Attorney General Cuomo And New York State Legislature Hold Public Hearing On Statewide Pension Fraud Investigation

On Thursday May 22, 2008, Attorney General Andrew Cuomo will presideFARMINGDALE, N.Y. (May 22, 2008) – Attorney General Andrew M. Cuomo and members of the New York State Legislature today held a public hearing relating to the Attorney General’s statewide investigation of fraud and waste in the New York State public pension systems.  The Attorney General was joined at the hearing by Senator Dean Skelos, Assemblyman Robert Sweeney, Senator Kenneth Lavalle, and Assemblyman Harvey Weisenberg. 

The hearing was held at SUNY Farmingdale and included testimony from education, legal, and law enforcement officials, among others.  Members of the public were also invited to submit written testimony. 

“Given the depth of fraud that our investigation has already uncovered, the public deserves to know exactly what is happening and how we in government are going to stop it,” said Attorney General Cuomo.  “Today’s hearing was a chance to give a full accounting to New Yorkers of the problems we are facing.  Using the testimony we received from witnesses and the feedback given by the public, we will work with the Legislature to effectively address these issues.”

Attorney General Cuomo’s ongoing statewide investigation of pension fraud has expanded to include more than 4,000 local governments and special districts across New York State and all 37 Boards of Cooperative Educational Services (“BOCES”).  The investigation has already revealed that many lawyers had remained on school districts’ or BOCES’ payrolls for such extended periods of time, or were included on the payrolls of so many school districts or BOCES simultaneously, that they accumulated substantial credits in the New York pension system.  Cuomo has also announced settlement agreements with a western New York law firm and a Capital Region attorney that ended their improper employment arrangements with school districts and various BOCES and rescinded all public benefits they had wrongfully received.

Last week, Cuomo announced his investigation was expanding to include the practice of school districts permitting employees to “double dip,” allowing them to earn both salaries and pensions simultaneously.  The Attorney General’s office is examining whether this is a proper use of public funds, whether these practices and their implementation violate existing laws and regulations, and whether existing law needs to be clarified as to these practices.

A significant purpose of today’s hearing was to listen to all sides of the issue and collect information in order to create a solution, potentially legislative, to put an end to fraud and abuse in the public pension system.

Attorney General Cuomo continued, “For years state benefits and pensions have been given out like blank checks to independent contractors, outside consultants, and countless others who do not deserve them.  My office is determined to uncover the full extent of these practices and work with the Legislature to cut off the gross misuse of state resources permanently.”

New York State Senate Deputy Majority Leader Dean Skelos (R-Rockville Centre) said, “Taxpayers have a right to know where their tax dollars are going and how they are being spent.  Today’s public hearing was an important step toward determining the scope of this problem and the steps that must be taken to address it.  I look forward to working with Attorney General Cuomo and developing the legislation necessary to prevent this type of situation from occurring again.”

Assemblyman Bob Sweeney (D-Lindenhurst) said, “Some highly paid appointed government employees are retiring and then returning to work the next day at full salary and with a pension.  This is an abuse of the public trust -- it’s galling the way these appointed officials are gaming the system.  It’s wrong and must stop.  I am hopeful that these hearings will provide the information needed to craft legislation to address these issues.”

Senator Kenneth Lavalle (R-C-I-Port Jefferson) said, “As the saying goes ‘the buck stops here,’ but as a result of those who know how to beat the system, hundreds of thousands of dollars are taking a drastic detour out of the classroom and into their pockets.  From the local to state levels, too many lines of defense that are supposed to be protecting New York’s education and pension systems have failed.  Therefore, it is the abuse of the pension system, our school districts, and taxpayers’ hard-earned money that must be stopped here and now.  I applaud Attorney General Cuomo for holding today’s hearing and I will use the information gathered here to help restore accountability to the state's pension system and further protect the taxpayers.”

Assemblyman Harvey Weisenberg (D-Nassau) said, “We can no longer continue to ignore the costs that this wasteful fraud has on New York State taxpayers.  Today at a public hearing on Long Island we heard from witnesses and the public about the problems we face and the solutions being implemented to address them.  I want to thank Attorney General Cuomo for organizing this hearing which was an important step in the ongoing battle against pension fraud.”

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