Attorney General Cuomo Notifies State Authorities That Compensation For Board Members Is Illegal

NEW YORK, NY (March 8, 2007) - Attorney General Andrew M. Cuomo today advised the New York State Power Authority and the Thruway Authority to stop paying health insurance premiums for their board members, based upon a legal opinion issued by the Attorney General last week.

If these authorities do not stop paying for their board members' health benefits, they have been asked to submit a list of the current or retired board members who are receiving such benefits. The Office of the Attorney General will inspect the lists and consider appropriate enforcement actions.

Furthermore, Attorney General Cuomo today announced that his office is sending approximately 100 letters to New York State authorities that appear to have enabling statutes prohibiting the payment of benefits to board members. The authorities are being informed that compensation for their board members is illegal. Also, the Attorney General's investigation is continuing and it is anticipated that additional authorities will receive similar letters in the near future.

Cuomo said, "For too long, public authorities have operated without adequate oversight. Authorities, like all public entities, must be held to the highest ethical standards. My office's actions today are a first step toward providing that needed oversight and ensuring that the hundreds of public authorities in this state will act with the integrity that the public rightfully demands."

On February 28, 2007, Attorney General Cuomo issued a legal opinion to the New York State Housing Finance Agency ("HFA") and State of New York Mortgage Agency ("SONYMA") stating that these public authorities were not permitted to pay health insurance premiums for current or retired board members. The Attorney General concluded that such activity was illegal, noting that the enabling acts that empower HFA and SONYMA were specifically amended in 1992 to prohibit board members from receiving "salary or other compensation." These agencies had requested an opinion on the legality of paying for board members' health benefits.

The related legal opinion is available at the Office of the Attorney General's website: www.ag.ny.gov/appeals-and-opinions/numerical-index

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