Attorney General Cuomo's Letter To The Metropolitan Transportation Authority

Mr. James B. Henley
Deputy Executive Director and General Counsel
Metropolitan Transportation Authority
347 Madison Avenue
New York, N.Y. 10017
Re: Illegal Compensation of Board Members

Dear Mr. Henley:

By this letter, the Office of the Attorney General of the State of New York asks that you immediately terminate and rescind all free E-ZPass tags that have been provided to past and present MTA board members. For the reasons set forth below, providing these tags to board members is a form of compensation that violates a previously-issued formal opinion of the Attorney General and the MTA's own enabling legislation. We also ask that the MTA immediately review and document for the Attorney General any and all other MTA-related benefits that are provided to current and past board members in light of the Attorney General's opinion regarding illegal compensation which is discussed below.

On February 28,2007, the Office of the Attorney General issued a formal opinion at the request of the New York State Housing Finance Agency and the State of New York Mortgage Agency, concerning the payment of premiums for health insurance for current and retired board members. The opinion is available at the Office of the Attorney General website at the following web address: http://www.ag.ny.gov/appeals-and-opinions/numerical-index. This opinion concluded that payment of health insurance premiums violates the provision in the enabling acts of those agencies directing that their board members shall serve without salary or other compensation, but shall be entitled to reimbursement of other expenses incurred in the performance of official duties.

The MTA's enabling legislation similarly provides that generally MTA board members are uncompensated. See Public Authorities Law section 1263(2) (providing that board members shall not receive a salary or other compensation)(1). It is the Attorney General's position therefore that the payment of benefits for current or past board members of the MTA is prohibited by law. In March 2007, the Attorney General notified the MTA of the Attorney General's opinion, and the MTA stopped paying health benefits to its board members in light of that opinion.

It has come to our attention that current and past MTA board members have been
receiving free E-ZPass tags. The Attorney General believes that providing E-ZPass tags for free is a form of compensation and therefore violates the Attorney General's Opinion and the MTA's own enabling legislation.(2)

Accordingly, the MTA should immediately terminate and rescind all free E-ZPass tags it has provided to its current and past board members. If the MTA is not inclined to immediately terminate and rescind these tags, the Attorney General asks that you provide the names of those persons who currently have free E-ZPass tags, how many tags each person has, and how much each tag has cost the MTA over the past 6 years, so that we may consider bringing appropriate enforcement actions.
Moreover, please immediately review and document for the Attorney General any and all other NITA-related benefits that are provided to current and past board members in light of the Attorney General's opinion regarding illegal compensation which is discussed below. Your response may be sent to me at the address above.
We look forward to your expeditious cooperation in this matter.

                                                                                               
Very truly yours,
Benjamin M.Lawsky                                                                                               
Deputy Counselor and
Special Assistant to the Attorney General

(1) The exceptions are the chairman and the first vice chairman, who are paid a salary in an
amount to be determined by the MTA. Id. All members are entitled to reimbursement for actual
and necessary expenses incurred in the performance of his or her official duties. Id.
Compensation includes the total consideration paid to an officer or employee for his or
her services, including salary or wages and authorized fringe benefits. See Op. St. Comptr. No.
2000-9.

(2) Compensation includes the total consideration paid to an officer or employee for his or
her services, including salary or wages and authorized fringe benefits. See Op. St. Comptr. No.
2000-9.

 

 

 

 

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