TU ITEM: Interestingly, or perhaps fickly, voters didn’t like Spitzer’s “steamroller” approach, but on the flip side they said he gave away too much.

Whether this downturn lasts for a governor who came in with historic support is another matter.

Comment by John Galt — April 4, 2007 @ 2:36 pm:

JOHN GALT REPLIES: Here is an interesting perspective from the NY TIMES EMPIRE ZONE this morning on those very thoughts expressed by the TU right above here, this same morning:

April 4th, 2007 9:01 am: Thanks for the heads-up on the state’s infamous “Empire Zone” program, which has been spreading its tentacles throughout upstate NY without us citizens having any real knowledge of what is going on in our own communities up here with respect to what this program means to our futures as state taxpayers.

And this is all very disturbing to us older folks on fixed and limited incomes, who end up year after year having our property taxes jacked up by ten or twenty percent while these BID-NESSES get an essentially free ride, at our expense.

And these continuing revelations about this “Empire Zone” program and its abuses at our expense are made all that much more disturbing to those of us in upstate NY who are property-tax payers by language in an article in THE NEW YORK SUN entitled “Spitzer To Seek Tuition Deduction on the Rebound” by JACOB GERSHMAN, Staff Reporter of the Sun, dated April 2, 2007, wherein is stated:

“The Spitzer administration is looking forward to resuming the governor’s role as unfettered state executive after spending time as one man in a crowded negotiating room with a deadline hanging over his head.”

http://www.nysun.com/article/51607?page_no=1

“Unfettered”, according to Webster’s New Collegiate Dictionary, means “FREE, UNRESTRAINED”, which we countryfolks up here translate as “TOTALLY LAWLESS” with respect to this “STEAMROLLER” and his crowd, especially after this just-concluded budget go-round, where this “STEAMROLLER” took OUR state Constitution and very openly wadded it up into a little ball and threw it out the window, spitting in our faces as citizens of this state in the process, which we will remember for some time to come, measured in years, and not minutes or seconds, as his crowd assumes will be the case.

Up here in upstate NY, this “STEAMROLLER” has just earned himself the title of “PUBLIC ENEMY NO. 1″ for trashing our state constitution during this budget fiasco, and putting this “Empire Zone” project into hands of this lawless, unfettered “STEAMROLLER” spells financial disaster for us, the property-tax payers of this state.

And so …

Thank you for the public service that you are performing here in this BLOG, which serves to keep us countryfolks informed as to what is going on “behind-the-scenes” here in NYS, in a way that we have never had made available to us before the advent of these BLOGS with the embedded links.

And so …

— Posted by Livyjr

http://empirezone.blogs.nytimes.com/2007/0...latte/#comments

http://blogs.timesunion.com/capitol/?p=4310#comments

"Gov. Spitzer's actions worthy of an 'Attaboy!'"

Letters to the Editor, Albany, New York Times Union

First published: Monday, April 2, 2007

Having barely crossed the threshold to his office, Eliot Spitzer has alienated Joseph Bruno, Sheldon Silver, Fred LeBrun and now Senate Republicans "Senate GOP attacks Spitzer" (March 23).

The common thread to these criticisms is that Spitzer doesn't negotiate nicely, that he wants things his own way, that he is "in a war mode" (Sen. Dean Skelos).

As one of the New York voters whose overwhelming majority gave him a mandate last November, I say "Attaboy!"

When the bipartisan of the dysfunctional political establishment and especially the pork brokers Silver and Bruno become apoplectic at a chief executive who won't engage in politics-as-usual, residents of New York, the state with the fattest medicaid bill, the emptiest hospital beds, and the most aversive tax environment for small businesses, are getting what they hoped for when they elected him.

JEFFREY D., M.D.

Wynantskill

http://www.timesunion.com/AspStories/story...wsdate=4/2/2007

Posted by: John Galt | April 4, 2007 5:38 PM:

I am one of a community of disabled Viet Nam combat veterans in upstate NY who has been following Elizabeth Benjamin's reporting on issues of importance to our small community since way back in 2004, and her story entitled "New Yorkers make do in off-peak slots" from the Thursday, July 29, 2004 Albany, New York Times Union is still one of our personal favorites, for the "signal" to us from the Kerry Campaign that it contained in the following words:

"Why some New Yorkers received coveted speaking roles while others remained on the sidelines was something of a mystery."

"Meanwhile, state Attorney General Eliot Spitzer, who built a national reputation fighting Wall Street corruption and flew to Mexico to endorse Kerry when President Bush's campaign attacked Kerry for his ties to 'special interests', wasn't tapped to speak."

"This fact caused a brief uproar when it was reported that Schumer used his clout to block the attorney general from speaking, the political explanation being that the two are considered possible rivals for the 2006 Democratic gubernatorial nomination."

"Schumer has insisted he had nothing to do with Spitzer's absence behind the podium."

Actually, to shed some further light on that mystery, one of the members of our disabled veterans' community up here had posted the following request to keep "STEAMROLLER" Spitzer off the podium at the DNC in the now-defunct John Kerry Forum, where it was acknowledged by the veterans who were working on the Kerry Campaign, and we were intently following EB's reporting on that convention to see what the results would be, and when we read her report, our day was made ...

And because of her work since then, we will follow her over to here:

Dear Mr. Kerry:

I am an honorably-discharged, twice-wounded, fully disabled Viet Nam war veteran who is a life member of the Military Order of the Purple Heart, the D.A.V., the American Legion, the Veterans of Foreign Wars, and the Tri-County Viet Nam Veterans in the Albany, New York area.

In that capacity, as an honorably-discharged, fully disabled Viet Nam combat veteran, I am asking you personally on behalf of all other disabled veterans in this area of the State of New York who must rely upon the integrity of the medical health and public health fields in the State of New York to not allow New York State Attorney General Eliot Spitzer an opportunity to speak at the podium of the Democratic National Convention on the grounds that he is pandering to partisan political interests in the State of New York by countencing blatant acts of discrimination against a disabled veteran in the State of New York who has been working to expose corruption in county government in the capital district area of State of New York.

Presently, Mr. Kerry, as this appeal is being written to you personally in this community forum, New York State Attorney General Eliot Spitzer is actively engaged in defending in Federal District Court for the Northern District of New York what can only be termed blatant acts of discrimination and retaliation against this disabled Viet Nam veteran in New York State by Republicans in the State of New York who wish to permanently suppress this individual and his testimony to the Federal Bureau of Investigation concerning Hobbs Act corruption involving Republicans in the Capital District area of the State of New York.

To stifle that testimony and evidence, in August of 2001, in the weeks before 9-11, as the record shows, this disabled veteran was the victim of what has become known in the Albany, New York area of the State of New York, as a "psychiatric takedown".

A "psychiatric takedown" is a defensive political manuver by which the Republicans in the capital district area of New York State have a witness against them removed by the vehicle of having a "pet doctor" sign a psychiatric arrest warrant for the individual which directs the New York State Police to take the individual into custody and transport them to the secure mental health facility of a local hospital, for psychiatric "care and treatment".

In this manner, the witness is removed, their crediblity is destroyed and their effectiveness as professional witnesses on behalf of the public health of the community is robbed forever.

In this case, the victim, in addition to being a disabled veteran, was also the local public health engineer, who had previously been commended in writing for his integrity by the New York State Health Commissioner.

In March of 1989, based upon an investigation conducted by this local public health engineer, the State Health Commissioner, a well-respected medical doctor named David Axelrod, declared that the public health and environment in our county was threatened by an inordinate amount of sewage system failures which were the legacy of ten years worth of negligence in the Environmental Health Division of the State Health Department itself.

A March 1989 Federal Bureau of Investigation report confirmed these findings by Dr. Axelrod, and further noted that the Republicans in charge of the county had no intention of cleaning up the corruption, and that to cover matters over after the Axelrod Report, the Republicans had removed the public health engineer from his position on grounds that his Viet Nam combat service had rendered him a threat to society.

Thus, ten years of corruption in the environmental health programs of the state public health services in the Capital District area of the State of New York was covered over as if it had never existed, and thus, has flourished up until this time.

In August of 2001, to prevent this same individual from coming forth with videotape evidence demonstrating that these corrupt public health practices have flourished to this day in the capital district area of the State of New York, the Republicans attempted a "psychiatric takedown", and the result has been disastrous for this individual personally, and all fully disabled veterans who would rely upon this individual for his integrity and expertise in the public health field to boot.

Presently, New York State Attorney General Eliot Spitzer, by and through his New York State Department of Law, is defending the actions of a New York State Veterans' Service officer who made alleged false statements to the Office of the United States Attorney for the Northern District of New York in connection with the false arrest of this honorably-discharged, decorated veteran on mental health grounds.

Because of those false statements, which are still being defended by Eliot Spitzer at this time in the State of New York, despite conclusive evidence to the contrary in his possession, including a graphic videotape portrayal of a violent physical assault on this individual intended to deter him from appearing in court in connection with the matter, this disabled veteran has been branded in the State of New York as a dangerous mental patient with no opportunity afforded him whatsoever at due process to either confront or combat this theft of this person's real identity as an honorable professional person of good standing in the community.

In the face of all of this, which is known to the veterans' community in capital district area of the State of New York, to then allow Eliot Spitzer to stand up at your side and speak at the Democratic National Convention would be an abomination, a travesty, as far as the protection of the rights of the disabled to equal protection of law goes, and well as the public health protection of the disabled veteran population of the State of New York.

For the disabled veterans population of this area, from a civil rights and equal protection of law for the disabled perspective, having Eliot Spitzer standing by your side at the Democratic National Convention would be just like having George W. Bush or George Pataki themselves standing there.

It would make a mockery of all of your promises to the disabled veterans of America to help us have dignity in our own communities, despite our combat-related disabilities, equal to that enjoyed by Max Cleland in his own community in the United States.

Help us prove to America that despite our disabilities, which are often disfiguring, or totally disabling as far as being effective in modern society, that disabled combat veterans are citizens of America too, and that despite our disabilities, we deserve the protection of law in America too.

Help us make this point by keeping Eliot Spitzer off the podium at the DNC.

Thank you on behalf of the disabled veterans of the Capital District area of the State of New York in the United States of America for considering this request.

I remain, sincerely and respectfully, a patriotic disabled American veteran.

Livyjr

http://www.commongroundcommonsense.org/for...njamin&st=0

http://www.nydailynews.com/blogs/dailypoli...of_the_futu.php

NEW YORK OBSERVER

"News Flash: Albany Never Changes - Spitzers come and go, but Seminerios are forever"

By Azi Paybarah

Given all the recent talk of bringing change to Albany, Governor Eliot Spitzer’s humbling budget compromise after a prolonged and highly public battle with the State Legislature may have come as a surprise to some people.

But at least one official says he always knew what was going to happen.

Meet Anthony Seminerio, a 72-year-old Democratic Assemblyman from Queens who is about to enter his third decade in the Legislature.

“Eliot may wish he had another way, but there’s only one way the budget is ever going to get done, son,” said Mr. Seminerio, sitting by himself in the Assembly chambers Saturday night, hours before the budget deadline.

“It’s three people, each getting a piece of the pie, and that’s it.”

That would be Assembly Speaker Sheldon Silver, Senate Majority Leader Joe Bruno and the Governor.

Like always.

In a speech to business leaders during his campaign for Governor last year, Mr. Spitzer said dismissively that the state’s legislative leaders had fallen into the habit of passing “faith-based budget[s].”

Last week, in order to pass his own budget by the April 1 deadline, Mr. Spitzer met privately with Mr. Bruno and Mr. Silver—behind closed doors—and agreed to restore millions of dollars in Medicaid reductions.

He also added millions in state education spending to high-performing school districts represented by a bloc of Republican State Senators on Long Island.

In the end, the lean, mean budget that Mr. Spitzer had originally proposed—insisting it was vital for the economic well-being of the state—had been expanded by about a billion dollars.

“I don’t know if he learned anything,” Mr. Seminerio said.

“I can’t speak for the Governor."

"I think maybe he understands the process a little better."

"I think, like everything else, he’ll learn."

"You know what I’m saying."

"He’ll learn."

"And it’s not that he did anything wrong."

"He thought the process should be done one way, and he thought, you know, he could accomplish it."

"And now I think he must understand—I can’t speak for him, certainly; you know he’s a brilliant man."

"I can’t speak for him—but I think he understands now that, hey, you have to sit down, and it’s a give-and-take.”

Waving his left arm in the air toward the empty room, Mr. Seminerio added:

“The only thing that ever changes in Albany are the faces."

"The system stays intact.”

http://observer.com/20070409/20070409_Azi_..._newsstory4.asp

FROM THE NY TIMES EMPIRE ZONE BLOG:

April 5th, 2007 8:27 am

“The only thing that ever changes in Albany are the faces.” [The Politicker]

Having just read this piece in the NY Observer in its entirety, as an independent upstate NY-er, it is my thought this morning that this Anthony Seminerio, a 72-year-old Democratic Assemblyman from Queens who is about to enter his third decade in the Legislature, became quite comfortable himself many, many years ago with being just “another piece of meat for sale” down there in Albany, just another kewpie doll on the shelf, waiting to see who would take it home that evening, and if the money was right, which it eventually always is for people like this Mr. Seminerio, he would be more than willing to SELL OUT his constitutents and our Constitution, so long as he got something in exchange “for his pocket”, as the long-term politicians like this Mr. Seminerio say to justify their actions, when they do sell us out, for a dime or a dollar, whatever it takes ….

Everything that is wrong down there in Albany, and in NYS, as a direct consequence, is stated concisely in that NY Observer piece, in the smug words of this Mr. Seminerio …

And once again, as an upstate reader, thanks for the heads-up, elsewise, we would likely not have come across this article, as the NY Observer is not something that we would normally never even see out here in the countryside outside of NYC ….

And so …

— Posted by Livyjr

http://empirezone.blogs.nytimes.com/2007/0...shots/#comments

NY TIMES EMPIRE ZONE

April 4, 2007, 6:58 pm

"Spitzer: ‘I Won on Every Issue’"

By Michael Cooper

As our friends at The Daily Politics are reporting, Gov. Eliot Spitzer spent a half million dollars of his own money on television commercials rebutting the omnipresent ones that 1199 and the Greater New York Hospital Association aired to scale back the proposed Medicaid reductions.

The governor contributed the money to his campaign account, which paid for the ads, an aide to the governor said.

Governor Spitzer, meanwhile, continued his tour around the state, in which he is declaring victory on his first budget.

After speaking about the new state budget with a family in the Rochester suburb of Chili, Mr. Spitzer was asked about Senate Majority Leader Joseph L. Bruno’s comments claiming victory since its passage.

“The only person I know who should be gloating is the taxpayer in the state of New York, because I won on every issue,” Mr. Spitzer said.

“If he’s gloating, he misunderstands what happened."

"Healthcare reform, education reform, property-tax reform, fiscal discipline –- these are the issues I fought for and these are the issues I won.”

Asked at another stop about the budget process, which he had vowed would be more open but which ended up once more with the governor and legislative leaders meeting in private, Mr. Spitzer conceded that it had not gone as planned.

“By the time we got to the middle of March, we fought these very tough battles and I said, ‘We want an on-time budget,” he said.

“And we went into a room.”

He added:

“Next year, we’ll try to have a more open process."

"I said, ‘This isn’t the process we’d like,’ but at the same time, it was imperative to get an on-time budget that made needed changes.”

2 comments so far...

1. April 4th, 2007 9:42 pm

What New York’s new governor has “won” is distance, public distrust and public disappointment.

After running against “the mess in Albany,” he has made it worse by adding a degree of incivility that elicits sheer disgust.

His ideas are vacuous reflections of special interest ideology — most clearly in his regurgitation of the HMO propagandist’s phrase book.

Listen to him.

Look at him.

Read his words.

He is a profoundly dysfunctional and abusive creature.

— Posted by asnet

2. April 5th, 2007 6:48 am

About the only thing that I can add to this post above concerning what “STEAMROLLER” Spitzer has “won” are the words “utter contempt” …

Eliot Spitzer has “won” our sheer and utter contempt for openly and intentionally flouting our laws and violating our constitution in the very short time that he has held the office of governor of NYS, especially with this budget BID-NESS, where he is seen as a looter of our state treasury, robbing from us, just like a thief, to buy up portions of our state legislature, and here, “Sell-out” Jimmy Tedisco’s bunch comes to mind, so as to be able to further subvert the processes of our government here in NYS, which serves to strip our democracy from us …

Which is likely what this “STEAMROLLER” means to himself when he tells himself that he won anything at all …

And, oh yes, lest I forget, he has also won the sobriquet of “PUBLIC ENEMY NO. 1″ up here in upstate NY, because he has made it incandescently clear that he intends to subvert our government even further, that this is just the start, folks, which makes him the biggest danger our government and our democracy faces here in NY, bar none …

Eliot Spitzer must live in some small fantasyland inside his own head, where life is beautiful all the time, and the masses all bow down and prostrate themselves before his penumbra and radiance as if he were the reincarnation of Ahura Mazda or some such Persian god, if he actually thinks that he has won anything at all here in upstate NY with these budget shenanigans …

And so ….

— Posted by Livyjr

http://empirezone.blogs.nytimes.com/2007/0...ssue/#more-1854

NY DAILY NEWS BLOG

"Justice delayed"

With all the hoopla about passage of the state budget, an important piece of unfinished business scarcely got mentioned -- the fact the governor and legislature failed, once again, to bump up salaries for the state's 1,200 judges, who have not had in raise in over eight years.

The lagging pay is the result of a classic Albany deadlock: the legislators who must approve a pay raise for judges have insisted that it be linked to their own salary levels, which haven't changed.

Here are excerpts from a letter to the New York Law Journal sent by Dennis Duggan, a Family Court judge in Albany:

The state's judges have had three raises in the last 28 years.

As a result of inflation, a judge who has dedicated the last 30 years of his or her professional life to the judiciary has lost almost $500,000 in current dollars.

I have lost about $110,000 to inflation.

My salary is now $25,000 less in current dollars than it was in 1998.

It is as if I have worked an entire year for free.

... It is worth mentioning that the most dysfunctional Legislature in America has saddled our judges with the most dysfunctional court system in America.

Our chief judge has dedicated her judicial career to court reform only to be met by complete disregard by the Legislature.

... My experience is that each of us has a great deal of regard for our individual legislators, but their performance as a collective body is pathetic.

Truth, transparency and merit are virtues long absent from New York's legislative process.

When is the last time you remember an important public policy matter being openly, honestly and respectfully debated on the floor of our Senate or Assembly?

Everything is wheeled and dealed and horse traded and spun by each side to the paint where George Orwell merges with Alice in Wonderland.

It is a cruel irony, indeed, that our Constitution sets April 1 for the budget deadline.

As a co-equal branch of government, to say that the state's judges are angry and disgusted beyond measure is an understatement.

It is fair to ask what kind of employer would let his workers go for more than eight years without a raise?

Who would treat their employees with such disregard?

Words are the currency of the judiciary and they now fail us when trying to describe the magnitude of our despondency over the way we have been treated by another co-equal branch of government.

Posted by Errol Louis on April 4, 2007 9:00 AM

Comments:

Without getting into a debate as to whether any judge in NYS is worth a dime, let alone a hundred grand or better, section 1 of ARTICLE VII of our state Constitution, which you would think this Judge Denny Duggan would know better than most fifth graders out here in the countryside in upstate NY, states in plain and simple language which surely this Denny Duggan could comprehend that:

Section 1. For the preparation of the budget, the head of each department of state government, except the legislature and judiciary, shall furnish the governor such estimates and information in such form and at such times as the governor may require, copies of which shall forthwith be furnished to the appropriate committees of the legislature.

*****

Itemized estimates of the financial needs of .... the judiciary, approved by the court of appeals and certified by the chief judge of the court of appeals, shall be transmitted to the governor not later than the first day of December in each year for inclusion in the budget without revision but with such recommendations as the governor may deem proper.

Copies of the itemized estimates of the financial needs of the judiciary also shall forthwith be transmitted to the appropriate committees of the legislature.

Now, I don't know about anyone else in here, but those words in OUR organic law are quite simple and understandable to me, so there is really where any inquiry into this matter of judicial salaries must start, as I see it, anyway ...

Did Chief Judge Judith Kaye actually ever do this, furnish the governor with certified itemized estimates of the financial needs of the judiciary, approved by the court of appeals not later than the first day of December of 2006 for inclusion in the budget for 2007 without revision by the governor?

IF the Court of Appeals did approve itemized estimates of the financial needs of the judiciary not later than the first day of December of 2006 for inclusion in the budget for 2007 without revision by the governor, did they in fact include pay raises for the various judges?

In this whining, crying tear-jerking piece above here by this Judge Denny Duggan, he is strangely silent on that issue, which has me wondering why ....

And that brings us down to sect. 4 of ART. VII, wherein is stated:

§ 4. The legislature may not alter an appropriation bill submitted by the governor except to strike out or reduce items therein, but it may add thereto items of appropriation provided that such additions are stated separately and distinctly from the original items of the bill and refer each to a single object or purpose.

None of the restrictions of this section, however, shall apply to appropriations for the legislature or judiciary.

Such an appropriation bill shall when passed by both houses be a law immediately without further action by the governor, except that appropriations for the legislature and judiciary and separate items added to the governor's bills by the legislature shall be subject to approval of the governor as provided in section 7 of article IV.

And sect. 7 of ART. IV states:

§ 7. Every bill which shall have passed the senate and assembly shall, before it becomes a law, be presented to the governor; if the governor approve, he or she shall sign it; but if not, he or she shall return it with his or her objections to the house in which it shall have originated, which shall enter the objections at large on the journal, and proceed to reconsider it.

If after such reconsideration, two-thirds of the members elected to that house shall agree to pass the bill, it shall be sent together with the objections, to the other house, by which it shall likewise be reconsidered; and if approved by two-thirds of the members elected to that house, it shall become a law notwithstanding the objections of the governor.

In all such cases the votes in both houses shall be determined by yeas and nays, and the names of the members voting shall be entered on the journal of each house respectively.

If any bill shall not be returned by the governor within ten days (Sundays excepted) after it shall have been presented to him or her, the same shall be a law in like manner as if he or she had signed it, unless the legislature shall, by their adjournment, prevent its return, in which case it shall not become a law without the approval of the governor.

No bill shall become a law after the final adjournment of the legislature, unless approved by the governor within thirty days after such adjournment.

If any bill presented to the governor contain several items of appropriation of money, the governor may object to one or more of such items while approving of the other portion of the bill.

In such case the governor shall append to the bill, at the time of signing it, a statement of the items to which he or she objects; and the appropriation so objected to shall not take effect.

If the legislature be in session, he or she shall transmit to the house in which the bill originated a copy of such statement, and the items objected to shall be separately reconsidered.

If on reconsideration one or more of such items be approved by two-thirds of the members elected to each house, the same shall be part of the law, notwithstanding the objections of the governor.

All the provisions of this section, in relation to bills not approved by the governor, shall apply in cases in which he or she shall withhold approval from any item or items contained in a bill appropriating money.

Now, there is THE PROCESS for considering the issues of judicial pay raises in NYS spelled out in very specific detail, and one would think that if fifth-graders out here in the countryside can understand this language, and discourse about it at length, that a couple of real hot-shot, big-time lawyers like "STEAMROLLER" Spitzer and Judge Denny Duggan would be able to understand it as well ....

And if Judge Denny Duggan could understand this constitutional language which as a judge he has a duty to uphold, one would think that in his piece above, he would have been informing us as to how the constitutional budgeting process went way off track this year, so that we citizens out here would have been better informed, instead of whining and crying about all the money he is not making as a judge in NYS, which really doesn't move countryfolks living on $20,000 or less out here in the countryside all that very much ...

And so ...

Posted by: John Galt | April 5, 2007 2:54 PM

http://www.nydailynews.com/blogs/dailypoli...e_delayed_1.php

"Investigation sought of appointee's claims - Working Families Party, Democrats want city probe of phone message"

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

First published: Thursday, April 5, 2007

TROY -- The Working Families Party joined three Democratic City Council members Wednesday night in demanding a city investigation into a former Republican political appointee's allegations that she was forced to record a telephone attack message at City Hall during the 2005 city elections.

Working Families members collected 250 to 300 letters of support from the community for an investigation into Colleen Regan's accusations, said Pat Pafundi, chairwoman of the party's Rensselaer County Club.

About 20 Working Families supporters stood behind Pafundi at a news conference outside City Hall, holding up placards to spell "INTEGRITY" in capital letters.

The two-party coalition wants Council President Henry Bauer to authorize an investigation into the alleged use of city equipment by Public Works Commissioner Robert Mirch and two other city officials in recording the call.

They also demanded that any city employee found guilty be fired.

"Part of what we expect from our elected officials is accountability to the people they represent," Pafundi said before the letters were to be presented to the City Council.

Mirch and city officials said there is no truth to Regan's allegations.

"All of Colleen Regan's accusations are 100 percent false," Mirch said after attending the news conference.

District Attorney Patricia DeAngelis has requested a special prosecutor be appointed to investigate the matter.

County Judge Patrick McGrath has not yet announced a decision.

The allegations stem from an affidavit by Colleen Regan, who alleges she was sexually harassed while she was an aide for the Rensselaer County Legislature's Republican majority and lost her job after rejecting sexual advances by her supervisor.

Regan has filed a claim with the state Division of Human Rights.

Regan, a former Sand Lake Republican supervisor, claims Mirch drove her in a city truck to City Hall.

Mirch is the legislature's majority leader and does political consulting work.

Regan further maintains that at City Hall, Mirch took her into an office where the two other city officials were and had her record a telephone message that was used to attack Democratic Councilman William Dunne in the 2005 council elections.

Regan said she recorded the message under the name of Tonya.

"We're calling for our president of the council, Henry Bauer, to conduct an open investigation," said Councilman Clem Campana, who is supported by fellow Democrats Dunne and Peter Ryan.

Regan's allegations have led to the matter being labeled "Intimigate" and "Tonyagate" on Web sites dealing with local politics.

The accusations have also drawn counterclaims about ethics from city Republicans.

Mirch distributed a news release from Republican Councilman Mark Wojcik asking for an investigation of a vote by Campana that transferred a parcel on Third Street to the Red Front restaurant where Campana's wife works.

The entire City Council voted 9 to 0 on Sept. 7, 2006, for the transfer.

City and county Democrats said the Republicans are trying to diffuse the Regan allegations by making this claim and others.

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

Comment by devtob — April 5, 2007 @ 3:22 pm

The “bizarre local story” has been reported on for more than a week at the Troy paper and on Troy Polloi.

Typically, it shows Boss Bruno’s gang abusing their staff, using public property for campaign purposes, and lying to win elections.

Maybe this time they won’t get away with it.

comment by John Galt — April 5, 2007 @ 4:18 pm

Ah, the segue …

Thanks, devtob!

I have right here before me right now a 609-page public record, APPENDIX FOR APPELLEES JIMINO, CYBULSKI, HOLT, AYERS, CHAMPAGNE, REITER, MCGRATH AND AIKEN, which is on file as a public record with the Office of the NY Attorney General, Rensselaer County and the 2d Circuit Court of Appeals in NYC in Matter of Plante, P.E. v. KATHLEEN JIMINO, Renss. Co. Exec. et. al. in a very similar type of situation of the alleged improper use of Renss. Co. employees to intimidate individuals in Rensselaer County for partisan political purposes connected with “holding power” in Rensselaer County, and at pp.600,01 of that APPENDIX, one finds the following facts stated by federal District Court Judge Gary L. Sharpe on Mar. 31, 2005, which language should be quite instructive and illuminating to devtob and other interested readers in here, as well:

III. FACTS:

On May 22, 2001, Jeffey Pelletier was issued a sewage system construction permit by the County of Rensselaer.

On July 7 (2001), Plante conducted an investigation of defendants Aiken (engineer) and McGrath’s “deliberate falsification of inspection data and fraudulent submissions” resulting in the issuance of the Pelletier permit.

During Plante’s investigation, Pelletier assaulted him.

On August 9 (2001), defendant Reiter (Rensselaer County Director of Veterans’ Services) warned Plante to “back off” the Pelletier investigation because he (Pelletier) was a “protected person” in the county.

On August 17 (2001), defendant Jimino (Rensselaer County Executive) allegedly phoned Plante threatening to harm him if he did not stop his investigation.

Thereafter, he claims that Jimino conspired with Cybulski (County Director of Community Services) to obtain a fraudulent involuntary commitment order and a medical certification from Samaritan Hospital.

end quotes

The “fraudulent involuntary commitment order” issued to Rensselaer County on 8-22-01 is found at p.272 of that APPENDIX, and at p.455 of that APPENDIX, there is a letter to Plante from Renss. Co. Court Judge Hon. Patrick McGrath, dated July 13, 2004, wherein is stated:

This will acknowledge the court’s receipt of your letter dated July 9, 2004, and the attachments thereto, all of which I have reviewed.

Needless to say, your allegations are disturbing, especially as they encompass potential federal, as well as state, criminal charges, in that they include, among others, an allegation of false imprisonment in a federal facility, Stratton VA Hospital.

end quotes

Keeping in mind that just this morning, on WGY news, we heard reports that a doctor involved in that Albany Co. steroids business could get several years in prison for the felony of issuing a prescription without ever having seen the patients, in this case, where the doctor at Samaritan Hospital issued the involuntary commitment order sight unseen, wherein he prescibed “treatment” for Plante in a secure mental facility at Samaritan Hospital, Tommy O’Connor, Judge Mary Donohue’s brother, along with Eliot Spitzer and “Donny Bob” Ford of the politically-connected and powerful Albany law firm of Thuillez, Ford and Gold Johnson got everybody involved, including the doctor, a FREE PASS, despite anything that Judge McGrath might have had to say about it as a criminal court judge in Rensselaer County ….

A FREE PASS, devtob ….

It’s alright to do this kind of stuff in Rensselaer County to “protect” a “protected person”, and when Republicans are involved, as they definitely were in this case, devtob, from whom do you think this level of “protection” is procured?

And how?

And when it is “alright” for Republican Kathleen Jimino to have a Rensselaer County citizen tossed into a secure mental facility with a literal snap of her fingers, despite any laws in NYS to the contrary, do you really think anything is going to come of anything going on down there in the Renss. Co. Office Bldg. right now, press releases from these various politicians calling for investigations aside?

I know I certainly don’t, having been an “observer” myself for some long time now of how the “blood sport” of Republican politics is played over here in Rensselaer County …

And so …

http://blogs.timesunion.com/capitol/?p=4320#comments

NEW YORK SUN

"Health Battle Hits Spitzer in Polls, Pocket"

By JACOB GERSHMAN

Staff Reporter of the Sun

April 5, 2007

ALBANY — Governor Spitzer took a hit financially and politically in his budget battle against the hospital industry.

Mr. Spitzer spent $3 million of his campaign money and $500,000 of his personal wealth on television ads defending his budget in an effort to counter a well-financed attack campaign waged by the state's largest health care employees' union and a major hospital association.

A spokeswoman for the governor, Christine Anderson, said the ad buy depleted the governor's campaign account, which had stood at $2.9 million in mid-January.

Mr. Spitzer's ad buy was an unusual tactic for a sitting New York governor and demonstrated his willingness to strike back hard at special interest groups that attack him.

It is even less common for a governor to put his personal money behind a policy matter.

A half a million dollars is not small change for the governor.

Mr. Spitzer, a son of a wealthy Manhattan real estate developer, is a multimillionaire, but is not in the same league of wealth as Mayor Bloomberg, a billionaire.

The Spitzer administration had hoped the ads would soften the blow landed by the hospital industry, which was spending millions of dollars on television ads, rallies, mailings, canvassing, and lobbying to drive down the governor's poll numbers and gain support in the Legislature.

One memorable ad by the hospital union and association featured a frail elderly woman saying, "Governor Spitzer, I want you to look at me."

"And when you cut health care, I want my face to be in front of you."

"Remember me."

The administration did not want to follow in the footsteps of Governor Pataki, who responded less forcefully to attack campaigns by the industry and suffered greatly in the polls as a result.

New poll data released yesterday show that despite Mr. Spitzer's efforts, hospital groups succeeded in draining some of the governor's popularity among voters.

Since mid-February, Mr. Spitzer's approval rating has fallen to 48% from 61%, according to a new Quinnipiac University poll, which also found that only 31% of New York voters approve of the way Mr. Spitzer is handling health care.

While Mr. Spitzer has insisted that he won't let poll numbers influence his policy decisions, he has also sought to leverage public opinion in his battles with the Legislature, such as when he has criticized uncooperative legislators during trips to their home districts.

Both Mr. Spitzer and the hospital groups have declared victory in the aftermath of last week's budget deal.

The governor proposed to cut $329.6 million from hospitals in his executive budget but agreed to restore $157.6 million in the final budget, according to figures provided by the governor's office.

Mr. Spitzer also agreed to restore 67.5% of his proposed nursing home cuts.

Despite the restorations, the Medicaid budget is increasing by less than 1%, according to the administration, a significant slowdown in growth caused both by cost-saving measures and cuts in the budget and by the fact that a greater share of Medicaid pharmacy costs are being covered by Medicare.

Spitzer officials insist that the biggest victories will be felt in the long term, including provisions in the budget that redistribute hundreds of millions of dollars to health care providers serving the largest number of Medicaid patients and which allow the governor to overhaul procedure reimbursement rates that have become outdated and fail to reflect actual costs.

Mr. Spitzer has ample time to replenish his campaign coffers before the next gubernatorial election, which is 3 1/2 years away.

But Mr. Spitzer will not be able to afford such a large-scale campaign next year in the event of another clash with a special interest group without an aggressive fund-raising effort.

The hospital employees union and the hospital association can better afford to mount another campaign.

The union, 1199 SEIU, and the Greater New York Hospital Association, had amassed about $65 million in a political action fund before launching their campaign and used up a fraction of the pot.

(The groups spent $4.5 million by the end of February, according to lobby records.)

The governor, however, has made it trickier to raise large sums of cash quickly, announcing when he took office that he was imposing on himself a number of campaign finance restrictions.

He said he would no longer accept individual campaign contributions of more than $10,000, an amount that is less than one-fifth of the state legal limit during an election cycle.

He also said that going forward he would not take advantage of loose campaign finance regulations that allow donors to exceed contribution limits by funneling money through multiple LLCs.

Mr. Spitzer spent $33 million in the governor's race, about 10 times more than his Republican opponent, John Faso.

Mr. Spitzer's use of his personal money to pay for the ad buy was first reported yesterday by the Daily News's political blog.

http://www.nysun.com/article/51854?page_no=1

THE NY SUN

"Columbia Dean Is Probed"

By MATTHEW CHAYES

Special to the Sun

April 5, 2007

The head of one of Columbia University's financial aid offices is being investigated for recommending a student loan company to borrowers at the same time as he held stock in the company, the state attorney general's office and Columbia said yesterday.

A senior associate dean of student affairs at Columbia, David Charlow, owned 7,500 shares of Education Lending Group Inc., according to records on file with the federal Securities and Exchange Commission.

The company is the parent of Student Loan Xpress, which Columbia recommends to students as a "preferred lender."

Investigators with Attorney General Andrew Cuomo's office sent Columbia a subpoena yesterday as well as inquiry letters to the University of Southern California and the University of Texas at Austin, whose aid officers are also being investigated by Mr. Cuomo for owning stock.

Mr. Charlow profited more than $100,000 from the sale of the 7,500 shares and an additional 2,500 in stock warrants, according to the attorney general's office.

The stock ownership disclosure comes in Mr. Cuomo's widening investigation of the $85 billion student loan industry.

A woman who answered Mr. Charlow's telephone at Columbia said he wasn't available.

A campus spokesman, Robert Hornsby, said in a statement that Columbia "promptly" began its own investigation and told the attorney general after it learned that one of its officers had a potential conflict of interest with one of its preferred lenders.

Mr. Hornsby said a financial aid official had been placed on leave pending the outcome of the investigation.

Representatives of the University of Southern California and Education Lending Group didn't immediately return phone calls seeking comment.

A spokesman for the University of Texas, Don Hale, said the university was investigating the matter.

Mr. Cuomo has charged that big lenders in the financial aid industry give kickbacks to universities as well as gifts and trips to school employees in exchange for placement on "preferred lender" lists.

http://www.nysun.com/article/51875?page_no=1

"SUNY chief linked to Cuomo target - John Ryan is on board of directors of company subpoenaed in student loan industry investigation"

By MARK JOHNSON, Associated Press

First published: Friday, April 6, 2007

ALBANY -- State University of New York Chancellor John Ryan is on the board of directors of a company under investigation by Attorney General Andrew Cuomo in a nationwide probe of the $85 billion student loan industry.

Ryan, who announced last month that he will step down at the end of May, has been a director of CIT Group Inc. since July 2003, according to the company's Web site.

Earlier this week, Cuomo's office issued a subpoena to the New Jersey-based company seeking information about stock transactions between one of its subsidiaries, Student Loan Xpress, and financial aid officers at Columbia University, the University of Texas and the University of Southern California.

CIT said it acquired Education Lending Group Inc., the parent company of Student Loan Xpress, in 2005, after the stock transactions took place.

Also, Higher Ed Watch reported that Matteo Fontana, the federal Education Department official who oversees lenders, owned about $100,000 worth of stock in Education Lending Group Inc.

Student Loan Xpress is listed as a preferred lender at SUNY Maritime College, where Ryan served as president.

"The chancellor stands by his service on the board of the CIT group, an approved outside activity, for which he received state Ethics Commission permission on July 2, 2003 and July 7, 2005," SUNY spokesman David Henahan said in a statement.

He added that Student Loan Xpress was only added to SUNY Maritime's preferred lender list in March 2006, after Ryan left.

On Monday, all 29 four-year State University of New York campuses agreed to abide by a code of conduct that would prohibit college employees from receiving anything of value for serving on the advisory board of any lending institution.

A company SEC filing shows Ryan earned about $146,000 last year in cash, stock and options for his service on the CIT board.

Cuomo's investigators say they have found numerous arrangements that benefited schools and lenders at the expense of students.

NY DAILY NEWS DAILY POLITICS

"Budget reform: a correction"

It turns out that one house of the Legislature -- the Assembly -- at least partly complied with the budget reforms state lawmakers enacted back in January.

Contrary to what I posted yesterday, the Assembly did, in fact, produce reports summarizing the spending they added to Spitzer's original spending plan before wrapping up action on the budget.

Assembly spokeswoman Sisa Moyo gave me copies of the reports and said they were on members' desks Sunday.

That was after the votes on two big chunks of the budget -- one bill covering public protection and general government and another covering transportation, economic development and environmental conservation -- meaning they technically missed the deadline in the law.

But members had the reports in hand before acting on the two most controversial bills, covering education and health care.

Moyo acknowledged that the reports were late, saying the staff involved in negotiating the budget could not possibly have produced the reports any more quickly.

"We were trying to honor the spirit" of the January reform legislation, she added.

My apologies to the Assembly for getting that wrong, and my thanks to commenter Tom Zee for pointing out the mistake.

Posted by Bill Hammond on April 5, 2007 6:18 PM | Permalink

COMMENTS:

Posted by: Dan Miller | April 6, 2007 9:01 AM:

The Daily News should not have issued a correction here because its original reporting was correct.

http://www.nydailynews.com/blogs/dailypoli...at.php#comments

The Assembly concedes that at the time it enacted most of the budget on Saturday, its members did not have the disclosure statement required by the 2007 budget reform law to be on its members' desks.

For the majority of the budget passed on Saturday, giving that statement Sunday was like locking the barn door once the horses had escaped.

And it's no answer that the Assembly was trying to honor the "spirit" of the reform law by speeding those statements out on Sunday.

Quite the contrary, the spirit of the reform law was to give all lawmakers the information they need WHEN they vote on the budget, not AFTER they vote on the budget.

During Saturday's late-night budget passage frenzy, Ways and Means Chair Denny Farrell couldn't say, when quizzed during legislative debate, how much money the budgets would spend in key areas: he even CONCEDED that!

He likewise conceded that the disclosure statements illegally were missing, thus ensuring that most lawmakers (including Farrell himself) wouldn't have a clue.

Under those circumstances, it was irresponsible for the Daily News to issue a correction and apology to the Assembly.

The Legislature broke the law, and most certainly broke the spirit of the law the Assembly said it was trying to honor.

The Daily News let itself be snowed and in turn snowed its readers.

Posted by: John Galt | April 6, 2007 3:15 PM:

Dan Miller - this disabled veteran thanks you for standing up for all of our rights out here in NYS in such a straightforward and concise manner.

We older countryfolks read these posts with great interest, as this medium is something entirely new in our lives, and when someone like yourself has the courage and the ability to speak out in such a calm, informed and yet forceful way, it is an example to us all, for not many in the countryside are good with words, not having cause to use them all that much in a world that requires deeds, instead.

And so ...

http://www.nydailynews.com/blogs/dailypoli...on.php#comments

"Forbes ranks Albany behind other upstate cities"

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

Last updated: 11:34 a.m., Friday, April 6, 2007

The Capital Region is a nice place to live and work, but it's no Poughkeepsie.

When is the last time you heard somebody say that?

But that, apparently, is the opinion of Forbes magazine, which, for the second time in two months, has ranked the Albany-Troy-Schenectady metropolitan area behind the city to its south.

In February, Forbes placed the Albany area 30th out of the nation's largest 100 metro areas on its "Best Cities for Jobs" list.

Poughkeepsie ranked 27th.

Now, the magazine that loves to rank is out with its annual list of "Best Places for Business and Careers."

Of 200 metro areas, Albany ranks 64th.

Rochester, ranked 33rd, leads New York cities, while Poughkeepsie grabbed the 53rd spot.

It's an odd list.

New York City, a magnet for the world's most ambitious people, is ranked 113th, while while Raleigh, N.C.; Provo, Utah; and Boise, Idaho, occupy the top three spots, in that order.

The Capital Region scores well for colleges (21), crime rate (39), and educational attainment (42).

But the region scores poorly for job growth (134) and the cost of doing business (175).

The magazine has a seperate listing for smaller cities.

On that list of 179 metro areas, Ithaca is ranked 28th, Kingston is 75th and Glens Falls is 117th.

"Albany judge subject of state investigation - Thomas Keefe allegedly aided his son twice during traffic stops by Albany police"

By MICHELE MORGAN BOLTON, Staff writer, Albany, New York Times Union

First published: Saturday, April 7, 2007

ALBANY -- A City Court judge is being investigated by the state Commission on Judicial Conduct over allegations he twice intervened when police stopped his son, including once when the youth had marijuana and drug paraphernalia, according to sources with knowledge of the probe.

Investigators with the watchdog panel that oversees judges are looking into claims Albany City Court Judge Thomas Keefe persuaded Albany police to allow him to take his son from two traffic stops without formal charges.

He also is alleged to have left with some evidence.

"This is news to me," said Keefe, when he was reached at City Court on Friday.

"I don't know anything about the fact the commission is looking into me."

When confronted with the allegations against him, Keefe said, "I'm not going to make any comment."

The Times Union filed a request under the state Freedom of Information Law in January for the incident reports that police prepared after two traffic stops: one on Nov. 8, 2005, at 1:15 a.m. at Lawnridge and New Scotland avenues, and another on March 30, 2006, at 11:08 a.m. at Kent and West Erie streets.

Those reports were released by the Albany City Clerk in February, but Keefe's son's name had been redacted with a thick, black line.

The youth was 16 during the 2005 incident.

However, the name of a passenger in the 2006 incident was left visible.

That youth's age was redacted.

According to information provided about the 2005 incident, Officer John Joyce pulled the younger Keefe over for speeding at 1:15 a.m. and then released him at 1:55 a.m.

What is not reflected on the report are observations by Joyce and a back-up officer, Daniel Meehan.

Sources with knowledge of the investigation say the officers saw the younger Keefe put a small wooden box in his pocket, which contained a small amount of marijuana, and found a digital scale and some baggies under the seat.

The officers asked the youth if the judge was his father and suggested he call home.

Within minutes, the judge appeared at the traffic stop, asked the officers to release his son to him and he confiscated the drugs and paraphernalia, and they left.

In the 2006 incident, officers Erin Commerford and Michael Smith stopped the younger Keefe for speeding at 11:08 a.m.

The judge again went to his son's aid, according to a person familiar with the case.

According to the report the officers filed, he was sent on his way at 1:45 p.m.

Joyce, the patrol officer at the 2005 traffic stop, was questioned Wednesday by the state commission in its Albany office, said people who knew what occurred during that session.

Albany Police Chief James Tuffey said he had no knowledge of the investigation or the traffic stops.

"I don't know what happened, if anything happened," Tuffey said.

"But I have asked the head of internal affairs to be in my office first thing on Monday morning."

If Keefe is found to have used his position to benefit his son, the judicial conduct commission could opt for discipline ranging from censure to removal from the bench.

Keefe, who is 54, makes $108,800 annually.

Commission Chief Counsel Robert Tembeckjian, reached Friday, said he isn't allowed to comment.

Michele Morgan Bolton can be reached at 434-2403 or by e-mail at mbolton@timesunion.com.

And by way of some background as to what the constitutional budgeting process is in the State of New York ....

NY TIMES

"Court's Budget Ruling Hands Pataki a Big Victory"

By James C. McKinley, Jr.

January 18, 2002

Gov. George E. Pataki won an important victory in his constitutional battle with the Legislature when a State Supreme Court justice ruled that he, not lawmakers, had the authority to alter the language in spending bills.

Legislative leaders vowed to appeal the decision all the way to the state's highest court, but if today's ruling stands, it will greatly strengthen the governor's ability to dictate policy choices in the state budget.

It will also alter the traditional balance of power over the last 30 years in Albany, returning the state to a time when the Legislature did little more than rubber-stamp the governor's spending plans.

The crux of the case is whether the governor can insert policy changes into the descriptions of appropriations.

Governor Pataki sued the Legislature in August, contending that the State Constitution gives him the ultimate authority over how the state spends its $80 billion budget.

He argued that the Constitution allows him to insert changes to state law into appropriations bills and bars lawmakers from touching that language.

Two weeks earlier, the Legislature had passed a stripped-down version of Mr. Pataki's budget that omitted several long passages they argued should have been submitted as separate bills.

In those passages, the governor had, among other things, altered how school aid and health benefits would be distributed.

The lawmakers said Mr. Pataki had overstepped his authority.

But Justice Bernard J. Malone, Jr. of Albany ruled today in the governor's favor, saying the Constitution and previous court decisions unequivocally gave the executive the power to include policy changes in the descriptions of appropriations.

In essence, Justice Malone said Article VII, Section III of the Constitution gives the governor the choice of folding any policy changes he thinks necessary to carry out his spending plan into the budget bill or submitting those changes in separate bills.

He ruled that the Legislature's contention that appropriation bills should consist only of a list of numbers with short descriptions of their purpose would render that part of the Constitution meaningless.

Justice Malone also upheld previous court decisions that the Legislature can only strike out an entire appropriation, reduce its amount or add a new appropriation, but may not change the description.

He said the Legislature has only one other power: to reject the budget entirely.

"They can simply fail to enact into law the governor's appropriation bills and the resulting deadlock, if a compromise cannot be reached, will cause public pressure to build to the point where these political questions will be settled in the voting booth and not in the courtroom," Justice Malone wrote, referring to an earlier decision, Saxton v. Carey.

But the judge also seemed to invite the Court of Appeals, the state's highest court, to make a clearer ruling on whether the Legislature could strike out language it saw as extraneous to the budget.

He also stayed his decision until a higher court can review it.

The Assembly speaker, Sheldon Silver, a Democrat, called the ruling "a very bizarre decision" and vowed to appeal it.

The Senate majority leader, Joseph L. Bruno, also denounced it and pledged that the Legislature would "continue to defend its rights as they pertain to writing and passing a state budget."

Joseph conway, a spokesman for the governor, said: "We are pleased that justice Malone's decision clearly recognizes the executive's strong voice in the constitutional budgetary process."

The state's current budget-making system was drawn up during a redrafting of the Constitution in 1927, at a time when the public had grown tired with the Legislature's penchant for spending.

The changes were refined again in a 1938 revision.

Those amendments gave the governor the power to write and submit appropriations bills as well as others needed to carry out the budget and severely limited the Legislature's ability to change the appropriations.

The governor was given the power to veto any additions, but the legislature was barred from passing other appropriations until they took "final action" on the governor's bills.

As a practical matter, however, the legislators did change the governor's proposals, especially as strong leaders began to assert their influence in the last three decades.

That ended in 1993, when the state's highest court ruled in New York Banker's Association v. Wetzler that lawmakers could change only the numbers in appropriation bills, not desriptions of an item's purposes.

Lawyers for the Senate and Assembly have said the governor is circumventing the power of the Legislature to make laws.

They maintain, for instance, that a governor could put in a sum for road-building and then say a specific company should be used, rendering state contrating laws moot.

"Education official put on leave after stock ownership revealed"

By NANCY ZUCKERBROD, Associated Press

Last updated: 7:12 p.m., Friday, April 6, 2007

WASHINGTON -- A Department of Education official who oversaw the student loan industry and owned at least $100,000 worth of stock in a student loan company has been placed on leave, a department spokeswoman said Friday.

Matteo Fontana, who keeps an eye on lenders and guarantee agencies that participate in the Federal Family Education Loan Program, was placed on leave with pay a day after his ownership of stock in Education Lending Group Inc. was disclosed by Higher Ed Watch, part of the New America Foundation, a nonpartisan think tank.

The case has been referred to the department's inspector general, John Higgins, said department spokeswoman Katherine McLane.

At issue is whether Fontana violated department conflict of interest rules.

McLane also said Education Secretary Margaret Spellings has asked for Lawrence Burt to resign from the department's Advisory Committee on Student Financial Assistance.

That panel provides guidance to Congress and the secretary of education on student financial aid policy.

Burt, associate vice president and director of student financial aid at the University of Texas at Austin, is under investigation by the UT System Office of General Counsel regarding allegations of impropriety.

Securities and Exchange Commission records indicated Burt also owned 1,500 shares in Education Lending Group Inc., the former parent company of Student Loan Xpress.

The company was on UT's preferred lender list, but Burt, who sold the shares in 2003, denied that his stock ownership had any connection to that listing.

Student Loan Xpress is now part of CIT Group Inc., one of several lenders targeted by New York Attorney General Andrew Cuomo in his probe of the student lending industry.

Cuomo is investigating allegations of possible kickbacks to school officials for steering students to certain lenders.

Cuomo's investigators say they have found numerous arrangements that benefited schools and lenders at the expense of students.

His office on Friday issued new subpoenas to CIT Group Inc. and Student Loan Xpress, seeking information on stock and gifts made by the company or its subsidiaries to federal or state government officials.

The office also sent subpoenas to SLM Corp., commonly known as Sallie Mae, for information on any current or former Sallie Mae employees who worked at the Education Department over the past six years, said Cuomo spokesman John Milgrim.

Cuomo's office has begun its own investigation into Fontana and is meeting with Department of Education investigators about the case next week, Milgrim said.

Fontana worked at Sallie Mae from 1994 to 2001, according to Sallie Mae spokesman Tom Joyce.

Fontana did not respond to messages, and the Education Department's press office declined to make him available for comment.

Fontana, a career employee, has worked at the department since 2002.

He is the general manager of Financial Partners, an office involved in overseeing the federal student loan program.

In September 2003, Fontana worked as a deputy in that office.

SEC records show Fontana had at least 10,500 shares of Education Lending Group Inc. in September 2003.

The shares were valued around $9.50 each at the time, according to Cuomo's office.

The Education Department would not say whether Fontana still owns the stock.

Senate Education Committee Chairman Edward Kennedy, D-Mass., called Friday's action by the Department of Education swift and appropriate.

"With American families struggling to put their children through college, we owe it to them to end corruption and conflicts of interest when it comes to student loans," he said.

Kennedy has said he wants to trim federal subsidies to banks that make student loans.

The subsidies are designed to guarantee lenders a rate of return that makes student lending profitable.

Michael Dannenberg, director of education policy at the New America Foundation, said the subsidies are excessive and the industry's stake in them led to some of the alleged conflicts.

"What's happening is the banks appear to be giving a taste of the corporate welfare in the system to some colleges, some college administrators and maybe even some people in the Department of Education in order to secure business," Dannenberg said.

------

Associated Press Writer Mark Johnson contributed to this report from Albany, N.Y.

"Empire Zone yields secrets after suit - Capital Region companies get $38M in breaks annually, newly released data show"

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

First published: Sunday, April 8, 2007

ALBANY -- New York state's Empire Zone economic development program provides a windfall of tax breaks to hundreds of Capital Region companies -- to the tune of about $38 million a year.

That information had been a well-kept state government secret until recently, when The Post-Standard of Syracuse successfully sued the state to make statewide Empire Zone data from 2003 to 2005 public.

Empire Zones were created in 1986 by the state to help stimulate economic growth in poor areas with high unemployment.

The Post-Standard had sought the data through the state's Freedom of Information Law in 2005, and a judge ruled in the newspaper's favor in February.

Empire State Development Corp., the state economic development agency that runs the Empire Zone program, released the data to the public last month.

Information gathered by the Times Union last week reveals that from 2003 to 2005, Capital Region companies were given more than $112 million in tax breaks through Empire Zones.

During that time, those companies created nearly 9,500 new jobs.

To qualify for the various tax breaks and credits available, businesses typically must be located in an Empire Zone and create jobs or make investments that will enhance the local economy.

Incentives include sales, wage, investment and property tax breaks.

And although business leaders praise the program and the benefits they have received over the years, the program has come under fire recently from consumer advocates who say that taxpayer money is being wasted.

About 1,000 local companies have been certified under the program, although not all receive benefits, state data show.

State economic development officials under Gov. Eliot Spitzer are looking at possible changes to the program, which was significantly expanded and widely used under Gov. George Pataki's administration.

"We are aware of the criticisms of how the Empire Zones program has been administered," said A.J. Carter, a spokesman with Empire State Development.

"We know we can, and will, do a better job going forward."

Since January, the management consulting firm A.T. Kearney has been developing a new strategic plan for Empire State Development -- at no cost to the state -- and looking closely at its economic development programs.

"Empire Zones is one of those programs," Carter said.

"We are awaiting their recommendations."

That's not to say the program hasn't helped tremendously to stimulate the Capital Region's economy, which suffered with the disappearance of manufacturing during the late-20th century but has been energized over the past decade with the promise of the growing number of technology companies and startups.

One of the companies aided by the Empire Zone program is SuperPower Inc. of Schenectady.

SuperPower is developing and manufacturing high-temperature superconducting wire that could revolutionize power lines used by electric companies.

The technology -- which has billions of dollars in potential -- is years away from acceptance, and SuperPower has been spending millions of dollars on research and development, and on expanding its manufacturing operation.

So far, it hasn't posted a profit.

Its spending on equipment and other capital projects alone since 2000 has reached $20 million.

The company, which is owned by Philips Medical Systems but is seeking to spin itself off in a possible sale, employs 60 people and earned $432,000 in tax breaks through the Schenectady Glenville Empire Zone in 2005, after getting more than $500,000 in total benefits during the two previous years.

SuperPower President Philip Pellegrino said those tax breaks have loomed large in the company's drive to commercialization.

"Every single dollar counts," Pellegrino said.

"It is an extraordinary benefit."

Another local technology company, Crystal IS Inc., has reaped a much smaller amount of Empire Zone benefits -- about $20,000 from 2003 to 2005.

But founder and chief technology officer Leo Schowalter said the company's decision to move to the Island Park business park in Green Island in 2005 was largely influenced by low real estate costs made possible by an Empire Zone.

The park, which is owned by the Galesi Group of Rotterdam, sits in an Empire Zone, and Galesi is able to pass on those benefits to tenants in the form of lower rent, he said.

Crystal IS, which makes materials used by the semiconductor industry, employs 23 people.

"Our biggest criterion was cost per square foot," Schowalter said.

An entity called Green Island Properties LLC, which is associated with the Island Park business park and shares the Galesi Group's address, according to state records, received nearly $350,000 in Empire Zone benefits in 2005.

David Buicko, Galesi's chief operating officer, wasn't available for comment.

Not all companies receiving Empire Zone benefits are creating jobs.

Brookfield Power, a Canadian company that owns the School Street hydroelectric power station on the Mohawk River in Cohoes, receives about $1.3 million in tax breaks each year from the Albany County Empire Zone.

State records show that less than one full-time job was created at the site between 2003 and 2005.

But Brookfield, which acquired the 38-megawatt power plant in 2004, said it receives the tax benefits because of the investments it has made in the facility, which include $2.5 million over the past few years, and its continued employment of 13 people at the site.

The company also plans as much as $25 million in upgrades in the next five years.

"Easily, there has been a good return for Albany County," said Tom Uncher, general manager for Brookfield's Hudson River operations.

"It (Empire Zone status) was essential to the future of the facility."

Indeed, Empire Zone benefits can be earned from either the creation of new jobs or investments made in the zone, according to program guidelines.

The Empire Zone program also helped to attract Advanced Micro Devices Inc. to the Luther Forest Technology Campus in Saratoga County.

Although the state has offered AMD $650 million in cash to build a $3.2 billion computer chip factory on the site, which is located within Saratoga County's Empire Zone, AMD would also be eligible for $250 million in Empire Zone tax breaks if it goes ahead with its plan.

A decision by AMD is expected as soon as this summer.

Ken Green, president of the Saratoga Economic Development Corp., the nonprofit that manages Luther Forest, said Empire Zone benefits were a major factor in AMD's decision, which was announced last June as the largest private-sector industrial investment in state history.

"Without it, the project would have gone to Singapore or Dresden (Germany)," Green said.

Not everyone likes the program.

Ron Deutsch, executive director of New Yorkers for Fiscal Fairness, an Albany-based state spending watchdog group, said the Empire Zones have been mismanaged, and companies often don't live up to their job-growth commitments.

Others reincorporate themselves under a different name to get benefits they otherwise wouldn't receive, he said.

"We've ruined this program, in my opinion," Deutsch said.

"Either the program needs to be completely reformed or just scrapped."

Deutsch said he would like to see the tax benefits going to Empire Zone companies used to make the entire state more competitive for businesses -- something that would trickle down to all businesses, not a select few.

Matthew Maguire, a spokesman for the Business Council of New York State, a business advocacy group in Albany, said "there are questions about whether the overall program is an efficient use of state resources."

He stressed that the program allows the state to compete with business incentive programs offered by other states that often have lower taxes and lower business costs.

But the council does support looking at the program's costs and possibly making changes to it.

"Going forward, we need to do more to improve the state's overall economic competitiveness," he said.

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

"Pataki loyalists saw big raises - Records show a number of appointees were given pay increases well beyond the norm by a departing governor"

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

First published: Sunday, April 8, 2007

ALBANY -- Former Lt. Gov. Mary Donohue's chief of staff, Karin Kennett, landed a job as an executive in an agency that is one of the most important in Gov. Eliot Spitzer's war on Medicaid fraud.

As the first deputy inspector general in the Medicaid Inspector General's Office, Kennett, 34, late last year joined a line of Pataki loyalists trooping to high-paying posts just before Pataki's 12-year reign ended.

According to records provided by the Division of the Budget under the Freedom of Information Law, more than 400 appointees, or "exempts," got raises in the last six months of the Republican governor's tenure.

That's not unusual, officials say, but a closer look shows numerous appointees received double-digit percent raises, well beyond the norm.

Many of those were above 40 percent.

Appointees serve at the governor's pleasure.

Pataki's former appointments officer, Robert Bulman, said most of those people were given promotions, sometimes filling the jobs of bosses who departed for the private sector, and the raises and promotions were appropriate to keep government running efficiently for the new administration.

He acknowledged that some of the movement helped long-serving and worthy staffers continue their state careers.

The raises have an impact on state finances in many ways.

For instance, when an employee ends state service, he cashes out unused vacation pay (up to 30 days) based on his current salary.

Also, benefits involving unused sick pay and pensions are more expensive for the state if someone's pay rises.

Beyond that, Kennett is employed at an important state agency.

When Spitzer on Friday named James G. Sheehan, an associate U.S. attorney, to be the new Medicaid inspector general the governor emphasized the responsibility:

"New York state's health care spending is the highest in the nation and our system requires dramatic reform."

Among the last to find new posts in state government, Kennett, a former spokeswoman for the state Republican committee, got a $90,000-a-year position with the Medicaid IG on New Year's Eve.

She was one of 12 Pataki administration employees who got jobs in the IG's office in the final months of 2006.

The unit is hiring dozens of people as it ramps up to meet challenges of cracking down on fraud, waste and abuse in the $47 billion Medicaid system.

If it does not recover specific sums of money each year, the state will have to return federal aid sent to New York to develop the anti-fraud unit.

The penalties could reach $500 million.

Further, Spitzer is counting on the unit to recover $430 million this year alone by stamping out fraud and abuse, up $130 million from last year, to help balance the budget.

So every hire is important, administration officials say.

Kennett, whose pay rose marginally, switched jobs just as newly elected Lt. Gov. David Paterson brought in his own team of staffers to the office where she worked.

Her colleagues also received soft landings at the Medicaid IG's quarters in Menands at the end of December:

Diana Meier, a confidential stenographer for Pataki, on Christmas became a $60,000 executive assistant at the IG's office before Spitzer took his oath of office.

She'd been making $51,958.

Erin Dahlmeyer, an executive chamber program associate, became a research associate at the IG office.

Her salary rose a few dollars to $77,000, but the previous incumbent in the slot had been paid $55,000, according to the records.

Recently departed Acting Medicaid IG David R. Ross praised all the new employees and said several resumes arrived from the governor's office and he acted to fill posts at the fast-growing office.

"Whenever the governor's office says, 'Do you need more people?' the answer is always yes -- a quality person."

"Everybody's happy."

Ross had been a top counsel at the Office of Alcohol and Substance Abuse Services for eight years before taking a job under the first Medicaid IG, Kimberly O'Connor, who is now a Court of Claims judge.

Ross and Susanne Alterio, of the Governor's Office of Regulatory Reform, both became $120,000-per-year deputy Medicaid IGs last year and received big pay raises -- nearly $18,000 for Ross and $27,400 for Alterio.

Indeed, most of the jobs at the IG provided substantial raises.

Ross said that is partly because the new agency is trying to lure people from inside and outside government to a new entity.

Big raises occurred in other agencies, too.

For instance, at the Governor's Office of Employee Relations, Pataki appointed the wife of one of his top aides as director.

Eileen Natoli arrived in March 2006 at a salary of $130,000, after essentially being unemployed.

Her pay jumped to $133,000 by April.

Natoli is a former Schodack town supervisor, and is the wife of James Natoli, who was Pataki's director of disaster preparedness and response.

Under her, a new secretary was recruited, Dawn Seibert, from the comptroller's office.

She received a $16,000 increase in pay to $52,000, even though the former employee in the post made $44,349.

And Keith Corneau, a $78,000 energy policy specialist at the Department of Economic Development, was brought in at $121,500 to help the Governor's Office of Regulatory Reform develop a clean coal initiative, a top priority of Pataki's.

His $43,500 increase stands out among the DOB records.

Bulman said new commissioners often rearrange staff, and end-of-term vacancies are tough to fill.

"It was incredibly difficult to attract people to come in," he said, adding that Natoli was a "known commodity" needed to spearhead the new energy initiative.

An indication of her value, he said, is that she has been retained by the new director of the agency as a special assistant, but at the reduced salary of $115,000.

Bulman, whose salary jumped last April to $165,000 from $154,500, did note that it was unusual for him to authorize raises above $10,000.

Yet several people received income boosts beyond that threshold.

For instance, Matthew Millea received a $15,000 raise when his pay jumped to $138,000 as executive vice president of the New York State Environmental Facilities Corp.

Bulman said Millea was the No. 2 person in the agency and supervised subordinates making more than the $123,600 he was paid until his raise in September.

And Matthew Andrus, deputy secretary of state, who preceded Kennett as the lieutenant governor's top staffer, got a $15,000 raise, bringing his pay to $115,541 last August.

"As the administration was winding down, and folks were leaving to pursue other employment opportunities, it was critical that we had competent and capable people at the helm."

"Their salaries were on par with what their predecessors' were," said Bulman, now a business developer for a major engineering firm.

He said he tried to find good fits for people on the governor's staff who deserved state employment.

As an example, he said a secretary, Jessica Babbie, who worked in the governor's office for years, wanted to return to Plattsburgh.

In October, she took a job with the Department of Economic Development's regional office there as an executive assistant at $45,000, a raise of $7,872 from her Albany job.

Other notables who got raises include former Assembly Minority Leader Charles Nesbitt.

The Republican leader's pay as president of the Tax Appeals Tribunal rose last June to $142,400 from $129,952, also more than the $10,000 upper threshold.

The niece of Assemblyman Dan Burling, who tried to oust Nesbitt in a failed coup, also got a raise.

Office of General Services spokeswoman Christine Burling, hired in 2002 amid Pataki's hiring freeze as a $33,000-per-year stenographer, saw her salary jump to $81,000 from $71,200.

Among other public information officers, her raise was not the most notable: Department of Health spokesman Marc Carey's pay rose to $110,000 from $93,080 in September after he was transferred from the Department of Civil Service.

A few weeks earlier, the man he replaced had received a raise: Rob Kenny's pay had climbed to $100,790 from $95,790.

And then he quit.

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

"Cost of charter schools puts Albany in spiraling tax trap"

Fred LeBrun, Political Analyst, Albany, new York Times Union

First published: Sunday, April 8, 2007

Albany taxpayers, brace yourselves.

Conventional wisdom has it that the recently completed state budget was flush with money for public education, and that is mostly true.

Historic increases in aid were given across the board, especially to high-needs school districts, and credit for that belongs to Gov. Eliot Spitzer.

In addition, Senate Majority Leader Joe Bruno was able to arm-twist the governor out of even more for the traditionally high-taxed districts on Long Island and elsewhere.

So everybody made out.

Well, almost almost everybody.

The Albany school district did not.

Remember, during his State of the State address, the governor singled out the Albany and Buffalo school districts as deserving a bunch more aid to compensate for an excessive number of taxpayer-killing charter schools imposed on them.

The governor, for reasons that continue to baffle and irritate upstaters, also insisted on raising the cap on the number of these abominations.

He got his wish, 100 more.

But true to the promise, there was $2.5 million in transition aid to compensate.

For what?

For an unbelievable eight charter schools approved for Albany next year, with 19 percent of the district's students attending.

Drawing off $10,176 per pupil.

By the year 2010, nine charters are scheduled to be up and running in the city, potentially drawing off 35 percent of the student population.

Talk about a selective alternate-choice experiment gone berserk.

What Albany is doing even now, and struggling to do so, is support two separate school districts.

One set of taxpayers, two school districts.

Superintendent Eva Joseph estimates that in the next school year, the district would need $14.7 million in transition aid alone to stay even, not $2.5 million.

And she insists those are not casual figures thrown out to shock.

They are careful calculations on the conservative side by the district's business department, adding up the fixed expenses for the district on a per pupil basis, whether they attend charters or regular public schools.

That is some disparity.

Guess who has to make up the difference?

Joseph finds herself between several rocks, and several hard places.

On the one hand, she notes the district got $7.1 million in extra school aid beyond the transition aid, and she is grateful for that.

But some of the extra aid is earmarked for pre-k programs that haven't started yet, and the total is still far short of what the district needs.

There are only so many notches in the belt to tighten.

In the last two years, the district has eliminated 105 positions.

Every time it loses 25 pupils, it drops a teacher; at every 50, an additional support staff; at every 500, an administrator.

Critics suggest selling one or more of the elementary schools.

Joseph says to do so is premature.

For one, the elementaries are all and the taxpayers are paying off the bonds over 30 years.

Selling them gains nothing.

For another, keeping neighborhood schools is important to the city's social fabric.

And more importantly, if New Covenant charter school fails at some point, which has been rumored for years, the school district would be required to absorb 750 to 900 youngsters overnight.

The district can mothball a few schools, maybe, but they have to be ready.

But the worst dilemma of all financially is that the district is caught in a spiraling trap.

It has to be competitive and improve, and it can't do that by cutting all the time.

Besides, to receive even the $2.5 million, the district had to sign up for the governor's Contract for Excellence, and must meet certain benchmark standards --or be penalized and lose more aid. Catch 22.

What the superintendent says the district desperately needs -- deserves -- is a tailor-made charter school compensation package from the state Legislature that recognizes the realities of Albany's nearly unique situation.

Buffalo deserves one too, she says.

As proof she points this out: The new onerous benchmark for any school district in terms of possibly putting a brake on charter schools is when enrollment reaches 5 percent of the district's student population.

Next year, Albany taxpayers will be funding four times that.

At the moment, the district is cranking up the numbers for the upcoming school budget vote.

It will not be pretty.

As I said, brace yourselves.

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

NY TIMES - The Empire Zone

"A Budget That Covers All the Bases"

By DANNY HAKIM

Published: April 9, 2007

ALBANY — While state lawmakers give taxpayer money to anti-gun organizations in the new budget, they also give grants to gun and hunting clubs.

Then there is $2,000 for nut allergy awareness, $100,000 for a soccer hall of fame and $10,000 for a boxing hall of fame, not to mention $5,000 for a roller hockey club in Lynbrook, on Long Island, and much more for Little League and Pop Warner football teams throughout the state, depending on legislators’ clout.

Lawmakers also give tens of thousands of dollars to interest groups like AARP and the Empire State Pride Agenda, which lobby elected officials.

Yes, there is pork aplenty in the first budget passed under Gov. Eliot Spitzer — $170 million worth of pet projects divvied up by the Assembly and the Senate in a budget with a spending increase three times the rate of inflation.

Still, after several years during which pork-barrel spending was decided behind closed doors by George E. Pataki and the legislative leaders, pet projects are once again being delineated line by line.

Attorney General Andrew M. Cuomo has also set up new procedures for vetting the projects.

On the other hand, there are no details identifying who sponsored any particular spending item in the budget or what the item is being used for, though each is identified by party and as coming from either the Senate or Assembly.

There are some familiar recipients, including the Ohel Children’s Home and Family Services, a Jewish charity closely tied to Assembly Speaker Sheldon Silver.

Ohel and affiliated groups receive more than $1 million in the new budget.

Consistency can be a casualty.

So, for instance, the Colonial Rifle and Pistol Club, on Staten Island, gets $5,000 from one lawmaker while New Yorkers Against Gun Violence gets $4,500 from another.

Senate Republicans are sending $50,000 of taxpayer funds to Safari Club International, a Tucson-based hunting organization that among other things supports removing grizzly bears and gray wolves from the endangered species list.

With the Legislature on vacation for the first two weeks of April, a Senate spokesman was not able to provide further details.

Christina Perez, a spokeswoman for Safari, said most of the money would be used to teach children about firearms safety and to help pay for a prisoner rehabilitation program that the group helps run at the Wyoming Correctional Facility in Attica, N.Y.

“The last $5,000 goes for wood for their blue-boxes program,” Ms. Perez said of Safari’s New York affiliate.

“They build nests for bluebirds and give them away.”

DANNY HAKIM

http://www.nytimes.com/2007/04/09/nyregion...amp;oref=slogin

NY TIMES EMPIRE ZONE

April 9, 2007, 9:22 am

"The Resilient Pork Barrel"

By Danny Hakim

From The Empire Zone notebook published today: http://www.nytimes.com/2007/04/09/nyregion...amp;oref=slogin

While state lawmakers give taxpayer money to anti-gun organizations in the new budget, they also give grants to gun and hunting clubs.

Then there is $2,000 for nut allergy awareness, $100,000 for a soccer hall of fame and $10,000 for a boxing hall of fame, not to mention $5,000 for a roller hockey club in Lynbrook, on Long Island, and much more for Little League and Pop Warner football teams throughout the state, depending on legislators’ clout.

Lawmakers also give tens of thousands of dollars to interest groups like AARP and the Empire State Pride Agenda, which lobby elected officials.

Yes, there is pork aplenty in the first budget passed under Gov. Eliot Spitzer — $170 million worth of pet projects divvied up by the Assembly and the Senate in a budget with a spending increase three times the rate of inflation.

Still, after several years during which pork-barrel spending was decided behind closed doors by George E. Pataki and the legislative leaders, pet projects are once again being delineated line by line.

Attorney General Andrew M. Cuomo has also set up new procedures for vetting the projects.

On the other hand, there are no details identifying who sponsored any particular spending item in the budget or what the item is being used for, though each is identified by party and as coming from either the Senate or Assembly.

There are some familiar recipients, including the Ohel Children’s Home and Family Services, a Jewish charity closely tied to Assembly Speaker Sheldon Silver.

Ohel and affiliated groups receive more than $1 million in the new budget.

Consistency can be a casualty.

So, for instance, the Colonial Rifle and Pistol Club, on Staten Island, gets $5,000 from one lawmaker while New Yorkers Against Gun Violence gets $4,500 from another.

Senate Republicans are sending $50,000 of taxpayer funds to Safari Club International, a Tucson-based hunting organization that among other things supports removing grizzly bears and gray wolves from the endangered species list.

1 comment so far...

April 9th, 2007 3:29 pm

With respect to this “PORK” in the present state budget, which represents an unlawful and unconstitutional looting of our state treasury by the governor and the Legislature, back on January 18, 2002, this newspaper published an article entitled “Court’s Budget Ruling Hands Pataki a Big Victory” by James C. McKinley, Jr., wherein was stated:

“The state’s current budget-making system was drawn up during a redrafting of the Constitution in 1927, at a time when the public had grown tired with the Legislature’s penchant for spending.”

1927, of course, was exactly 100 years ago, now, when America was poised to enter into the “Great Depression”, and here we are once again, in the year 2007, 89 years after our state Constitution was amended in 1938 by We, THE PEOPLE to end the ability of the NYS Legislature to loot our state treasury and hand us the bill for the looting, and it is as if nothing had ever happened back in 1938, at all …

And any lessons that might have been conveyed to the public in NYS in that January 18, 2002 NYT article mentioned above here are apparently long since forgotten, if they were ever heeded in the first place, since here we are, 5 years later, and once again, we are being screwed by the NYS Legislature as it once again loots our state treasury to provide all of this PORK, at our expense …

With respect to any and all expenditures of what are OUR tax dollars, sect. 7 of ART. VII of OUR state Constitution provides:

§ 7. No money shall ever be paid out of the state treasury or any of its funds, or any of the funds under its management, except in pursuance of an appropriation by law; nor unless such payment be made within two years next after the passage of such appropriation act; and every such law making a new appropriation or continuing or reviving an appropriation, shall distinctly specify the sum appropriated, and the object or purpose to which it is to be applied; and it shall not be sufficient for such law to refer to any other law to fix such sum.

From what I have read on this issue this morning, the Legislature has in fact failed to comply with the constitutional language of sect. 7 of OUR state Constitution above here, in that “the object or purpose” to which this PORK money is to be applied is not mentioned in any of the appropriations bills, which then brings us to sect. 8 of ART. VII of OUR State Constitution, wherein is stated:

§ 8. 1. The money of the state shall not be given or loaned to or in aid of any private corporation or association, or private undertaking; nor shall the credit of the state be given or loaned to or in aid of any individual, or public or private corporation or association, or private undertaking, but the foregoing provisions shall not apply to any fund or property now held or which may hereafter be held by the state for educational, mental health or mental retardation purposes.

Applying that constitutional standard to the list of PORK that I was viewing this morning, which is reiterated in your article above here, it would appear that much of it is unlawful and unconstitutional ….

So in reality, nothing at all has changed in NYS since 1927, with respect to Legislature’s continued penchant for spending …

And craven fools that we are in this state, once again, we will simply allow this looting of our state treasury to happen, without a whimper on our part, as once again we are handed the bill for this looting of our state treasury to provide all of this illegal PORK …

And so …

— Posted by Livyjr

http://empirezone.blogs.nytimes.com/2007/0...barrel/#respond

"Chief judge faults 'Albany politics' - Kaye complains of 'shabby treatment' on salaries for the bench"

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

Last updated: 2:43 p.m., Monday, April 9, 2007

ALBANY - Blaming "Albany politics" for holding up pay raises for New York judges, Chief Judge Judith Kaye on Monday did not rule out a lawsuit to force bigger paychecks.

"It is nothing short of disgraceful that we have been brought to this point, that for more than eight years, longer than any other judges in America - likely longer than any workers in any field - New York state judges, for no reason other than Albany politics, have been denied even a cost-of-living adjustment to their salaries," Kaye said in a speech at a noon news conference at the Court of Appeals.

She complained of "shabby treatment" of judges and said she is writing to the four legislative leaders, asking for a chance to speak directly to their members in a call for greater pay.

She also said she she may take administrative action to hike salaries if the state comptroller and attorney general say she has the authority to do so, but she has rejected a call by some judges to unionize or boycott work.

"If there is no action on judicial salaries before the Legislature adjourns in June, the only remaining course of action available to us may well be to institute litigation," Kaye said.

Judges pay has been linked to legislative pay raises, but lawmakers have been unwilling to vote to increase their own compensation given the unpopularity of doing so with voters.

Money for judges pay raises - a total of $111 million - was stripped by the Legislature from Gov. Eliot Spitzer's budget plan.

Kaye, who is paid $156,000 annually, wants a raise retroactive two years for all judges that would make up for some of the 23 percent reduction in their spending power because of inflation since the last raise in 1999.

"Kaye says lack of pay raise hurts courts, considers lawsuit"

By MARK JOHNSON, Associated Press

Last updated: 4:33 p.m., Monday, April 9, 2007

ALBANY -- The state's top judge on Monday said the Legislature's failure to give judges a raise since 1999 is threatening to undermine the judicial system and held out the possibility of a lawsuit to achieve long-sought raises.

Chief Judge Judith Kaye's arguments for judicial raises have been rebuffed by the Legislature for years.

Judicial and legislative raises have traditionally occurred at the same time, but the pay hike for lawmakers is always one of the most politically sensitive issues in Albany.

Gov. Eliot Spitzer had included a judicial pay increase in his budget proposal, but the increase was tied to the creation of a commission backed by Kaye that would consider the pay levels of all three branches of government.

The measure was not included in the final budget accepted by the Legislature and governor.

Kaye wants to raise the salary of state Supreme Court justices, the main trial judges, to $165,200 a year, the same amount made by comparable federal court judges.

Higher ranking appellate court judges would earn more.

Supreme Court judges now earn $136,700 a year, which she said is less than many first-year associates at major New York City law firms.

Kaye said judges cannot maintain public confidence if the there are questions whether their decisions are influenced by efforts to encourage pay raises and said the lack of adequate pay keeps the best lawyers from entering public service.

She noted that some judges have already left the bench for better earnings.

"It is nothing short of disgraceful that we have been brought to this point, that for more than eight years, longer than any other judges in America -- likely longer than any workers in any field -- New York state judges, for no other reason than Albany politics, have been denied even a cost-of-living adjustment to their salaries," she said.

Kaye said she would "exhaust every possible option" before filing a lawsuit.

She said she would first try to meet with lawmakers to press for pay raises, order an independent assessment of the state's judicial pay to press her case and consider issuing an administrative order to give judges a boost in pay or an additional stipend.

She has asked the offices of the attorney general and state comptroller for their opinions on ordering an immediate pay hike under her office's powers.

Kaye, however, said she was reluctant to make such a move because it could compromise the judiciary's credibility.

"The governor agrees with the chief judge that the Legislature should pass a bill granting a pay raise to the judiciary," Spitzer spokeswoman Christine Anderson said.

"We had hoped to see it included in the enacted budget, but will work with the chief judge and the legislative leaders to help advance this during the legislative session."

Mark Hansen, spokesman for Republican Senate Majority Leader Joseph Bruno, said the Senate was supportive of Kaye's plan and that it was "still something the Senate is open to discussing" before the end of the Legislative session in June.

Charles Carrier, spokesman for Assembly Speaker Sheldon Silver, said Silver is "committed" to getting the judges a pay raise before the end of the session.

--------

Associated Press Writer Michael Gormley contributed to this story.

--------

On the Net:

New York state Unified Court System: http://www.courts.state.ny.us/home.htm

http://timesunion.com/AspStories/story.asp...wsdate=4/9/2007

NY TIMES EMPIRE ZONE

April 9, 2007, 4:52 pm

"No Raises for Justices, No Peace"

By Michael Cooper

The judges are crying out for justice.

Judith S. Kaye, the chief judge for the State of New York, held an extraordinary new conference in Albany on Monday to lament the fact that the long-delayed raise for the state’s judges was delayed again this year when it was left out of the budget agreement between Gov. Eliot Spitzer and the Legislature.

Judge Kaye said that if no action is taken by June on judicial salaries, which have not gone up since 1998, “the only remaining course of action available to us may well be to institute litigation.’’ (Which would, of course, be decided by…judges.)

The sticking point, of course, is Albany horse-trading.

Everyone says they favor pay raises for judges.

But the State Legislature wants to tie a pay raise for judges to a pay raise for itself.

And Governor Spitzer has made it clear that he does not support a pay raise for the Legislature until they show that they have earned it (presumably by acting on some of the bills that he thinks should be passed).

So no one gets a raise.

Judge Kaye used unusually blunt language to call for the raise:

“It is nothing short of disgraceful that we have been brought to this point, that for more than eight years, longer than any other judges in America – likely longer than any workers in any field – New York State judges, for no reason other than Albany politics, have been denied even a cost-of-living adjustment to their salaries.’’

1 comment so far...

April 9th, 2007 7:08 pm

This is indeed a strange story above here concerning these judicial pay raises for several reasons, not the least of which is a statement in a story this afternoon in the upstate Albany Times Union entitled “Chief judge faults ‘Albany politics’ - Kaye complains of ’shabby treatment’ on salaries for the bench” by JAMES M. ODATO, TU Capitol bureau last updated: 2:43 p.m., Monday, April 9, 2007 that:

“She (Judge Kaye) also said she she may take administrative action to hike salaries if the state comptroller and attorney general say she has the authority to do so, but she has rejected a call by some judges to unionize or boycott work.”

As Chief Judge of the NYS Court of Appeals, one would think that Judge Kaye would know the law and the requirements of state Constitution concerning pay raises for state judges better than either the NYS comptroller or the attorney general, especially in light of the language of sect. 1 of ART. VII of the state Constitution concerning that very issue:

Section 1. For the preparation of the budget, the head of each department of state government, except the legislature and judiciary, shall furnish the governor such estimates and information in such form and at such times as the governor may require, copies of which shall forthwith be furnished to the appropriate committees of the legislature.

*****

Itemized estimates of the financial needs of …. the judiciary, approved by the court of appeals and certified by the chief judge of the court of appeals, shall be transmitted to the governor not later than the first day of December in each year for inclusion in the budget without revision but with such recommendations as the governor may deem proper.

Copies of the itemized estimates of the financial needs of the judiciary also shall forthwith be transmitted to the appropriate committees of the legislature.

Presumably, since Judge Kaye was the chief judge of the court of appeals on December 1st of last year, she did in fact comply with this constitutional requirement, which then begs the question of why she would now need to be seeking opinions on this matter from either the state comptroller or the state attorney general.

Then, in a subsequent article this same afternoon in the Albany TU entitled “Kaye says lack of pay raise hurts courts, considers lawsuit” by MARK JOHNSON, Associated Press, last updated: 4:33 p.m., Monday, April 9, 2007, it was further stated:

“Gov. Eliot Spitzer had included a judicial pay increase in his budget proposal, but the increase was tied to the creation of a commission backed by Kaye that would consider the pay levels of all three branches of government.”

http://timesunion.com/AspStories/story.asp...wsdate=4/9/2007

Now, based on all of this, what it appears like is that what Chief Judge Judith Kaye was doing here with her press conference today, and with this commission of hers that would consider the pay levels of all three branches of government, is playing at blatant politics with this issue of judicial pay raises, which leads me to the thought that these state judges here in NYS cannot any longer maintain public confidence if there are now questions in the minds of us, the general public, as to whether their decisions are influenced by efforts to encourage pay raises, and that thought leads me to the further thought that it is indeed nothing short of disgraceful that WE, THE PEOPLE of the State of New York have been brought to this point of where we now have state judges talking of unionizing and conducting work slow-downs, instead of providing us with equal justice, as OUR state Constitution demands of them …

And so …

— Posted by Livyjr

http://empirezone.blogs.nytimes.com/2007/0...tices-no-peace/

"Kaye willing to sue for pay - State's top jurist calls Albany politics to blame for wage freeze as latest New York budget leaves out judicial salary bumps"

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

First published: Tuesday, April 10, 2007

ALBANY -- Blaming "Albany politics" for denying New York's 1,300 judges a pay raise, Chief Judge Judith Kaye on Monday said she's considering a lawsuit to force bigger paychecks.

"It is nothing short of disgraceful that we have been brought to this point," Kaye, the state's top judge for the past 14 years, said in a news conference at the Court of Appeals.

"For more than eight years, longer than any other judges in America -- likely longer than any workers in any field -- New York state judges, for no reason other than Albany politics, have been denied even a cost-of-living adjustment to their salaries."

Despite a two-year lobbying effort for raises, Kaye and her colleagues on the bench have been shut out, most recently with the new state budget.

It was enacted April 1 without $111.4 million Gov. Eliot Spitzer sought for pay hikes for judges retroactive to 2005.

Kaye said such "shabby treatment" of judges demands an offensive that could include suing Spitzer and lawmakers.

First, she said, she will write to the four legislative leaders asking for a chance to appeal directly to their members for greater pay.

She also will invite top leaders and Spitzer to meet to discuss the issue.

She also said she may take administrative action to hike pay if the state comptroller and attorney general say she has the authority to do so.

"If there is no action on judicial salaries before the Legislature adjourns in June, the only remaining course of action available to us may well be to institute litigation," Kaye said.

Judges are "wholly demoralized," she told reporters.

She delivered her speech in a room filled with members of the state's highest court, lawyers and representatives of business, district attorney and bar associations.

Some members of the judiciary have even called for unionizing, work stoppages or the right to take outside jobs, as legislators are allowed to do to augment their base pay of $79,500.

Lawmakers can also get sizable stipends for committee and leadership posts.

Judges' salaries were caught up in negotiations between Spitzer and Assembly Speaker Sheldon Silver during the budget talks, several sources said.

"We're getting into linking, and linking and linking here," said Barbara Bartoletti, legislative director of the League of Women Voters.

The League agrees with Kaye that an independent commission must be set up to review and recommend pay raises for public officials, judges and lawmakers.

Pay hikes for judges have been linked historically to lawmakers' compensation, and both have been frozen since 1999.

Previously, when legislators voted themselves a pay hike they also approved raises for judges.

But members of both the Assembly and Senate have been unwilling to vote to fatten their paychecks, given the unpopularity of doing so.

As a result, Court of Appeals judges' pay is locked at $151,200.

Kaye's pay plan calls for an upgrade to $178,416 retroactive to April 1.

Appellate Division judges are paid $144,000, and Kaye wants an increase to $171,808.

State Supreme Court judges get $136,700, and Kaye wants that raised to $165,200, the same pay as a U.S. District Court judge.

U.S. Supreme Court Chief Justice John G. Roberts Jr. also has been complaining that U.S. judges are woefully underpaid, saying that makes it difficult to recruit the best and brightest.

Kaye, who is paid $156,000 annually, wants a raise, retroactive for two years, for all judges.

Assembly and Senate leaders say they are sympathetic and willing to revisit the issue in the weeks ahead.

"The Senate majority supports her bill," said Sen. Hugh Farley, R-Niskayuna, who has sponsored legislation for unilateral raises for judges, free of the historic ties to legislative pay raises.

"We wanted to get it done in the budget, but we didn't get support."

However, in its one-house budget, the Senate struck out the funding Spitzer called for.

The Assembly proposed only enough money for raises retroactive to this April.

"There's no question about it; if you want to call it Albany politics, there are certain forces that want to make sure that the Legislature gets its pay raise too," Farley said.

Darren Dopp, Spitzer's spokesman, said the governor backs Kaye's pitch, and said lawmakers could yet tackle the issue separately from the state budget.

"Even though the Legislature chose not to include pay increases in the final budget, they can pass a stand-alone bill," he said.

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

http://timesunion.com/AspStories/story.asp...&TextPage=1

NY TIMES EMPIRE ZONE COMMENTS:

2. April 10th, 2007 12:56 am

CHIEF JUDGE JUDITH S. KAYE HONORS HER SACRED OATH TO DEFEND THE CONSTITUTION BY SERVING NOTICE UPON HER CO-EQUAL BRANCHES OF GOVERNMENT TO CURE THEIR FOUL BREACH OF THEIR SACRED OATH THAT NEW YORK SHALL HAVE AN INDEPENDENT JUDICIARY OR FACE A LAWSUIT THAT CONSTITUTIONALLY REPLENISHES JUDICIAL SALARY

The noble judiciary, state and federal, elective and appointive, our Founding Fathers decided needed to have a political birth, so as to avoid extreme judicial activism.

But they mandated a mechanism for an independent judiciary post-birth, either with life tenure, as with the federal Article III judges, or with long terms, as in New York and a salary that cannot be diminished.

The functioning of the judiciary is predicated upon their independence from politics as well as from their co-equal branches of government so that our separation of powers regime may work, and each judge in the appropriate case feels free to say “no” to power without fear or seeking favor.

Eight long years without even a cost of living increase has caused the1999 salary to be ravaged by corrosive inflation and to illegally pierce the Constitutional floor that bars salary “diminution;” salary protection is the gatekeeper to judicial independence while barring retribution by the co-equal branches of government when their laws are found unconstitutional.

In point of fact, the judiciary deserve a merit-based salary increase well beyond the number sought by the salary-frugal Chief Judge Kaye, dictated as it plainly is by the judges’ caseload shooting skyward.

Chief Justice Roberts has called for the federal judges to be paid approximately $225,000 as a floor for judicial independence that life tenure was meant to insure (judges exiting to earn a living wage damages judicial independence).

Surely, the cost of living in New York exceeds Ohio and New Mexico, while the talent and industry of our New York judges is renowned nationally!

Our Founding Fathers, leaving aside Governor Alfred E. Smith’s assumption of legislative budget power over 75 years ago, mandated that governance be split three-ways so that when it necessarily re-merged to govern, the people’s government would better serve the people.

Self-perpetuation was barred by the separated powers regime, but respectful equal co-dependency was mandated.

Here, the judiciary’s vital independence has been mugged, year after year for eight long years with a diminution in salary caused by a rising cost of living, sometimes higher than the inflation rate depending upon where the judge served in New York State.

Chief Judge Kaye has done everyday New Yorkers proud by standing up and asserting that we will continue to have an impartial and independent judiciary that fashions merit-based justice one case at a time, and in so doing, defended the Constitution and our cherished freedoms delivered everyday in courtrooms across New York State.

While no one can argue that those who toil in the executive and legislative branches of government also deserve a pay increase just to regain lost ground, but their similar condition isn’t constitutionally protected with a bar against diminution in salary as in the case of the judiciary, for they can cause gridlock to get what they want and delay budget passage past April 1 as we have experienced in the past.

The judiciary’s sole constitutional protection for being independent was that they cannot be punished with a salary decrease, as has occurred here over eight years.

This is a constitutional crisis that has left our noble judiciary financially bleeding, an insult that must addressed swiftly and respectfully.

The legacy of Chief Judge Kaye is enhanced in history as she valiantly does battle to protect the very honor of the judiciary: its vital independence.

Dated: 4/9/07
/s/
Ravi Batra

— Posted by Ravi Batra

http://empirezone.blogs.nytimes.com/2007/0...peace/#comments

NY TIMES EMPIRE ZONE COMMENTS:

3. April 10th, 2007 9:25 am

Emotional press conferences by Chief Judge Judith Kaye in a room filled with members of the state’s highest court, lawyers and representatives of business, district attorney and bar associations aside ….

http://timesunion.com/AspStories/story.asp...sdate=4/10/2007

And flowery press releases by Ravi Batra aside, as well, the REAL ISSUE here has to do with restoring constitutional processes of government with respect to budgeting to WE, THE PEOPLE, who were not at all in attendance at this press conference, nor were we at all represented in this press conference called by Judge Kaye, which is quite a telling statement about where matters now lie in NYS with respect to the lack of independence and integrity of the court system in NYS, given that lawyers and representatives of business were in attendance at this press conference.

In 1996, in Ricky Brown et al. v. State of New York, 89 NY2d 172, the New York State Court of Appeals stated:

“Constitutions assign rights to individuals and impose duties on the government to regulate the government’s actions to protect them.”

“The underlying rationale for the decision, in simplest terms, is that constitutional guarantees are worthy of protection on their own terms without being linked to some common-law or statutory tort, and that the courts have the obligation to enforce these rights by ensuring that each individual receives an adequate remedy for violation of a constitutional duty.”

“If the remedy is not forthcoming from the political branches of government, then the courts must provide it by recognizing a damage remedy against the violators much the same as the courts earlier recognized and developed equitable remedies to enjoin unconstitutional actions.”

“Implicit in this reasoning is the premise that the Constitution is a source of positive law, not merely a set of limitations on government.”

IF Chief Judge Judith Kaye wishes to restore integrity to the state court system here in NYS, and if she wishes the people to believe that the court system here in NYS is not simply another willing mouthpiece for the politicians, perhaps what Judge Kaye should have done was to quote from OUR Constitution at this emotional press conference of hers, and she should not have been seen standing in a room full of lawyers and representatives of business while discussing “horse-trading” with the Legislature, which does not represent OUR interests as mere state citizens, and the “STEAMROLLER”, who is seen by WE, THE PEOPLE as having less integrity than the Legislature.

Judith Kaye appears to want money in her pocket a lot more than she seems interested in equal justice for us here in NYS, for which the sentiment out here in the countryside is that she and her court system are not worth a dime.

And so …

— Posted by Livyjr

http://empirezone.blogs.nytimes.com/2007/0...peace/#comments

"AP NewsBreak: Cuomo gets guilty plea from worker in state scam"

By MARC HUMBERT, Associated Press

Last updated: 5:24 p.m., Tuesday, April 10, 2007

ALBANY -- A well-paid veteran state employee pleaded guilty to grand larceny on Tuesday after scamming the state out of $1.2 million over more than eight years, state Attorney General Andrew Cuomo said.

Cuomo said James Leggiero faces up to 10 years in prison when he is sentenced July 2 after pleading guilty to a felony count of first-degree grand larceny.

He also must reimburse the state for the $1.2 million, Cuomo said.

The arrest and plea Tuesday marked the first high-profile state ethics case brought by Cuomo's public integrity unit.

Democrat Cuomo, elected in November to replace Eliot Spitzer, had vowed to make public integrity a major part of the work of the attorney general's office.

"If there is corruption, we will be diligent in policing it," Cuomo told The Associated Press on Tuesday as Leggiero was pleading guilty.

Leggiero, 50, was a $79,000-a-year principal auditor for the state Office of Mental Health.

He had worked for the state since 1980.

Cuomo's investigators said Leggiero had created a company, Very Important Property Inc., that would bill the state office for phony site feasibility studies for its residential treatment program.

Leggiero would then approve the vouchers.

The scam allowed Leggiero to support a lavish lifestyle that included three homes and fancy automobiles, including a vintage 1958 Corvette.

Cuomo said Leggiero might have assets the state could claim immediately that could be worth "several hundred thousand dollars."

The attorney general also said the length of Leggiero's prison sentence may depend, in part, on how much restitution he can make now and what sort of plan he develops for paying off the rest of the debt.

Cuomo said that as part of the investigation he was also announcing the creation Tuesday of a toll-free hot line that can be used to report possible government corruption.

The new attorney general told the AP the Leggiero case was a clear sign that state agencies had to do a better job policing their own operations and have better checks and balances on state spending.

"This whole area of state operations, this is where the money is ... $50 billion a year."

"Follow the money," said Cuomo.

In fact, Leggiero was only caught after the state comptroller's office implemented a new system in November for reviewing the more than 20 million payments made each year by the state to various vendors.

"The payments turned up right away," said Dan Weiller, a spokesman for Comptroller Thomas DiNapoli.

The case was referred to Cuomo by the comptroller's office in February.

"There was a problem with the internal controls at OMH," Cuomo told a news conference Tuesday afternoon when pressed about how the fraud could go undetected as long as it did.

"The good news is, it was found out," DiNapoli said.

"The Office of Mental Health is aggressively reviewing its internal control processes, and is implementing changes that have been identified to strengthen its financial systems," said OMH spokeswoman Jill Daniels when asked about Cuomo's criticism.

Leggiero was suspended without pay by OMH after Cuomo began his investigation.

As part of the plea agreement, Leggiero resigned, Cuomo spokesman John Milgim said.

------

AG's Public Integrity Hotline: 800-428-9072

AN OPEN LETTER TO THE RENSSELAER COUNTY LEGISLATURE TAKEN FROM THE ALBANY, NEW YORK TIMES UNION LOCAL POLITICS BLOG:

WE, THE PEOPLE out here in Rensselaer County who are paying the property taxes that keep this clown show called Rensselaer County government running want to know why the Rensselaer County Legislature used our county property tax dollars to provide legal services for Carl Richard Aiken, a politically-connected engineer from East Greenbush, and Kevin Joseph McGrath, a politically-connected land surveyor from Poestenkill, in Matter of Plante, P.E. v. Jimino et al in 2005, and we want to know why the Rensselaer County Legislature condones the use of Rensselaer County employees to obtain a fraudulent involuntary psychiatric commitment order for Plante from Samaritan Hospital in 2001, so as to destroy his credibility as a witness for us against the Rensselaer County Department of Health ….

We also want to know how Jeffrey Pelletier of Poestenkill became a “protected person” in Rensselaer County according to Rensselaer County Veterans’ Service Agency Director Robert “BOB” Reiter, so that Pelletier could assault Plante with inpunity, without any fear at all of being prosecuted in Rensselaer County for that assault, which was recorded on videotape, which videotape has been in the possession of Rensselaer County since August of 2001 …

If the county legislature does not know the answers to those questions today, we will simply come back tomarrow, and ask them all over again, as we are indeed patient people out here in the countryside …

And so …

Comment by John Galt — April 9, 2007 @ 3:59 pm

http://blogs.timesunion.com/localpolitics/?p=63#comments

Rochester Democrat & Chronicle

"Property taxes top Spitzer's list of economic obstacles"

Mary Chao, Staff writer

(April 11, 2007) — Too many people are "voting with their feet" and leaving upstate, Gov. Eliot Spitzer told a Rochester audience Tuesday, and he's determined to improve the region's economy.

Spitzer said cutting property taxes, curbing Medicaid spending and nurturing industries that have growth potential will be instrumental to economic revival.

Addressing a standing-room-only crowd of more than 500 people at a Rochester Rotary Club luncheon at the Riverside Convention Center, the governor recapped his first 100 days in office, highlighting passage of an on-time state budget and compromises he made with the Legislature to advance his agenda.

"We're beginning to make real progress," he said, citing $1.3 billion in property tax cuts, $1.8 billion in additional school aid and approval of 100 more charter schools.

The governor sought to impress upon the audience, mostly businesspeople, that his understanding of what's important to Rochester goes beyond the locally made Hickey Freeman suit he wore.

"If we cannot entice people to stay here, we are failing," he said.

The Census Bureau reported last week that the five-county Rochester area had a net population decline of 2,400 from 2000 to 2006.

And job growth here has been among the slowest in the nation.

Medicaid spending, energy costs and the local tax burden are issues that must be addressed so that it isn't so expensive to live and do business upstate, Spitzer said.

He said New York residents pay taxes that average $1,374 per $10,000 of income, while the national average is $1,028.

The state's property taxes are climbing at 3½ times the rate of wage increases and consumer prices, he added.

"We have to turn this around."

"We have to rein in property taxes."

Spitzer spoke about some of the pro-business initiatives already under way, including the appointment of Daniel Gundersen as upstate chairman of Empire State Development Corp.

Gundersen has been widely credited with engineering a deal under which Onex Corp. of Toronto will add 500 jobs in Rochester after it acquires Eastman Kodak Co.'s health imaging unit.

The governor mentioned the Legislature's recent approval of changes in the workers' compensation system that could reduce business costs by at least 10 percent.

But he said corporate taxes also are too high.

In talking about growth sectors of the economy, Spitzer stressed Rochester's strengths, including higher education, technology and specific fields such as optics.

He also called for investment in downtowns.

Spitzer's message resonated with Peter Robinson, chief operating officer of the University of Rochester Medical Center.

"He's been very supportive of higher education," Robinson said, adding that he thinks Spitzer has a keen understanding of a research university's contributions to the economy.

County Executive Maggie Brooks, a Republican, credited the Democratic governor with making some tough decisions during his first 100 days.

"He understands the problems," Brooks said.

"He tackled issues that have not been tackled before."

MCHAO@DemocratandChronicle.com

http://www.democratandchronicle.com/apps/p...4%2F1002%2FNEWS

EMPIRE CENTER FOR NEW YORK STATE POLICY

"Albany Oink, '07-08 Edition"

April 10, 2007

by E.J. McMahon, Matt Smith and Kathryn McCall

To promote greater public scrutiny of tax-funded expenditures, the Manhattan Institute's Empire Center for New York State Policy has assembled a list of pork-barrel "member items" found in the 2007-08 budget bills passed by the Legislature.

Roughly 5,800 obvious member-item appropriations are scattered throughout the four major budget bills.

Our compilation of these items can be downloaded in two different file formats:

> Adobe Acrobat "pdf" file. The printable form of the member-item list is 162 pages long and lists all line items in alphabetical order, noting in each case the amount of the appropriation and the code for the legislative conference that requested it.

> Microsoft Excel spreadsheet. In addition to a full listing of member items, this worksheet file includes separate tab breakouts of items sponsored by all four legislative conferences.

It is also formatted to permit easy sorting and tabulation of line items.

NOTE: In compiling these lists, we may have overlooked some member items salted among the thousands of pages of budget legislation passed on March 31 and April 1.

Although it has been widely reported that the budget included a total of $170 million in new legislative pork, our analysis of budget bills turned up only $101 million in individual appropriations listed under various subtotals for the "Community Projects 007" account, which traditionally is the funding source for legislative member items.

Moreover, while the two houses traditionally divide the member-item grants into equal amounts, our totals (as summarized below) are unevenly distributed between the Senate and Assembly.

This may indicate that more member items will be lined out in a supplemental budget bill, or that the Legislature expects some expenditures to come out of lump-sums re-appropriated from previous years.

After six years of appropriating member items only in lump sums, the Legislature's return to the practice of making line-item appropriation has restored a modicum of transparency to the pork-barrel spending process.

As usual, however, there was no opportunity for public scrutiny of the member-item list in advance of the budget vote.

In fact, as of ten days after the budget was passed, neither the Senate nor the Assembly had made good on a promise to release an authoritative list of member items.

The Legislature also has not identified individual sponsors of member items (although Senate Majority Leader Joseph Bruno released his personal list).

Also still missing from the public record is any information on the purpose of, or justification for, any of the member-item expenditures.

Pork propensities: a summary

Based on the Empire Center's compilation, here's a look at how some of the funding breaks down:

Kenmore Mercy Hospital and Geneva Community Center Inc. each received $500,000 member items from Senate Republicans.

The Senate majority's 2,427 member items totaled $56.5 million.

Senate Democrats delivered targeted grants of $100,000 to each of the following groups: the Creative Arts Team of CUNY; the Lesbian, Gay Bisexual, and Transgender Community Center; NARAL Pro-Choice of New York; and the Public Policy and Education Fund of New York, which is an arm of Citizen Action lobbying group.

Overall, Senate Democrats issued 982 member items totaling $6.5 million.

Prisoner's Legal Services received the largest member item from Assembly Democrats, with a $2.3 million grant.

There were 1,682 member items lined out in the new budget bills from the Assembly Majority totaling $31.4 million.

Assembly Republicans issued 730 member items totaling $4.2 million.

The two largest grants -- both totaling $50,000 -- went to the Williamsville Junior Football program and the Town of Greenwood.

As is normally the case, a significant portion of member-item spending under the 2007-08 budget goes to senior-citizen groups, libraries, veterans organizations and youth sports programs.

At least 666 grants totaling $6.5 million were awarded to senior-citizen organizations statewide.

Veterans groups, including American Legion posts, accounted for at least 151 member items totaling $1.5 million.

Nearly 40 youth sports programs and Little Leagues received $227,506 in funding from lawmakers.

At least 599 grants totaling $6.8 million went to public, private and charter schools, and to public libraries across the state.

http://www.empirecenter.org/2007/04/Oink07.cfm

NEWSDAY

AP New York

"AP Interview: Cuomo says student loan corruption widespread"

By MARK JOHNSON

Associated Press Writer

April 10, 2007, 6:21 PM EDT

ALBANY, N.Y. -- It was a call from an industry whistleblower that first drew New York Attorney General Andrew Cuomo's attention to dubious practices in the student loan business.

While various authorities have been examining the issue for about a year, Cuomo became interested after a lender trying to break into the business told him that a few loan companies dominated the lucrative market.

Cuomo, who would not name the whistleblower, saw it as an antitrust issue and started asking questions.

"For me it became real when I talked to lenders who couldn't get into the market," Cuomo told The Associated Press Tuesday.

"You can be a lender who wants to compete and have a better product, but you just can't get to the students."

"... The schools are controlling the access to the students."

Two months after launching the case, Cuomo believes cozy arrangements between colleges and the companies that lend their students billions of dollars are far more widespread than even he anticipated.

Cuomo wouldn't divulge where the burgeoning investigation is headed next, including whether more subpoenas are on the way, but said his investigation of the $85 billion industry could lead to criminal charges against high-ranking officials at both lending companies and universities.

"This is like peeling an onion," Cuomo said.

"It seems to be getting worse the more we uncover."

"It's more widespread than we originally thought ..."

"More schools and more lenders at the top end."

Cuomo is investigating alleged kickbacks to school officials who steered students to certain lenders.

His investigators say they have found numerous arrangements that benefited schools, financial aid officers and lenders at the expense of students.

Investigators found that many colleges have established "preferred lender" lists and entered into revenue sharing and other financial arrangements with those lenders.

Some colleges have "exclusive" preferred lender agreements with the companies.

So far, six schools, including the University of Pennsylvania and New York University, have agreed to reimburse students a total of $3.27 million for inflated loan prices caused by revenue sharing agreements, Cuomo said.

The schools will return money to students who took out loans during the time the revenue sharing agreement was in effect.

Students will be refunded based on the amount they were loaned.

On Monday, a loan company that has been at the center of the investigation, CIT Group Inc., placed three top executives at its Student Loan Xpress division on paid leave following allegations of stock transactions with a high-level U.S. Department of Education official and college financial aid officers.

On Tuesday, two more school officials joined a growing list of those who have been placed on leave for possible ties to lending companies.

Widener University in Pennsylvania placed Walter Cathie, the dean of financial aid at Widener on leave.

Cuomo's office said Cathie was paid $80,000 by Student Loan Xpress since 2005.

Investigators said they also believed Cathie had an agreement with the company to market its services to graduate schools, receiving fees based on loan volume.

Capella University, a Minneapolis-based online school, said Tuesday that it suspended its director of financial aid after he acknowledged accepting consulting fees from Student Loan Xpress.

Financial aid director Timothy Lehmann was put on paid administrative leave after he received more than $13,000 in consulting fees from the company, Capella President Michael Offernan said.

The most recent announcements by the schools come just days after it was learned that a U.S. Department of Education official who oversaw parts of the student loan industry was placed on leave.

It was reported that in 2003 Matteo Fontana owned at least $100,000 worth of stock in Education Lending Group Inc., the former parent of Student Loan Xpress.

The company was acquired by CIT in 2005.

Cuomo now says he suspects "dozens" of financial aid officers around the country have similar arrangements that he has called deceptive, unethical and at times, illegal.

"No one is even defending the situation anymore," he said.

"When we first started, it was 'Oh, this is just a few bad apples."'

Last week, Cuomo sent subpoenas to SLM Corp., commonly known as Sallie Mae, requesting information on any current or former employees who had worked at the Education Department over the past six years.

In some cases, investigators said, lenders provided all-expense-paid trips for college financial aid officers to exotic locations.

Financial aid officers at schools in some cases served on loan company advisory boards, Cuomo said.

Cuomo said the arrangements are particularly predatory because of the relationship between students and the colleges they choose.

"Ninety percent of the students take the 'preferred lender,"' he said.

"Why?"

"Because that's the nature of the relationship."

"You trust the school."

"The school is in a position of authority."

"The school is there to nurture you."

He said lending companies that don't offer perks to financial aid officials have been frozen out of the schools.

"The new lenders were saying because they weren't doing the conferences, they didn't have these relationships with financial aid offices, they weren't willing to do or hadn't been doing the financial aid incentive," Cuomo said.

"They couldn't even compete."

The attorney general said he has talked with lawmakers in Washington _ including Sen. Edward Kennedy, D-Mass., who heads the Senate Health, Education, Labor and Pensions Committee, about new legislation to reign in the student loan industry.

"There hasn't been enough supervision," he said.

"There hasn't been enough regulation."

Earlier this year, House Democrats in Washington introduced a bill that would ban gifts from lenders to college employees and would require lenders to disclose the terms of their arrangements with colleges and universities.

http://www.newsday.com/news/local/wire/new...egion-apnewyork

"A fast lifestyle to end in prison for auditor - $1.2M theft from state agency financed a fleet of Corvettes, Escalade"

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

First published: Wednesday, April 11, 2007

ALBANY -- A lifestyle that once included a stable of Corvettes, a Cadillac Escalade and a spacious home in Slingerlands will end in state prison after a veteran auditor admitted stealing $1.2 million from the state.

State Office of Mental Health auditor James Leggiero admitted Tuesday that he illegally funneled the money over nine years into a sham company he set up to bilk the state.

Leggiero, 50, faces a maximum sentence of 3 to 10 years in prison when sentenced July 2 by Albany County Judge Thomas Breslin for his plea to first-degree grand larceny.

The state has seized at least three Corvettes, including a classic 1958 model and two SUVs, but Leggiero and his wife, Kathleen, will be allowed to keep the 3,000-square-foot family home near the Albany Country Club that featured a three-car attached garage as well as carriage houses and sheds.

As part of his plea, Leggiero said he would resign from his state job and never seek public employment again.

He also agreed to pay back the $1,232,072 he took, although lawyers said it wasn't clear precisely how much money he would be able to repay or whether his state pension would be tapped or future earnings garnisheed.

A $79,000-a-year auditor at OMH, Leggiero stole the funds by creating a company, Very Important Property, which then billed the state agency for conducting bogus site feasibility studies for residential treatment facilities.

As an auditor, he signed off on the bills going to the phantom company.

"VIP was in fact a sham entity I created," Leggiero said as he pleaded guilty.

After the plea, Leggiero, who is free on $50,000 bail, left silently, accompanied by defense attorney Steve Coffey.

Attorney General Andrew Cuomo and Comptroller Tom DiNapoli later said the scam was discovered when workers at the state comptroller's office who approve bills such as those submitted by VIP noticed what DiNapoli described as "red flags," including a post office box for a mailing address and lack of a phone number for the business.

When Leggiero was first accused by the attorney general, in March, he owned a Cadillac Escalade and Chevrolet Trailblazer as well as at least three Corvettes, including a classic 1958 model.

Authorities at the time seized the vehicles and froze his bank accounts.

Kathleen Leggiero, who also works at OMH and earns $77,624, was unaware her husband was stealing from the state, Coffey said.

Court records didn't accuse her of wrongdoing although she was listed as being linked to VIP.

She has been on paid leave from the agency since March, according to OMH spokeswoman Jill Daniels, and it was not immediately clear when she would return to work.

"She's got to put her life together," said Coffey, adding that she and her husband have two high-school age children at home.

In addition to the Slingerlands home, Leggiero is listed as having purchased a $195,000 home in Rensselaer County with Kelly A. Marhafer in 2000.

Marhafer is a former OMH employee who transferred in 2002 to the comptroller's office, where she earns $38,590.

During a news conference following Leggiero's plea, Cuomo suggested state agencies, under Gov. Eliot Spitzer, should tighten up their internal controls to prevent such inside scams.

"This a great time for those new commissioners to review their agencies," said Cuomo.

And DiNapoli, who took office in January after former Comptroller Alan Hevesi stepped down following a scandal, said his agency has been working to improve the way it ferrets out abuses such as those done by Leggiero.

"This is obviously part of an ongoing effort," said DiNapoli.

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

THE NEW YORK SUN

"State's Surplus Played Big Role in Budget Talks"

By JACOB GERSHMAN

Staff Reporter of the Sun

April 11, 2007

Adding to the tension in Albany as the budget deadline loomed was one thing that didn't sound like a problem: the state's growing surplus.

Among the factors weighing on the Spitzer administration, which was debating whether to settle short of its goals on the budget deal or take its chances by negotiating into April past the deadline, was a growing anticipation of a surprise revenue windfall.

The growing surplus numbers and an increasing suspicion that the positive news would lead to even more revenue arriving via income tax payments created a sense of urgency for those interested in constraining the already high level of spending.

A missed deadline would have likely pushed back a budget deal by weeks, past the point at which those suspicions would be confirmed by new cash reports providing a final tally on receipts, spending, and the surplus for the 2006–07 fiscal year.

If the surplus shot up, as many in Albany thought it would, Governor Spitzer would have faced increasing pressure to yield to legislative demands that would have increased spending beyond the rate of 6% that was proposed in the executive budget.

Such positive news could have had the potential to unravel negotiations, as lawmakers would have likely used the updated information to question the credibility of the administration's claim that the budget was stretched to the brink.

An uptick in the surplus and the state's cash balance could help to buttress the administration's argument that it was better off accepting a compromise budget deal that fell short of some campaign and first-month promises made by the governor.

In late February, the Spitzer administration was predicting a budget surplus of $1.5 billion for the 2006–07 fiscal year.

Higher than expected capital gains receipts and Wall Street bonuses could push that figure up significantly.

"The consensus is that it's going to be a lot bigger than $1.5 billion," a Republican state senator who represents a district in Western New York, Dale Volker, said.

"Bottom line, we are developing the second biggest surplus in the state's history."

New York had a $4.1 billion surplus in the 2000–01 fiscal year but saw its reserves drained after the September 11, 2001, attacks.

The details will become clear when the Spitzer administration releases its financial and enacted budget report on Monday and when the comptroller's office comes out with a cash report for March, wrapping up the 2006-07 fiscal year.

A spokesman for Mr. Spitzer said the administration did not have specific figures and refused to speculate on the size of the surplus.

A higher-than-expected cash balance and surplus would help to allay fears about out-year budget gaps.

Spitzer officials have been predicting a deficit next year of more than $3 billion.

If the extra surplus is due to increased revenue, the extra money would not only roll over to this year but would have the effect of increasing base revenue.

In other words, if there were $400 million in higher revenue, the state would assume that it has $800 million in extra cash this year.

In the lead-up to the budget agreement, a refrain heard from the Spitzer administration was that Senate Republicans were proposing an unrealistic amount of spending.

Senate Republicans were pushing for a more expensive property tax cut program and a restoration in hundreds of millions of dollars in hospital and nursing home cuts.

Spitzer officials said the Republican package would have added more than $3 billion to the total budget.

Mr. Spitzer called the Senate's budget package "ruinous" and likened the spending to a "game of three-card monte, because every time you look underneath to find the money, it's not there."

The Republican majority leader, Joseph Bruno, accused the governor of underestimating the available revenue.

In Albany, it's not uncommon for governors to stand behind conservative revenue and surplus estimates during budget talks.

By low-balling, the governor can more easily fend off legislative pressure to tack on new spending.

By protecting the surplus at the end of the budget process, the governor also increases control over how the money is spent.

The governor can dictate how the money is spent in the following year's executive budget, taking advantage of his powerful budget language powers.

Mr. Volker said lawmakers have begun to lose trust in the financial figures coming from the state's budget office.

"We've been watching these numbers for so long, we're getting tired of it," he said.

http://www.nysun.com/article/52187

Binghamton Press & Sun-Bulletin

Wednesday April 11, 2007 NEWS

"Spitzer pledges economic help - Governor visits Binghamton family"

By Brian Liberatore

Press & Sun-Bulletin

BINGHAMTON -- In a now familiar scene on Gov. Eliot Spitzer's "Bringing the Budget Home Tour," the governor Tuesday sat in a crowded living room in a middle-class Binghamton home promoting the state's $121 billion budget.

The house next door was vacant.

"The person (next door) lost his job and moved on," said Jeffrey Brooks of Greene, who was among the crowd in the living room of Binghamton High School teacher Brendan Byrnes' Crary Avenue home on the city's West Side.

"Everything we do in this administration is to reform the way government operates and bring back the economy," Spitzer said, sipping a cup of coffee.

The governor touched on the harsh realities of the upstate economy, but kept his message on his vision of an optimistic future.

The state budget, which passed earlier this month, aims to improve the business climate upstate, Spitzer said.

The budget, he said, focuses on property tax relief.

The Legislature passed a measure designed to cut the cost of workers' compensation, and Spitzer is also pushing for cuts in the cost of energy.

The measures are meant to combat "a perfect storm of unaffordability" that has driven up costs and driven out businesses over recent decades, he said.

Another key tenet of the budget, Spitzer said, and a long-term solution to the region's fiscal recovery, lies in education funding reform and increased school accountability.

Under the Educational Investment Plan, the state will increase school aid by $1.76 billion this coming school year, with increases planned into 2011.

State aid to schools will total close to $19.6 billion.

The plan, Spitzer said, is designed to dole out school funding based on a district's need and not the political clout of its state representative.

"The hardest thing in education is trying to figure out how to develop accountability," Spitzer said.

"I'm not an educator, but I know as somebody who looks at this as a policy matter, you need to have some accountability measures."

Spitzer's visit to the Southern Tier also included a stop at Greater Binghamton Airport, where the governor discussed the Flood Relief Act, which provides $5 million in aid to municipalities to compensate for property tax lost when flooding last year destroyed thousands of homes and businesses.

Under the plan pushed through the Legislature by state Assemblywoman Donna A. Lupardo, D-Endwell, and state Sen. Thomas W. Libous, R-Binghamton, property owners will receive refunds on taxes paid for 2006.

Spitzer also discussed holding a flood caucus over the summer in Binghamton with state lawmakers and federal and state emergency response officials in Binghamton to discuss projects that could prevent or mitigate future flooding.

"The governor speaks eloquently about the future," said Brooks.

"We need help now."

http://www.pressconnects.com/apps/pbcs.dll.../704110328/1006

While I am not generally a fan of Mr. Galt’s reasoning, I must give him all due kudos for this one.

This post should be a veritable sine qua non for every legislator and judge in the State of New York.

While most of them would not appreciate the cogent arguments proffered, at least a few neurons in the cerebrum should be stimulated.

Comment by Phana24JG — April 10, 2007 @ 9:21 pm

http://blogs.timesunion.com/capitol/?p=4359#comments

NEW YORK DAILY NEWS

As an older up-state NY-er who has encouraged many young people to get the hell out of NY while they can, and as an older NY-er who lives in one of the upstate "APPALACHIAS" created by the State of NY itself, in conjunction with out-of-state corporate interests in such places as Texas and Ireland, I would suggest that IF the state of NY really wants to stem this tide, that they first set about restoring to us the integrity in our government that OUR Constitution demands of them, and one place that they can start is by reviewing the contents of an Albany Times Union editorial entitled "State DEC undermines home rule", first published Friday, March 3, 2006, wherein is stated:

"New York prides itself as a home-rule state."

"It's in our constitution."

"Effectively that means that when a state law or governmental action is going to affect a locality, a home-rule message of support is sought from the grass-roots entity, usually a town or city."

"Not that this has done Nassau, or East Nassau, any good at all."

"Nobody's asked them if they want another mine in town, or any mine at all."

"Worse, the DEC has relied for years on a self-generated technical memo from the early 1990s that states the DEC will process mining applications regardless of local zoning objections."

This complete and total disregard by the State of NY itself for our laws, our Constitution, our health, our safety, our well-being, our property rights, so that out-of-state corporations can make bigger profits is one of the chief reasons that I advise everyone that I can to leave this state ...

And then, the "state" should set down and read the article entitled "Planned rules set cleanup guidelines - Proposed regulations that would set standards for developers building on polluted sites called inadequate by critics" by COLIN McDONALD, Staff writer, Albany, New York Times Union, first published Monday, March 6, 2006, wherein is stated in part:

"The issue is difficult for all of us because of how we have impacted our environment," said Linda Shaw, a Rochester environmental attorney who supports the new regulations.

"The rural background numbers came out higher than everyone expected because our environment is unfortunately more contaminated than anyone thought."

And the "state" should then consider how many people out of ten want to live in a state where the "state" itself, through the DEC and the state Health Dept., is responsible for that groundwater contamination, despite an amendment to OUR state Constitution in 1969 that should have ended this problem a long time ago, but for the state's continued ignoring of our laws intended to end groundwater pollution so as to not disturb the profits of the businesses that cause this pollution, as was the case with the now-infamous Storonske Cooperage in Schodack, NY, way back in the 1980's, now ....

But since "STEAMROLLER" Spitzer has already assured the NY Business Council back in Sept. of 2006 that he intends to "out-Mexico" Mexico itself to make NY "the best place to do business in the world" by further gutting our regulations intended to protect and safguard our health and well-being, my advice as an older person in this state to younger people will continue to be, "GET OUT WHILE YOU ARE STILL ABLE" ..

And to anyone out there who is thinking of moving here, don't do it unless you don't care about your own health and well-being, along with that of your children ...

And so ...

Posted by: John Galt | April 11, 2007 8:49 AM

http://www.nydailynews.com/blogs/dailypoli..._of_the_day.php

"Subprime crisis hits home sales - Prices dip for first time since 1968 as buyers on margins are left out of market"

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

First published: Thursday, April 12, 2007

ALBANY -- The National Association of Realtors predicted Wednesday that U.S. home prices will fall this year for the first time since it began tracking sales in the 1960s, conceding that troubles in the subprime loan industry are having a broad impact on the housing market.

The 0.7 percent decline in median prices, to $220,300, would be the first annual drop since the group began keeping records in 1968.

Meanwhile, a joint congressional committee Wednesday reported rising foreclosure rates nationwide.

Several Democratic members of the committee, including Sen. Charles Schumer of New York, called for hundreds of millions of dollars in new federal aid for homeowners at risk of foreclosure.

"We'd like to start doing something very quickly,"said Schumer, chairman of the Joint Economic Committee, which released the report.

In the Capital Region, housing prices already are dropping.

The Greater Capital Association of Realtors says the median-sale price for single-family homes fell 7 percent in February from year-earlier levels.

The median sale price for the month was $175,000; a year before, it was $188,000.

And Realtors say the inventory of houses here is growing.

"People are going to have to come to the realization that prices are going to have to come down to get houses sold," said Mary Ann Larkin, a real estate agent in Sharon Springs.

"There's a tremendous amount of inventory, and the days of putting a high price on a house to see what buyers will pay are over."

But area Realtors see the housing market here as more stable than in other cities, if only because it didn't have the rapid price rise seen in Boston, San Diego or New York.

The market simply has less room to fall, they say.

"But I'm definitely seeing price hesitation with buyers," said Latham Realtor Anthony Gucciardo.

"If you don't price it right, it won't sell."

The National Association of Realtors predicts prices for newly built homes will increase 0.4 percent to $246,000, the smallest gain since prices fell in 1991.

But the association expects the number of new homes sold to drop by 14.2 percent.

The association said sales of existing homes will drop by 2.2 percent, with prices down 0.7 percent.

Analysts say the housing market, both locally and nationally, was set to cool anyway, after years of hot price appreciation.

But the troubles in the subprime mortgage industry are adding to the slowdown, they say, because lenders are tightening standards and making it harder for potential buyers to get a mortgage.

The housing boom of recent years was partly fueled by subprime loans given to buyers with lower incomes and shaky credit.

Many of those loans had adjustable financing rates that require homeowners to make larger payments with the passage of time.

But many homeowners, the joint committee report said, are struggling to make payments -- and foreclosure rates could skyrocket.

The Capital Region has so far seen only modest increases in rates of foreclosure, but the report suggests an increasing number of the region's homeowners are struggling to pay.

In the Albany-Schenectady-Troy metropolitan area in February, 11.2 percent of homeowners with subprime loans were more than 60 days behind with payments, an increase from 8.5 percent one year ago.

In Glens Falls, 13.4 percent of such homeowners had fallen behind, the report said, an increase from 8.2 percent a year earlier and the second highest figure in the state.

Jamestown had the highest rate, with 14.8 percent of homeowners with subprime loans more than 60 days in arrears.

Those homeowners could see federal help. Sen. Christopher Dodd, a Democrat from Connecticut and a presidential candidate, called for a summit "to try to work out a process for providing relief to homeowners."

The lawmakers also said they would seek legislation to strengthen federal regulation of mortgages, impose stricter rules on predatory lending and require that lenders establish a borrower's ability to pay back a mortgage for the entire life of the loan.

Also Wednesday, the Boston-based Neighborhood Assistance Corporation of America announced plans to work with Bank of America Corp. and Citigroup Inc. on refinancing troubled loans.

NACA said existing funds from those banks pledged through federal regulations requiring loans for low- to moderate-income home buyers could be used to help 7,000 to 10,000 homeowners with high-interest rate mortgages refinance at lower rates.

"We want to send out hope to the victims of the subprime lending crisis," said Bruce Marks, NACA's chief executive.

"There is hope if you are about to lose your house."

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

THE NEW YORK OBSERVER POLITICKER

"Spitzer Gets Into National Politics"

Eliot Spitzer has formed a new federal PAC to contribute to candidates for state and federal office across the country.

According to a reader, the governor's finance people discussed the PAC, Excelsior Committee, at a breakfast this morning in Manhattan with approximately 75 potential supporters.

According to a reader, they explained that "because federal candidates can't accept corporate funds, it was hard for Spitzer to support them with campaign funds and this federal PAC, which can't accept corporate money, would be able to fill that void."

According to another person familiar with the committee, the purpose is to "support other candidates across the country."

The treasurer for Excelsior Committee is Jerry Barbanel, who is also the treasurer for Spitzer 2010.

The operations are both headquartered out of the same offices at 330 Madison Avenue, 19th Floor.

-- Azi Paybarah

http://thepoliticker.observer.com/2007/04/...l-politics.html

Aon Consulting Announces Financial Advisory and Litigation Services Practice

Aon Corporation (www.aon.com) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting.

The company employs approximately 51,000 professionals in its 600 offices in more than 120 countries.

Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.

"New Executive Vice Presidents Jerry Barbanel and Roger Siefert to Co-Lead New Practice"

CHICAGO, Jan. 18 /PRNewswire-FirstCall/ -- Aon Consulting today announces the creation of a global Financial Advisory and Litigation Consulting Services practice.

The company also announces the hiring of veteran forensic accounting and litigation consulting experts Roger Siefert and Jerry Barbanel, who join Aon Consulting as executive vice presidents and co-global practice leaders in charge of the Financial Advisory and Litigation Consulting Services practice.

(Logo: http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO )

Said Aon Consulting Chief Executive Officer Andrew Appel: "The Financial Advisory and Litigation Services practice strengthens our portfolio and complements the employee benefit and ERISA consulting services we already offer clients."

"Given the regulatory environment of today's business world, we believe providing these distinctive client services will be welcome in the marketplace."

"Roger and Jerry are two of the leading experts in financial advisory and litigation consulting, and we are pleased they have chosen to join Aon Consulting."

The Financial Advisory and Litigation Consulting Services practice will provide a full suite of consulting services including: white-collar and financial statement investigations; securities litigation; financial due diligence; damage calculations; Sarbanes-Oxley consulting; financial valuation services; expert testimony; computer forensics; and other related specialties.

According to Greg Case, chief executive officer, Aon Corporation:

"Roger and Jerry are two of the most respected experts in their field."

"The fact they chose to join Aon not only demonstrates our commitment to attracting the industry's top talent, but reconfirms that the industry's best want to work at Aon."

Roger Siefert has more than 20 years of combined experience in forensic accounting, litigation consulting, financial advisory, accounting and auditing services.

During his career he has assisted numerous clients in significant litigation matters and investigated financial statement fraud, as well as served as an expert witness.

Roger joins Aon Consulting from Kroll, where he led its Financial Advisory Service practice.

Prior to joining Kroll, Siefert was partner at Deloitte & Touche, where he held several positions during his 20-year career, including working in the Office of the General Counsel and head of the securities litigation practice in the New York Office.

He is a licensed CPA.

Jerry Barbanel also joins Aon Consulting from Kroll, where he led its Forensic and Investigative Accounting practice and oversaw its High-Tech Investigations and IT Consulting practice.

Jerry began his career in 1985 as a financial services auditor with Peat Marwick Mitchell & Co.

Barbanel has also held positions in forensic accounting and litigation consulting at both KPMG and Arthur Andersen, where he was director and principal respectively.

Prior to that Barbanel served as an Assistant District Attorney in Manhattan, and subsequently practiced civil litigation at a law firm.

Barbanel currently concentrates on complex financial investigations and securities litigation, having most recently led the forensic accounting and litigation consulting efforts at Enron.

Barbanel is licensed Certified Public Accountant, Certified Fraud Examiner, Certified Anti-Money Laundering Specialist and was admitted to the bars of the U.S. Supreme Court, U.S. District Court (Southern and Eastern Districts of New York), and the States of New York and New Jersey.

Siefert and Barbanel are based in New York City.

About Aon

Aon Corporation ( http://www.aon.com ) (NYSE: AOC) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting.

There are 47,000 employees working in Aon's 500 offices in more than 120 countries.

Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.

Aon Consulting is among the top global human resources consulting firms, with 2004 revenues of $1.247 billion and 7,000 professionals in 120 offices throughout the world.

Aon Consulting delivers integrated consulting solutions to help clients with employee benefits, human resources outsourcing, compensation, communication and management consulting.

For more information, contact:

Joe Micucci, Aon Consulting Worldwide, 312-381-4786, Joe_Micucci@aon.com; or

Thaddeus Woosley, Aon Corporation, 312-381-2446, Thaddeus_Woosley@aon.com

This press release contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors.

Potential factors that could impact results include:

general economic conditions in different countries in which we do business around the world,

changes in global equity and fixed income markets that could affect the return on invested assets,

fluctuations in exchange and interest rates that could influence revenue and expense,

rating agency actions that could affect our ability to borrow funds,

funding of our various pension plans,

changes in the competitive environment,

our ability to implement restructuring initiatives and other initiatives intended to yield cost savings,

our ability to implement the stock repurchase program,

changes in commercial property and casualty markets and commercial premium rates that could impact revenues,

changes in revenues and earnings due to the elimination of contingent commissions,

other uncertainties surrounding a new compensation model,

the impact of investigations brought by state attorneys general, state insurance regulators, federal prosecutors, and federal regulators,

the impact of class actions and individual lawsuits including client class actions, securities class actions, derivative actions, and ERISA class actions,

the cost of resolution of other contingent liabilities and loss contingencies,

and the difference in ultimate paid claims in our underwriting companies from actuarial estimates.

Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, is contained in the Company's filings with the Securities and Exchange Commission.

SOURCE Aon Corporation

http://www.prnewswire.com/cgi-bin/stories....3242&EDATE=

"Soares set to probe complaints in Troy - Albany DA named as special prosecutor after alleged misconduct in Rensselaer County"

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

First published: Friday, April 13, 2007

TROY -- Albany County District Attorney David Soares will serve as a special prosecutor to investigate allegations of misconduct by Republicans and Democrats in the Rensselaer County Legislature and the city of Troy.

Rensselaer County Judge Patrick McGrath appointed Soares Thursday to handle five different complaints made within the past three weeks by Colleen Regan, a former employee for the County Legislature's Republican majority, and two members of the majority leadership.

"Since this is a public integrity case we can't comment," said Heather Orth, director of communications for Soares.

Soares's Public Integrity Unit has three assistant district attorneys assigned to it full-time.

Orth said a determination will be made about who will handle the Rensselaer County investigation.

Rensselaer County District Attorney Patricia DeAngelis requested the appointment of a special prosecutor due to the political nature of the charges.

The rash of claims of official misconduct began when Regan filed a sexual harassment complaint with the state Human Rights Division alleging she was fired from her post last year when she rejected the amorous overtures of her supervisor.

Since March, Regan filed requests for investigation with DeAngelis alleging she was forced to make a political attack message at City Hall in 2005 attacking Democratic candidates by County Legislature Majority Leader Robert Mirch, who also serves as the Troy public works commissioner.

Regan also alleges county employees had to do political work for Victory Lane, a political consulting company owned by Mirch and Richard Crist, the majority spokesman.

Mirch filed complaints regarding Troy Democratic Councilman Clement Campana allegedly making political calls from Hudson Valley Community College and Legislature Minority Leader Virginia O'Brien asking him to have city crews clean up a property.

Then Legislature Vice Chairman Richard Salisbury requested a probe of Susan Steele, the minority's spokeswoman, taking photos of Crist during a County Legislature meeting that were used in a political mailing.

Democrats and Republicans have all denied any misconduct.

O'Brien said, "I called the garbageman and asked him to pick up some garbage."

"For this, my reputation is being sullied."

"I am completely confident I will be exonerated."

The Republican majority said they can't comment on allegations they haven't seen.

"We will be more than happy to cooperate with any requests from a law enforcement agency reviewing these issues," Crist said in a statement.

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

NEW YORK POST

"NYCERS LOW ON GIULIANI"

By MAGGIE HABERMAN

April 12, 2007 -- Rudy Giuliani, who leads presidential polls across the country, is getting more bad reviews than good ones in his hometown, according to a NY1 news poll.

Giuliani gets a thumbs-down from 46 percent of the city's voters, compared to 44 percent who view him favorably, while 10 percent are undecided.

That's a stark contrast to the 55 percent approval rating he gets statewide, with 32 percent viewing him unfavorably and 13 percent undecided.

Also yesterday, Giuliani explained his goof on low-balling the price of a gallon of milk, saying he was thinking of a half-gallon.

http://www.nypost.com/seven/04122007/news/...ie_haberman.htm

"State leaves rivers at risk - Group says DEC backlog on reviewing 1,300 water pollution permits dates to Mario Cuomo years"

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

First published: Friday, April 13, 2007

ALBANY -- Like an office worker with a swamped desk, New York state is behind -- way behind -- in taking a close look at about 1,300 water pollution permits stretching back to the administration of Gov. Mario Cuomo.

In a report released Thursday, an environmental lobbying group said the backlog violates federal law -- and has put the state's rivers and waterways at risk of unnecessary pollution for years.

"In terms of what damage is being done, we wish we could tell you," said Robert Moore, executive director of Environmental Advocates of New York.

"The polluters have lived up to their end of the bargain by filing the paperwork."

"It is the state that has chosen not to review it."

Water pollution permits allow industrial firms and municipalities to release pollution such as chemical waste or treated sewage into bodies of water.

They include large industries, like chemical plants and paper mills, as well as oil storage terminals, sewer systems and power plants.

Detailed reviews are required every five years under the U.S. Clean Waters Act before a permit is renewed as a way to ensure that permitted levels of pollution are not causing unforeseen environmental damage.

The review backlog -- which includes about 90 percent of the state's permits -- drew attention in 2004 from the U.S. Environmental Protection Agency, which has been negotiating with the state Department of Environmental Conservation to find ways to catch up.

"We have been aware of there being issues and problems with state permitting program," said Mary Mears, an EPA spokeswoman.

"The state has acknowledged that there are issues."

However, she stopped short of endorsing Moore's claim that the state has been "breaking the law" for years.

"The state is not meeting the goals of the Clean Water Act," Mears said.

Moore said the backlog grew under Gov. George Pataki from 1995 to 2006.

About three-quarters of the overdue permits came under Pataki's watch, with the rest dating to Cuomo.

In 1992, the state began to rank permits on a review schedule, based on the potential environmental impact.

Those scoring in the top 10 percent were earmarked for review, while the rest were renewed without review.

"The Pataki administration's response to the backlog was to cut back at DEC further and institute a hiring freeze," said Moore.

He said EPA was slow to force the state to obey the law because water pollution is not a priority for President Bush.

Locally, examples of facilities that have gone unreviewed since 1992 included the former General Electric Silicones plant in Waterford, which discharges about 50 million gallons of treated wastewater a day into the Hudson River, and the Rensselaer County Sewer District Plant in North Greenbush, which discharges about 24 million gallons daily into the river.

More than 1,200 miles of rivers and streams and 284,000 acres of lakes, ponds and reservoirs in New York are listed as pollution-impaired by the EPA's 2002 Water Assessment report.

"Given this, it's amazing that the state would choose to not scrutinize the performance of facilities that collectively dump tens of billions of gallons of polluted water," said Timothy Sweeney, program director for Environmental Advocates.

"The best thing that EPA could do now is start writing some checks," said state Deputy Secretary for the Environment Judith Enck.

"Federal funds that help support this and other clean water efforts have been cut by half during the Bush administration."

Enck said Environmental Advocates' report, based on state records released under the state Freedom of Information Act, raised "many valid issues."

Ten more permit reviewers are included in the 2007 state budget adopted this month.

"It's not enough, but we view it as a first step."

"We don't want permits to be rubber-stamped," Enck said.

Moore said that while DEC will now have 25 permit examiners, 45 would be needed to clear the backlog.

He criticized EPA for being "behind schedule" in dealing with the backlog and being "unlikely" to resolve it.

"We have lot of months to go here, but I would not agree that we are behind schedule," said Mears.

"I don't agree that what comes out of this won't meet the law."

To view the report online, visit http://www.eany.org/ MuddyingtheWaters.pdf

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

NY TIMES EMPIRE ZONE

April 12, 2007, 3:20 pm

"Lagging on Pollution Reviews"

By Anthony DePalma

The state of New York routinely fails to review the pollution permits of hundreds of factories, generating stations, sewage treatment plants and other operations that discharge billions of gallons of contaminated water into the state’s rivers and lakes, according to a study [pdf] released today by Environmental Advocates of New York, a citizens group.

The lack of regular reviews means that regulators cannot accurately keep track of the substantial amount of pollutants that are allowed to enter the state’s waters.

Update: An article for the daily metro report has further details, including the Spitzer administration’s response.

1 comment so far...

April 12th, 2007 7:26 pm

In 1969, at a time when I was in Viet Nam as an infantryman in the U.S. Army, I voted to amend the NY Constitution by adding this following language to ARTICLE XIV of the NY Constitution entitled “Conservation”:

§ 4. “The policy of the state shall be to conserve and protect its natural resources and scenic beauty and encourage the development and improvement of its agricultural lands for the production of food and other agricultural products.”

“The legislature, in implementing this policy, shall include adequate provision for the abatement of air and water pollution and of excessive and unnecessary noise, the protection of agricultural lands, wetlands and shorelines, and the development and regulation of water resources.”

In 1970, that constitutional language became “law of the land” here in NYS, which is why I personally chose to return here as a disabled combat veteran coming home from Viet Nam, as opposed to any other state in the union that did not have such a provision protecting our water resources in their state constitutions.

And as it turned out, my state job in environmental enforcement with the NYS Health Dept. that I had taken a military leave of absence from to go to Viet Nam had been transferred to the newly created NYS Dept. of Environmental Conservation, so that I was one of the original employees of the NYSDEC who had previous experience in an enforcement capacity, and it was a real education in how politics trumps law and constitutions working at that highly-political state agency back then.

Based on my experiences at the NYSDEC in the early-1970’s, and based on solid evidence, such as the Hearing Officer’s Report In Re General Electric, File No. 2833, dated February 9, 1976, which is the hearing report for the PCB’s that now contaminate the upper Hudson River, it can fairly be said that the State of NY has not been doing its job of regulating businesses and curbing pollution on purpose, and with intent.

In the GE Hearing report above, the Hearing Officer notes, quite candidly, that:

“In this interim opinion, the hearing officer holds that General Electric Company’s (GE)discharges of PCB’s (polychlorinated biphenyls) into the upper Hudson River violate the New York Environmental Conservation Law (ECL).”

“GE’s PCB discharges are toxic substances capable of causing skin lesions, destroying body cells, adversely affecting reproduction and inducing cancer and death.”

“As an affirmative defense, GE asserts that its conduct is immunized from state law penalties by virtue of its being specifically authorized in a series of permits granted under the Federal Water Pollution Control Act.”

I myself was involved in the background of those hearings on the engineering side, and I will say that based on the evidence, the NYSDEC had handed the GE a license to destroy the upper Hudson River, and GE did, since that litigation lingers to this day, with no remedial action taken by GE to date to rectify the harm it has done in upstate NY.

As to the negligent role of the NYSDEC in that fiasco, the Hearing Officer had this to say:

“However negligent the department (NYSDEC) may have been in granting GE a permit to discharge those large amounts, the permit and the ECL (New York State Environmental Conservation Law) required GE to conform its effluent to stream classification standards.”

“This proceeding is designed to protect public resources, and cannot be made into a forum for determining the relative fault of GE and the department (New York State Department of Environmental Conservation).”

And thus, the present day and age being discussed in this very BLOG-article above here was born, right with those very words.

The DEC itself got a “pass” in that no one ever went back and did an official assessment of that negligence, and the one licensed professional engineer up this way with the knowledge and qualifications to continue with this investigation was himself branded as a dangerous mental patient by the State of NY, which has had the effect of destroying his credibility in a court of law as an expert witness for the PEOPLE of NYS ….

And so, here we are, right now today, and the future of the environment upon we all must depend for our health and well-being here in NYS looks bleak, as a result …

And so ….

— Posted by Livyjr

http://empirezone.blogs.nytimes.com/2007/0...views/#comments

NY TIMES EMPIRE ZONE

April 12, 2007, 4:30 pm

"The Shape of Things"

By Danny Hakim

During a news conference today, Barbara Bartoletti, legislative director of the League of Women Voters of New York State, said the 51st Senate district looked like “Abraham Lincoln riding on a vacuum cleaner.”

Looking at the map of the district, The Empire Zone concedes a likeness:

Ms. Bartoletti and representatives from other so-called good government groups were repeating their perennial call for redistricting reform, which is thought to be a nonstarter for Assembly Democrats and Senate Republicans who like to draw district lines to their favor.

Still, looking at some of the district maps can be enlightening.

Some, like the 60th Senate district, are not even contiguous, except “at low tide” as Ms. Bartoletti put it.

The groups have a better shot with another formidable challenge, campaign finance reform, which is on Gov. Eliot Spitzer’s to-do list when the legislature returns to Albany next week.

Comments so far...

April 13th, 2007 7:56 am

With respect to “goo-goo” groups and individuals like Barbara Bartoletti, legislative director of the League of Women Voters of New York State “repeating their perennial call for redistricting reform, which is thought to be a nonstarter for Assembly Democrats and Senate Republicans who like to draw district lines to their favor”, they should all do themselves and their credibility a real big favor by quoting to us common folks out here in the countryside in NYS from ART. III of the NYS Constitution, which is where one finds the only lawful procedures that there presently are in NYS for creating senate and assembly districts.

And with respect to senate districts, specifically, sect. 4 of ART. III states that:

“Such districts shall be so readjusted or altered that each senate district shall contain as nearly as may be an equal number of inhabitants, excluding aliens, and be in as compact form as practicable, and shall remain unaltered until the first year of the next decade as above defined, and shall at all times consist of contiguous territory, and no county shall be divided in the formation of a senate district except to make two or more senate districts wholly in such county.”

If Barbara Bartoletti, legislative director of the League of Women Voters of New York State, and these “goo-goo” groups want real “reform” of OUR government here in NYS, that reform had better be entirely consistent with what is presently written in OUR state Constitution, or else, like this Barbara Bartoletti, they will be seen by us older folks living here in NYS as having absolutely no credibility, whatsoever.

And if the League of Women Voters of New York State really wants to “strike a blow” for freedom and justice here in NYS with respect to these unlawful and unconstitutional senate district apportionments, they should do so in strict accordance with this following language straight out of sect. 4 of ART. III of OUR NY Constitution:

“An apportionment by the legislature, or other body, shall be subject to review by the supreme court, at the suit of any citizen, under such reasonable regulations as the legislature may prescribe; and any court before which a cause may be pending involving an apportionment, shall give precedence thereto over all other causes and proceedings, and if said court be not in session it shall convene promptly for the disposition of the same.”

But, of course, for such a lawsuit to happen, WE, THE PEOPLE would require a truly independent state court system here in NYS, which we do not presently have, because the political lawyer-judges that we are now stuck with here in NYS have us common citizens here in NYS “locked out” of court, so that we can’t make these constitutional challenges, unless we are rich enough to be able to “buy” ourselves a lawyer from the NYS Bar Assn. to get us “in the door”, which is something that you never hear a peep about from people like this Barbara Bartoletti, legislative director of the League of Women Voters of New York State.

Of course, if WE, THE PEOPLE could actually get into court to make these constitutional challenges to apportionment of senate districts without having to pay extortionate fees to some lawyer to “carry our water” for us, then there really would be no need for people like this Barbara Bartoletti, legislative director of the League of Women Voters of New York State, and her hand-wringing press conferences, which would mean that she would then have to find some other type of employment, other than being a perpetual hand-wringer who is always holding a press conference, but is never seen as doing anything substantive with respect to true reform of OUR government here in NYS, to make it consistent with what OUR state Constitution demands it be …

And so ….

— Posted by Livyjr

http://empirezone.blogs.nytimes.com/2007/0...hape-of-things/

Journal News - Lower Hudson On-Line

"Albany ready for next round in fight against gridlock"

By JAY GALLAGHER, ALBANY BUREAU

(Original publication: April 13, 2007)

ALBANY - Subsidies for upstate manufacturing jobs, rent regulations for downstate apartments and pay for judges are among the issues state lawmakers are expected to tackle Monday when they return to the Capitol.

Though traditional Albany gridlock seems likely to prevail on many topics, others will be harder to duck because of onrushing deadlines and expiring programs.

And the rest of the session will be another test for Gov. Eliot Spitzer, who had a productive first three months in office, driving through deals on issues like workers' compensation and ethics reform that had eluded predecessors.

"Albany has been galvanized by Spitzer," said Russ Haven of the New York Public Interest Research Group.

"There's more of a sense of energy and can-do attitude than there has been in the past."

But after a bruising fight over the new state budget and far lower approval ratings than he had in January, it's unclear whether Spitzer can engineer additional deals.

Yet the calendar will force lawmakers' hands on some issues, including power subsidies for businesses.

The current program will expire at the end of June.

But additional cheap power would have to come from a supply that now helps hold down upstate residential bills.

The Legislature also faces a deadline at the end of the session to decide what firm will take over the racing franchise at the three state-owned tracks: two in Queens and one in Saratoga.

The current franchise holder, the New York Racing Association, wants state permission to run the tracks for an additional 20 years.

But three other groups are vying for the job, and all are promising billions in revenue to the state, thanks largely to the anticipated addition of thousands of video slot machines at Aqueduct and Belmont racetracks.

"Empire is prepared to deliver nearly $2 billion in direct payments to the state, capital investment and program expenditures to revitalize the New York racing franchise," Jeff Perlee of Empire Racing told a panel reviewing applications this week.

Officials from the other contenders made similar claims.

Other issues lawmakers will face when they return:

- Rent regulation: The law that controls rents for several hundred thousand apartments, mostly in New York City but also some in Westchester and Nassau counties, expires at the end of May.

Assembly Speaker Sheldon Silver said he wants to raise the limit of $2,000 a month, above which controls on rents are removed.

"Two thousand dollars a month does not now pay for a luxury apartment," Silver, D-Manhattan, said of rapidly rising rents in the city.

But landlords are sure to resist any attempt to change that cap, which has been reducing the number of apartments where rents are limited during the past few years.

- Quick Draw: Authorization for the lottery game played in bars and restaurants also expires at the same time.

Its creation 12 years ago was tied to extending rent regulations.

The game makes $140 million a year, lottery spokeswoman Susan Miller said.

- Health Care Reform Act: The law that drives billions of dollars to programs like health-insurance and prescription-drug subsidies by using money raised through tax surcharges and other sources is set to expire at the end of June.

There likely will be attempts to drive the money elsewhere.

- Pay raise for judges: They haven't had a raise in eight years, but lawmakers removed $111 million from Spitzer's budget proposal because it included no increases for lawmakers.

Raises for those groups traditionally have been linked, and Silver said that should continue.

"It's difficult to do one without the other," he said, since neither group has had a raise since 1999.

He said he supports the idea of a commission to determine how big the raises should be.

- Granny's Law: The Senate intends to pass a bill to make any assault on an elderly person a felony, but it's unclear how much support the idea has in the Assembly, which is more cautious about increasing criminal penalties than the Senate.

- the Wicks Law: It requires four contracts on public construction projects.

Critics say it adds 15 percent to 20 percent to the cost of public construction.

Lawmakers have failed to act for years, but this year Spitzer has made it a priority.

- Reapportionment: Authorization for a panel that is in charge of redrawing legislative and congressional lines expires at the end of June.

Reformers don't want it extended until lawmakers support setting up a nonpartisan commission that would create new districts after the 2010 census.

Reach Jay Gallagher at Jgallagh@gannett.com.

http://www.thejournalnews.com/apps/pbcs.dl...2F1026%2FNEWS10

"Activists: Time remains for reform - Groups says Legislature needs to act on campaign finance rules, legislative district boundaries"

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

First published: Friday, April 13, 2007

ALBANY -- Government reform activists have just two things they want the Legislature and Gov. Eliot Spitzer to accomplish in the 32 days remaining in this year's legislative session: Overhaul campaign finance rules and create a fair way of drawing legislative district lines.

The trouble is, they freely acknowledge those changes would jeopardize the job security of the very lawmakers who need to approve them.

"These are certainly going to be the heaviest lifts and the most difficult to get done this session," said Russ Haven of the New York Public Interest Research Group.

But NYPIRG, joined by Common Cause and the League of Women Voters at a news conference Thursday, said the current reform climate in Albany presents a rare opportunity.

Spitzer and legislative leaders have already passed bills on ethics and budget reform, they noted, and Spitzer, who ran on a slogan that "On Day One, Everything Changes," has identified campaign finance and redistricting reform as priorities.

"We do see this as a once-in-a-generation opportunity to change the way Albany conducts business," Haven said.

Assemblyman Michael Gianaris, D-Astoria, sponsor of a one-house bill on redistricting reform, agreed, and noted that some 40 colleagues, many of them freshmen, have signed on as co-sponsors.

The two issues, he said, are intertwined.

"The key to both of them is restoring confidence in the electoral process in New York."

In the 2004 election, he said, more than half of lawmakers ran unopposed.

"We can't say with a straight face that district lines and campaign finance don't play a role in that."

A different bill by James Alesi, R-East Rochester, is pending in the Senate.

The groups want to lower New York's high limits on campaign contributions and ban soft money, contributions from government contractors and fundraisers during the legislative session.

They also want better disclosure rules, tougher enforcement and public financing of campaigns.

On redistricting, they want to establish an independent commission in the state constitution to draw district lines, rather than the Legislature.

A constitutional change requires legislative and voter support, and would likely take at least until 2010.

They held up several examples of odd-shaped and divided districts, such as the far flung 51st Senate District, which the league's Barbara Bartoletti characterized as "Abraham Lincoln riding on a vacuum cleaner."

Republican James Seward represents that Central New York district.

The Legislature redistricts every 10 years after a new federal census, putting the task in the hands of politicians with a vested interest in keeping their power.

"Right now, we have a system where lawmakers choose their voters, rather than voters choosing their lawmakers," said Rachel Leon of Common Cause.

Jay Jochnowitz can be reached at 454-5424 or by e-mail at jjochnowitz@timesunion.com.

NEWSDAY

State/Region

"Campaign finance bills sought - Civic groups call on Spitzer to keep his promises as they aim to limit the impact of big money in politics"

BY JAMES T. MADORE

james.madore@newsday.com

April 13, 2007

ALBANY - With lawmakers set to return here Monday for the second half of the legislative session, good-government groups yesterday again called for reforming campaign finance and the system of drawing boundaries for Assembly and State Senate districts.

The groups acknowledged movement on these issues would require "a heavy lift," having languished for years, but said the election of Gov. Eliot Spitzer, a self-proclaimed reformer, "offers a once-in-a-generation opportunity to change the way Albany conducts its business."

Citizens Union, the state chapters of Common Cause and League of Women Voters, and the New York Public Interest Research Group (NYPIRG) blamed gerrymandering of legislative districts and weak campaign finance rules for the Capitol's entrenched status quo, where 95 percent of incumbents win re-election.

And as a result, Democrats have controlled the Assembly and Republicans the Senate for generations.

"There certainly has been a good deal of productivity and there is a sense of energy with a new governor, but the really big reforms are outstanding," said Russ Haven of NYPIRG.

The league's Barbara Bartoletti agreed, calling on Spitzer to back up his campaign promises from last fall with proposals for an independent commission to determine legislative districts and a limit to the influence of big money in politics.

"If you are going to call yourself a reformer, then this is the one issue that has to be addressed this session," she said of redistricting.

Spitzer, a Democrat, is expected next week to outline his legislative priorities.

Last week, he vowed to push for campaign finance changes "but we will see if they [lawmakers] can stomach the tough decisions."

The good-government groups want a constitutional amendment establishing the independent commission for redistricting.

However, the amendment must be approved by this legislature and the next one, and then by voters.

The commission would replace the Legislative Task Force on Demographic Research and Reapportionment, which helps lawmakers redraw the boundaries.

Nearly $2 million was earmarked in the new budget for the task force.

Districts are redrawn every 10 years based on the new census, which is slated for 2010.

"We have a system where lawmakers choose their voters rather than the voters choosing their lawmakers," said Rachel Leon of Common Cause.

But not all lawmakers support the status quo.

Thirty-eight Assembly members back a bill from Assemb. Michael Gianaris (D-Astoria) to overhaul the redistricting process.

"We got into government to make government better, more open and more accessible," Gianaris said.

Another bill from Assemb. James Tedisco (R-Schenectady) has garnered 19 co-sponsors, while a spokesman for Assembly Speaker Sheldon Silver (D-Manhattan) said he hoped to work with Spitzer to enact campaign finance bills that have passed the Assembly only to die in the Senate.

Circumstances may not change this year, despite Spitzer's strong advocacy.

A spokesman for Senate Majority Leader Joseph Bruno (R-Brunswick) said campaign finance is "an issue under discussion" with the Assembly, but redistricting "is not an issue we need to deal with for several years."

http://www.newsday.com/news/local/state/ny...enews-headlines

THE NEW YORK SUN

"Pataki Gift to Spitzer: An $800 Million Problem"

By JACOB GERSHMAN

Staff Reporter of the Sun

April 13, 2007

One of the legacies of the Pataki administration was a secret, questionable accounting trick that left Governor Spitzer with an $800 million problem.

For years, Governor Pataki helped balance the books by taking advantage of loose federal regulations that allowed the state to tap into hundreds of millions of dollars of federal matching funds intended to support public hospitals, including New York City's Health and Hospitals Corp.

It was a complex scheme that benefited the state, New York City, and several other counties, and reflected a wider national trend of states employing revenue-sharing tactics to maximize federal Medicaid funds.

The only loser was the federal government.

In New York alone, the special arrangement cost federal taxpayers billions of dollars over the years.

At the time the Bush administration cracked down on the practice in 2005, the Pataki administration had come to rely on the annual $400 million-plus revenue stream from its arrangement with New York City.

Mr. Pataki faced the same problem that confronted more than a dozen other governors who no longer were able to exploit the loophole through a budget mechanism called intergovernmental transfers.

Governor Barbour of Mississippi last year dealt with the problem by taxing private hospitals.

For the Pataki administration, the federal matching funds were too lucrative to give up, but the new level of scrutiny and more stringent regulations forced them to come up with an alternative plan.

The solution Mr. Pataki's budget director John Cape settled on — in consultation with the city's budget director Mark Page and other top Bloomberg officials — was to stop a scheduled reimbursement to the city of $450 million for funding of CUNY's senior colleges.

New York City's public hospital system was not the only one that funneled federal money into state coffers.

The governor's office embedded into its 2005-06 budget other tricks that preserved the revenue flow from other counties with public hospitals that participated in the matching fund program, including Nassau, Erie, and Westchester.

The Spitzer administration said it was counting on that money when it released its executive budget at the end of January, but did not realize the underhanded nature of its source.

The budget office's five-year financial plan described the money as a risk and said it was the "subject of ongoing negotiations" between the city and state.

After a sequence of behind-the-scenes negotiations late in the budget process, Spitzer officials put an end to the sleight of hand by agreeing to double the payment to CUNY this year.

Stopping the practice came at a heavy price, adding more than $800 million to the projected budget gap of the 2008-09 fiscal year.

Thanks to a surge of tax receipts, the state is expected to absorb the loss.

In a more fragile economy, the extra burden could have had a disastrous fiscal impact.

Spitzer officials and former Pataki officials say the delayed CUNY payment was not a violation of federal regulations.

After the federal clampdown, New York City stopped the practice that resulted in New York State receiving extra Medicaid aid.

The city technically never transferred any of the matching funds to New York State, which made up the difference by halting the CUNY payment.

The shift had no impact on CUNY, which had already received the money from the city.

Because the city's fiscal year begins three months later than the state's, city budget officials were able to obscure the fact that the state was late on its payment.

An official at the Centers for Medicare and Medicaid Services, the federal agency that administers the programs, said New York had stopped improperly drawing down the federal funds in March 2005 and did not respond to a question about the CUNY payment.

The budget resolution appears to have marked the end of a convenient and little-known arrangement between the city and the state that began in the mid-1990s.

As Medicaid programs across the nation made a transition to managed care from fee-for-service, the federal government set up a supplemental matching fund program to assist public hospitals that relied on the fee-for-service cash.

With the Legislature's approval, New York City would direct $600 million a year to the state's Medicaid agency, triggering the matching funds.

The state would then transfer the $1.2 billion pot of money to HHC, which gave the $600 million back to the city.

The state also benefited, to the tune of $450 million, from the city agreeing to absorb a higher than normal local share of Medicaid payments.

Of the $1.2 billion, HHC would typically keep about $150 million, according to sources.

The state used the money to pay its own Medicaid bills, essentially shifting the cost of the Medicaid program to the federal taxpayer.

New York City often lobbied for money, but was turned down; the state pulled the strings because its legislation is what made the funding possible.

State lawmakers knew about the transfers but didn't talk about them.

"It was in everybody's interest for the topic not to be on the front pages," a Democratic assemblyman of Manhattan, Richard Gottfried, the chairman of the Assembly's health committee, said.

Despite the more than $800 million budget hole, Spitzer officials insist the story of the state's Medicaid arrangement with the city has a happy ending.

The Spitzer administration said it wanted to deliver more state aid to HHC anyway, and the city — currently flush with funds — can afford to leave HHC with the combined local and federal funding.

In the 2006-07 fiscal year, the city did not take back its local share, which produced a fiscal turnaround for the hospital corporation, converting an expected $510 million deficit into a $14 million surplus.

"The Spitzer administration stopped this practice because it was inconsistent with the administration's strong support for HHC," Mr. Spitzer's budget director, Paul Francis, said.

The resolution also played a role in the Spitzer administration's agreement to restore revenue sharing beginning in 2008-09 worth $330 million a year.

Mr. Francis said the money was in recognition of the city's increased Medicaid expenses related to providing the local share to HHC.

Asked for comment, a spokesman for Mr. Bloomberg, John Gallagher, said via e-mail:

"The budget adopted by the State Legislature and signed by the Governor for this State fiscal year provided authorization for HHC's Medicaid claim and did not delay payments to the City for CUNY."

http://www.nysun.com/article/52379?page_no=1