Thursday, March 26, 2009
Catherine Wilson, Bureau Chief
A Cynical Gathering in Yonkers
On Wednesday, March 18th, New York State Attorney General Andrew Cuomo held a community meeting in Yonkers for local residents to discuss their concerns. Such community outreach efforts help our leaders hear what is on the minds of their constituents. That is, if those leaders actually attend the outreach meetings that they set up. As it was, on March 18th, Andrew Cuomo was nowhere to be found in Yonkers!
The excuse proffered by the Deputy staff was that “Andrew Cuomo is working on the AIG bonus issue and is heavily involved, right now, in trying to get that money back. And that’s the truth!”, a statement that brought the loud applause intended from the two-hundred plus members of the audience.The plethora of news cameras at the rear of the auditorium capturing the event however, could not notice that
the local politicians had been savvy enough to provide a full audience by inviting several local high schools to attend. Given that the event was held in the middle of a work day, and the relative youth of those attending, the politicians had skillfully seen to it that there would not be too many individuals attending who would ask probing questions of the representatives on hand.
Indeed, since the representatives present included Westchester County Executive Andrew Spano, and Yonkers Mayor Phil Amicone, it would be difficult for a wary citizen, fearful of retribution, to step forward with complaints of either the County or Yonkers government. The purposely full audience also removed any hope of privacy that such a citizen would desire. The community “outreach” session in Yonkers, therefore, appeared to this reporter’s observations to be really just another media opportunity for the politicians involved.
During the introductory remarks, the deputy staff denoted the various responsibilities of the Attorney General’s Office, among them, “To fight corporate fraud and abuse,” and, “To fight for the little guys”. The applauding youthful audience did not pick up on the fact that had the AG’s Office been doing their job all along, they would have caught the corruption of Madoff and AIG long before now and would
not be currently faced with the embarrassing task of begging for the taxpayers’ money back!
No one on the AG’s staff mentioned the legislative loopholes that were put into place by New York State in September of last year to initiate the bailout of AIG. In an interview with Fox Business News last September, Gov. Paterson explained the actions of the State’s Insurance Department: “Because its (AIG) headquarters is in New York City, it comes under the regulation in our State Insurance Department. So our Superintendent of Insurance authorized that AIG could borrow from its subsidiary corporations and could access their own assets and use them as collateral to create liquidity cash which is what they actually need. And they can do that to the tune of twenty billion dollars.
Secondarily, it opened the door by regulation and by law so now the federal government can put a deal together for some of the other private investment banks. They want someone to put up $580 billion dollars and that’s a prohibitive number but if it can be done, then perhaps AIG can be rescued”.
In other words, New York State was the legislative body that set up the mechanism for the AIG rescue package to begin with! So where
was Andrew Cuomo and his staff last September? Why didn’t they make sure that the initial funds borrowed by AIG could not be used for staff bonuses? Any funds issued by banks or governments can be earmarked for specific uses; governments and corporations restrict the grants they give to nonprofits for limited uses and banks earmark loans they make to individuals and businesses; a car loan may only be used to buy a car, a mortgage may only be used for a house, etc. So why didn’t Andrew Cuomo demand that any funds issued to AIG through New York State legislation or government bailouts could only be used for certain limited business activities?
Why didn’t he earmark the taxpayers’ funds and specifically prohibit their use for executive bonuses? Why didn’t he ward off this debacle when he had the opportunity last September? As State Attorney General, Cuomo had the authority and responsibility to review any legislative changes affecting the state’s insurance regulations.
So why did Andrew Cuomo allow the legal loophole for AIG to be set up by the New York State insurance commissioner and Albany to begin with? Could it have anything to do with the $547,629 of campaign contributions by AIG to New York State legislators, among them Senator Steward, head of the Insurance Committee in Albany, and Governor Paterson? AIG has shared the wealth over the years with a variety of New York State politicians and political players among them George Pataki, Eliot Spitzer, and Nick Spano, ex-New York State Senator from Yonkers. The deputy staff explained to the attendees, “The Attorney General’s staff find fraud and abuse everywhere,” and “We investigate those issues”. They assured the attendees, “We are here to right those wrongs”. But in a session involving labor and Immigration rights, the AG’s staff had no answers at all for several issues the Guardian posed to them.
First and foremost among the concerns of local residents are the extraordinarily high county, local, and school taxes they pay. Several
districts are facing double-digit increases in their school taxes for the 2009/2010 school year. However, when questioning those increases,
the residents are told that up to 90% of the expenses in local school budgets are due to contractual expenses, the teachers and union contracts, that cannot be altered, an excuse that now sounds remarkably similar to the one being offered by AIG executives.
They have the taxpayers’ money and are using the law as a weapon to refuse to give it back, even though what they received with that money is over and above what a reasonable individual should expect to receive. Local residents have a right to investigate if their school district contracts have any extraordinary benefits that the unions should now give back in these difficult times.The Guardian asked the AG
staff if they investigated union contracts for possible irregularities and how a taxpayer could obtain a copy of all current and pending contracts. The response from Alphonso David, an AG Deputy Bureau Chief, “There is no area of law that governs the union contracts!”
According to the Attorney General’s office, an office that claims to “fight corruption wherever it is found” and to be on “the side of the little guy”, they do not investigate labor contracts in New York State at all, contracts that now make up almost 90% of some of our local budgets!
The AG’s office conducts no review of these contracts for legal compliance, no audit of these contracts to assure that all monies provided to
the unions by taxpayers are being spent for the purposes for which they were intended, and no investigations of unions for conflicts of
interest and other legal and ethical violations.
David also told the Guardian that there was nowhere in New York State where a concerned citizen could go to even be able to review a union contract. “If the local municipality refuses to give this to you under a FOIL request”, David said, “There is nothing we can do”. The only suggestion David had for local residents was “To talk to your legislators to have them change the law and provide access.”
In this budget season, the Guardian is therefore asking all school districts to provide copies of all contractual agreements affecting their budgets, union, food service, suppliers, etc., along with line-by-line financial analyses of what each item in the contract costs the local taxpayers so they can vote on what can be eliminated or amended.
No taxpayer should be asked to make what amounts to a blind vote in this economy. As our current President has said, “It’s time for open government”. The taxpayers deserve full access to the opened books and all contractual obligations of their school districts, their towns, and our County government. And the Attorney General’s office should be prepared to back up that access with legal force.At the Attorney General’s event, the Guardian approached Westchester County Executive Andrew Spano and inquired what cutbacks and union concessions
the County government was making to alleviate the economic stress on local residents. Spano sidestepped the issue by answering, “All I am doing is making sure that you get lower taxes; I cut millions out of last year’s budget”. When this reporter reminded Spano that that savings
was primarily the result of shifting expenditures into future years he simply responded, “There was no shifting. We’re the only AAA County in the entire state”.
When we pressed the point and asked “Why should ablebodied individuals be allowed to retire at age 55 on full pensions at taxpayers’ expense?” Spano acknowledged, “This has to come from the state”. However, he argued, “The workers have agreed not to get a raise next year,” not noting that the contractual raises are only 3% to 4% of their base salaries compared to the 12% to 15%, or more, annual contributions to their pensions. Taxpayer groups have calculated that shifting government employees from taxpayer-subsidized pensions to
a personally funded 401K plan would save billions in New York State alone, yet no politician has been brave enough so far to demand
such a change.
When this reporter pressed the issue of union concessions with Spano he responded, “You set me up!” Spano insisted that “we [County government] are not your problem. It’s not the County taxes that are the problem”. This reporter noted that most residents could not afford local taxes to begin with and now that they are trying to recover their lost retirement savings they need a reduction on those taxes. Spano responded, “I hear your frustration. But these are issues for Albany. I asked for givebacks and I got it. We are the only County in the state that got a reduction in healthcare costs.”
This reporter noted that many local residents pay for their own health costs in full. “Why should they then be expected to also subsidize
the health insurance of not only the government workers but also their spouses and children as well? They don’t work for the government and they’re not our families so why are we paying for them?” Spano acknowledged the frustration this reporter expressed on behalf of the many local residents the Guardian has spoken to on this issue. However, he noted “this is out of my hands”.
Andrew Cuomo’s session in Yonkers did reveal several things, however:
1. No one in the AG’s office fights corporate corruption until after the fact, and even then, only when the cameras are rolling; there are no upfront audits and investigations;
2. No one investigates union contracts at all, or conducts audits of the billions being spent by New York State unions; the unions are
not being held accountable at all;
3. Taxpayers have zero rights to obtain, audit, or review any of the local, school district, County, or State contracts affecting their
budgets and tax dollars or be provided with information of pending contracts or contracts being offered to unions and suppliers;
4. County government deflects all questions on contractual issues to the State and the State deflects them back saying “it’s not our job”;
5. The AG’s office spent hundreds o tax dollars on printed materials hat almost no one touched, materials that are all available on
he websites so they did not need o be printed out at all;
6. The political players know how to make an auditorium look good for the cameras and how to manipulate he makeup of the attendees
There was one bright point at this session. The AG’s office, unlike the New York State Courts, at least had the good manners to provide coffee and refreshments for the attendees, correctly sensing that sitting through several hours of political discussions required significant doses of caffeine! But even that gesture served to highlight the current economic difficulties some of our local residents are facing. At the end
of the event, an elderly woman approached the AG’s staff to beg permission to take home one unopened container of milk. Sadly, she fell in her attempt to approach the staff.
When this reporter came to her aid and heard her plea, I cleared the entire table of leftovers for her. But anyone who could really aid her in her plight was no longer around; once the cameras left, the politicians and their staffs beat a hasty retreat. They never saw the impact of our economy unfolding on our residents in their own backyard. They never witnessed the degradation of an elegant elderly woman being
reduced to begging for permission to take home a lousy $1 container of milk. Our leaders were probably in too much of a hurry to get to
the $200 dinners at their next fund raising event, undoubtedly paid for and hosted by the next round of AIG wannabes.