMER SPENDING HERE IN AMERICA, ALL OF YOU INVESTORS ....

WHEN THE TAXMAN IS TAKING ALL OF OUR MONEY TO FEED HIS FAT FACE, THERE IS NOTHING LEFT FOR YOU ....

And so ...

"State hikes DMV fees - Charges for motorists go up today as part of already-passed budget"

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

First published in print: Tuesday, September 1, 2009

ALBANY -- If you drive or own a car, get ready to pay more.

The cost of a standard eight-year driver's license is going from $50 to $64.50 today.

Then, starting next April, anyone registering or re-registering a car will have to buy and install new license plates, at $25 a pop.

And registration costs will rise from about $40 to $55 for the average motorist, according to the governor's office.

We won't have to pay this all at once, as license renewals come due at different times and motorists are always registering cars.

Nonetheless, Republican legislators as well as county clerks have been burning up the state's highways making public appearances to remind New Yorkers of the higher fees, which they point out are another name for a tax hike.

"He just likes to increase taxes," Assemblyman Jim Tedisco, R-Schenectady, said of Democratic Gov. David Paterson.

The increases were part of the 2009-2010 budget that many Republicans, including all 30 Senate Republicans, voted against.

Because they are in the minority, GOP lawmakers could oppose the budget without fear that they would cause a delay.

And they've kept up a drumbeat of criticism against the budget, with an estimated $8 billion in new taxes and fees, since it was approved in April.

Paterson, though, attempted to put the onus back on the lawmakers Monday, suggesting that he'd be willing to reverse the license and registration hikes if they help find places to make up the lost revenue.

"I'd be happy to entertain it but they are not just going to be able to get up at a news conference and act shrill."

"They are going to have to tell us where they can close the gap," Paterson said during a talk Monday at Myers Middle School in Albany.

The increased license and registration fees are projected to generate an additional $70 million this year.

Paterson has said the state still faces a $2.1 billion budget deficit and he has signaled that he'll call lawmakers back to the Capitol later this month to attempt to deal with that.

For now, however, Republican legislators are getting an assist from county clerks, who oversee Department of Motor Vehicles offices where drivers renew their licenses and register their cars.

Tedisco on Monday traveled to a Saratoga County DMV office, where he appeared with the county's GOP Clerk Kathy Marchione and Rensselaer County Clerk Frank Merola to decry the increases.

Today, Assemblyman Peter Lopez, R-Schoharie, will appear in Kingston with several other Hudson Valley Republicans, Marc Molinaro and Nancy Calhoun, along with GOP county clerks from Greene, Schoharie, Ulster, and Orange counties, to bemoan the increases.

The last time county clerks became involved in a statewide issue was two years ago, when they led a chorus of those protesting then-Gov. Eliot Spitzer's plan to offer licenses to undocumented aliens.

Facing a public outcry, Spitzer had to abandon that plan.

A $14.50 license increase may not be the same kind of hot-button issue as illegal aliens.

And it's unlikely to drive anyone to bankruptcy.

Such increases often are known as "nuisance fees," but they also are just some, albeit the most visible, increases that New Yorkers will have to pay this year.

"We're now being hit with the death of a 1,000 cuts," said Lopez.

Truck drivers, for example, will have to pay higher fees as well, which will likely be passed along to consumers.

And other fees, already enacted, are having an impact in a range of areas.

"There have been people who have gone out of business," Peter O'Connell, a lobbyist for the pest control industry, said of exterminators ,who have seen a doubling of license fees under this year's budget.

As a result, some exterminators must now pay $1,800 every three years.

(Physicians pay $575 every two years, and lawyers pay $300, noted O'Connell).

He explained that many exterminators operate small independent businesses and the higher costs have prompted them simply to go to work for large national chains.

"It really inhibits their efforts to advance themselves," said O'Connell, who noted that many small pest control firms in New York City are owned by minorities, a group of business owners the state is supposedly trying to help.

In other industries, the fee hikes may simply prompt people to pull out of some endeavors entirely.

"I'd have to charge $20 per cigar," Dan Abbruzzese, co-owner of the Orchard Creek golf course in Altamont, said of a looming increase in the cost of tobacco licenses.

Abbruzzesse's tobacco license would go from $100 to $2,500 because the state is now basing the fee on gross sales of a given establishment, rather than the tobacco sales.

"You're going to pay your tobacco fee based on how much seafood and lettuce you sell," Jim Calvin, president of the state Association of Convenience Stores, said of how that fee will hit food stores.

Likewise with convenience stores that make much of their money on gasoline sales.

Calvin's group is looking at a possible lawsuit against the fee, which is due to take effect Sept. 20.

He also believes the higher fees, designed to inhibit tobacco sales, will simply expand the black market.

Abbruzzese said that up until now, he's offered cigars in his golf course clubhouse as a convenience, but he rarely sells more than 500 per year.

With the increased fee, however, selling cigars would be a losing proposition.

"They are 'feeing' us to death," he said.

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

"Fund crisis hits home - Property tax prime target to fill public pension coffers drained by financial meltdown"

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

First published in print: Friday, September 4, 2009

ALBANY -- Cities, towns and counties statewide face a budget-busting rise in their employee pension costs and New Yorkers, already hit by the recession, will likely see higher property taxes.

It's the latest financial hit to come from last year's stock market crash, state Comptroller Tom DiNapoli said Thursday as he released the 2011 pension contribution rates for towns, cities, counties and the state work force.

"It is going to have an impact on local budgets," DiNapoli said.

Due largely to the state Employee Retirement System's battered investment portfolio, the percentage of payroll that local governments must contribute for pensions will rise from 7.4 percent next year to 11.9 percent in 2011.

The higher contributions are expected to cost the city of Albany $4.5 million more.

In Albany County, it could cost another $6 million by 2012, Comptroller Mike Conners said.

The looming increases are just another sign that New York's generous public employee pension plans are not sustainable, say critics like E.J. McMahon, director of the Empire Center for State Policy, a fiscally conservative think tank.

"Do you think you can promise 300,000 people early retirement at three-quarters of their salaries and it's cheap?" McMahon said.

Many localities make their payments a few months early, meaning they will pay their 2011 contribution at the end of next year.

Increases for "uniformed" employees, including police and firefighters, who receive richer benefits, will be even higher: going from 15.1 percent of payroll in 2010 to 18.2 percent in 2011.

The state retirement system serves more than 1 million public employees including 358,109 retirees and beneficiaries, according to the comptroller's data.

Many public employees can retire at age 55, younger for police and firefighters -- far sooner than most private sector workers."

"Their pensions can approach 75 percent of their earnings or more, depending on hiring date and length of service.

The rising costs come after five years where contributions remained steady or even fell thanks to a booming stock market.

But last year's financial collapse meant the retirement fund shrank to $116.5 billion as of March, down from a high of $154 billion in the spring of 2008.

With lower investment returns, local governments have to make up the difference because public employee pensions are protected by the state constitution.

That's in contrast to the private sector, where workers often see their pensions reduced or eliminated with economic downturns.

"All of these systems offer pensions that are extravagant by private sector standards," added McMahon.

DiNapoli stressed the effect of higher contribution rates depends on the locality.

But short of making deep cuts in services or laying off people in order to save money, many will likely have to raise taxes at some rate to make up the difference.

The increased costs also come as counties and municipalities are squeezed by lower sales tax revenues, noted Stephen Acquario, executive director of the state Association of Counties.

The 2012 rates are significant since they are expected to jump even higher if the current trend continues.

The 57 counties outside of New York City, for example, could be paying $1 billion in pension contributions by 2012, compared to the current $337 million, said Acquario.

Also on the horizon: possible cost increases to school districts and their attendant tax rates.

That's because the Teachers Retirement System, another pension system entirely, is likely to announce higher costs when its report comes out this fall.

The number of retirees is growing, prompting observers to call for changes.

McMahon and other conservatives believe future public employees should enter a largely self-funded plan such as that used by the State University system.

Politicians, who rely on public sector unions for contributions and political support, have broached more modest changes.

Gov. David Paterson earlier this year called for creation of a less-generous "Tier V" program in which future employees would make more of a contribution and retire later than those in earlier retirement plans.

Thursday's news on pension costs prompted Paterson to renew his call.

His spokeswoman Marissa Shorenstein said the governor is continuing to push for a deal with lawmakers.

Two major unions -- the Public Employees Federation and Civil Service Employees Association -- earlier this year agreed not to oppose a Tier V in exchange for a no-layoff pledge from Paterson.

But other politically influential unions such as the New York State United Teachers oppose Tier V and legislators don't appear to be embracing the concept.

The looming expenses have been both aggravated and masked by past actions of state officials and lawmakers.

Previous comptrollers such H. Carl McCall have, when the stock market was rising, reduced the amount of money localities had to pay for pension costs.

But that makes the increases doubly painful when the market is down.

And lawmakers in past years have sweetened public employee pensions -- a move popular with unions, but which ultimately bears a price tag.

In the future, DiNapoli wants to allow localities to institute reserve accounts they could tap in bad years.

He also wants localities to amortize payments, or borrow against future years to cover their rising costs.

That would include increasing from 4.5 percent to 5.5 percent the floor or lowest amount that communities pay into their pensions.

"The pension liability is there."

"It's not going to go away," said DiNapoli.

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

edit

HEY!

HERE'S A REAL SURPRISE ....

And so ...

"Cuomo finds evidence of political influence on State Police - Report uncovers examples of improper meddling by top officers"

By CASEY SEILER AND RICK KARLIN, Capitol bureau, Albany, New York Times Union

Last updated: 4:16 p.m., Tuesday, September 8, 2009

ALBANY -- State Attorney General Andrew Cuomo's report into the State Police describes a string of incidents going back to the administration of Gov. George Pataki in which political matters improperly affected investigations and bent policy to serve the interests of elected officials.

Cuomo's introductory remarks in the report -- addressed to Gov. David Paterson, who requested the investigation -- states that "our fundamental finding is that there is no evidence that the rank and file of the State Police ... acted in anything other than the public interest and maintained their integrity."

"However, we have found several troubling situations in which, at the highest levels of the State Police, political considerations played an improper and determinative role," Cuomo wrote to Paterson.

" ... Your concern that there may have been political influence with the State Police was justified."

The report remains mum on the widely reported question of whether or not a "rogue unit" of the State Police performed political dirty work, either for the executive branch or its own purposes.

"What we found was worse: political influence at the absolute highest levels of the State Police," said Cuomo spokesman John Milgrim.

Much of the report concerns the activities of former State Police Col. David Wiese, who according to the report pushed for the appointment of Pataki supporter David Mack to the unsalaried position of Deputy Superintendent for Facilities Management, a uniformed position that that gave him the third highest rank on the force.

James McMahon, who at the time was State Police superintendent, told Cuomo's investigators that Wiese informed him the directive to appoint Mack -- described as a "police buff" -- came from Pataki.

The report also reveals that State Police Superintendent Wayne Bennett was the one who in the fall of 2006 ordered the removal of the original report into a December 2005 domestic violence report at the home of then-U.S. Rep. John Sweeney.

The decision to amend the computer record allowed Sweeney, who was locked in a tight re-election race with Kirsten Gillibrand, to claim that the original report was false -- a statement he later admitted was untrue.

The report attributes Bennett's decision to "sanitize" the record on the Sweeney incident to fears that a State Police employee had leaked the original report to the press, including the Times Union.

The AG's investigation failed to uncover who might have leaked the material.

To read the full report and Paterson's response to its findings and recommendations, visit the Capitol Confidential blog.

http://blog.timesunion.com/capitol/

"Cuomo says politics drove police affairs - Report tells of political matters improperly affecting investigations"

By CASEY SEILER AND RICK KARLIN, Capitol bureau, Albany, New York Times Union

First published in print: Wednesday, September 9, 2009

ALBANY -- While evidence of the existence of a "rogue unit" remains elusive, a new report from state Attorney General Andrew Cuomo finds plenty of political bad behavior by State Police leaders -- especially those in close contact with recent governors.

Released Tuesday, Cuomo's report describes a string of incidents going back to the administration of Gov. George Pataki in which political matters improperly affected investigations and bent policy to serve the interests of elected officials.

Cuomo's introductory remarks in the report -- addressed to Gov. David Paterson, who requested the investigation -- state that "our fundamental finding is that there is no evidence that the rank and file of the State Police ... acted in anything other than the public interest and maintained their integrity."

"However, we have found several troubling situations in which, at the highest levels of the State Police, political considerations played an improper and determinative role," Cuomo wrote to Paterson.

" ... Your concern that there may have been political influence with the State Police was justified."

The report remains mum on the widely reported question of whether or not a "rogue unit" of the State Police performed political dirty work, either for the executive branch or its own purposes.

Instead, the report contains a catalogue of rogue behavior.

The majority of its findings focus on the activities of former State Trooper Daniel Wiese, who was viewed by many on the force as the governor's protege.

During Pataki's 12 years in office, Wiese rose from staff inspector to assistant deputy superintendent -- promotions that were done outside the usual system for officers above the rank of lieutenant.

Wiese retired from the force in 2003 to become inspector general of the state Power Authority, but was allowed to keep his badge and gun after being appointed "Special Assistant to the Superintendent" under James McMahon.

McMahon, who served as the head of the State Police from 1994 to 2003, told Cuomo's investigators that Wiese pushed for the 1995 appointment of Pataki political supporter David Mack to the unsalaried position of deputy superintendent for facilities management, a uniformed position that gave him the third highest rank on the force.

McMahon told Cuomo's investigators that Wiese informed him the directive to appoint Mack -- described as a "police buff" -- came from Pataki.

Mack's position was terminated a few weeks after Pataki left office.

The real estate mogul's reappointment to the board of the Port Authority -- Pataki named him to that post in 1997 -- was on the agenda for Thursday's state Senate session.

Late Tuesday, Paterson's office announced it was pulling Mack's renomination, citing his refusal to cooperate with Cuomo's office.

Some of the most troubling revelations in the report concerned Wiese's management of Pataki's security team, the Executive Services Detail, which on a number of occasions operated beyond the boundaries of its mission to protect the physical safety of the governor and other public officials.

The report notes that in 1995, Wiese assigned members of the ESD to investigate a break-in at Pataki's campaign headquarters in Manhattan.

When a campaign worker was revealed to be the culprit, Wiese directed that he should not be arrested.

In late 1997, Wiese inserted the ESD into another Pataki campaign matter: a citizen complaint that a $23,000 contribution had been made in exchange for special consideration from the state Parole Board for a relative of the donor.

After the New York City Police Department began its investigation into the charge, Wiese arranged for the city detective assigned to the case to work with an ESD investigator -- the only time the investigator had been assigned to a matter unrelated to a physical threat to the governor.

Eventually, the case was referred to the U.S. Attorney, who upon learning of Wiese's involvement ordered the NYPD to immediately break contact with his unit on the matter.

Other individuals mentioned in the attorney general's findings include State Police Superintendent Wayne Bennett, who is identified for the first time as the official who in the fall of 2006 ordered the removal of the original report into a suspected December 2005 domestic violence incident at the home of then-U.S. Rep. John Sweeney.

The decision to amend the computer record allowed Sweeney, who was at the time locked in a tight re-election race with Kirsten Gillibrand, to claim that the original report was false -- a statement he later admitted was untrue.

The report attributes Bennett's decision to "sanitize" the record on the Sweeney incident to fears that a State Police employee had leaked the original report to the press, including the Times Union.

The AG's investigation failed to uncover who might have leaked the material.

Bennett, now Schenectady's public safety commissioner, didn't return a phone call late Tuesday.

Michael Balboni, who oversaw the State Police as Gov. Eliot Spitzer's deputy secretary for public safety, comes in for criticism for allowing himself to be used as an envoy between the governor and the Republican-controlled state Senate in the wake of the travel records scandal involving Spitzer and former Senate Majority Leader Joseph L. Bruno.

Balboni's proximity to the executive, the report concludes, made him an extremely bad fit to objectively oversee the force in the aftermath of the scandal.

When Republican senators suggested Balboni call for an investigation of the travel records affair, which would put pressure on Spitzer, Balboni, in an e-mail to Spitzer secretary Richard Baum, sarcastically wrote "Yeah."

"Right."

Balboni, now a principal with Navigators Global, a lobbying/government relations firm, didn't return a phone call Tuesday.

Finally, the report found that the secretary to the governor should not receive a State Police protective detail.

Most recently, the Times Union reported that former Paterson aide Charles O'Byrne had received his own State Police drivers before his departure last fall.

The report doesn't mention the suicide last year of retired State Police official and Wiese protege Gary Berwick before he was questioned by investigators.

Nor did the report examine how Spitzer was able to shake off the ESD when he was consorting with a prostitute in a Washington, D.C., hotel room -- an incident that ultimately led to his resignation.

Reach Seiler at 454-5619 or cseiler@timesunion.com

The Cuomo report includes some recommendations to address "weaknesses and vulnerabilities" in the State Police.

They include:

The governor should not make political appointments to the State Police, instead leaving personnel decisions to the superintendent.

There should be a direct line of communication between the governor's secretary to the governor and superintendent.

The superintendent should be able to contact the governor directly if necessary.

Superintendent vacancies in the State Police should be filled promptly to avoid uncertainty.

State Police should never sanitize or alter official reports.

The report remains mum on the widely reported question of whether or not a "rogue unit" of the State Police performed political dirty work,

"'Surprise' hits school taxpayers - Property owners greeted with bigger-than-expected bills, in part because the state reduced STAR breaks"

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

First published in print: Saturday, September 12, 2009

ALBANY -- Dan Egan got quite a surprise when he received his Albany city school tax bill last week.

Rather than rising about 2.5 percent as the district had predicted before last spring's budget vote, school taxes on his house jumped a whopping 9.7 percent.

"That's hardly an estimate when you miss by 300 percent," he said.

Egan has heard similar complaints from his neighbors.

"It's a surprise tax of a couple of hundred bucks," said Egan, a retired Department of Transportation financial officer, whose school taxes rose from $3,811 to $4,184.

Albany isn't the only school district in which homeowners are seeing tax bills that are higher than those predicted by school officials.

Part of that is the state's fault, as the governor and legislature in 2008 quietly lowered the School Tax Relief (STAR) tax breaks that most homeowners receive.

That reduction is what is known as the "floor adjustment," or the discounted basis upon which a homeowner's taxes are calculated.

STAR, which was instituted in the late 1990s, helps control property tax costs by reducing the assessed value upon which a home's taxes are based.

The initial STAR exemption was $30,000, meaning that a home valued at $100,000 would be taxed on $70,000 of its worth.

As housing prices rose in the late 1990s and the early part of this decade, the exemption amount went up as well.

But now that prices have been falling, so has the exemption, explained state Division of Budget spokesman Matt Anderson.

Since 2008, it has dropped 11 percent.

A lower exemption translates into higher taxes:

In Albany, for instance, last year's basic STAR exemption was $36,160 taken off the price of a home; this year, that sum fell to $32,180.

That means the baseline home value from which school taxes are calculated went up by $3,980 for homeowners.

The change in the exemption was made with almost no publicity, even though Gov. David Paterson proposed it in his budget, which was passed last spring.

"It just kind of gets slipped in (the state budget), but it shows up on your tax bill," said Bill Hogan, assistant superintendent for business at the Albany school district.

That move presaged a larger and much more publicized hit on homeowners: the elimination of the middle-class STAR rebate program, which had previously saved property owners hundreds of dollars annually.

The rebate's demise and the exemption's decline were among the sacrifices to close the state's $17.7 billion budget deficit.

But STAR changes only tell part of the story in Albany.

Egan (who is unrelated to the school board member of same name) figures that the reduced STAR cost him around $50.

City homeowners are also paying more this year because commercial property prices slid faster than residential values.

The taxable value of Albany's commercial property fell about 4.3 percent, compared to a drop of less than half a percent for residential structures, said Hogan.

He said the overall tax levy, or the amount of money the schools took from all of the city's real estate taxes, went up a fairly modest 2.77 percent.

But with less real estate value to tap, officials had to dig deeper to achieve its budget.

The Albany school district serves about 10,000 students and carries a budget of $203.8 million.

Homeowners like Egan and his neighbors wonder if businesses should start paying more in future years.

The possible peril of that move would be driving some establishments out of the city, which would mean even fewer taxable dollars and the possible creation of a vicious cycle of declining revenue.

Right now, "The burden is falling on the residential taxpayers," said Egan, who like others says he thinks about leaving Albany every time he see property taxes rise.

"I like living in Albany, but I think it's getting out of hand," said Deborah Onslow, another neighbor of Egan's, who said her total local tax bill will run about $10,000.

Onslow, the former president of WMHT, said a friend of hers owns a $1.3 million condo in Boston and pays a fraction of that.

"I honestly wonder about whether or not I'm going to continue to live in the city," she said.

"They are going to lose their most valuable asset: They are going to tax middle-class taxpayers out of their houses."

"Feds investigate foundation at SUNY - They're looking into how federal dollars meant for health projects are spent"

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

First published in print: Monday, September 14, 2009

ALBANY -- Federal investigators have opened a far-reaching probe of the State University of New York Research Foundation to see if SUNY is appropriately spending tens of millions of dollars in government grants meant for specific health projects.

Millions in such funds were directed to the University at Albany.

The investigation could involve every SUNY university and college that receives federal funding from the National Institutes of Health, including the University at Albany, which has won millions of grant dollars for its biotechnology research at the East Campus, an investigator said.

Assistant U.S. Attorney Robert Trusiak said Sunday that two subpoenas were issued in late August seeking several years' worth of documentation about health-related grants that aggregate to tens of millions of dollars flowing through the Research Foundation to SUNY schools statewide.

The material is being gathered to assist the U.S. Department of Health and Human Services Inspector General, he said.

The subpoenas were served on SUNY Central and on the Research Foundation, which handles about $1 billion annually in revenues, most of it research grants from the federal government.

The Research Foundation operates privately and less openly than SUNY although its board is made up mostly of SUNY executives faculty and presidents, including the president of UAlbany and UBuffalo.

The documentation must be turned in to the government investigators by Sept. 30, Trusiak said.

He said concerns have arisen about how the Research Foundation is spending funds meant for federal research projects.

The probe was first reported in the Buffalo News Sunday in a story that said questions about research spending at the University at Buffalo triggered the investigation.

Trusiak said SUNY Buffalo is one of several campuses that received grants for which he is now seeking backup documentation.

"It's fair to say some of the information with the government include audits that raise questions about the correct treatment of federal grant money," Trusiak said.

He said the subpoenas seek information on "whether grant costs were properly allocated as required by federal regulations."

Research Foundation President John J. O'Connor, a SUNY vice chancellor, said Sunday the foundation is cooperating with "an administrative request from HHS."

He said the foundation has several controls in place to make sure SUNY's contracts with federal granting agencies are in compliance with all federal laws.

"They haven't been specific yet as to what they're looking at," O'Connor said.

He said the information sought deals with the process used for the grants.

Cathy Kaszluga, a spokeswoman for the foundation, touted the results of internal and external audits of functions and said some funding agencies, specifically the Environmental Protection Agency and the Defense Contract Audit Agency, have given the foundation "clean" reviews.

"We are confident that our business system is designed with appropriate internal controls to ensure that only those costs that are allowable, allocable and reasonable are claimed on federal grants and contracts that we administer," she said.·

Joseph A. Brennan, a spokesman for UBuffalo, said he suspects the inquiry has its roots to 2007 complaints from a former Buffalo researcher that were investigated internally by the Research Foundation.

That examination found no "fraudulent billing," but did identify problems with the methodology used to allocate costs for computer services, he said.

Recommended changes, he said, were instituted 18 months ago.

He could not say why the federal government is interested in the use of research dollars now.

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

"Feud darkens visit by Obama - President's trip comes on heels of White House urging Paterson not to run in 2010"

By IRENE JAY LIU, Capitol bureau

First published in print: Monday, September 21, 2009

ALBANY -- New York's latest political drama will be center stage in Troy today, as President Barack Obama and Gov. David Paterson come together less than 36 hours after news broke of the White House's efforts to dissuade the governor from seeking a full term in 2010.

The President's visit happens a week to the day after White House political affairs director Patrick Gaspard met with Paterson to discuss the governor's historically low poll numbers, and his prospects for winning in 2010.

Gaspard "was there on behalf of the President to let David know that they had lost confidence in his ability to retain his hold on the governorship next year, and that they would like him to reconsider for the good of the party," said a Democratic political operative who was briefed on the conversation.

According to the operative, Paterson's reaction during the conversation was "all over the lot."

"It was a combination of, 'The polls aren't accurate; I can still pull it out,' to obviously being fairly sobered by the message that was delivered," the operative said.

The White House's intervention in state politics will likely overshadow the President's intended message for his first visit to upstate New York since taking office.

Obama had hoped to use his speech at Hudson Valley Community College to promote his administration's investment in community colleges as part of an overall "strategy for American innovation."

"The timing on this story was not the choosing of the White House," said the Democratic political operative.

"I think that there's a lot of unhappiness about how embarrassing this will be for the governor, and how distracting this will be for the President's message."

On Thursday, Paterson publicly reasserted his intention to run when he announced the hiring of longtime New York political operative Richard Fife to serve as his campaign manager.

Fife worked as a volunteer for Obama's 2008 presidential campaign and attended last summer's Democratic National Convention as an Obama delegate.

Congressman Gregory Meeks of Queens reiterated the White House's concerns to Paterson on Friday.

Meeks has had a close relationship with Paterson; both men served for years in the state Legislature.

Meeks endorsed Hillary Clinton during her presidential bid, but since the election has grown closer to the White House through his work in the Congressional Black Caucus.

Meeks served as an informal emissary between the governor and both House Speaker Nancy Pelosi and the White House during the governor's convoluted appointment process to replace Clinton in the U.S. Senate last winter.

A White House official said Sunday that while the President has not spoken with Paterson directly about next year's race, "it's no secret that Democrats in New York are very concerned about the situation."

"We share those concerns and those concerns have been conveyed in an appropriate way."

The official emphasized that "no one has ordered Paterson out of the race, nor does anyone have the authority to do so."

"He has to look at his situation and make the decision that he thinks is right for himself, the party and the state."

Paterson refused to comment on "confidential conversations" on Sunday.

"I'm not talking about any specific conversations."

"As I said, I am running for office," Paterson told reporters at the African American Parade in Harlem, for which he served as Grand Marshal.

Paterson has not been able to improve his standing after months of record-low approval ratings.

According to a poll released last week by the Marist Institute for Public Opinion, only 20 percent of voters say Paterson is doing an excellent or good job; 42 percent say he's doing a fair job; while 34 percent say he's doing a poor job.

The poll also found that 70 percent of registered voters do not think Paterson is a viable candidate in 2010 -- including 65 percent of Democrats, 80 percent of Republicans, and 64 percent of independent voters.

Top Democrats around the state have voiced concern that Paterson's weakness at the top of the ticket could endanger the rest of the party's candidates, particularly if former New York City Mayor Rudy Giuliani decides to run for governor.

Giuliani in recent weeks has signalled that he is seriously considering a run for governor and has accelerated the timetable of the conversations about the gubernatorial race.

Attorney General Andrew Cuomo, widely considered the most viable Democratic candidate for governor, has so far demurred when asked about his gubernatorial ambitions.

Increasingly, Democrats have grown concerned Giuliani would ultimately decide to run if Paterson was the candidate; polls show Giuliani trouncing Paterson in hypothetical 2010 matchups, but losing to Cuomo.

Democrats currently control every statewide elected office, both state legislative chambers and all but three congressional seats.

(There will be a special election for one of the three GOP-held seats, due to Rep. John McHugh's recent confirmation as Obama's Secretary of the Army.)

The fate of Democrats' dominance will be determined in 2010, when the party will defend its majority in the state Senate, which will determine whether Democrats will control redistricting after the 2010 census.

In addition, the Obama administration is concerned that Paterson's weakness at the top of the ticket could allow Republicans to capture the U.S. Senate seat currently held by Kirsten Gillibrand.

Democrats are one vote shy of a filibuster-proof majority, due to the death of Sen. Ted Kennedy of Massachusetts.

While the House of Representatives enjoys a strong Democratic majority, the White House is concerned about losing seats in 2010, particularly marginal Democrats such as freshman congressmen Scott Murphy, Dan Maffei and Eric Massa -- who all represent conservative, upstate districts formerly held by Republicans.

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

"Rift plays out on Troy stage - Governor, under pressure from Obama not to run, turns solemn"

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

First published in print: Tuesday, September 22, 2009

TROY -- The tension between President Barack Obama and Gov. David Paterson during Monday's presidential visit to the Capital Region played out in wordless political pantomime.

While Obama did not address the controversy over his decision to dissuade Paterson from seeking a full term next year, the silence didn't stop observers from reading body language and tone for signs of the friction.

The usually jovial governor looked solemn as he greeted the President at Albany International Airport and throughout Obama's visit to Hudson Valley Community College.

Before Obama's speech, the governor sat alone for a few minutes in the VIP section at HVCC, while Attorney General Andrew Cuomo -- Paterson's fiercest Democratic gubernatorial rival -- joined the President at a private reception along with Senate Democratic Conference Leader John Sampson, state Comptroller Thomas DiNapoli and Troy Mayor Harry Tutunjian, a Republican.

Cuomo, whose political currency soared over the weekend with the news of Obama's actions, was all smiles as he shook hands with well-wishers before the President's speech.

When Cuomo reached the governor, the two rivals shared a brief man-hug; Cuomo sat two seats away from the governor.

Obama's introductions added more fuel for speculation.

Speaking off the teleprompter, Obama introduced the governor, averting his eyes from Paterson as he called him a "a wonderful man."

Paterson stayed seated and managed a quick wave before Obama moved on to introduce Cuomo as "your shy and retiring attorney general," a line that drew laughter from the audience.

"Andrew is doing great work enforcing the laws that need to be enforced," Obama added, turning to face the attorney general and smiling broadly.

The President gave a subtle thumbs-up as Cuomo stood to wave at the applauding audience.

Earlier Monday, White House press secretary Robert Gibbs addressed the weekend's news in a question and answer session with the press corps on the flight to Albany.

"I think everybody understands the tough jobs that every elected official has right now ... and I think people are aware of the tough situation that the governor of New York is in," Gibbs said in answer to a question about Paterson.

"This is a decision that he's going to make," Gibbs said, referring to Paterson's plans for 2010.

Former Republican Gov. George Pataki on Monday criticized the White House's intervention against Paterson.

"I just think it's wrong," Pataki said during a campaign-style conference call following Obama's visit.

Pataki's name has been floated as a potential challenger for the U.S. Senate seat held by Democrat Kirsten Gillibrand, who was appointed to the post by Paterson in January.

Pataki said Obama should be focusing on the economy, not meddling in politics on the state level.

"The President should not be reading a poll and deciding from that who should or should not be running for governor of the state of New York," Pataki said.

Irene Jay Liu can be reached at 454-5081 or iliu@timesunion.com. Staff writer Scott Waldman contributed to this report.

AND ANOTHER FAST-TALKER BITES THE DUST ....

"Troy developer owes $323,000 in back taxes"

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

Last updated: 2:38 p.m., Wednesday, September 23, 2009

Sandy Horowitz, the owner of a substantial chunk of property in downtown Troy, owes $323,000 in back taxes, the city of Troy said Wednesday.

The city released the information to the Times Union after the newspaper filed a Freedom of Information Law request.

Horowitz, who couldn't immediately be reached for comment, owns about a dozen buildings in downtown Troy, including the properties that housed the businesses owned by Larry Schepici.

Schepici on Monday shuttered his businesses, including the highly regarded Tosca restaurant, citing financial and tax woes.

Horowitz owes taxes dating back to the 2007-2008 school tax bill, and he owes on the following properties, according to the city:

212 River St $14,554.

63200 Broadway $229,321.

54258 Broadway $57,162.

131 Second St. $21,494.02

Horowitz, a Hollywood producer, arrived in Troy in 2003 with grand plans to remake the city.

But he quickly established a pattern of unpaid bills.

"Paterson predicts $3 billion budget deficit - Leaders meeting sets the stage for cuts"

Capitol bureau, Albany, New York Times Union

Last updated: 11:22 a.m., Wednesday, September 23, 2009

ALBANY -- Gov. David Paterson said he expects the current estimated budget deficit of $2.1 billion to grow to around $3 billion before the end of the fiscal year, adding urgency to his call for legislative leaders on both sides to set aside partisanship and posturing in order to enact a series of midyear cuts.

Paterson emphasized that figure wasn't a "hard" number, but said that upcoming budget reports would lend greater clarity to the size of the gap.

With Lieutenant Governor Richard Ravitch by his side, the newly clean-shaven Paterson asked the four leaders of the Senate and Assembly to bring their economic staffers together to begin working through ideas to be acted upon in a special session -- the date for which could be announced as early as next week.

In general, the tone of the meeting was collegial and largely free of the back-biting that hampered many such meetings over the past year.

Senate Democratic Conference Leader John Sampson, in his first solo appearance at a leaders meeting, said his conference needed a better sense of the size of the deficit to avoid "government by guesswork."

"We need real numbers ... so we can find real savings," Sampson said.

Sampson's Senate leadership colleagues, Temporary President Malcolm Smith and Majority Leader Pedro Espada Jr., did not attend the meeting in the Capitol's Red Room.

Senate Republican Leader Dean Skelos reiterated his hope that midyear cuts would fully involve members of his conference, unlike the crafting of the 2009-2010 budget.

Skelos and Sampson seemed to be in agreement that whatever fiscal measures are taken should not add to New Yorkers' tax burden -- a sentiment that Paterson agreed with.

Assembly Speaker Sheldon Silver said he was preparing his conference for "tough choices."

"We are required to provide our working families, our children in the classrooms, our elderly, those citizens ... who go to us for last resort" in times of crisis, he told the governor.

" ... We're prepared to roll up our sleeves and work with you."

Assembly Minority Leader Brian Kolb expressed frustration that the governor failed to respond to his earlier calls for a leaders meeting.

"The voters are upset and mad we aren't taking actions ... that we haven't met this summer to address these issues," said Kolb.

"Court of Appeals finds for Paterson in Ravitch appointment - Voting 4-3, panel hands governor a victory"

Capitol bureau, Albany, New York Times Union

Last updated: 10:54 a.m., Tuesday, September 22, 2009

ALBANY -- The state Court of Appeals has upheld Gov. David Paterson's right to appoint Richard Ravitch as his lieutenant governor, voting 4-3 in a decision that reversed a lower court decision that tended to find for the arguments of Senate Republican Leader Dean Skelos.

Skelos' legal team had argued before the seven-judge panel that Paterson had overstepped his duties under the state constitution.

Paterson appointed Ravitch to the post in early July, just before the end of the monthlong Senate coup crisis in which Republicans attempted to elevate renegade Democrat Pedro Espada Jr. to the post of temporary president of the chamber, a move that would have put him next in line of succession to the governor.

The post of lieutenant governor was left vacant by Paterson's elevation to the top job following Eliot Spitzer's resignation in March 2008.

Skelos released a statement that reiterated his lawyers' argument that "an unelected Governor could appoint a Lieutenant Governor, with no scrutiny by the electorate and no confirmation by the Senate."

"Should that Lieutenant Governor become Governor, he or she could then appoint another unelected person to serve as Lieutenant Governor without even the basic confirmation hearing and vote that is required of agency commissioners and other members of state boards."

"The court's decision to allow the state's highest offices to be filled with no accountability whatsoever to the public or to their elected representatives in the Legislature, is dangerous to democracy," Skelos said.

Skelos said he hoped the matter should be one of several to be dealt with in a constitutional convention, a move advocated by many on both sides of the aisle including Attorney General Andrew Cuomo, former New York City Mayor Rudy Giuliani, and former congressman Rick Lazio -- who announced his own 2010 gubernatorial run this morning in Albany.

The decision is a victory for Paterson, who has been battered by the polls and the recent news that President Barack Obama had sent clear signs that the governor should step aside from running for his first full term in 2010 for the good of other Democratic candidates.

http://www.timesunion.com/AspStories/story...?storyID=844678

"Paterson says he's not ready to quit - Odds stacked against governor as Obama warmly praises Cuomo"

Associated Press

First published in print: Wednesday, September 23, 2009

ALBANY -- As New York Gov. David Paterson's political vitality is threatened, he declared he wasn't ready to give up the fight Tuesday.

But the odds aren't in his favor.

"There is no question right now that the political soap opera of New York politics centers around the Democrats," said Steven Greenberg of the Siena College poll.

"This gives great fodder to the Republicans, and the Republicans are smartly taking advantage of that."

President Barack Obama warmly praised Attorney General Andrew Cuomo during a New York event Monday, while blandly acknowledging Paterson.

And aboard Air Force One on Monday, White House spokesman Robert Gibbs wouldn't deny that the President sent word that Paterson should drop out of the 2010 race so Cuomo could lead a stronger Democratic ticket.

On Tuesday, Paterson shot back.

"I have had conversations with the White House," he said as he prepared to address a growing $2.1 billion deficit.

"I am concerned about the Democratic Party."

"But I'm also concerned about my ability to govern."

He told reporters he understood the President's interest in New York's 2010 Democratic ticket because "they haven't exactly been able to govern in the first year of their administration the way other administrations have."

Paterson appeared to blame Republican partisanship for Obama's inability to attract even a single GOP vote at times in Congress.

Despite the chorus suggesting that Paterson quit, the governor declared he's still "clearly running."

"You don't give up," Paterson told reporters at Columbia University.

"You don't give up just because people tell you what they think is going to happen."

"You don't give up because people tell you who's running and who's not before they ever announce to do it."

"Affidavits: Ballot abuse rampant - Troy absentee voting scandal related to dozens of forged, fraudulent WFP primary election ballots"

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

First published in print: Saturday, September 26, 2009

TROY -- Dozens of forged and fraudulent absentee ballots from people registered to vote on the Working Families Party line were filed in the Sept. 15 primary elections in Troy, the Times Union has learned.

Many of the questionable ballots were filed under the names of students and people who live in government-subsidized housing and other downtown areas.

Still others were submitted on behalf of voters who were alleged to have signed the ballots earlier this month, but those people have not lived in New York state for at least a year, records show.

Documents at the county Board of Elections show the fraudulent ballots were handled by or prepared on behalf of various elected officials and leaders and operatives for the Democratic and Working Families parties.

A Troy housing authority employee, Anthony Defiglio, who sources said oversees vacant properties for the Troy Housing Authority, also handled many of the fraudulent ballots, according to public records and interviews with voters who said they were duped.

Victor Gonzalez, a resident of Griswold Heights, told the Times Union he was visited several weeks ago by Defiglio and another man who asked him to sign an absentee ballot application.

Gonzalez is registered on the WFP line.

But Gonzalez, like many other people interviewed, never saw, signed or submitted the absentee ballot later filed at the Board of Elections under his name.

Also, someone else wrote on the Gonzalez's ballot application that he couldn't vote in person because of a work conflict.

''I've been out of work for about six to eight months."

"I've been laid off and looking for work,'' he said.

There may be as many as 50 absentee ballots that were forged, according to people close to the case.

Countywide, there were 126 absentee ballots applied for on the Working Families Party line.

The third-party WFP line has become a key battleground between the Republicans and Democrats in Troy.

The scandal is unfolding in a year when the city council's nine seats are up for grabs with 19 candidates, including nine Republicans and nine Democrats.

Six at-large county legislative seats in Troy also are on the line this year with 12 candidates.

Attorneys consulted by the Times Union who are familiar with voter-fraud issues said the allegations surfacing in Troy may be unprecedented here and could result in criminal prosecutions.

Two of the absentee ballots reviewed by the newspaper carry addresses in Griswold Heights, a public housing complex, and are attributed to residents who have not lived there for years, records show.

One of the ballots is listed under the name of Milagros Serrano, 44, who left Griswold Heights in October 2007 and now lives in Hollywood, Fla., records show.

The signature attributed to Serrano on the ballot looks nothing like her signature from a voter registration card filed several years ago at the Board of Elections.

The hand-written excuse allegedly provided by Serrano for not voting in person in the primary states: ''Dartmouth Hos. doctor appt.''

Many other ballot applications also include fictitious reasons why the person needed an absentee ballot, including casino bus trips, Cape Cod vacations, work conferences and medical ailments.

Several voters interviewed by the newspaper said someone wrote the information without their knowledge.

Some of the suspicious absentee ballots list Defiglio as the person who could pick it up for the voter.

Residents of Griswold Heights said he is a familiar figure around those complexes.

Other ballots were handled by, or returnable to, Democratic or WFP party officials, or candidates for citywide office, including: Troy Council President Clement Campana; City Clerk William McInerny; Councilman Gary Galuski; Rensselaer County WFP Chairman James Welch; council candidates Michael LoPorto and Kevin McGrath; and Tom Aldrich, a LoPorto campaign volunteer.

Welch, the county's WFP chairman, declined to speak with a reporter on Friday evening.

"I'm with my family."

"Another time, sir," Welch said and then hung up the telephone.

Affidavits signed by some of the hijacked voters are included in a related lawsuit filed Wednesday by Rensselaer County Republicans through Christian Lambertsen, a WFP candidate for City Council.

The lawsuit seeks to have the ballots thrown out.

The ballot investigation was initiated by Robert Mirch, a Troy county legislator and Republican party operative.

Mirch said he was alerted to the suspicious ballots on Sept. 14 by an elections official.

He hired two private investigators from Loudonville and they began unraveling the fraud last week.

Peter Testa, a Fourth Street shop owner, told an investigator an absentee ballot in his name was forged when it was filed.

Testa said he voted in person on primary day, unaware someone had apparently stolen his identity the day before.

His signature on the ballot application was forged, Testa said.

A section of the document that asks ''Where will you be on election day?'' it states, in someone else's handwriting: ''Job Interview - Boston.''

''That is a complete falsehood,'' Testa said in a deposition.

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

On 'Meet the Press,' Paterson says he's staying in race - Despite White House message, governor forges ahead with 2010 campaign"

By CASEY SEILER, State editor, Albany, New York Times Union

Last updated: 12:07 p.m., Sunday, September 27, 2009

ALBANY -- Gov. David Paterson appeared on NBC's "Meet the Press" Sunday morning to discuss the Obama administration's attempt to ease him out of the 2010 gubernatorial race, and reiterated his intention to stay in the contest.

"I'm running for governor of the state of New York," he said.

Interviewed by David Gregory, the exchange featured a bit of fencing over just what message had been transmitted to Paterson, and by whom.

"There are a lot of people who have told me not to run," said Paterson, who declined to discuss his "confidential conversations" with the administration.

"But the White House specifically said, 'Don't run'?" Gregory asked.

"I don't know that," Paterson said.

Gregory seemed slightly taken aback.

"You don't know that?"

"You certainly know you don't have their support," he said.

"David, the White House has a country to run and I have a state to run," Paterson said.

"There's politics that go on all the time."

"I'm blind, but I'm not oblivious."

"... I've never gotten an explicit indication authorized from the White House that I shouldn't run."

Asked to clarify exactly what had been communicated to him, Paterson said, "They certainly sent the message that they have concerns, and I appreciate that."

Paterson was clear on one point: President Barack Obama "has never told me not to run for governor."

The governor initially pivoted away from a question about his standing in the recent Marist poll that found his approval ratings dropping to 17 percent.

"What I agree with is that the overwhelming number of people in the poll would like to make that decision for themselves," he said, referring to the survey's finding that 62 percent of voters think the White House was wrong to involve itself in the gubernatorial race.

Paterson repeated his contention that his poll numbers have been driven down by tough economic times, and his efforts to keep the state's fiscal house in order during a time of fast-blooming deficits.

"I'm not going to sit here and tell you ... that I haven't had a difficult week," Paterson said.

"But I, like a lot of New Yorkers and a lot of Americans, are having difficult weeks because we're having to make tough decisions."

The governor's appearance comes a week after news broke that White House political operatives had expressed concern over Paterson's woeful standing in the polls, and how his presence at the top of the ticket could imperil other Democratic candidates -- including U.S. Sen. Kirsten Gillibrand.

Gillibrand was appointed by Paterson to fill Hillary Clinton's seat.

The same Marist poll, released Thursday, had Gillibrand losing in hypothetical matchups with two possible Republican opponents: former New York City Mayor Rudy Giuliani (51 percent to 40 percent) and former Gov. George Pataki (45 percent to 41 percent).

On "Meet the Press," Paterson insisted that his decision to stay in the race wouldn't damage Democrats in 2010.

"I don't think I am a drag on my party," he said.

"I think I'm standing up for my party's priorities."

"Judge to act in vote case - Court anticipated to name special prosecutor to probe Troy primary absentee ballot fraud allegations as WFP officials call for investigation"

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

First published in print: Sunday, September 27, 2009

TROY -- A special prosecutor is expected to be appointed Monday to investigate widespread allegations of voter fraud linked to dozens of absentee ballots on the Working Families Party line in the city.

Two people familiar with the case, which was first publicly exposed in Saturday's Times Union, said Rensselaer County Judge Robert Jacon may make the appointment.

Last week, District Attorney Richard McNally, a Democrat, privately notified the court that his office would recuse itself from the investigation, the sources said.

The voting scandal centers on allegations that people associated with the city's Democratic party forged absentee ballots attributed to several dozen voters, including students and people living in the city's public housing complexes.

The ballots were listed under the names of people who had registered to vote on the Working Families Party line.

The WFP has been a battleground third-party line between the city's Republicans and Democrats for years.

In all, about 50 WFP absentee ballot applications were filed in Troy out of about 126 county-wide.

It's unclear whether the forged ballots would change the outcome of any of the city's primary elections that were held Sept. 15.

City Democratic Chairman Frank Laposta issued a statement early Saturday stating he was ''outraged and appalled'' by the allegations outlined in the Times Union.

''This massive case of voter fraud was in no way sanctioned by the Democratic city committee and apparently was carried out by a group of rogue Democratic officials,'' the statement reads.

Reached for comment, Laposta said he is concerned because the scandal comes weeks before the general election and could confuse and dissuade voters.

''I'm shocked to tell you the truth,'' Laposta said.

''I don't understand what they were thinking."

"Whoever engineered this thing I can't even fathom."

"... I didn't know anything about it until a couple days ago there was a rumor.''

The Times Union interviewed numerous voters last week who confirmed their signatures and other information listed on absentee ballot applications had been forged without their knowledge.

Many of those voters said they did not fill out or sign absentee ballots that are now locked in a safe by a court order at the Board of Elections.

Jermaine Joseph, 19, who lives in the city's College Hill apartments and attends Hudson Valley Community College, said Friday the signature on his ballot application is forged.

He also said a handwritten statement on the ballot indicating he would be ''visiting relatives in Rochester'' on primary day is false.

''My relatives are in Maryland, (Washington) D.C., and Virginia,'' Joseph said.

He said a man who identified himself as being ''from City Hall'' visited him in late August and offered to help him register to vote.

He never received another document and didn't vote in the primary, he said.

Delorise Robinson, who lives in the Arnold Fallon Apartments off River Street, said during an interview at her residence Saturday that the cursive signature on her absentee ballot is a forgery.

The ballot application indicates she would be unable to vote in person because of a ''work conference in Kingston.''

Robinson does not write in cursive.

The ballot signature also looks nothing like her real signature on a voter registration card.

As for the excuse listed about going to a work conference on Sept. 15: ''I've never even been to Kingston,'' said Robinson, who works in Troy.

Two other suspicious absentee ballots examined by the newspaper list addresses in Griswold Heights for residents who have not lived there for more than a year, records show.

One of the ballots is listed under the name of Milagros Serrano, 44, who left Griswold Heights in October 2007 and now lives in Hollywood, Fla., according to public records.

The signature attributed to Serrano on the absentee ballot in her name looks nothing like her signature on a voter registration card filed with the county.

Other excuses listed on the absentee applications include trips to casinos, Lake George and Cape Cod, medical procedures and, in one case, a made-up excuse that a voter needed to take care of her ailing mother.

Brian Suozzo, 28, who works for an Albany engineering firm, had an absentee ballot filled out in his name stating he would be ''at home recovering from medical procedure'' on primary day.

In an affidavit attributed to Suozzo, which was taken recently by a private investigator hired by Rensselaer County Republican county Legislator Robert Mirch, Suozzo said the information is a lie.

''I have not had a recent medical procedure,'' Suozzo's said.

''Someone wrote false information on the ballot application and then forged my signature.''

The application attributed to Suozzo was returnable to City Clerk William McInerney, a Democrat in an appointed post.

Karen Scharff, co-chair of the Capital District WFP, on Saturday called for an outside investigation.

"It's extremely troubling that local Democrats in Troy appear to have committed fraud in an attempt to win a primary fight with Troy Republicans for our ballot line,'' Scharff said.

''We call on the district attorney to investigate this matter immediately and prosecute any acts of voter fraud to the fullest extent of the law.''

Records at the county Board of Elections show the fraudulent ballots were handled by or prepared on behalf of various elected officials, and leaders and operatives for the Democratic and Working Families parties.

A Troy housing authority employee, Anthony Defiligio, was involved in handling some of the ballots.

The absentee ballots and applications for those ballots both are sworn documents.

The U.S. Justice Department can investigate voter fraud.

Federal statutes make it a felony offense for individuals to use corrupt tactics to obtain political and personal gain.

Charges can include conspiracy to injure voters' rights.

The voting scandal has erupted in a year when the City Council's nine seats are up for grabs with 19 candidates, including nine Republicans, nine Democrats and a WFP candidate.

Six county legislative seats in Troy also are on the line this year with 12 candidates.

The Democrats currently hold a 6 to 3 advantage on the council over Republicans.

The Republicans, meanwhile, control five of the city's six seats on the County Legislature, which is controlled by the GOP.

The WFP line in Troy has been in the crossfire dating back years.

Party insiders said the WFP traditionally aligns itself with Democrats but the GOP has sought to seize control of the coveted third-party line.

Many of the suspicious absentee ballots are listed as returnable to Defiligio.

Other ballots were returnable to Democratic or WFP party officials, and candidates and elected officials for citywide office, including: Troy Council President Clem Campana; Councilman Gary Galuski; Rensselaer County WFP Chairman James Welch; council candidates Michael LoPorto and Kevin McGrath; and Tom Aldrich, a LoPorto campaign volunteer.

''I can tell you that my conduct was strictly proper,'' Welch said in a statement issued Saturday.

Campana said Saturday that he handled only one absentee ballot, and properly, for a fellow employee at Hudson Valley Community College.

''I'm upset having my name tied with any impropriety; that's not me,'' said Campana, who is finishing his second two-year term in office.

A notarized deposition taken by one of Mirch's private investigators, and attributed to Griswold Heights resident Richard Gushlaw states LoPorto and a man who identified himself as ''Mr. Campanna'' visited him around Sept. 13 and asked him to sign an absentee ballot.

''Mr. LoPorto had an envelope and asked me to sign it,'' Gushlaw's deposition states.

''He said if I signed it I wouldn't have to vote in person and that by signing the envelope it would count as a vote for Mr. Campanna (sic)."

"I agreed not completely understanding what was going on.''

The affidavits were taken by two private investigators from Probst Investigations in Loudonville who crisscrossed the city the past two weeks interviewing voters and taking sworn statements.

Some of the affidavits were attached to a lawsuit filed Wednesday by Rensselaer County Republicans under the name of Christian Lambertsen, a WFP city council candidate.

The lawsuit challenges the authenticity of the ballots.

Mirch, whose political tactics over the years have rankled Democrats and the WFP, initiated the investigation after an elections official alerted him about several suspicious ballots on Sept. 14.

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

"Ballots, documents seized in Troy probe - Special prosecutor takes evidence as part of city election investigation"

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

First published in print: Thursday, October 1, 2009

TROY -- A special prosecutor assigned to investigate allegations of voter fraud related to the Sept. 15 primary elections in Troy has seized about 50 absentee ballots and other documents from the Rensselaer County Board of Elections.

Two people familiar with the matter said Trey Smith removed the documents on Tuesday afternoon with assistance from two investigators at the district attorney's office.

Smith has not yet retained an outside law enforcement agency to assist in the probe.

He is a former assistant district attorney who was appointed this week as a special prosecutor in the case.

The records, including 51 absentee ballots, are locked in a safe at the district attorney's office, the sources said.

The ballots have not been opened.

Another person familiar with the case said the U.S. Attorney's office will not get involved with the investigation at this time.

Smith, as a special prosecutor, may seek assistance from any law enforcement agency, including State Police or the FBI.

The case centers on allegations by dozens of city residents, many of whom live in public housing complexes, that information, including some signatures, were forged on election ballot documents filed in connection with the primary.

Some of those residents said they never received the ballots that were filed in their name at the board of elections.

Normally, absentee ballots are only released to the voter or someone listed on their ballot application as authorized to pick it up for them.

It's unclear who picked up the ballots, and later filed them, at the county board of elections.

In at least one case a voter told investigators that someone posing as them cast a ballot in person at the board of elections on the day before the primary.

County election commissioners Larry Bugbee, a Republican, and Edward G. McDonough, a Democrat, could not be reached for comment Wednesday.

The voting scandal involves ballots and ballot applications attributed to several dozen voters registered on the Working Families Party line.

Many of those people said they were asked to sign ballot applications by people connected with the city's Democratic party.

Others said they never filled out a ballot application and that the signatures attributed to them are forgeries.

County records show the fraudulent ballots were handled by or prepared on behalf of various elected officials, and leaders and operatives for the Democratic and Working Families parties.

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

"Liquor authority called public threat - Report says corruption, bureaucracy, outdated laws taint state agency; sweeping changes advised"

By STEVE BARNES, Senior writer, Albany, New York Times Union

First published in print: Friday, October 2, 2009

ALBANY -- A long-awaited report on the State Liquor Authority concludes the agency is fundamentally broken.

The 43-page assessment, released Thursday, depicts a department unable to perform its duties with more than minimal competence because of a profound lack of resources.

The SLA, the report contends, has become hamstrung by bureaucracy, antiquated laws, outdated technology and a lax internal culture that allowed corruption to flourish.

The result is a regulatory and enforcement agency that "jeopardizes public health and safety and exacerbates the economic crisis currently plaguing New York," the report says.

The findings are the result of two years of research and hearings by the state Law Revision Commission, which in 2007 was tasked by the state Legislature with assessing the SLA and suggesting fixes for both the agency and the laws that govern the manufacture, distribution and sale of alcohol in New York state.

"This is clearly the largest … most work-intensive report I've been involved with," said Robert M. Pitler, a Brooklyn Law School professor who is the commission's chair.

"What they're facing is massive."

Some of the changes recommended in the report are already underway as a result of reforms ordered by the SLA's new chairman, Dennis Rosen, who took office in August.

Others require action by the Legislature.

Even if only partially implemented, the commission's recommendations would result in the most profound changes to the way the SLA operates since its creation after the 1933 repeal of Prohibition.

The public would see streamlined regulation of an industry with $9 billion in direct annual economic impact in the state, including faster license approvals and enhanced enforcement.

Practical changes like expanded hours for alcohol sales and wine and spirits sales in stores currently limited to beer sales are also possible.

"I would give the Law Revision Commission a very large gold star," said Assemblyman Robin Schimminger, a Democrat from suburban Buffalo who co-sponsored the 2007 bill requesting the report.

"I think they've done very good work and have given a mission to the current administration of the SLA."

The authority's problems arew well documented, from a 1981 state Senate report that advocated scrapping the SLA entirely to several major state investigations over the past four years that resulted in fines, prosecutions and major changes.

(One investigation was led by Rosen, who previously worked in the attorney general's office.)

What's new about the commission's overview is the way it comprehensively outlines problems and recommends solutions.

The overhaul facing Rosen's administration is "herculean," the report says.

Among the findings:

A nine-month backlog of 3,000 liquor-license applications awaiting processing that grows by at least 150 new applications per month.

The decision five years ago to put the SLA under the financial and administrative control of the Division of Budget rendered the authority "incapable of protecting the public health and safety through licensing and enforcement" because "another agency is second-guessing the SLA's needs."

In addition, the report characterizes morale at the authority as "extremely low" because of factors including mountains of paperwork from lengthy applications that must be entered by hand or scanned; licensing software that is incompatible with enforcement software, hampering investigations; a voicemail system that was simply turned off because of an overwhelming volume of calls; and employees being forced to work above their pay grades or in jobs for which they are not trained, such as clerks pressed into service reviewing applications.

"I think much of what the report highlights is very instructive and useful … (but) it's easily demonstrable that we have already addressed or begun addressing many of these concerns and recommendations," Rosen said.

The new SLA chief has been given permission from the Budget Division to fill key positions, re-implemented basic administrative oversight of areas including employee attendance and use of state vehicles, and signaled a new openness by meeting with industry representatives to seek input about reforms.

"I would say the new chairman brings a very welcome attitude of wanting to change the agency for the better rather than maintain the status quo," said Albany attorney James D. Linnan, who for 36 years has been appearing before the SLA on behalf of clients seeking licenses and responding to disciplinary measures.

Linnan is counsel to the Empire State Restaurant & Tavern Association and also an SLA licensee himself, as the business partner with the chef Dale Miller in the latter's eponymous restaurant in downtown Albany.

As he moves forward, Rosen appears to have the support of Gov. David Paterson.

"Gov. Paterson is confident that the initiatives being developed by Chairman Rosen will go a long way to meet (reform) objectives and improve efficiency at the SLA," said Paterson spokesman Morgan Hook in an e-mail.

Hook emphasized that the conditions described in the report predate Rosen's appointment.

"The governor looks forward to receiving the complete report from the Commission, which will satisfy its statutory objectives and include recommendations for legislative action," he said.

The second half of the commission's report should be released in mid-December.

Steve Barnes can be reached at 454-5489 or sbarnes@timesunion.com. Visit his blog at http://blogs.timesunion.com/tablehopping.

Plans for reform

The Law Revision Commission report's recommendations for fixing the State Liquor Authority:

Staff: Hire permanent and, if necessary, temporary employees to address backlog.

Self-govern: Restore autonomous administrative, budgetary control to authority.

Enforcement: Focus on underage drinking.

Temporary licenses: Allow liquor-license applicants to sell alcohol and/or permit BYOB for restaurants while applications are pending.

"Benefits likely to lag for state's unemployed - U.S. Senate's failure to pass extension will impact New Yorkers"

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

First published in print: Saturday, October 3, 2009

ALBANY -- Haggling in the U.S. Senate is likely to interrupt the unemployment benefits received by about 40,000 New Yorkers, who are looking for work amid the highest national unemployment rate in 26 years.

The House has already passed a bill that would extend unemployment benefits for 13 weeks in states with unemployment rates of at least 8.5 percent, which includes New York.

But Senators from low-unemployment states balked at being left out of the extension, meaning the measure couldn't garner enough support to pass.

New Hampshire Democratic Sen. Jeanne Shaheen said on Friday that she would seek next week to give at least another 13 weeks of unemployment benefits to workers in all states.

Patricia Smith, commissioner of the New York Department of Labor, said the Senate's failure to pass an extension on Friday would almost certainly delay the checks received by New Yorkers, including more than 1,000 people in the Capital Region.

"We're going to see a lag in benefits," said Smith.

"People's benefits are running out this week."

Smith said she was confident Congress would eventually agree on an extension, but she said that for many New Yorkers the payments would not be "seamless."

The Senate debate occurred as new numbers from the U.S. Department of Labor showed continuing job losses.

The unemployment rate rose to 9.8 percent in September, up from 9.7 percent in August.

That's the highest national rate since June 1983 and a sign that employers are still cutting jobs.

"We're shedding jobs," Smith said at the Labor Department's job resource center on Washington Avenue at Albany.

"I don't when we're going to see an increase."

Those words weren't encouraging to those who had arrived at the resource center to check job listings.

But many of those folks already know how tough the job market is.

"The job hunt is very challenging," said John Pinkney, an unemployed 32-year-old from Albany.

"Every job you go to there's at least 15 people who have been there ahead of you."

The Labor Department said Friday that the economy lost a net total of 263,000 jobs last month, from a downwardly revised 201,000 in August.

Still, many economists say the economy is improving, even if it's not being reflected in the job numbers.

"This is just a slow recovery," said Anthony Riccardi, an economist in Albany who doesn't expect a quick jobs turnaround.

"It's just a slow and painful process."

All told, 15.1 million Americans are now out of work, the department said.

And 7.2 million jobs have been cut since the recession began in December 2007.

Chris Churchill can be reached at 454-5442 or by e-mail at cchurchill@timesunion.com. The Associated Press contributed to this story.

"Housing aide quits in ballot scandal - Anthony DeFiglio resigns; judge finds 39 absentee ballots tainted in primary"

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

First published in print: Saturday, October 3, 2009

TROY -- A Troy Housing Authority employee whose name surfaced in an unfolding absentee voter scandal abruptly resigned from his job on Friday.

Anthony DeFiglio, who oversaw vacant housing for the housing authority's various complexes, submitted an e-mail correspondence to a housing authority official stating he was resigning effective immediately, said Jay Vandenburgh, vice chairman of the housing authority's board of commissioners.

DeFiglio could not be reached for comment.

His resignation took place the same day that state Supreme Court Justice Michael C. Lynch issued an order striking down 39 absentee ballots of voters whose information had been forged on their ballots or the applications used to obtain them.

Some of the people said DeFiglio and other Democratic officials visited them during the past several weeks and asked them to sign applications for absentee ballots.

But a review of the documents, and testimony during a hearing Thursday before Lynch, showed that much of the information, including signatures and the reasons why certain voters couldn't vote in person, had been forged.

Some of the voters said they never received or filled out ballots even though they were later filed under their names at the Rensselaer County Board of Elections.

At least two ballots were filed under the names of people who have not lived in Troy for more than a year, including a woman who now lives in South Florida.

In an 8-page ruling, Lynch wrote:

''Finally, the court recognizes that the testimony and affidavits reveal significant election law violations ... that have compromised the rights of numerous voters and the integrity of the election process in the Working Family's Party September 15, 2009 primary.''

Lynch said a copy of the hearing transcript will be forwarded to a special prosecutor assigned to investigate the ballot scandal.

DeFiglio's resignation came six days after his housing authority office and computer were locked down by a housing authority official after the allegations were publicly revealed in the Times Union.

Trey Smith, a former assistant district attorney appointed as a special prosecutor in the case, seized the absentee ballot documents on Tuesday afternoon with assistance from two investigators with the Rensselaer County District Attorney's Office.

Smith is expected to seek help in the investigation from the State Police or FBI.

Two of the ballots were validated by Lynch's ruling.

The judge said those voters indicated at Thursday's hearing that they had signed both their absentee applications and the sealed envelopes that contained their ballots.

The case centers on allegations by dozens of city residents, many of whom live in public housing complexes, that information, including some signatures, were forged on election ballot documents filed in connection with the Working Families Party primary, which has been a battleground party line for the city's Republican and Democratic parties dating back years.

Normally, absentee ballots are only released to the voter or someone listed on their ballot application as authorized to pick it up for them.

It's unclear who picked up the ballots, and later filed them, at the county board of elections.

In at least one case a voter told investigators that someone posing as them cast a ballot in person at the board of elections on the day before the primary.

Others said no one ever came back with their ballot.

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

"Former Liberal Party chief pleads guilty in pension fraud - AG announces plea deals in wide-ranging scandal"

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

Last updated: 1:27 p.m., Tuesday, October 6, 2009

ALBANY -- The former head of the New York State Liberal Party has pleaded guilty to felony securities fraud in Attorney General Andrew Cuomo's ongoing probe of corruption involving the giant state pension fund.

Ray Harding, former Liberal Party chairman, admitted to receiving kickbacks during the tenure of former Comptroller Alan Hevesi was in office.

Under the scheme, Hevesi's top advisor Hank Morris had Harding appointed as a sham "placement agent" for investments in the pension fund.

In return, Harding helped create a vacancy in the Assembly which was then filled by Hevesi's son, Andrew Hevesi, in a special election.

Harding also worked with David Loglisci, the pension funds' chief investment officer under Hevesi.

Loglisci and Morris face more than a hundred federal charges related to their alleged roles in the scheme.

Harding collected $800,000 in bogus "placement fees," Cuomo said.

Also pleading guilty was Dallas investor Saul Meyer, founder of Aldus Equity, who admitted to paying $300,000 to Morris for access to doing business with the fund.

During his plea, Meyer admitted that he understood that Morris's political connections could help him secure that business.

"These guilty pleas vividly depict the depth and breadth of the New York State pension fund," Cuomo said.

Harding faces up to four years in prison, but Cuomo said he is cooperating with the investigation, which could result in a lighter sentence.

"Former Spitzer aide fined $10,000 - Commission penalizes Darren Dopp for his role in travel records scandal"

By VALERIE BAUMAN, Associated Press

First published in print: Thursday, October 8, 2009

ALBANY -- A New York state commission fined a former aide to disgraced Gov. Eliot Spitzer $10,000, saying Wednesday he misused his official position in an effort to discredit Spitzer's main political foe.

The state Public Integrity Commission found that Darren Dopp, who was Spitzer's communications director, had the State Police create official looking documents about then-Republican Senate Majority Leader Joseph Bruno's use of state aircraft.

He then gave the documents, which wouldn't ordinarily exist, to a reporter.

"With this decision, I become the first public information officer in history to be sanctioned for releasing public records in response to a media request," Dopp said in a written statement.

"This decision is unfounded, erroneous and tainted."

"I intend to sue the commission."

Michael Cherkasky, chair of the commission, said Dopp was motivated by politics and sought to damage Bruno, who had become an obstacle to Spitzer.

"Such misconduct erodes public confidence in both the integrity and the independence of our State Police," Cherkasky said in a statement.

Dopp said he worked through proper channels and under the direction of Spitzer.

Dopp announced earlier this year he planned to sue the commission rather than contesting the charges against him.

He said the suit will accuse current and former commission staff members of improper conduct.

Dopp previously testified before the commission during the initial investigation into the 2007 travel records scandal in which he and other aides were accused of having the State Police create documents about Spitzer's political nemesis on behalf of the former governor.

"Feds call indictees to testify"

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

First published in print: Monday, October 12, 2009

Federal prosecutors have subpoenaed at least three people in trouble with the law to testify against former Senate Majority Leader Joseph L. Bruno at his November criminal trial.

Among them is Mark Congi, who is doing 15 years in federal prison after being convicted of racketeering.

The crimes occurred during his leadership of Laborers Local 91 in Niagara Falls, a period when he had influence over the local's pension fund.

Congi was one of 18 local officers and members convicted of federal crimes.

Bruno was paid by investment houses, including Wright Investors' Service and McGinn Smith Inc., to find investors.

Union pension funds were key customers.

Bruno's honest services fraud trial also involves two people who now find themselves as possible witnesses for the same government that is proposing to prosecute them in separate trials.

Longtime Bruno friend Russell Ball was indicted by the U.S. attorney in Brooklyn in April for allegedly bribing Consolidated Edison employees to secure road contracts.

Cooperating witnesses who had been employed by the utility assisted the federal government's investigation.

Ball headed Roadway Contracting Inc., a construction company that opens up streets for utilities to do repairs.

His alleged briberies occurred from 2002 to 2006, when ConEd was awarding work to contractors in lower Manhattan.

A person familiar with Ball said Bruno has been helpful to Ball's company.

Ball's wife, Dori Evans, has done fund-raising for Senate Republicans.

Her name is also on the government's witness list for Bruno's trial.

Also on the prosecution's list: Rocco Fassacesia, one of 11 former ConEd employees charged in January with demanding more than $1 million in kickbacks from an unnamed construction company to get work for ConEd in New York City.

Bruno is accused of failing to disclose how he made money privately and free of conflicts of interest; he is contesting the charges.

Many of the names on the defense's witness list -- including Ball and Evans -- also appear on the government's.

Both lists were filed this week in U.S. District Court in Albany; you can examine them at http://blogs.timesunion.com/capitol.

Bruno grants for unions

The case against Bruno is likely to look at member items and budget line items for union training programs, according to lawmakers questioned by a federal grand jury.

Sen. Elizabeth Little, R-Queensbury, said she was subpoenaed to talk about training grants, including one she secured for trades unions in Plattsburgh.

She said a similar grant was secured by Bruno for a program in Saratoga, which is part of his district.

The state budget typically includes as much as $6 million a year in member items and line items for union training, some of them handed out at the discretion of lawmakers.

Sen. George Maziarz, R-Niagara County, who served as chairman of the Senate labor committee, said he also testified in the grand jury that investigated Bruno.

Maziarz said he was simply asked if he was familiar with about two dozen different labor leaders, many of whom were from New York City.

He said it was a short appearance.

The two senators are among five on the witness lists for the Bruno trial.

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

"Republicans seek absentee ballot reforms in Rensselaer County"

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

Last updated: 2:20 p.m., Monday, October 12, 2009

TROY -- The Rensselaer County Legislature's Republican majority leadership wants better monitoring of the way the absentee ballots are issued.

The demand for reforms and safeguards made today at a press conference in the legislature's chambers comes as a result of alleged absentee ballot fraud during the September Working Families Party primary by city Democrats.

The Republicans, who allege that some of the voting fraud involved public housing employees, will ask the county Board of Elections to compare signatures on absentee ballots issued to a person other than the voter, to record information verifying the identity of the person picking up the ballot for a voter and to request identification from any person not known to board employees.

"We want to make sure there are no more problems,'' said Legislature Chairman Neil Kelleher of Troy.

The Republicans also anticipate passing a resolution on Tuesday night, when county lawmakers meet, asking the state Legislature to review signature requirements for absentee ballots, regulate public housing employees' participation in elections and require members of the Republican and Democratic parties to be present when ballots are processed at public housing sites.

A state Supreme Court justice invalidated 39 absentee ballots in question for the Working Families Party primary in Troy after a court hearing last month.

County Legislature Majority Leader Robert Mirch of Troy, working with private investigators, obtained affidavits from voters who said they did not cast the absentee ballots and that the ballots were fraudulent.

Trey Smith, a former assistant district attorney, has been named as a special prosecutor to investigate the allegations.

City Democrats and Republicans have fought over the Working Families Party line in various elections.

Mirch, an enrolled Conservative Party member aligned with the GOP in the legislature, has long led Republican efforts in the city to secure the Working Families Party line by registering voters in the party.

The Republicans have usually been able to keep the line from the Democratic candidates.

In the November election, eight of the nine Democratic City Council candidates will appear on the Working Families Party line.

In the county Legislature races in the city, six Working Families Party candidates will appear on that party's ballot line.

"Flurry of motions in Bruno case - Defense attorneys seek to block jury from hearing about witnesses' criminal problems"

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

First published in print: Wednesday, October 14, 2009

ALBANY -- A flurry of pre-trial motions were filed late Tuesday in the criminal case of former Senate Majority Leader Joseph L. Bruno, including a request by his lawyers to bar information at trial about the criminal backgrounds of some witnesses slated to testify.

Defense attorneys filed eight motions Tuesday, including a request to U.S. District Judge Gary Sharpe to delay the start of the trial one week to Nov. 9.

They said that's necessary because prosecutors only recently turned over a mountain of discovery materials, including grand jury transcripts of about 100 witnesses and 350 more investigative files.

Under federal rules the records were not required to be disclosed sooner.

"These materials are obviously important to Mr. Bruno's defense, and they may trigger a need by defense counsel to take their factual investigation into new directions and a need to develop additional defenses and address additional legal arguments," Bruno's lead attorney, Abbe D. Lowell, wrote in a motion.

The defense team also seeks to prevent a jury from hearing testimony about government witnesses' criminal histories, immunity deals, cooperation agreements or pending charges.

At least five witnesses on the government's list -- four of them current or former labor union officials -- are either in prison or facing federal criminal charges related to bribery and racketeering.

Some of those witnesses are expected to testify about payments made by their companies to Bruno's private consulting company, or about investments by their union pension funds in companies for whom Bruno secretly worked, according to the indictment and court records.

"The government concedes that Mr. Bruno had nothing to do with any of the alleged criminal acts these witnesses committed," Lowell wrote in a motion.

Several people charged with bribery in a case connected to a New York City construction project are on the witness list.

Other witnesses may have signed cooperation or immunity deals with prosecutors in exchange for testimony.

Bruno's lawyers say allowing a jury to hear about those deals, which have never been disclosed, could improperly bolster a witness's credibility.

Prosecutors have challenged many defense pre-trial motions, including the request that jurors be instructed about whether Bruno relied on advice of attorneys.

The government also argued in a motion filed Tuesday that Bruno should be limited if his attorneys attempt to buttress his character through exhibits or testimony of witnesses.

Bruno served in the state Senate from 1976 to June 2008.

He was indicted by a federal grand jury in January on eight felony charges related to his alleged theft of honest services.

"Despite debt, grand hotel plans - Potential developer of DeWitt Clinton into hotel to get $4M from state, vows to pay taxes"

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

First published in print: Wednesday, October 14, 2009

ALBANY -- The state has awarded $4 million in economic development funding to a Brooklyn-based investor and diamond merchant who owes $615,000 in back Albany taxes and bills.

The money awarded by Empire State Development, the state's economic development arm, is for the planned transformation of the historic DeWitt Clinton building in downtown Albany into an Embassy Suites Hotel.

The mostly vacant building is owned by Chaim Ausch, who purchased it in 2006 for $5.3 million.

Ausch has since paid few of his tax, sewer and water bills.

Ausch's attorney on Tuesday said his client intends to quickly settle his outstanding debt, despite what he described as unsettled issues with how the bills were applied and charged.

"They'll be fully paid by the end of next week," Henry Nahal, the attorney, said.

The state announced the money for DeWitt Clinton redevelopment on Tuesday, as part of $17.5 million in Upstate Regional Blueprint funding.

The money is targeted at projects expected to create jobs and spur additional development.

State and city officials touted DeWitt Clinton plans at a City Hall news conference, describing the $4 million as a loan that would become a grant when development conditions established by the state are met.

Dennis Mullen, chairman and chief executive of Empire State Development, said the decision to award money to Ausch, doing business as C & Y Albany Hotel LLC, came only after a highly competitive and "very arduous process" of review.

Mullen and other officials, including Mayor Jerry Jennings, described a revived DeWitt Clinton as an important piece of downtown development.

The hotel redevelopment, first announced in August, is described as a $25 million project that will turn the DeWitt Clinton into a 198-room hotel.

Indeed, downtown boosters have long hoped to see the building at State and Eagle streets, which opened as a glamorous hotel in the 1920s but fell into disrepair in the 1970s, restored to its glory -- especially as it occupies a prominent spot across from the state Capitol.

Ausch, operating then as See Why Gerard LLC, told city officials of plans to renovate the building at the time of his purchase.

He quickly moved to evict the low-income tenants who then occupied the building.

But Ausch's redevelopment plans stalled as See Why Gerard became entangled in a long legal dispute with the building's last remaining tenant, Thomas Nicchi, who operates the The State Room Banquet Hall and The Original Comedy Works.

Nicchi has survived several eviction attempts by See Why Gerard, which even filed for Chapter 11 bankruptcy protection in an unsuccessful attempt to have Nicci's lease nullified.

Nicchi in September moved the comedy club to Colonie.

But he continues to operate the banquet hall.

On Tuesday, he said he has no plans to move, despite the redevelopment plans.

"We're here for another nine years," he said, citing a lease that expires in 2018.

"I have a lot of events on the books."

Nahal said the redevelopment would proceed around Nicchi's business, if necessary.

Chaim Ausch's son, Yakov Ausch, attended Tuesday's press conference but referred questions on unpaid bills and the dispute with Nicchi to Nahal.

Nahal said sewer and water bills were unpaid because of a dispute on the initial estimate.

The attorney said the unpaid bills resulted from what was essentially a "clerical error."

Nahal said the taxes were unpaid because of a disagreement over the building's assessment.

He said Ausch now would pay all of the unpaid bills in total, with the expectation of an eventual refund upon the resolution of the disagreements.

The Times Union was provided an itemized Albany County statement on the taxes and other bills owed by Ausch.

Yakov Ausch and Nahal on Tuesday agreed that the statement was accurate.

Other officials at Tuesday's announcement were also aware of the issue of Ausch's unpaid bills.

County Executive Mike Breslin said he had learned of Ausch's tax debt earlier in the day and had received an assurance the debts would be paid.

"I'm confident it's going to be paid off immediately," Breslin said.

"I'm sure this money is not going to go through without these taxes being paid."

The itemized statement includes bills going back to 2006.

It says Ausch and See Why Gerard owe $248,743 in school taxes; $132,255 in city taxes; $187,451 in sewer and water bills; and more than $46,000 in fees and penalties.

A spokesperson for ESD had no immediate comment.

Jennings did not return a request for comment.

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

"Democrats: Monserrate must go - Assault conviction draws calls for ouster from fellow Democrats"

By CASEY SEILER, State editor, Albany, New York Times Union

First published in print: Saturday, October 17, 2009

ALBANY -- As the fate of state Sen. Hiram Monserrate moved from the courtroom toward the Senate chamber, Friday brought a flurry of news releases from his Democratic colleagues.

Most of them called for him to resign or -- if he refused -- for the chamber to boot him from his seat.

The Queens Democrat was found guilty Thursday of misdemeanor assault despite being acquitted of much more serious felony charges stemming from a December 2008 incident in which his girlfriend's face was slashed by a broken glass.

After the verdict in the non-jury trial, Senate Democratic Conference Leader John Sampson released a statement saying that the majority Democrats were exploring their options for taking action against Monserrate.

On Friday, a half-dozen members of Sampson's conference became much more vocal about what that action ought to be.

"Being an elected official is an honor and a privilege, not a right," said Sen. Liz Krueger of Manhattan in a statement.

"As a state legislator, the voters give you the power to decide what laws all 19 million of us live under."

"And as such we are obligated to hold ourselves to the highest standards of our laws."

" ... The Senate is exploring our institutional legal options now that the courts have ruled, but haven't yet issued a sentence," Krueger continued.

"For me, the length of the sentence does not matter – domestic violence is domestic violence, guilt is guilt."

"We, the Senate, have been through so much this past year," said Sen. Neil Breslin of Bethlehem.

"It is time for us to take the steps necessary to earn back the public's trust."

"Hiram Monserrate remaining a member of the Senate contradicts this effort."

"I have followed the developments in the domestic violence abuse case ... and been disgusted by what I have seen and heard," wrote Sen. David Valesky of Oneida.

"Domestic violence is a serious matter and a violent crime that cannot be ignored or dismissed."

Some of the relatively few words of support for Monserrate came from Sen. Ruben Diaz Sr., a member of the so-called "Gang of Four" that made trouble for the larger Democratic conference following last year's elections and during the June coup crisis.

The Bronx Democrat defended Monserrate by comparing the calls for his resignation to his colleagues' seemingly more lenient reaction to former Sen. John Sabini's February 2008 plea to a charge of driving while ability impaired -- a non-criminal violation.

"Sen. Monserrate did not hide behind a plea."

"Sen. Sabini did," Diaz wrote, contending that Monserrate "was found guilty of trying to do good by forcing his girlfriend to go to the hospital for treatment."

Sabini, who had been arrested after a September 2007 incident in Albany, subsequently left the chamber in June 2008 to become head of the state Racing & Wagering Board; Monserrate was elected to Sabini's vacant seat a year ago.

" ... How many of my colleagues have posed in photos with Mothers Against Drunk Driving after embracing with our former Sen. John Sabini?," Diaz added.

"Is this because my colleagues practice drunk driving, too, or are my colleagues just more comfortable with drunk drivers?"

Democrats control the Senate 32-30.

They keep the majority if Monserrate is ousted, but it would be reduced to a single vote.

The majority will have ample support from Republicans if they decide to move for Monserrate's ouster.

Sen. Martin Golden of Brooklyn, for example, told the Daily News "he should not be sitting in that Senate, and if someone thinks otherwise, I'd like some of the crack they're smoking."

The Associated Press reported Monserrate has a defense fund set up by backers, according to a person familiar with the case who spoke on condition of anonymity.

The person, who was not authorized to speak publicly about Monserrate's finances, says the network consists of "high-net individuals" and Monserrate did not use campaign funds to pay his legal bills, estimated at $500,000.

Blair Horner of the New York Public Interest Research Group says Monserrate should release the names of all who donated since some may have business before the state government.

Calls to Monserrate were not immediately returned Friday.

The Associated Press contributed to this report.

"Senate Democrats announce Monserrate committee"

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

Last updated: 4:36 p.m., Tuesday, October 20, 2009

ALBANY -- Senate Democratic Conference Leader John Sampson announced the formation of a nine-member committee to consider disciplinary action against Democratic Sen. Hiram Monserrate, who was found guilty of misdemeanor assault last week.

Monserrate, a Queens Democrat, was aquitted on felony charges related to an incident last December in which his girlfriend's face was slashed by a broken glass.

Since the verdict, a number of senators have called for Monserrate to resign or, failing that, for the Senate to boot him from the chamber.

The committee will be chaired by Sen. Eric Schneiderman of Manhattan, one of Sampson's closest advisers.

The other four Democratic members are all women: Sens. Diane Savino of Staten Island, Andrea Stewart-Cousins of Westchester, Ruth Hassell-Thompson of the Bronx/Westchester, and Toby Ann Stavisky of Queens.

Senate Republicans have not yet announced the names of the four committee members that will represent the minority conference.

"This is a difficult situation for all involved -- for the member, our conference and, most importantly, the victim and the constituents of the 13th Senatorial District," Sampson said at a press conference in New York City, referring to Monserrate's district.

"Violence against women is not acceptable and will not be tolerated," he continued.

" … No one knows what happened in the dark."

"... We must bring light to those dark rooms."

Sampson committed to working in a "bipartisan fashion," but added, "We have to remember that we are Democrats."

"We are the party charged by history, by common decency, to care for the least, the lost and the last."

He had harsh words for Monserrate:

"As a father with daughters I'm not only angry, but I'm pissed off," he said.

"But as a leader, I cannot let my personal feelings supercede."

Schneiderman said that once the chamber's Republicans appoint their members, the committee will proceed as quickly as possible.

Before the news conference, Senate Minority Leader Dean Skelos released a statement criticizing Sampson for not referring the matter to the Senate Ethics Committee, which is chaired by Sampson but whose membership is split evenly between the parties.

"In appointing members to this committee, I will appoint Senators without preconditions who will serve the committee and pursue the investigation in a fair manner," Skelos said.

A statement from Monserrate's office said the embattled senator "respects Conference Leader John Sampson's and the Democratic Conference decision to review the matter."

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

"Thousands join online fight against new NY plates - Upstate NY clerk joined by more than 5,000 against Paterson plan for new license plates"

Associated Press

Last updated: 6:36 p.m., Thursday, October 22, 2009

CANTON, N.Y. -- An upstate New York county clerk is carrying out an online petition drive to thwart Gov. David Paterson's plan to require all residents to purchase new license plates next April.

St. Lawrence County Clerk Patricia Ritchie said Thursday it's an outrage to ask families and businesses to pay more for new license plates they don't need or want when they are being battered by the ongoing recession.

"New York residents and motorists from as far as Plattsburgh and Brooklyn are raising their voices to tell Albany to stop picking our pockets to pay for more wasteful spending ... while our representatives add to their burden, instead of bringing relief," said Ritchie, estimating residents and businesses in her county will pay about $2.5 million for new plates.

More than 5,000 people have signed the petition since the Web site went up Monday to protest the new license plan, Ritchie said.

Another 200 people who didn't have Internet access came to her office to sign their names, she said.

Beginning April 1, the state will require new license plates for every one of the estimated 10 million cars, trucks, trailers and ATVs registered in the state at a cost of $25 -- a $10 increase over the current cost.

If you want to keep your same license plate number, it will cost you another $20.

In September, the state increased driver's license and registration fees 25 percent.

The governor's office has said the new licenses could make $129 million for the cash-starved state, which has a projected budget deficit next year nearing $5 billion.

The legislature last spring approved a measure authorizing the license plate plan.

"If the St. Lawrence County Clerk wants to eliminate $129 million in revenue for the state, she needs to suggest a way to replace it," said Morgan Hook, a spokesman for the governor.

"Is she calling for a $129 million tax hike?"

"Is she calling for $129 million more in cuts to school aid?"

"Because that's really what this petition drive is all about."

"This is the type of irresponsibility that led to the crisis we face today," he said.

New York license plates were last issued in 2001 and they need replacing for safety reasons because the reflectivity on many has worn out, Hook said.

"It's just pure revenue raising," said Myron Burns, president and CEO of Ray Burns and Sons Trucking Inc. in Canton, who signed the petition in Ritchie's office.

His company will have to switch over its entire fleet of 60 trucks and trailers.

The registration fee hike in September already cost it more than $200 a truck, and now there will be more additional costs associated with the new plates to change all the company's overweight permits and amend its commercial registrations in Pennsylvania and Vermont, where it does some of its milk hauling business.

"It gets a little pricey," Burns said.

"Just to say everybody should have new plates is ridiculous."

"Feds probing Medicaid fraud at SUNY firm"

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

First published in print: Sunday, October 25, 2009

ALBANY -- A federal criminal investigation into systemic fraud related to audits of New York's Medicaid program is targeting numerous supervisors and employees at the state Health Department and the Research Foundation for the State University of New York.

Interviews with people familiar with the matter and documents obtained by the Times Union show that in recent weeks at least seven employees with those agencies received letters from federal prosecutors in Albany notifying them they are targets in the investigation.

The letters say evidence is being prepared for presentation to a federal grand jury for indictment in a case involving fraud, health care fraud, falsification of records and conspiracy.

The targeted employees were encouraged to contact prosecutors to discuss a pre-indictment settlement, and to consult attorneys if necessary.

The letters were sent by assistant U.S. Attorney Sara Lord, who specializes in white-collar crime cases.

Federal investigators with the U.S. Department of Health and Human Services are pursuing whether the scandal reaches into the upper levels of management for the SUNY Research Foundation and the state Health Department, according to sources briefed on the case.

At stake is more than $22 billion in annual matching federal funds for Medicaid.

The allegations are that Research Foundation workers, who were under contract with the state Health Department to audit the program, were pushed to manipulate data related to the percentage of ineligible people receiving benefits.

On Saturday, the Research Foundation issued a written statement in response to a request to interview John J. O'Connor, who is SUNY vice chancellor and president of the Research Foundation.

The statement shifted focus to an arm of the Research Foundation in Buffalo.

People briefed on the investigation said workers at the foundation's Albany headquarters are targets of the probe.

"We understand that a number of people received target letters from the assistant United States attorney in connection with programs carried out by the Center for Development of Human Services, which is part of Buffalo State College,'' the statement reads in part.

"Since some of the people who received target letters are RF (Research Foundation) employees, we are cooperating fully with all requests from federal officials."

People familiar with the case said several Research Foundation workers have alleged they were fired or retaliated against after questioning the practice of altering data or manipulating information such as residency requirements of Medicaid recipients.

One such employee, Ava Dock, filed a civil complaint against the Research Foundation in U.S. District Court late Friday.

The complaint alleges Dock's job in Albany is being eliminated at the end of this year because she stood up to supervisors who were altering data in their audits.

The complaint, which seeks at least $250,000 in damages, casts Dock as a whistleblower.

Dock's complaint also accuses an unnamed Research Foundation supervisor of altering records before the information was released last year to investigators with the U.S. Department of Health and Human Services office of inspector general.

The OIG began investigating the New York program last fall and is now the lead agency in the criminal investigation that has followed.

The Research Foundation's ''purpose to underreport New York's error rate for Medicaid claims was to defraud the federal government ... in order to avoid the disallowance of federal matching funds for Medicaid to New York,'' states Dock's complaint, which was filed by Albany attorneys John D. Hoggan Jr. and Donald T. Kinsella.

The complaint adds that while the Research Foundation submitted documents to the federal government purporting to show an ''error rate'' in its Medicaid program of below the maximum permitted rate of 3 percent, that the error rate ''was actually in excess of 20 percent.''

The Research Foundation considers itself a private, not-for-profit agency though its leaders are mostly made up of top SUNY officials.

The foundation contends it is not subject to the state Freedom of Information Law.

Still, the foundation handles about $1 billion annually in revenues, mostly in research grants from the federal government.

Its workers also routinely conduct business on behalf of the state through government contracts, and many of its employees have state government jobs and state e-mail addresses.

The Times Union is suing the Research Foundation, which employs roughly 13,000 people, in an unrelated court action in which the newspaper is seeking access to the foundation's payroll records.

The case evolved from the Times Union's efforts to obtain employee records, including time sheets, stems from the newspaper's reporting on Susan Bruno, a former Research Foundation employee and the daughter of former Senate Majority Leader Joseph L. Bruno, a Brunswick Republican.

The Times Union reported in January that Susan Bruno's resume on file with the Research Foundation appeared to contain false information and her co-workers accused her of having an $84,000-a-year no-show job.

She later resigned from her job as a special assistant to O'Connor at the Research Foundation.

The federal criminal investigation stretches back months.

In July, Research Foundation officials notified some workers that it had been served with federal grand jury subpoenas related to their Medicaid auditing program.

Part of the program is connected to Buffalo State College.

But most of the employees who are targets in the criminal investigation work in Albany, where the Research Foundation is headquartered at 35 State St., across from the federal courthouse on Broadway.

The Medicaid audits conducted by the Research Foundation on behalf of the state Health Department were intended to be randomized checks of the eligibility of New York recipients of Medicaid, which pumps billions of dollars a year into New York state -- money matched by state and county funds.

The allegations are that data was changed, altered or ignored to make it appear there was a lower percentage of ineligible Medicaid recipients so the state would not have to repay federal dollars from the program, records show.

Federal prosecutors also are examining whether Research Foundation supervisors may have tried to obstruct efforts by federal auditors.

In July, a related internal Research Foundation memorandum was sent to four people, including the interim president of Buffalo State College, Dennis K. Ponton, who also is a Research Foundation employee.

They were told in the memo the U.S. attorney's office had subpoenaed documents related to two programs: the Payment Error Measurement program (PERM) and the Medicaid Eligibility Quality Control Program (MEQC).

''It is of the utmost importance that we retain and preserve documents and electronic information that may be relevant to this subpoena,'' stated the memo from Heather M. Hage, who is listed as the Research Foundation's intellectual property manager for the Office of Technology Transfer.

In a follow-up memorandum three weeks later, Hage notified employees that the Research Foundation had hired an Albany law firm, O'Connell & Aronowitz, ''to ensure that the investigation is conducted in an orderly fashion.''

Hage's memo informed the employees that they may be contacted by federal agents or prosecutors and ''the choice to speak with them is entirely yours."

"... If at any time you feel threatened or intimidated by anyone from the (U.S. attorney's office), I ask that you immediately report the threat to me."

"Prosecutors and investigators often attempt to induce people to talk to them.''

The employees also were instructed not to remove or copy any Research Foundation or state Health Department documents without authorization.

That letter was sent out as several Research Foundation workers were cooperating with federal investigators.

''The Research Foundation, through its legal counsel, will be making arrangements with (federal prosecutors) to review documents and will provide them to the appropriate authority,'' Hage wrote.

''Under no circumstances should any document or record be changed or altered in any fashion before it is turned over.''

In the federal complaint filed by Dock late Friday, she alleges Research Foundation attorneys from O'Connell & Aronowitz threatened her with termination if she did not agree to be interviewed by them as part their own internal investigation.

They would not allow Dock to be accompanied to the interview with her attorney, according to the complaint.

Dock met with the Research Foundation's attorneys on Aug. 24, five days after the Research Foundation notified her that her job was being eliminated because the agency was discontinuing its PERM and MEQC contracts with the state.

Dock had received a letter stating the attorneys wanted to interview her to facilitate their gathering of information for the federal subpoenas.

But Dock's complaint alleges the Research Foundation's attorneys asked her very few questions about the subpoenaed information.

Instead, she said, they ''challenged (her) opinions regarding the lawfulness of ... pervasive alteration and falsification of data relating to the PERM/MEQC project.''

Dock recorded the interview and her complaint states she has been assisting federal investigators.

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

"Bruno trial set to begin - Trial to open Monday; judge rejects motions to limit evidence, testimony"

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

First published in print: Tuesday, October 27, 2009

ALBANY -- A federal judge on Monday struck down a series of pretrial motions in the criminal case of former Senate Majority Leader Joseph L. Bruno, whose trial on public corruption charges is scheduled to begin next week.

The pretrial motions ruled on Monday were filed by both sides in attempts to limit the evidence or testimony of the other.

Most of the motions were filed by Bruno's defense team, which wanted to limit what evidence the jury would hear.

They challenged the ability of the government, for instance, to elicit background on a smattering of witnesses with troubled backgrounds.

They also tried to prevent the introduction at trial of relevant state law, or allegations of wrongdoing by Bruno that predate a five-year statute of limitations.

But U.S. District Court Judge Gary L. Sharpe denied all their motions and told the attorneys he had settled many of the evidentiary issues in previous rulings.

Most of the remaining arguments, he said, will be resolved during trial on a case-by-case basis.

"I have no idea who is going to testify and who isn't," Sharpe said, explaining that he cannot rule out certain evidence or testimony in advance.

"It depends on the foundation that's laid as to whether or not that evidence become relevant."

"... I'll deal with them when the issues arise."

Bruno, who resigned last year from his state Senate position, attended what was scheduled to be his final pretrial conference.

It marked the first time the 80-year-old has been in federal court since he pleaded not guilty in January to an eight-count felony indictment charging him with theft of honest services.

Outside court, Bruno said he feels "confident."

He also said he hopes news coverage of his trial is fair and that the public will keep an open mind until it's over.

"I've done nothing wrong," Bruno said, repeating what he has said since first publicly disclosing the federal investigation in late 2007.

A pool of 60 pre-screened prospective jurors will arrive at the federal courthouse Monday.

Numerous jurors from a larger pool already have been removed from the list due to reasons ranging from personal hardship to prejudicial predisposition about the case.

Sharpe already has pre-screened jurors through detailed questionnaires, leaving a pool of jurors that may enable the attorneys to quickly pick their panel on Monday, the trial's opening day.

Sharpe runs a tight courtroom during trials.

He begins each day promptly at 9 a.m. and continues until at least 5 p.m.

Attorneys in the case said they expect the trial, with more than 100 witnesses expected to testify, to last as long as six weeks.

But Sharpe said it may not go that long due to his regimented trial practices.

Among the motions struck down Monday was a request by the defense to prevent jurors from hearing testimony about government witnesses' criminal histories, immunity deals, cooperation agreements or pending charges.

Lowell said Monday that after reading some of those witnesses' grand jury testimony, it's arguable whether the government is putting on certain people to simply lump Bruno with a bad element.

At least five witnesses on the government's list -- four of them current or former labor union officials -- are either in prison or facing federal criminal charges related to bribery and racketeering.

Some are expected to testify about payments made by their companies to Bruno's private consulting firm, or about investments by their union pension funds in companies for which Bruno secretly worked, according to court records.

The charges allege Bruno failed to properly disclose his receipt of money from companies or individuals that had an interest in his legislative duties.

Reach Lyons at 454-5547 or blyons@timesunion.com.

"State's ink a deeper shade of red - New York to enter negative cash flow; first time in recent memory"

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

First published in print: Tuesday, October 27, 2009

ALBANY -- Gov. David Paterson's call for the Legislature to return for a special budget-cutting session on Nov. 10 may be well-timed:

It will likely come as the state enters what finance experts call a month-to-month "negative cash flow" situation for the first time in recent memory.

That means the state's general fund will hit a $1.4 billion shortfall by next month, necessitating a loan from a special fund that historically has been paid back within weeks.

In years past, the state's general fund could borrow from a pot of money known as the Short Term Investment Pool, but only on an intramonth basis -- meaning the money had to be paid back by the end of the month.

But because of the size of the shortfall, and thanks to legislation that was tucked in this year's budget allowing for a longer payback, next month's STIP loan won't have to be paid back for four months, or until the end of the fiscal year on March 31, 2010.

"The issue in November is that we'd actually end the month with a negative cash balance," said Matt Anderson, spokesman for the governor's Budget Division.

STIP borrowing doesn't necessarily carry an additional cost since the state doesn't have to pay interest, said Robert Whalen, a spokesman for Comptroller Tom DiNapoli, whose office oversees the STIP, which consists of vehicles such as treasury bills.

But it's symptomatic of the kind of imbalance that now exists in state finances.

"Spending is outpacing revenue," said Whalen.

Indeed, while previously disclosing the STIP loan, Paterson has noted that in December the state is scheduled to pay more than $4 billion in education funding and aid to localities; that money is unlikely to be available.

It wasn't clear Monday if Paterson would speak about the negative cash flow Nov. 9, when he wants to address a special joint session of the Assembly and Senate to impress upon them the seriousness of the state's budget situation.

On Nov. 10, Paterson wants lawmakers to start attacking a $5 billion, two-year deficit, including $3 billion for this fiscal year.

Lawmakers in both the Senate and Assembly are continuing with hearings on the proposed cuts.

So far, the sessions have provided lawmakers plenty of stated reasons to try to avoid deep cuts.

On Monday, Paterson fired back, issuing the first of what he said will be a series of "Did You Know" announcements about various aspects of his deficit reduction plan.

Monday's notice centered on cuts Paterson wants to make in local school aid -- something that lawmakers are loath to do, especially in an election year in which they risk being blamed for potential school property tax increases.

Expanding on statements he made earlier in the month, Paterson pointed out that 95 percent of the state's school districts could tap their reserve funds to make up for state aid shortfalls this year.

Paterson's budget office also pointed to a Web link to http://emsc.nysed.gov/mgtserv/propertytax/ that allows people to view the size of their local districts' reserve funds.

That prompted criticism from the state School Boards Association and others.

School Boards spokesman David Albert noted that if schools tap those funds this year, they'll be in even more trouble next year when federal stimulus payments are scheduled to end.

He and others also called on Paterson to tap the state's own reserve fund -- a move the governor said would hurt the state's credit rating.

"We're all heading for the same cliff, the state and schools," said Robert Lowry, associate director of the state Council of School Superintendents.

"The governor would rather have the schools go off the cliff sooner."

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

TWO AND TWO MAKE FOUR ...

AND IS IT ANY SURPRISE?

WHO WANTS TO STAY UP HERE WITH THE HIGH TAXES, CORRUPTION AND LUNATICS IN GOVERNMENT PLUS THE COLD ...

And so ...

"1.5M New Yorkers moved out of state this decade, study finds"

By ERIC ANDERSON Business editor, Albzmy, New York Times Union

Last updated: 12:32 p.m., Tuesday, October 27, 2009

The Empire Center for New York State Policy in a study released today finds that New York lost more residents between 2000 and 2008 to other states than any other state.

New York had a net domestic migration outflow of more than 1.5 million people, or 8 percent of the population.

Using data from the Census Bureau and the Internal Revenue Service, the study found that most of the outmigration came among downstate residents, and that those moving out had incomes 13 percent higher than those moving to New York state during the most recent year for which data are available.

An influx of immigrants from foreign countries more than offset the domestic loss, and the state's population has grown since 2000.

The Capital Region was the only metro area statewide to gain population from domestic migration, the study reported.

"Was Ruiz AMD leak? - Wall Street Journal IDs GlobalFoundries chairman as source who gave inside info on restructuring"

By ERIC ANDERSON, BUSINESS EDITOR, Albany, New York Times Union

First published in print: Wednesday, October 28, 2009

The Wall Street Journal is identifying GlobalFoundries Chairman Hector Ruiz as the source who provided insider information about Advanced Micro Devices Inc.'s restructuring in 2008.

Ruiz shared confidential information with Danielle Chiesi, a defendant in the insider trading case involving Manhattan hedge fund firm Galleon Group, the newspaper reported on its Web site Tuesday evening.

At the time, he was AMD's executive chairman.

Ruiz isn't a defendant in the case, and he declined to comment, the Journal reported.

The restructuring spun off AMD's manufacturing operations into a new company, GlobalFoundries, bankrolled by Abu Dhabi investors in a $3.6 billion deal.

GlobalFoundries is building a $4.2 billion semiconductor fabrication plant at the Luther Forest Technology Campus in the Saratoga County towns of Malta and Stillwater.

New York state has provided incentives worth $1.4 billion for the project, which is expected to be up and running by 2012.

Six people were arrested Oct. 16, including Chiesi and Robert W. Moffat Jr., a senior vice president in charge of IBM's hardware and semiconductor operations.

Moffat, 53, is a 1978 graduate of Union College in Schenectady.

Also arrested was Raj Rajaratnam, founder of the Galleon Group.

According to federal wiretaps, Chiesi was getting insider information about AMD from Moffat, who was in a position to know about the restructuring because IBM would have to approve the licensing of chipmaking technologies that GlobalFoundries would use in its chip fabrication operations.

But according to the federal wiretaps, Chiesi also was getting information from an unnamed AMD employee about the deal with Abu Dhabi.

She was passing that information on to Rajaratnam, along with the information she was getting from Moffat.

Another defendant, Anil Kumar, a director at consulting firm McKinsey & Co., also is accused of providing information to Rajaratnam about the AMD restructuring.

McKinsey had been hired by AMD in June 2008 to work on the Abu Dhabi deal.

GlobalFoundries spokesman Travis Bullard Tuesday evening said the company would have no comment.

"The events in the (Journal) story actually predate our creation," he said.

Asked whether it would have any impact on GlobalFoundries Luther Forest project, he said no.

AMD spokesman Drew Prairie said:

"We are thoroughly reviewing the situation, but at this time we don't have any more detail to discuss publicly."

"We are not aware of any allegation of criminal misconduct on the part of any current or former AMD employees, nor have any current or former AMD employees been charged with a crime."

"It would be inappropriate to comment further on an ongoing Department of Justice investigation."

Chiesi had used the information to buy millions of dollars worth of AMD stock, according to prosecutors.

So did Rajaratnam.

While the shares rose after the restructuring was announced, they later tumbled in the stock market meltdown.

Business writer Larry Rulison contributed to this story. Eric Anderson can be reached at 454-5323.

"Is $5,000 stipend boost a back-door pay hike? - Chief judge doubles payment to $10,000 as judiciary still in salary fight with Legislature"

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

First published in print: Wednesday, October 28, 2009

ALBANY -- As the Legislature and governor tackle New York's $3 billion budget deficit, the state's third branch of government has doubled judges' stipends, which will cost an additional $6 million per year.

Citing the judges' decade-long lack of a pay raise, Court of Appeals Chief Judge Jonathan Lippman announced during an Oct. 14 webcast that he would double judges' supplemental allowance from $5,000 to $10,000, to cover items such as uncovered medical expenses, robe dry cleaning, travel, judicial license plates and marriage counseling.

Lippman said in an interview with the New York Law Journal, which first reported the allowance increase, that he was "pleased to be able to double" the support.

"We are not giving judges (added) salary," he said.

"…We have finite resources."

"I think it's an appropriate reimbursement of judges for expenses of all different kinds."

Judges have been locked in a battle with the Legislature over judicial pay, which has been locked at $136,700 for the past 11 years.

The Legislature, which must approve judicial pay raises, has historically tied them to their own salary increases -- a practice that the judiciary has called unconstitutional.

The Court of Appeals will hear arguments in three separate cases about the issue early next year.

Legislative leaders and the governor have been named as defendants in the three lawsuits.

Responding to the judges' lack of a pay raise, former Chief Judge Judith Kaye in 2008 created the Judicial Supplemental Support Fund, which would provide full-time judges with a $5,000 annual stipend for "services and goods to support them in the performance of their judicial responsibilities," according to a 2009 bulletin from the state comptroller's office.

Judges can receive the stipend in two ways:

They can file receipts for reimbursement of expenses, or they can take a lump-sum payment which is taxable as income and does not require judges to file receipts.

More than 90 percent of judges take the full $5,000 allowance, according to the Office of Court Administration, costing the state roughly $6 million.

Doubling the allowance will cost another $6 million per year, according to OCA spokesman David Bookstaver.

The expanded allowance will become effective Nov. 1, but checks reflecting the added funds will not be cut until April 15, 2010.

The expansion will be added to next year's budget, said Bookstaver.

Bookstaver emphasized that the increased allowance was not in lieu of a raise.

"We have to keep the best and the brightest on the bench."

"And frankly, some of them are leaving because they can't make ends meet," he said.

"This is really to make the judges lives slightly more tenable in an untenable situation."

Bookstaver added that the judiciary may reconsider the expanded benefit if judges receive a pay raise before April 15.

"If the salaries are increased, we'll certainly take a second look at the judicial supplement support fund," he said.

Reaction from state leaders to the judiciary's planned increase was muted, even as Gov. David Paterson, Assembly Speaker Sheldon Silver and Senate Democratic Conference Leader John Sampson tackle the state's estimated $3 billion current-year budget shortfall.

"It's our policy not to comment on next year's budget submission until it's formally introduced," said Division of the Budget spokesman Matt Anderson.

"New York judges are overworked and underpaid, and while we are in a fiscal crisis, we have to ensure the administration of justice is never compromised," Sampson said.

Silver's office declined to comment on the issue.

While state leaders have stayed largely silent on the issue, the allowance expansion was met with consternation in some quarters of the legislature.

"In the scheme of the larger budget problem, $6 million is symbolic ... but it is indicative of them having too much money to spend."

"They obviously have the money and they want to spend it," said Assemblyman William Parment, D-Chautauqua County, who has questioned the judiciary's significant budget expansion over the past few years.

The judiciary's budget has grown about 45 percent over the past seven years, from $1.7 billion in the 2002-2003 budget to $2.5 billion in the current-year budget.

"Is it not symbolic or symptomatic of a larger, more troubling problem within the judiciary?," asked Parment of the stipend expansion, particularly given the state's current economic crisis.

Paterson did not propose cuts to the judiciary's $2.5 billion budget in his deficit reduction plan, which proposes cuts in almost every corner of state government in an attempt to save $5 billion over two years.

"I don't see how the governor can expect the Legislature to cut school teachers and leave the judicial budget unscathed," Parment said.

"The governor does not typically put forward proposed spending reductions for other coequal branches of government when submitting his initial budget recommendations," Anderson said.

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

"Bruno: A life on trial - The ex-state senator's story starts in poverty, turns to great political power and wealth, but a federal jury will write the final chapter"

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

First published in print: Sunday, November 1, 2009

ALBANY -- He was the ultimate rainmaker.

A political success story for the history books.

Joseph L. Bruno transcended an impoverished upbringing and rose to the top of state government.

For more than three decades, the Rensselaer County Republican, a boxer and Korean War veteran, was defined in the New York Senate by his chiseled looks, distinctive charisma and toe-to-toe legislative style.

He brazenly squared off with governors and thrived in the shadowy game of state politics, rising through the ranks to seize the Senate majority leader position in an historic coup in 1994.

From town playgrounds to the region's largest airport, Bruno's legacy endures in the millions of taxpayer dollars doled out in his name while he shared control of the state's coffers.

According to the Justice Department, his influence was for sale.

Now, at age 80 and out of power, Bruno finds his legend is on the ropes.

On Monday, Bruno's trial on felony corruption charges begins in U.S. District Court.

Federal prosecutors have invoked a potent statute to accuse Bruno of using his position to enrich himself through secret deals hidden from the public he took an oath to serve.

A jury of 12 will decide whether Bruno broke the law, or, as his lawyers have argued, was unfairly singled out for prosecution under a theft of honest services statute they claim is unconstitutional.

The case marks the first time a person of Bruno's political stature has faced such a prosecution in New York.

Yet around the country, other public officials facing similar cases to the one facing Bruno have been convicted despite their vehemently pronounced claims of innocence.

For federal prosecutors, the honest services statute, which is slated for review by the U.S. Supreme Court, has become the Justice Department's favored weapon in public corruption cases.

The years-long FBI investigation of Bruno began around December 2005, when reports surfaced Bruno had flown from Schenectady to LaGuardia Airport in New York City aboard a private jet chartered by Loudonville businessman Jared Abbruzzese.

The flight was arranged for Bruno after he was unable to secure a state-owned helicopter at a time when he was feuding with Gov. George Pataki.

The flight ignited the FBI's interest.

Over the next several years, federal agents deeply plied Bruno's relationship with Abbruzzese, whose dealings with Bruno are the subject of four of the indictment's eight counts.

Yet, the Abbruzzese-Bruno relationship is only a portion of the case, and the indictment outlines a scheme to defraud by Bruno spanning 13 years and involving numerous individuals and entities, all of whom had varying interests in state government.

On Jan. 23, more than three years after the probe began, the felony indictment that Bruno fought hard to prevent was unsealed in a courthouse just a few blocks from the Capitol where he reigned as Senate majority leader for nearly 14 years.

The iconic businessman arrived in a BMW and flashed a smile as he brushed past reporters.

He took an elevator to the fourth floor, walking into the courtroom with his marked confidence, and politely introduced himself to the prosecutors.

Minutes later, a magistrate judge explained the charges to Bruno, who, if convicted, could face a sentence ranging from home confinement to multiple years in prison.

''This is a moment that I hoped would never come in my life,'' Bruno said following his arraignment.

''There is nothing, I share with you, more serious than to stand before a judge and hear yourself formally charged with breaching your personal and professional code of conduct.''

Not surprisingly, Bruno fought back immediately.

Although retired from the Senate for six months by that point, he used money from a campaign war chest to reserve a conference room at a nearby hotel.

Bruno was animated as he read a prepared statement criticizing the FBI's three-year investigation as a ''get-Joe-Bruno campaign.''

He lashed out at what he called a ''politicized U.S. Attorney'' and warned his fellow lawmakers they could be next.

For their part, prosecutors have built a case they said shows Bruno abused his powerful Senate post to secretly do business with at least five groups or individuals who paid him more than $3 million between 1993 and 2006.

The payments were not bribes, but ''gifts'' that Bruno was obligated to disclose to the citizens of New York, according to the charges.

Bruno and his defense team have said he reported every financial relationship he was required to disclose under state law.

Bruno said his business deals were reviewed by attorneys and that he had a right as a ''part-time'' lawmaker to outside business interests.

''This is a threat to everyone in government because if they can indict me for what I've done over the last 12 to 15 years of my life ... I'm a businessman, I am not a lawyer,'' Bruno said in January.

''I have a right to earn a living and I did it legally and I did it right."

"I checked with counsel."

"I checked with ethics people."

"I called the FBI and asked them to clarify for me what I could do and what I couldn't do."

"They told me they couldn't answer that, that you're on your own.''

A central part of the prosecution's case will hinge on what Bruno actually did for the money he received.

Much of the money was paid directly to Bruno or to private consulting businesses he set up and operated from his Brunswick home.

Andrew T. Baxter, acting U.S. attorney in New York's Northern District, said their allegations are that Bruno ''exploited his office'' and his private consulting work consisted primarily of the promise of his influence.

''Bruno did not perform legitimate consulting services commensurate with these substantial consulting fees which were in essence gifts from the individuals or related entities who benefited from his official actions,'' Baxter said in January.

''Bruno failed to report these gifts as he was required to do under state ethics and reporting laws."

"Bruno also misrepresented to two of these consulting clients that he had received clearance from the legislative ethics committee to receive payments from them, when in fact he had not sought such ethics opinions relating to those particular outside activities.''

The government's more than 100 witnesses will include labor union officials who have been convicted or charged in connection with unrelated financial scandals, including bribery and extortion.

The witnesses slated to testify also include Bruno's close friends, former political allies, Senate colleagues and people who worked for the Legislature's ethics panel.

At times the trial may well provide an unprecedented look at the state's murky ethics forums, where legislators' requests for opinions from a secretive panel are never publicly revealed, and financial disclosure forms are routinely cleansed of details such as financial earnings before being made public.

Prosecutors said some people who cooperated in the grand jury may turn squeamish on the witness stand at Bruno's trial.

They told U.S. District Court Judge Gary L. Sharpe some witnesses may be subject to questioning as hostile witnesses.

In instances where a witness attempts to recant or soften their grand jury testimony, prosecutors said they're prepared to pull out grand jury transcripts and clarify for the trial jury what the person previously said under oath about their dealings with Bruno.

In the months leading up to the trial, Bruno's supporters have come to his aid as word was being spread through the community his legal fees have soared.

Bruno's campaign war chest, which in better times contained around $2 million, was regularly used to pay for restaurants, phone bills, floral arrangements, party supplies and other day-to-day costs related to his lavish political lifestyle.

It has since dwindled as criminal defense bills mounted.

Bruno declined to answer questions last month about his campaign accounts or efforts to privately raise money for legal expenses.

A statement by a spokesman said:

''The government spent years and untold millions of taxpayers dollars in this case."

"We are fortunate to have friends and supporters willing to step up to level this playing field.''

John Nigro, an Albany commercial real estate developer and friend of Bruno's, signed an open letter that's been widely distributed to solicit contributions to Bruno's ''legal defense fund.''

Nigro's signature at the bottom of the one-page letter is next to that of James Barba, the head of Albany Medical Center.

Barba declined a request for an interview but said through a spokesman it was a private matter.

''No one has done more to fight for us here in New York state than Joe,'' the letter states.

''Now the time has come for us to help him in his fight.''

Nigro said he doesn't know who has the key to the Albany post office box listed as the place for supporters to send money.

''All contributions will be kept private and are not reported publicly,'' the letter reads.

''I and several of us, many of us people who have benefited in the Capital Region just felt we need to say something and give something back,'' Nigro said of his decision to sign the letter.

''We're a believer, a firm believer, that this is going no place but unfortunately it will cost him a lot of money to get there."

"We feel an obligation for all that he's done for our families and our futures.''

Bruno's efforts to garner state and federal aid for the Capital Region has been a strong subtext in the case.

Since his indictment, Bruno has attended numerous public events, posing for news cameras and keeping his message upbeat.

Bruno is poised for a court showdown that in January he said would be settled in front of a jury of his peers.

''I've had to fight my whole life for myself, for what I believe in,'' Bruno said at the time.

Last week, during a break in his final pretrial conference, Bruno was more subdued, but still firm.

''Confident,'' he said when asked how he was doing.

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

"Ethics laws on trial - Statutes will get scrutiny in Bruno case opening today"

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

First published in print: Monday, November 2, 2009

As the trial of former Senate Majority Leader Joseph L. Bruno begins today, state ethics laws, as much as the powerful Republican leader himself, will be on trial.

Prosecutors have shown they intend to dissect New York's public officers law and disclosure laws, and many onlookers are eager to see the weaknesses in those laws laid bare.

"I always felt the disclosure laws were lacking in transparency and given the rules on outside employment ... you needed the corresponding disclosure into those relationships," said Michael Garcia, who stepped down at the end of 2008 as U.S. attorney for the Southern District of New York.

His office became the most aggressive to prosecute Albany lawmakers in corruption cases in years and won convictions through guilty pleas.

Garcia said the Bruno case will be a positive thing for Albany.

"I always felt we were close to reform -- one more case, one more event would quite possibly put it over the edge to real reform," Garcia said.

"None of those cases ever went to trial."

"Maybe a public airing of the rules and facts will cause people to re-engage in the reform debate."

New York's ethics codes aren't the worst.

The state received a "C" grade in an analysis by the Center for Public Integrity of standards required of state lawmakers nationwide.

The state's history suggests public outrage over corruption scandals can propel action on ethics laws.

After exposure of Democratic Party racketeering in the 1980s, state lawmakers created the integrity laws now in place after voters and leaders pushed for change.

With the passage of time showing those laws to be inadequate, many lawmakers, public policy experts and government reform advocates are focusing on the Bruno trial to spark meaningful reform.

The use of the federal honest services statute against New York elected officials already caused a rethinking of financial disclosure laws this legislative session.

A plan passed in the Assembly stalled and compromises are under negotiation.

Bruno, 80, of Brunswick, is a 32-year Senate veteran who rose to lead the chamber from 1995 to 2008.

He gave up his powerful post and quit amid a federal investigation of his outside business interests.

He is charged with not fully disclosing his consulting activities and representation of investment companies that involved people and groups having business before the state.

His activities made him millions of dollars for barely doing any work, according to federal investigators, and the income did not have to be disclosed on financial forms lawmakers must fill out every year.

Indeed, New York does not require disclosure of business clients, sums of money earned privately, or even how the money is earned.

Some states require such disclosure.

A few require lawmakers, even lawyers, to name clients.

This summer, lawmakers began attempts to update the Ethics in Government Act of 1987.

The 22-year-old legislation was a response to scandals that rocked the Democratic Party and climaxed with the suicide of Donald Manes, the Queens borough president under investigation in a kickback scheme.

The dramatic Manes story became national news.

Well-known Syracuse Mayor Lee Alexander was under investigation for his own kickback scheme and pleaded guilty to charges in 1987.

Assemblyman G. Oliver Koppell, who later was appointed attorney general, led a committee that recommended the ethics legislation that became the backbone of the "landmark" laws governing public officials.

Koppell, now a New York councilman, also is a lawyer with an outside business practice.

He said he would want to protect client identities but doesn't mind if income from law practices becomes a disclosable detail.

"It's good to review things in light of experience and problems that may have evidenced themselves," he said.

His bill more than two decades ago arose when the public, Gov. Mario M. Cuomo and newspaper editorials demanded reform.

It passed in both houses easily, causing some lawmakers to weep at its substance.

Yet Cuomo vetoed it, saying the rules didn't go far enough.

After negotiation, lawmakers worked out a compromise.

They persuaded him to agree to a separation-of-powers argument.

Cuomo instituted a tougher ethics program for executive branch officials policed by an ethics commission.

The Legislature set up its own regulator, a Legislature-controlled body.

"The Legislature's ethics agency is a toady agency, a disaster," said Blair Horner, legislative director for the New York Public Interest Research Group.

The commission and the in-house ethics panel set up by the Legislature has shown little evidence of policing members, although its operations are mostly confidential.

Horner said it has been too easy for lawmakers to go afoul:

"If you're based on an honor system and you see others gaming the system, you say: 'Why can't I go one more step beyond what is allowed?'"

"It's the Wild West without U.S. marshals, it's the lawlessness of state ethics where state officials wittingly or unwittingly break the law."

Attempts to create new laws broke down in September when the Senate squabbled over passing a plan advanced by Assembly Speaker Sheldon Silver and co-sponsored by Assembly Minority Leader Brian Kolb, R-Canandaigua.

The measure calls for revealing ranges of income of lawmakers.

It would require lobbyists and clients of lobbyists to disclose business relationships with public officials and set up a new executive branch ethics commission and new lobbying commission.

Gov. David Paterson is pushing for what he calls a better plan.

The Senate failed to pass the bill after Sen. John Sampson proposed an amendment that included tougher campaign finance enforcement.

Missing from the legislation is the broad disclosure of the special interest group relationships and clients of lawyers, such as Silver, who is a practicing attorney.

"Are we going to require that lawyers and real estate brokers disclose their clients?"

"How far do we go?"

"And accountants having to disclose their clients?" said Assemblywoman RoAnn Destito, D-Rome.

"Then this is no longer going to be a legislature that allows outside clients."

"That would have a monumental impact on whether we remain a part-time legislature or if we transition into a full-time legislature."

Lawyer Mark Davies, who runs New York City's Conflicts of Interest Board, said the disclosure requirements need a major overhaul, such as rewriting disclosure forms so they solicit more details that point out the potential for conflicts.

Many doubt whether the Legislature has the will to make heavy revisions.

Barbara Grumet, a veteran ethics professor who worked at Russell Sage College, is now a conflict-of-interest watchdog at a City University of New York technology college.

"I think we need more disclosure, but it's politicians who decide on changing the rules and setting up the mechanisms for changing the rules," she said.

"I'm not optimistic we're going to get greater disclosure."

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

"Feds: Bruno 'exploited' power, public’s trust"

November 2, 2009 at 4:43 pm by Robert Gavin

Albany, New York Times Union

A federal prosecutor today cast former state Senate Majority Leader Joseph L. Bruno as a scheming state leader who skated by New York’s ethics rules, deceptively solicited unions with business before the state and reeled in hundreds of thousands of dollars while betraying the public’s trust in a shroud of secrecy.

“He exploited his position,” said Assistant U.S. Attorney Elizabeth Coombe as the trial of Bruno began before Judge Gary Sharpe in U.S. District Court on Broadway in downtown Albany.

An eight-count indictment accuses Bruno, 80, who had been the Legislature’s most powerful Republican for more than 14 years, of mail and wire fraud in an alleged scheme to defraud the public of “honest services.”

The silver-haired Bruno, of Brunswick, sat with his hands folded as the prosecutor repeatedly told a jury of seven women and five men of upcoming evidence they would hear to show his guilt.

While many parties were “constantly bombarded” by investor representatives, “Senator Bruno’s calls were different,” she said.

She told jurors Bruno approached 15 unions on behalf of the Milford, Conn.-based Wright Investor Services and 11 later invested with the outfit, which had paid the senator $1.3 million.

She noted Bruno also received $630,000 from the locally based McGinn-Smith and Company between 1993 and 2005.

She highlighted the alleged “mixing of Senator Bruno’s private interests and public duties.”

She told jurors they would hear from the likes of union officials, as well as Loudonville businessman Jared Abbruzzese, who she said paid Bruno $360,000 in 2004 and 2005 – and then exchanged a horse when the payments stopped.

Coombe said Bruno did not inform a legislative-controlled ethics committee he would be contacting labor unions – which deal with the state – when he approached the panel.

And the prosecutor said while Bruno sat atop the Senate leadership, some bills passed and some would not that “directly affected the unions.”

She also alleged the senator had “empty shell” entities, identified as Business Consulting Inc. and Capital Business Consultants, within the alleged scheme.

While Coombe spoke for less than 30 or so minutes, defense attorney Abbe Lowell doubled that time, questioning what proof existed to his client’s guilt.

The high-profile lawyer began his opening arguments addressing those in court, with special mention to “members of the Bruno family.”

He painted Bruno as a self-made business success story who was repeatedly re-elected 16 times – and hardly conducted his dealings secretly.

Rather, he told jurors, Bruno did not as much as violate a state ethic rule, let alone a federal felony.

Lowell scrawled words on a paper board to illustrate his points.

He said Bruno never had any exchange, applied no pressure to anyone, paid off no one and showed “no hiding of anything required in the state of New York.”

Not one document, e-mail, check, phone message or witness for that matter would support the government’s case, Lowell said.

While Coombe had alleged Bruno hid details of his consultant work to the state legislative ethics panel, Lowell said Bruno repeatedly kept it informed.

And he questioned how Bruno could have broken the law when other Senate staffers – who knew of Bruno’s work – have not been charged.

“It is wrong for public officials to violate the public’s trust,” he said.

“But it is equally wrong when an innocent man is convicted.”

Coombe objected twice during Lowell’s lengthy opening.

Sharpe rebuked her twice, noting the lawyer was offering arguments and not evidence.

While lawyers were meeting to potentially “expedite” the trial, according to Sharpe, Jurors were sent home without any witnesses being called.

The trial resumes Tuesday at 9 a.m.

(Staff writer James M. Odato contributed to this story)

"Ruiz resigned in September - Executive tied to Galleon Group insider-trading case"

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

Last updated: 10:53 a.m., Monday, November 2, 2009

MALTA -- GlobalFoundries Inc. Chairman Hector Ruiz turned in his resignation at the end of September -- an indication that he may have known he was an unnamed source in the $20 million Galleon hedge fund insider trading scandal.

GlobalFoundries, which is building a $4.2 billion computer chip factory at the Luther Forest Technology Campus, announced this morning that Ruiz has taken a leave of absence and will step down as chairman of the board of directors Jan. 4.

Ruiz's resignation is not surprising considering a recent Wall Street Journal story identifying him as an unnamed tipster in government telephone recordings used to implicate a Bear Stearns hedge fund trader in the scandal.

At the time of the recordings last year, Ruiz was executive chairman of Advanced Micro Devices, the company that later spun off its manufacturing operations into GlobalFoundries, a joint venture with the government of Abu Dhabi.

Ruiz become chairman of GlobalFoundries when the company was formed in March.

Ruiz was allegedly recorded giving confidential information about the spinoff to Danielle Chiesi, the Bear Stearns trader.

He was never named in any government documents and has not been charged.

Chiesi bought millions of dollars of AMD stock with the information but likely lost money after the stock market tanked as part of the global financial crisis.

Ruiz never tried to profit from his knowledge, according to government documents.

However, it was assumed that Ruiz's standing as head of GlobalFoundries' board would be extremely compromised by his identification in the Wall Street Journal story.

He has yet to comment on the story in the news media.

Yet today's press release raised a lot of questions about whether Ruiz knew he was the unnamed source and how long he has known about the government's case, which also led the arrest of Robert Moffat Jr., the No. 2 executive at IBM Corp., a research partner with GlobalFoundries on computer chip manufacturing technology.

Richard Mintz, a spokesman for the GlobalFoundries board, declined to comment on why Ruiz decided to take a leave of absence in advance of his official resignation.

Alan "Lanny" Ross, a well-known semiconductor industry veteran who was previously CEO at Broadcom and was a member of the GlobalFoundries board, is the interim chairman.

"SUNY leader deflects focus of case - Research wing head says his staff is not a target"

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

First published in print: Monday, November 2, 2009

ALBANY ­­-- The head of the Research Foundation of the State University of New York, who ran SUNY for much of this year, told foundation directors and SUNY trustees that his staff are not the target of a federal grand jury, and that criminal inquiries concern SUNY campus and state officials.

Research Foundation President John J. O'Connor, who is vice chancellor of SUNY, wrote to his two boards, newly minted Chancellor Nancy L. Zimpher and SUNY presidents Oct. 29 distancing himself from three subpoenas issued upon foundation officials this year.

He said the most recent subpoenas involve about eight foundation employees as targets for potential criminal indictments, but that they don't work with him.

He emphasized that no one at central staff in Albany has been subpoenaed and that the headquarters is only responsible for fiscal administration.

The recent subpoenas involve a probe of potential Medicaid fraud.

They mark the third time this year that federal investigators have sought information from the private research arm of SUNY long run by O'Connor.

He also headed the 64-campus SUNY for several months while a search was conducted for a chancellor.

O'Connor's memo, on the foundation's Web site, says the responsibility lay with campuses to oversee the programs under investigation.

"All programmatic, business and management decisions are made at campuses," he said.

He also suggested the prosecutors are concerned with the state Department of Health, not his staff, in his memo because two projects in the newly revealed probe are paid for by the DOH and involve monitoring Medicaid errors and eligibility.

"The federal inquiry is designed to determine if DOH is conducting those two programs appropriately and not improperly programming the calculations to increase reimbursements to the state," O'Connor wrote.

He said a total of three subpoenas were received this year.

Two received this month involve the grand jury inquiry into whether Medicaid fraud was committed by Research Foundation employees housed at a facility located in Albany.

O'Connor said the programs are not run from the 35 State St. headquarters of the foundation.

They are housed at 800 North Pearl St., a foundation spokeswoman said.

The program grants were obtained by Buffalo State College, O'Connor said, noting that responsibility for overseeing the project was in the hands of veteran administrator Bob Spaner.

Spaner did not respond to a call.