WE'RE IN THE MONEY

The story of the phantom school employees has legs, it seems. That’s newspaper talk for a story that lasts beyond the first day it’s printed. When it was first printed in Newsday -
not my favorite paper, but due a salute for investigative journalism -- most of the space was taken up by a man named Reich, a lawyer who was carried as an employee full-time by five different school boards and got a $61,000 pension as a result. His smiling face decorated the front pages of Newsday for a week after that but now he’s been replaced by a much greater star. This is a lawyer named D’Agostino who appears to have been the beneficiary of a fraud that will go down in history along with the Tweed Courthouse and the Credit Mobilier.

Concerning his case the Nassau County comptroller has said “Who was watching…when a private lawyer…is retroactively given 21 years of employment status without the county ever hiring him?” Mr. D’Agostino started working for public bodies, including school districts, in 1976 and up to the year 2000 when he “retired.” (He’s still lawyering for three school districts.) He often worked for up to four municipal bodies at a time, disproving the claim that there’s no such thing as an indispensable man. In the year 2000 he got his reward in the shape of a ruling that during all the years he was being paid as an independent contractor he was actually a public employee. Presumably though, he had been filing tax returns as a contractor, thereby being able to take advantage of the helpful deductions appertaining, which were not available to those filing as employees.

The objective of the ruling being to qualify Mr. D’Agostino for a state pension, Nassau County paid $110,000 into the pension system to cover the contributions which he would have paid during his career if only everyone had realized then that he was really an employee, not a legal consultant. But it’s never too late to mend and don’t let it be said that Nassau is too proud to recognize an oversight and correct it when found. So with his arrears to the pension fund made up in this way Mr. D’Agostino emerged from his chrysalis and entered on his new existence as a rich retiree at a pension of $106,702 yearly.

The New York State Comptroller, Mr. DiNapoli, now has the monumental job of getting Mr. D’Agostino to give back the $700,000 plus that he’s collected since retiring. I wrote recently that that would be like getting fish from a man-eating shark. But there it is. The Comptroller has already ordered repayment by Mr. Reich, who began all this uproar when he was found to have been designated an employee after years of consulting and got a pension of $61,459 starting in 2006. Obviously he has less of a challenge than Mr. D’Agostino, but the law requires equal treatment without regard to hardship.

Another complication has arisen in the shape of a vote that Mr. DiNapoli cast for a lawyer named Weinstein 32 years ago when he was head of the Mineola school board. DiNapoli proposed that he be classified as a full-time employee at a salary of $7,000 yearly. The records, however, show that he also got double that amount as an independent contractor. Besides that he was able to work out the same kind of arrangement with four other districts at the same time. He was classified full-time at two of them, part-time at the others. The $7,000 salary seems unlikely for a full-time employee of any type, and the $12.000 pension he got also seems low, but probably both can be explained. The newspaper story says he collected $427,000 salary in his best three years, on which his pension was based. Total years of employment also count in the pension computation, which may be the reason it wasn’t higher. If anyone’s wondering about the Social Security account, well. independents pay in to it using the SE self-employment return, so they’re properly paid up when they switch to employee status.

Since the attorney general of the state says that all intentional misclassifications of contractors as employees to receive taxpayer paid benefits were and are frauds, it looks like Mr. DiNapoli has some explaining to do. My own recommendation is that he could say something about school board meetings getting out of hand sometimes and people proposing that something should be done for good old Hank the lawyer. Someone else says “I’ll drink to that” and the next thing you know we’ve made the guy an employee and pension-eligible. After thirty-two years it’s all a blur. All I remember is we all got home safe.

This may not be good enough. Mr. DiNapoli may have to recuse himself from the investigation. A Special Counsel should then be named. Luckily New York has one available whose reputation is such that a successful outcome is almost guaranteed. In fact, upon hearing his name not only should people like D’Agostino agree to restitution of their illegitimate gains, but people not yet even under suspicion would be likely to come out of hiding and surrender themselves at discretion, knowing that resistance would be futile.

Only one man could produce an effect like this. I’m referring of course to Rudy Giuliani, New York’s most famous, and feared, citizen. He is presently at liberty, having put his presidential ambitions on hold for this election while he waits for his chance at the governorship in 2010. A nice brisk investigation of the school mess would be a good warmup for 2010. It would keep him in the public eye and reassure the public that the guilty and maybe even the innocent were being properly punished for their misdeeds.

Recourse to Rudy may be too much to hope for with the Democrats in power in Albany, but media pressure might be enough to overcome that problem. There is no one else of Giuliani’s stature who could possibly be appointed. Giving him the job would insulate Governor Paterson from cover-up charges and improve his standing with the citizenry. And maybe Rudy wouldn’t run against him in 2010. It might hurt rather than help his presidential plans for 2012. He’d be charged with running out on his job in Albany, plus he’d have to spend at least half his time campaigning around the country.

I think I’ve been taking in too much information about politics lately and am in danger of becoming an expert. I protest. I’m really like the guy who said he wasn’t a politician and his other habits were good.






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