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State employees held harmless; taxpayers are another matter

State lawmakers just closed a huge budget deficit for the fiscal year that ended March 31, and another one is already rearing its ugly head for the current year. But not to worry - state workers won't.

Their jobs are all safe. All 136,490 of 'em.

Even if the jobs held by many of the taxpayers keeping them in a style they're accustomed to, aren't.

Newsday reports that, rather than the 8,900 jobs Gov. Peterson has threatened to eliminate through layoffs, only a couple of hundred might actually be at risk.

The Budget Division said last week the state payroll had shrunk by around 1,200 positions since the job-cutting plan was drawn up. The reductions were because of a hiring freeze and people leaving for retirement or other reasons.

So, the positions on the chopping block now stand at 7,687 from a workforce of 136,490. These cuts will be achieved primarily through more attrition and wiping out unfilled jobs. At most, only a few hundred layoffs are expected, experts said.

Why no layoffs, you ask?

Paterson's weak position in negotiating with the powerful Civil Service Employees Association, Public Employees Federation and eight other unions. Besides having dismal poll numbers, he limited his leverage by not inflating the jobs at risk. Previous governors attempted to scare rank-and-file union members with higher numbers to lobby their leaders into making concessions.

There, now isn't this a nice break from all that One Sunset news?

Comptroller audit should only be a start

The city comptroller's office is going to look over the books at the Buffalo Economic Renaissance Corp. in the wake of The News' investigation of the agency's role in the failed One Sunset restaurant.

Reports my colleague Brian Meyer:

The agency has millions of dollars in its loan portfolio, (Comptroller Andrew) SanFilippo said, and the public deserves assurances that there aren’t other questionable transactions.

“This potentially could be just the tip of the iceberg,” the comptroller said.

SanFilippo hastened to add that he won’t jump to conclusions until his audit division begins a review of BERC’s delinquent loans and lending criteria.

The review team, led by Chief Auditor Darryl McPherson, also will try to determine whether past loans are “really providing the business and job-creation stimulus incentives that we want,” SanFilippo said.

A review by the comptroller's office makes sense - given the scope of the office.

I have to chuckle, however, at SanFilippo's assertion that he was planning this review all along. Kind of like Mayor Byron Brown saying Tuesday that he didn't know if the supposed decision two weeks ago by BERC President Brian Reilly to review the agency was triggered by the knowledge The News was investigating the One Sunset deal.

All I can say, Mr. Comptroller, Mr. Mayor and Mr. BERC President, is why does it take a newspaper story for you to start paying attention?

While the comptroller's review can shed light, it's no substitute for the involvement of outside investigators.

Let's be honest, City Hall is an incestuous place with a 'go along to get along' culture.

Moreover, there is more that needs to be looked at than what the comptroller's office alone can provide in manpower and expertise.

The U.S. Department of Housing and Urban Development issued a scathing review of the city's management of the the Community Development Block Grant program described sloppy record keeping - at best - that strikes me as a potential breeding ground for corruption.

BERC is  just one of the city entities that lives off block grant money, so, for starters, perhaps a review by the comptroller and others needs to follow all that money. That means not only looking at BERC, but the Buffalo Urban Renewal Agency, and various city departments.

Then there's the issue of personnel practices. It's no secret that hiring at both BERC and BURA  is largely of the patronage variety in which credentials are often an after-thought. Michelle Barron might be today's poster child, but she is far from the only one who got hired and/or promoted for reasons that have nothing to do with expertise in economic development.

Little wonder, then, that City Hall's economic development efforts founder.

There's also the larger issue of the multitude of agencies, starting with BERC and BURA, that have their hands in economic development. Do we really need all of them, or is consolidation and more direct accountability in order?

Perhaps it's time to look at best practices in other cities.

In short, have at it Mr. SanFilippo. But you should not be the only watchdog sinking his teeth into this mess.

A scandal bigger than just One Sunset

So, Byron Brown, chairman of the Buffalo Economic Renaissance Corp., says Brian Reilly, president of the Buffalo Economic Renaissance Corp., is going to investigate the Buffalo Economic Renaissance Corp.'s role in the One Sunset restaurant fiasco.

This is so like the Brown Administration.

When confronted with a problem, call for a study, rather than act.

Kind of like poverty. Appoint a deputy mayor charged specifically with combating poverty, wait a year and then issue a paper essentially calling for a study.

Only, with the case of One Sunset, the investigation already has been done. By The News.

It is unrealistic to expect any government to investigate its own actions, much less one as obsessed over image as is Brown and Co.

All of a sudden, the mayor wants to get to the bottom of matters? The same mayor and some of his people at BERC were not exactly cooperative during our investigation.

Brown refused to be interviewed, as did Brian Davis, his fellow Grass Rooter and the Common Council's rep on the BERC board who has a history with the restaurant that includes a bounced check.

Then there's the BERC attorney, who used time lines spelled out in the state Freedom of Information Law in an effort to delay release of records on at least three occasions, especially as our deadline approached and time became an issue.

And while Michelle Barron agreed to an interview, chaperoned by the BERC attorney, it consisted largely of answers along the lines of "I don't know," and "I didn't go anything out of the ordinary."

In other words, we got name, rank and serial number.

The rank, by the way, is vice president for neighborhood economic development. At $76,323 a year, it's nice work if you can get it with a high school diploma and a flair for painting bar stools.

In all likelihood, the folks running BERC knew they had a problem long before Patrick Lakamp and I started nosing around. Barrons' role in the operation of the restaurant wasn't exactly a secret and was the source of consternation with some of her fellow staffers.

Having Reilly now look into matters could be construed as an effort at damage control. One that I have a hunch is too little, too late.

Ultimately, the story behind One Sunset is endemic of a much larger scandal, and that's the way City Hall has used and abused Community Development Block Grant funds going all the way back to Jimmy Griffin.

Here we are, now the nation's third-poorest city, going on our fourth decade of wasting anti-poverty money.

Think about that.

The U.S. Department of Housing and Urban Development has been documenting the waste for the better part of 20 years, while choosing to do nothing about it other than the periodic slap of the wrist. People are aghast - for a while, anyway - but then things quiet down and it's back to business as usual.

But my sense is things will be different this time around. We're not just talking another critical HUD review, with its technical findings and bureaucratic recommendations.

Now we're talking things people can relate to - and get outraged about.

Stuff like One Sunset, the use of block grant funds to equip bureaucrats with BlackBerrys, and  Brian Davis bouncing checks, dodging bill collectors and falsifying resumes.

So, let the mayor have his people look into it. Me, I'm wondering where the real watchdogs are.

HUD has an inspector general. The New York Attorney General and the FBI have public integrity units. Erie County has a district attorney. 

If Brian Davis didn't get their attention, you'd think Michelle Barron would.

A question for Mayor Brown

Patrick Lakamp and I have an investigation in Sunday's News that goes something like this:

Former basketball star Leonard Stokes wants to open a restaurant in the old Locker Room on Delaware Avenue despite having no business experience.

Bankers tell him he can't borrow from them. Too much risk, not enough experience or equity.

City bureaucrats cobble together $110,000 in public financing, including a $30,000 grant using anti-poverty funds that are earmarked to help the impoverished Ellicott District represented by Councilman Brian Davis but which instead go to help the restaurant located in the city's wealthiest district.

Stokes doesn't attend classes recommended by the city to help business newbies like him learn the ropes and doesn't invest much sweat equity once the restaurant opens its doors.

Michelle Barron, veep of the city agency that financed the restaurant, doubles as a sort of de facto  manager. Former employees said she was around more than Stokes. Among other things, she helps to handles the till, pay the bills and deal with those pesky employees and vendors who expect to be paid.

The restaurant starts to tank, so Barron and the agency's chief lending officer tell the county IDA it should give lend some money. They never tell the IDA the restaurant is deep in the red, and the IDA doesn't ask questions before forking over $50,000.

Councilman Davis, not content to simply send his constituents' money to another district, writes a check to cover the restaurant's overdue rent. Check bounces. Stiffed landlord files complaint with police. Oops.

Restaurant closes in less than a year. Stokes defaults on $160,000 in public financing. State goes after his business for not turning over sales tax collections or paying some of his employees.

Barron, it turns out, is a college drop out holding a job that calls for a college degree, and she deals with all kinds of public finances - and the restaurant's - despite having trouble paying her own bills.

My question for Brown, who, besides being the mayor, is chairman of the agency responsible for this mess:

"What are you going to do about this?"

Senators, start sweating

The New York Daily News is reporting that a judge has ruled the time sheets and other payroll records of state Senate employees are public record.

Senators, including Byron Brown, when he served in Albany, used what the courts have determined is an incorrect interpretation of Senate rules to, among other things, thwart scrutiny of the common practice of staffers banking overtime -- supposedly -- and later drawing on the resulting comp time to campaign for their boss.

Writes Daily News political reporter Elizabeth Benjamin:

The decision by the five-judge panel was based on the Senate's own rules, NOT the Freedom of Information Law, which applies only narrowly to the Legislature. Thus, it doesn't appear that this ruling would apply to the Assembly, which has different rules than the Senate.

However, the decision is "significant," according to (the plaintiff's attorney) ... because it "opens up a broad range of records on all Senate employees that previously were secret."

Say, for example, that a reporter spotted a staffer doing work on a campaign during a particular time period and then FOILed for that staffer's records -- just to see whether said staffer had indeed taken time off from his taxpayer-funded job to do political work.

Wouldn't THAT be interesting?

I am so there.

Yogi Berra has the call

We're what, less than two months removed from balancing the state books -- ha, ha -- and Gov. David Paterson is projecting a $5 billion budget deficit for the current fiscal year that started April 1.

The Associated Press reports:

Last year, Paterson predicted the severity of the state's financial downturn months before other elected officials. He has long complained that others underestimate how dire the state's financial standing is and that other lawmakers failed to act early to respond to the problem. If his latest concern becomes reality, lawmakers may have to revisit the state budget before the end of the year.

"I'm just trying to think ahead and start preparing the Legislature and everyone else that seems to continue at times not to recognize the difficult situation that we face," Paterson said.

Assembly Speaker Sheldon Silver says all this deficit talk is premature. Sure you do, Shelly.

As Silver told the AP:

I just think it's too early to make a prediction. We did the best we could."

Of course you did, Shelly.

Yogi berra As Yogi Berra says: "This is like deja vu all over again."

Yogi also said: "A nickel isn't worth a dime today," which I think might qualify him to be the Assembly's chief budget analyst.

Meanwhile, NY Public Payroll Watch reports the Silver-led Assembly has passed a bill that would require county legislators to rubber stamp any contract settlements their community colleges reach with employee unions.

Basically, if there's money in the county budget and legislators reject a tentative contract, they would be guilty of an improper labor practice under the Taylor Law.

All but six Assembly members voted in favor.

Yahoo! or Boohoo?

When the federal government helps underwrite job creation, it often caps the subsidy at $35,000 per job.

The New York Power Authority has offered hydropower discounts worth $809,940 in an effort to lure a Yahoo! data center to Western New York.

I think the numbers speak for themselves.

Come to think of it, I'll let a few more talk.

I've built a database that tracks allocations of low-cost hydropower the Power Authority has made since 2006. The value of the discounts has worked out to an average of $12,446 per job, per year.

The richest of the deals worked out to $32,733 per head.

Yahoo! would come in at $53,996.

Multiply that by the 15-year contract and you're at $800,000 and change.

Server farmPower Authority boss Richard Kessel concedes the numbers don't look good on the surface.

"On a number basis this doesn't look like the greatest deal in the world, but we can't look at the numbers alone," he said. 

He quickly added, "Numbers matter less than jobs. We've just got to create jobs in Western New York."

Greg LeRoy of Good Jobs First, a national expert who I've used for years as a sounding board for economic development subsidies, said the proposed Yahoo! subsidy is one of the largest he's ever seen, and he questioned if the deal is the smartest way to leverage low-cost hydropower to create jobs.

"It really, really begs the question of what else cheap electricity could be doing to stimulate the regional economy," LeRoy said.

With that said, I'll leave you with a few more numbers to ponder.

If the authority could find takers for the 15 megawatts allocated to Yahoo! for the aforementioned average cost per job of $12,446, the result would be 542 jobs, not the 125 Yahoo! is guaranteeing.

A hypothetical situation, granted. But worth contemplating.

I'll have more on the deal in the days ahead.


Where art thou, Steve Casey?

Brown and casey

We're into Week Two of the mayoral campaign, incumbent Byron Brown vs. challenger Mickey Kearns.

Early, I know, but not too early to ask:

(1) What role will Steve Casey play in the Brown campaign?

(2) Will he be doing it on the taxpayers'  dime?

These are fair questions, given that Casey managed Brown's campaign four years ago while still drawing a state paycheck. He'd have us believe he worked 12-to-15-hour days on the campaign trail while still putting in an honest day's work with the State Senate.

As I reported nearly four years ago, Brown and Casey insisted everything was done on the up and up.

But when I asked for payroll records to back up their story, well, they were not willing to share. The State Legislature exempts itself from releasing the kind of payroll information every other government employer in the state has to disclose, and the mayor-elect hid behind that loophole.

 "There is absolutely no problem, no issue with the use of this time," Brown said. "It is proper and legal according to the policies and procedures of the New York State Senate."
"I was smart about everything I did," added Casey, in line to be one of Brown's two deputy mayors. "I made sure everything I did was legal."

Brown, however, has refused to turn over payroll records to substantiate his claim.

What's more, there's a question as to whether Casey, in particular, could have banked enough time to cover the long hours he has worked the past year on the Brown campaign and transition.

Brown, in an interview during the race, spoke of spending 15 hours a day with Casey as his campaign manager.

DA Frank Clark looked into the matter and decided everything was hunky dory.

Big surprise, huh?

But I digress.

Putin That was then, this is now, but no one in the know seriously thinks Casey will play anything but a central role in the upcoming campaign.

The guy has a reputation for being both a hard worker and a control freak. He no doubt has already invested a fair amount of time.

Probably the best we can expect is that Casey plays a Putin-type role in the campaign, giving the top title to someone else while holding most of the real power.

The question remains: "On whose dime will he be campaigning?"

Casey isn't saying. I called his office last week to discuss, but was told he was unwilling to talk. Sooner or later, however, he or Brown are going to need to address this issue with the public.

Chris Collins for governor chatter heats up

New York Post columnist Fred Dicker writes today that the state GOP is taking a look at Erie County Executive Chris Collins as a potential candidate for governor.

Some thoughts from Dicker:

GOP leaders say Erie County Executive Chris Collins, a wealthy, charismatic, conservative-oriented entrepreneur and government reformer is interested.

Collins, who won a surprising landslide victory in the heavily Democratic county in 2007, would make a great candidate, they say.

"He recently came to see me, and I came away sure he was interested in running for governor," former U.S. Sen. Alfonse D'Amato told The Post.

"I think he'd be a very formidable candidate."

Chris collins A few questions from me:

Isn't this a bit premature?

I mean, Collins has been in office for only 17 months. How will his search for greener pastures so soon after taking office play with the locals? Didn't he run saying Erie County needed a chief executive, not a chief politician?

Considering his short tenure, he hasn't had the time to accomplish anything that would demonstrate his qualifications to serve as the state's CEO. That's no knock against him, but a reflection of the fact he's been in office less than a year-and-a-half, with no prior government experience.

Is the GOP really interested in Collins or already desperate for a candidate in the event Rudy Giuliani decides not to run?

Think of it: When the last time the party ran an upstater at the top of the ticket? 

Would a Collins run be much more than a vanity candidacy?

Given the state of the state GOP, its candidate faces a long, hard slog, unless Paterson somehow survives to top the ticket. And if  Paterson is the guy, Giuliani is regarded as the likely opponent.

Collins vs. Cuomo? Gee, I'd like to see the Vegas odds on that one. I'm not sure Collins even carries Erie County.

Warming up the skillet for some fried Pigeon - and Golisano?

I'm not going to accuse the state Board of Elections of being aggressive when it comes to the shenanigans of Tom Golisano and Steve Pigeon, but they're starting to make some noise, even if right now it's just a squeak.

A $560 fine against their anti-Sam Hoyt front group, Mothers and Fathers Demanding Answers, for failing to file one of four delinquent campaign disclosure reports is a start. A board spokesman said they'll try again to serve papers on the organization in an effort to force compliance or obtain more judgments.

"It looks like they're 0 for 4," said spokesman John Conklin.

Golisano and pigeon A $500 fine is chump change to the billionaire from Rochester -- news flash, he's moving the Florida to avoid taxes here -- and he's probably insulated himself from being responsible for paying the fine. That's what front groups are for.

But there is certainly an embarrassment factor.

Moreover, there are signs that the Board of Elections is taking a serious look at allegations filed by, among others, the Erie County Board of Elections, that Responsible New York committed felony violations of state election law by pouring oodles of cash into the campaigns of several candidates for the state Legislature.

As an independent committee, Responsible New York could do that, provided it maintained an arms-length relationship with the campaigns it contributed to. But the allegation is that there was a lot of coordination going on. Felony kind of stuff.

And from the folks I'm talking to, those allegations may be gaining traction.

Conklin, of the Board of Elections, would not comment on the status of two complaints filed last fall against Responsible New York by Jeremy Toth, a political associate of Hoyt, and Erie County Board of Elections Commissioners Dennis Ward and Ralph Mohr.

As an independent political committee, Responsible New York does not have to comply with contribution limits to candidates provided they do not coordinate activities with their campaigns. Toth and the local Board of Elections have charged Responsible New York coordinated activities with several candidates last year and thus violated the spending caps.

Ward said state Board of Election investigators have contacted him and Mohr "several times. It appears from what they've said that they're conducting at least an informal investigation."

So maybe Conklin, the board spokesman, wasn't being altogether flip the other day when he explained that one reason why the board wasn't pressing Brian Davis was because they have "bigger fish to fry."

Meanwhile, the Erie County Board of Elections is continuing its own investigation, which predates the allegations lodged against Responsible New York, into the financial activities of several campaign committees operated by Pigeon.

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