NYC Comptroller John C. Liu on the Mayor’s Fiscal Year 2012 Executive Budget

New York City Comptroller John C. Liu today presented testimony before the New York City Council Finance Committee regarding Mayor Bloomberg’s Fiscal Year 2012 Executive Budget.

Comptroller Liu’s testimony as prepared for delivery is below:

Good afternoon Chairman Recchia and members of the Finance Committee, and thank you for allowing me the opportunity to present testimony on the Mayor’s Fiscal Year 2012 Executive Budget.

The Mayor’s FY 2012 Executive Budget totals $65.7 billion after various prepayments. The FY 2012 budget is the product of a series of actions which closed a $3.26 billion gap in the July 2010 Financial Plan stemming from a structural imbalance where expenditures exceeded revenues. The gap was further exacerbated by State actions that took place during the year.

While it is estimated that FY 2011 will end with a $3.217 billion surplus, when compared with the $3.646 billion surplus similarly transferred from FY 2010 to FY 2011, it becomes clear that in the current year, the City is drawing on more resources than it is generating. However, if past history is any indication we can anticipate that the year may end with a budgetary surplus.

Overall spending in the FY 2012 budget has decreased by 0.4 percent when compared to the FY 2011 budget. But these numbers mask the fact that while overall expenditures have been held flat, the City-funded portion of the budget has increased from 67.1 percent of the FY 2011 budget to 70.7 percent of the FY 2012 budget. The City-funded portion of the budget is $2.2 billion greater than the FY 2011 budget and $2.1 billion more than was planned a year ago. The Financial Plan assumes that by FY 2015 the City-funded portion of the budget will exceed 74.5 percent. This trend is a direct result of a reduction in State and Federal aid to New York City.

As we hear talk of layoffs and cutbacks it is critically important for the City to identify as many areas of savings as possible.

You are well aware of the outcome of my office’s work on the CityTime issue. As a result of our steadfast oversight, the project is now nearing completion without any additional cost to the taxpayers. While that may be good news, it does not make up for the fact that the costs ballooned from $68 million to more than $700 million. My office will continue to work closely with the investigative authorities on this issue in hopes of possibly recouping some of the money that has been allegedly funneled to subcontractors on the project.

In addition, it was a welcome sign that the Department of Education has decided to cancel a $43 million contract with another high priced consultant, Future Technology Associates, who have been suspected of utilizing subcontractors to overbill the City. My office has been conducting an audit into the vendor for quite some time and will continue to do so in order fully disclose what really went on.

While we are discussing the DOE, I would like to point out that a review of OMB documents within the past week has found that after years of looking the other direction, the Department of Education has decided to finally seek additional Medicaid reimbursement funding from the State for occupational and physical therapy and speech and language services. The Executive Budget assumes an additional $100 million in revenue as a result of increased Medicaid reimbursements on top of the previous estimate of $17 million presented in the Preliminary Budget.

My office has been working with the City’s Office of Management and Budget and the UFT to identify the actual value of funds eligible for the City. While the current estimate of $117 million is enough to significantly impact the cuts proposed to the classroom, we believe this to be a cautious estimate. The City may be eligible for greater reimbursements, which would free up funds for use elsewhere.

The $100 million in additional reserves have been allocated to cover various other expenses in the DOE budget, such as $48 million for general education non-personal service and $26 million for charter schools. These dollars and any additional Medicaid funds realized during Fiscal Year 2012 should be used to help offset the proposed teacher layoffs, which have a more direct negative effect on classroom services.

In the Executive Budget, the Mayor has allocated nearly $1 billion towards funding anticipated changes in the actuarial assumptions and methods used in computing pension contributions. The City actuary is currently reviewing an independent audit of the rate change and will offer his recommendations to the pension boards. While it is expected that the actuary will recommend a change in the assumed rate of return of the City’s pension funds, there is more uncertainty about what other modifications would be proposed. As such, the eventual cost of the any recommendations is unknown at this point. It is also uncertain as to when the recommendations and the eventual changes would take effect.

Another potential area of savings is through the City’s settlement of claims. My office is responsible for authorizing monetary amounts of settlement where we feel the City may have been at fault for personal injury or property damage. The City has indicated that they expect a rise in the cost of settlements to occur. However, my office anticipates that based upon historical data, the City is overestimating this total by at least $50 million.

As always, my office will seek the most fair and equitable results in our claims settlement process and continue to act in the best interest of the taxpayer when doing so.

We have also identified some risks to the Mayor’s plan. Most significant is the assumption that contract discussions with the UFT and CSA will not result in any additional cost to the City. These are placed as risk because the Mayor has not budgeted for raises consistent with those of other municipal unions, and has instead relied on a labor strategy that uses productivity initiatives to offset cost.

Another risk to the Mayor’s plan is his underestimation of overtime. In fact, my office has estimated that the overtime costs will be upwards of $195 million more than the Mayor anticipates.

As we gradually move out of this recession, it is important to note that the City is continuing on a steady but slow path to recovery. Despite mostly positive indicators for the City’s short-term economic condition there exist the possibility of negative externalities that could hinder the current expansion. Factors outside of the City’s control such as rising energy prices, the continued depression of the construction industry specifically within the residential construction sector, and the potential European debt crisis can be expected to produce additional drag on the US and local economies.

One area that has shown strength is our City’s pension systems. After posting returns of 14 percent last Fiscal Year, the most recent data show that the funds are up more than 20 percent in the current year. These gains will help offset future payment towards the pension systems.

My office released a study last week, the first of its kind, which revealed the past decade of fluctuation in the markets will cause pension costs to rise in the short term. However, due largely to already enacted benefit reforms that took place between 1995 and 2009 the long term costs to the City will steadily decline. These projections are sound and have been verified by independent professional actuaries.

The study shows that over the next 30 years City pension costs as a percentage of the City's budget will decline from 11.4 percent in FY 2016 to 5.1 percent FY 2040.

I hope I was able to be helpful today in presenting an accurate look at the City budget, as well as provide some areas worth exploring during phase of the budget process. As always my office is available to assist you in any way necessary.

News & Notes from NYS Comptroller Tom DiNapoli...

COMPTROLLER DiNAPOLI PROPOSES LEGISLATION TO MAKE HIS BAN ON PLACEMENT AGENTS PERMANENT

June 2, 2011

State Comptroller Thomas P. DiNapoli has proposed legislation to codify his ban on the involvement of placement agents, paid intermediaries and registered lobbyists in investments with the New York State Common Retirement Fund (CRF). The CRF became the first public pension fund in the nation to ban placement agents when Comptroller DiNapoli issued his Executive Order in April 2009. His proposed legislation would make the ban part of state law.

If enacted, it would be the first time such a ban on placement agents was codified into law in the United States.

“Since I took office, we’ve worked to implement reforms that will help restore integrity and trust in this office and the pension fund,” DiNapoli said. “Banning placement agents and lobbyists from involvement in investments was a big step. Now it’s time to make that ban a permanent part of New York State law.”

“As long as I’m in office, I will never allow placement agents in CRF deals. But we have to eliminate any potential for abuse in the future. This bill will make sure that the Fund is protected no matter who is comptroller.”

Immediately after he took office, Comptroller DiNapoli began instituting a series of reforms to address the misdeeds of the previous administration. He has increased transparency, enhanced ethics reporting and worked with the Insurance Department to strengthen oversight of the pension fund. Among his top priorities has been to restore the public’s confidence in the integrity of the Fund’s investment decision making process and in the operations of the Retirement System.

The legislation, which would add a new Section 425 to the Retirement and Social Security Law, is sponsored by Assemblyman Peter Abbate. The bill defines a “placement agent or intermediary” as any person or entity, including a registered lobbyist, that is directly or indirectly engaged and compensated by an investment manager to promote investments to or solicit investment by the CRF, whether compensated on a flat fee, a contingent fee, or any other basis.

COMPTROLLER DiNAPOLI: RISING GAS PRICES COULD HURT FRAGILE ECONOMY

Supports Probe of Possible Energy Market Speculation

May 31, 2011

New York State Comptroller Thomas P. DiNapoli repeated his warning to New Yorkers that another gas price hike this summer will stall an “already slow” economic recovery. DiNapoli said: “There’s no question it will cause a setback.”

Speaking to Susan Arbetter on The Capitol Pressroom radio show Monday morning, DiNapoli said that government regulators should rule out improper speculation in oil commodities that could further harm the economy. New York Sen. Charles Schumer recently called on the Federal Trade Commission to investigate the possible manipulation of gas prices.

A report released Friday by the Comptroller details the effect of price hikes on residents, government and businesses.

DiNapoli is the sole trustee of the $140 billion New York State Common Retirement Fund. He noted that his approach to energy investing is to protect the state’s fund while also working for the greater public good. Last year, DiNapoli helped secure the resignation of Massey Energy Company Chairman Don L. Blankenship for his “callous disregard” of employee safety prior to the disaster at West Virginia’s Upper Big Branch mine which killed 29 miners. New York’s Common Retirement Fund holds about $14 million in Massey stock.

COMPTROLLER DiNAPOLI: HIGHER ENERGY PRICES MAY SLOW RECOVERY

May 27, 2011

Paying more at the pump may slow New York’s fragile economic recovery, according to a report issued today by New York State Comptroller Thomas P. DiNapoli. The rising price of oil—which tripled to over $100 per barrel since hitting a $30-per-barrel low in December 2008—has driven up food, transportation and heating costs for consumers, businesses and government agencies.

“The sprouts of economic growth we’ve seen recently may be mowed down by high energy costs,” said DiNapoli. “It’s costing a lot more to fill up your tank, and price hikes for oil and gas also mean more expensive food and rising heating costs. If the current upward trend holds, it’s also going to cost more to run basic government services like the MTA. All this could put another chill on the economy just as it’s starting to thaw. If we need another reminder, here it is: we need to find alternatives to the expensive, pollution-heavy fossil fuel energy we rely on.”

DiNapoli’s report estimates that the average cost of driving a car in New York totaled $1,646 during the April 1, 2010 to March 31, 2011 period, which was $288 more than during the prior twelve-month period. If current prices are maintained over the next twelve months, the cost of driving a car could increase by another $523 to $2,169. This would represent a two-year cumulative increase of $811, or 60 percent. The increase would be even higher for SUVs and light trucks.

Similarly, the statewide average cost to heat a home by oil was $2,757 during the April 1, 2010 to March 31, 2011 period, which was $492 more than the prior twelve-month period. If current prices are maintained over the next twelve months, the cost of heating a home by oil could increase by another $535 to $3,784. This would represent a two-year cumulative increase of $1,027, or 45 percent. The cost increase would be higher in colder regions of upstate New York.

DiNapoli’s report cites a New York State Energy Research and Development Authority study that named New York the most energy-efficient state in the nation, due to a widespread public transportation system and the state’s highly-urbanized population. Despite its efficient use of power, New York remains the fifth largest consumer of energy in the nation.

COMPTROLLER DiNAPOLI AUDIT RECOMMENDS STRENGTHENING
ENFORCEMENT OF VETERAN HOUSING PREFERENCES

New DHCR Commissioner Darryl Towns Supports Recommendations

May 26, 2011

Mitchell-Lama housing companies in New York City failed to provide disabled war veterans with priority consideration for housing as required by state law, according to an audit released by New York StateComptroller Thomas P. DiNapoli at a news conference today. DiNapoli was joined by Darryl Towns, Commissioner of New York State Homes and Community Renewal (NYSHCR).

“By law, disabled veterans are supposed to be given a preference to Mitchell-Lama housing,” DiNapoli said. “What has happened is unconscionable. These vets have made unimaginable sacrifices for our nation; they shouldn’t be penalized when they come home.

“So many New Yorkers are serving in Iraq and Afghanistan. NYSHCR has to make and enforce immediate changes to ensure these men and women – and their families – aren’t turned away from the housing that they deserve and the law says they should have. Commissioner Towns has only been on the job a short while, but he’s already stepping up to implement our recommendations and protect veterans’ rights.”

Commissioner Towns said: “NYS Homes and Community Renewal is dedicated to increasing transparency and accountability in our programs and procedures. The audit released today indicated that practices that occurred in this agency under previous administrations did not adequately relay information about housing preferences to some disabled veterans on housing waiting lists. Actions that our administration has already initiated, and steps that we have since developed with the Comptroller’s office, will fix this problem.”

According to the law sponsored by Towns, a former assemblyman, housing companies must provide disabled veterans with a preference in admission to Mitchell-Lama housing developments. In advance of that law’s enactment, NYSHCR issued a memorandum in 2007 instructing housing companies on how they should implement the law. Since then, NYSHCR has required housing companies to revise their tenant selection procedures, marketing advertisements, outreach letters, and apartment applications to give disabled veterans, and their families, priority consideration for available housing.

In addition, the housing companies were to notify existing waiting list applicants of this new priority.

The audit covered the period November 2007 to September 2010. The law was subsequently expanded to include all wartime veterans and their spouses.

Auditors examined 18 housing facilities in the New York City area. Among the findings:

· Of eight developments required to have a tenant selection plan, three had not updated their plans to include a veteran preference.
· Of six that had placed advertisements for vacancies, five did not mention the veteran preference, even though NYSHCR approved the ads.
· Eight of the 17 developments that had open waiting lists had not updated their applications to include the veteran preference.
· NYSHCR reviewed tenant selection plans and prepared reports on 14 of the developments. These reports failed to mention deficiencies at 13 of those developments that DiNapoli’s auditors later discovered.

DiNapoli recommended that NYSHCR:

· Train Housing Management Representatives to properly review housing company compliance with applicable laws and division guidance; and
· Increase monitoring of housing company compliance with applicable laws and division guidance.

DHCR generally agreed with DiNapoli’s findings and indicated they would take corrective action.

The full audit can be read here:

Currently, there are 175 DHCR-supervised Mitchell-Lama developments in New York State, with approximately 73,000 units. There are approximately 695,000 wartime veterans who are residents of New York State, according to the U.S. Department of Veteran Affairs.

COMPTROLLER DINAPOLI SUPPORTS LEGISLATION TO LEGALIZE SAME-SEX MARRIAGE IN AN HRC VIDEO

May 26, 2011

The Human Rights Campaign (HRC) today released a video featuring New York State Comptroller Thomas P. DiNapoli expressing his strong support for legislation to legalize same-sex marriage.

“Common decency, human dignity and basic equality are still in short supply in New York,”

DiNapoli said. “Until the relationships of gay men and lesbians are respected and recognized by New York State, we cannot call New York a true democracy. Gay couples should not have to jump through legal hoops just to protect their loved ones and their property. New York should legalize same-sex marriage now.”

“We’re very grateful to Comptroller DiNapoli for joining the mainstream majority of New Yorkers who endorse marriage equality,” said HRC’s Senior Strategist for New York, Brian Ellner. “Now is the time to get this done and let all loving and committed couples marry the person that they love."

DiNapoli is a long time supporter of marriage equality and has repeatedly demonstrated his support since becoming comptroller in 2007. The New York State Common Retirement System recognized same-sex marriages conducted in Canada under the principle of comity, a legal doctrine that has been followed by New York State for many years. In September 2007, DiNapoli directed the Retirement System to recognize same-sex marriages conducted in any jurisdiction where they are legal.

As Comptroller, DiNapoli is sole trustee of the New York State Common Retirement Fund. He has consistently advocated for corporate recognition of same-sex partner rights in the work place and protection from corporate discrimination based on sexual orientation and gender. In addition, DiNapoli created a section of his Your Money New York Web site that provides lesbian, gay, bisexual and transgender (LGBT) New Yorkers with essential resources to help achieve financial stability. The section offers access to reliable information on legal rights, on domestic partnerships and programs of interest to the LGBT community, and on other resources that can support individuals through tough economic situations.

The Human Rights Campaign represents a force of more than one million members and supporters nationwide. As the largest national lesbian, gay, bisexual and transgender civil rights organization, HRC envisions an America where LGBT people are ensured of their basic equal rights, and can be open, honest and safe at home, at work and in the community. The DiNapoli video is part of an on-going series featuring prominent Americans promoting marriage-equality.

COMPTROLLER DiNAPOLI TO CHEVRON: RESOLVE AMAZON LAWSUIT

Standoff on Poor Ecological Record Bad for Business

May 25, 2011

New York State Comptroller Thomas P. DiNapoli and a coalition of investors today released a letter to oil giant Chevron urging the company to settle its 20-year legal battle with indigenous populations in the Amazon rainforest. The long-running court case alleges that Texaco, which merged with Chevron 10 years ago, destroyed huge tracts of the rainforest by dumping billions of gallons of oil waste products over several decades. Citing the “grave reputational damage” Chevron has suffered due to the lawsuit, DiNapoli and other investors called on the company to promptly negotiate a reasonable settlement to prevent further shareholder damage.

“It’s time for Chevron to face reality,” said DiNapoli, trustee of the $140.6 billion New York StateCommon Retirement Fund (Fund), which owns 7.5 million Chevron shares worth an estimated $780 million. “The effects of this horrific, uncontrolled pollution of the Amazon rainforest are still being felt today. Investors don’t derive any benefit from this never-ending courtroom drama.

“The entire case is looming like a hammer over shareholders’ heads. Chevron should start fresh with a new approach that embraces environmental responsibility and risk management as part of its corporate culture. More legal proceedings will only delay the inevitable.”

For nearly 25 years, beginning in 1964, Texaco and its joint venture partner Petroecuador dumped nearly 16 billion gallons of oil waste products into the Amazon rainforest. The two companies also spilled nearly 17 million gallons of oil from their trans-Ecuadorian pipeline operation between 1971 and 1991 —50 percent more oil than was spilled by the Exxon Valdez crash.

In a letter sent in November 2008, DiNapoli called on Chevron’s board of directors to come to an equitable settlement in order to avoid substantial penalties in an Ecuadorian court. Chevron refused to negotiate, and in February, 2011 the Ecuadorian Provincial Court awarded plaintiffs nearly $18 billion in compensatory and punitive damages. The Ecuadorian court judgment is the second-largest of its kind, topped only by BP’s $20 billion fund established to settle claims stemming from the 2010 Gulf of Mexico oil spill. DiNapoli is co-lead plaintiff in an ongoing class action lawsuit filed against BP last year.

In an effort to improve Chevron’s environmental policies, DiNapoli has co-sponsored a proposal calling for the appointment an independent board director with a high level of environmental expertise. Shareholders are expected to vote on the resolution at Chevron’s annual meeting today (May 25).

NYC Comptroller John C. Liu on Wal-mart

New York City Comptroller John C. Liu issued the following statement in response to questions concerning the NYC Pension Funds’ presentation at Wal-Mart’s annual meeting in Fayetteville, Arkansas today.

“Low prices are good, but it is Wal-Mart’s responsibility to ensure that it is not passing to its customers savings bought with abusive labor practices,” Comptroller Liu said. “Wal-Mart can and should do much more to hold its suppliers accountable for protecting human and workers’ rights. Wal-Mart can’t claim to be that bright yellow smiley face that we see around the world if its global suppliers don’t protect their workers from abuse or intimidation.”

The NYC Pension Funds’ shareholder proposal calls on Wal-Mart’s board to require that the company’s suppliers publish reports on their compliance with internationally recognized standards of human and workers’ rights. Kalpona Akter, a labor rights leader in Bangladesh and former garment worker, presented the proposal to Wal-Mart’s board of directors at the invitation of Comptroller Liu and the Funds.

The NYC Pension Funds hold 5,696,055 shares of Wal-Mart, Inc. valued at $305,023,745.25 million as of 6/2/2011.

NYS Comptroller Tom DiNapoli Proposal Will Catch Pension Abusers

New York State Comptroller Thomas P. DiNapoli proposed legislation today to greatly enhance his ability to catch those who abuse the pension system. The bill would grant the Comptroller access to New York State Department of Taxation and Finance’s wage reporting system to identify New York State and Local Retirement System retirees working for local governments who exceed post-retirement earnings limitations. If a state or local government employee earns more than those limits, the Comptroller has the authority to suspend and recoup any excess pension payments.

“This legislation sends a message to anyone who tries to game the retirement system: if you don’t play by the rules, we will find you and make you pay,” said DiNapoli. “Government agencies should be enabled to work together to reduce waste, fraud and abuse. This legislation will do just that. We have half the puzzle and Tax and Finance has the other half. Together, we’ll solve this problem and stop this kind of abuse.”

Currently, the Retirement and Social Security Law (RSSL) places limits on the amount that may be earned by a retiree who returns to public employment without it affecting his or her pension payments. Most retirees are covered by Section 212 of the RSSL, which allows retirees under age 65 to earn up to $30,000 per calendar year without any pension penalty.

The Retirement System annually compares information for state employees with the State Comptroller’s Office Division of Payroll to identify retirees who have obtained employment with the state. In addition, a law passed in 2008 requires school districts and BOCES to annually report all public retirees, including independent contractors and consultants, on their payrolls during the previous calendar year. If retirees are found to have exceeded the wage earnings limitations, the Retirement System suspends and recoups excess pension payments.

However, there currently isn’t a mechanism for a similar comparison for retirees employed by the thousands of local public employers in the state. DiNapoli’s legislation would amend Section 171-a of the Tax Law to grant the Comptroller’s Office access to Tax and Finance’s wage reporting system to match the Retirement System’s records with information reported by local governments to Tax and Finance. This match would allow the Comptroller’s Office to identify retirees improperly collecting a state pension and a local government salary.

In February, Comptroller DiNapoli and Oneida County District Attorney Scott McNamara announced that former Rome police officer Thomas C. Hubal had been convicted of third-degree larceny for earning more than his pension legal limit over a nine-year period. Hubal must repay more than $88,000 and serve six-months incarceration for defrauding the system. If this legislation had been in effect, Mr. Hubal would have been caught in the first year that his salary exceeded his pension limitation.

Under current law, it is the responsibility of retirees to report any post-retirement income to the Retirement System. Each year, all retirees are mailed a Report of Post-Retirement Employment Form, which must be filled out and returned to the State Comptroller’s Office if the retiree received any earnings from public employment.

Comptroller Tom DiNapoli Statement on the Sentencing of Alan Hevesi

Today’s sentencing of Alan Hevesi is a welcome and just conclusion to a years-long saga. Mr. Hevesi betrayed the trust of all New Yorkers. His sentence is clear evidence that this type of criminal behavior will not be tolerated.

Since taking office, I have changed the way the pension fund does business so history cannot repeat itself. I have banned placement agents and pay-to-play practices, and I have increased transparency in pension fund transactions. But there is more that can be done.

The punishment for breaking the law while performing a public duty must include pension forfeiture and increased fines and sentencing. The pension forfeiture bill I proposed earlier this year would do just that. No public official who violates the public trust should be allowed to receive a taxpayer-funded pension. Passage of my bill would be a much-needed step in rebuilding the public’s confidence in its government.

Revealed! Vito’s $64,000 Pension by Aaron Short • The Brooklyn Paper

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“What is Assemblyman Vito Lopez’s annual state pension” — now has a $64,000 answer.

The scandal-plagued legislator is collecting a monthly pension of $5,386.16 — or $64,634 per year — on top of his $92,000 yearly salary, according to state records that were released to this newspaper under the Freedom of Information Law.

In other words, Lopez is earning time-and-a-half while on the job as the people’s representative in Albany.

He’ll close out 2011 with an income topping $156,000.

And it’s all legal.

Lopez, 69, is one of 10 lawmakers who filed his “retirement” papers on Dec. 31 in order to collect the extra moolah — thanks to a little-known state loophole that allows officeholders over the age of 64 to legally collect their pensions while still on the job.

The cancer-stricken lawmaker defended the practice in an exclusive interview with The Brooklyn Paper last year, explaining that he applied for his pension to take care of his family if his health rapidly declined.

“I’m very comfortable with my rationale and I’ve explained that to you,” said Lopez. “My obligation is to my family and to my health.”

Lopez has been combatting a recurrence of cancer since last summer— forcing him to take a brief leave of absence to treat the illness in October.

But he came back stronger than ever introducing more than 20 bills, fighting for affordable housing, and to stave off Gov. Cuomo’s threat to close scores of senior centers.

And he’s done it all in the shadow of two exhaustive federal probes and a widening city investigation into the finances and board of the nonprofit he founded

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NY Pension Fund Posts 6% Rate of Return | The Business Review

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New York state’s pension fund posted a 6 percent rate of return in its most recent quarter, a $7.8 billion net gain in value, officials said Tuesday.

The fund’s assets are now worth $140.6 billion, as of the end of 2010, said Comptroller Thomas DiNapoli. The fund’s assets have not been that large since mid-2008.

The fund remains the third-largest public pension system in the nation, behind two in California.


DiNapoli said the fund benefited from a rally in the equities market experienced during the final three months of 2010. The pension fund runs on the same fiscal year as the state, ending March 31.

The fund pays $7.7 billion of benefits every year. There are 1.06 million state or local government workers, retirees and beneficiaries who belong to the system.

The state pension fund, combined with the teachers’ retirement system, pays $1 billion of benefits a year to residents in the four core Capital Region counties of Albany, Rensselaer, Schenectady and Saratoga.

Avella To Bloomberg: Stop Blaming The Unions by Liz Benjamin - Capital Tonight

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NYC Councilman-turned-Senator Tony Avella sent a letter today to his erstwhile political foe, Mayor Blooomberg, accusing him of taking an “unconscionable” stance on the so-called holiday “bonuses” he’s trying to eliminate as part of his pension reform push.

The Queens Democrat, who ran a longshot run for mayor in 2009 (losing the Democratic primary to then-NYC Comptroller Bill Thompson), is siding with the more than 33,000 former NYC cops and firefighters who receive that amount every December as part of the Variable Supplement Fund.

The bonus was established in 1968 and, unlike other pension benefits, is not constitutionally protected. Doing away with it would save the city $200 million a year, Bloomberg mantains.

But the unions – and now Avella – note the bonuses came about as a result of the collective bargaining process. In exchange, the city was allowed to adopt a more aggressive pension investment strategy to reduce its annual direct contribution to the pension funds. (This reportedly saved $4 billion, Avella said).

Avella called the mayor’s characterization of the VSF as “Christmas bonuses” disgraceful, adding: “Your attacks in this regard on the city’s uniformed personnel, who put their lives at on the line every day throughout their careers, is unbecoming for a mayor of the City of New York.”

Letter to Mayor Bloomberg re VSF

Police and Fire Unions Accuse Mayor Bloomberg of Trying to Steal Their Pension Benefits by Sally Goldenberg - NYPOST.com

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Cops, Firemen: Mike Lies on Pensions

A bitter feud between Mayor Bloomberg and the city's police and fire unions erupted yesterday when enraged labor leaders called the mayor a "liar" and a thief for proposing to end a $12,000 annual pension sweetener they claim was negotiated in good faith.

"As we approach the 10th anniversary of 9/11, Mike Bloomberg wants to say to firefighters and police officers who were there that day and didn't die, 'I'm going to steal money from your pocket.' It's outrageous," Uniformed Firefighters Association President Steve Cassidy fumed at a City Hall press conference.

He and his counterpart at the Patrolmen's Benevolent Association, Pat Lynch, insisted the city reaped a $4 billion economic windfall after the unions allowed it to invest their members' pensions in the volatile stock market in 1968 that was the condition for handing members supplemental $12,000 pension payouts.

"This is a lie campaign, a media campaign to get everyone thinking that we're getting something we don't deserve," Lynch fumed.

Under then-Mayor Ed Koch, the city negotiated with the unions in 1988 to pay retirees a fixed amount -- then $2,500 per member annually -- from the "Variable Supplement Fund," rather than let the payments be determined by earnings. That set amount has since increased to $12,000 per retiree.

Bloomberg in his upcoming budget wants to end the benefit for retirees, for an estimated savings of $1 billion. But Cassidy and Lynch vowed to wage an advertising campaign and personally lobby city and state lawmakers to reject Bloomberg's proposal.

Final approval for the mayor's plan rests with Albany, but Assembly Speaker Sheldon Silver, Senate Majority Leader Dean Skelos and Gov. Cuomo have not taken public positions.

Nor has City Council Speaker Christine Quinn, whose members might asked by Albany lawmakers for a "home rule" vote before the issue can be sent to the legislature.

Bloomberg defended his comments against the unions' accusations, saying he has not mischaracterized the program and he continued to call it a "Christmas bonus."

"I don't know what they're talking about. We certainly didn't put out anything that, to the best of my knowledge, isn't accurate and true," Hizzoner said.

Bloomberg said the savings from reduced pension costs could spare schools from massive cuts that could be coming in the next city budget.

"We have to make a decision: Do we want to send out Christmas bonuses or have more teachers?" Bloomberg said.

sgoldenberg@nypost.com

Comptroller Tom DiNapoli Proposes Pension Forfeiture Bill

Calls for Severe Penalties for Abuse of Public Trust

Public officials stand to lose pension benefits if they commit a felony related to the performance of their duties under a bill proposed today by State Comptroller Thomas P. DiNapoli. DiNapoli’s bill also imposes a penalty up to twice the amount a public official benefitted from the commission of a crime committed in the course of his or her public duty.

“When public officials break the law while performing their public duty, they should forfeit their public pension, plain and simple,” DiNapoli said. “It’s time to take away the pension of anyone found guilty of committing a felony in the course of his or her official duties. No one who violates the public trust should be allowed to receive a taxpayer-funded pension. And the tough sanctions I’m pushing will remind every public official that violating the public trust will not be tolerated.

“Public confidence in government has been bruised and battered. This bill will be a strong step toward rebuilding trust.”

“New York’s pension system needs to be reformed and this is a logical first step,” said Stephen J. Acquario, executive director of the New York State Association of Counties. “This proposal ensures government officials who violate the public trust are accountable for their misdeeds, not rewarded for them.”

DiNapoli noted that while the state constitution prohibits any diminishment of retirement benefits for current public officials and public servants, the new felony provisions would apply to all current and future public officials and public servants.

Fulfilling a pledge made last fall, DiNapoli’s legislation provides for the revocation of the pension benefits of future Retirement System members who are state or local elected officials, officers and appointees, including directors and members of public authorities and public benefit corporations, who are convicted of or plead to the commission of a job-related felony.

DiNapoli’s bill also enhances penalties by elevating Official Misconduct to a felony and increasing the penalties for any abuse of the public trust by public employees in New York state. An abuse of the public trust entails committing a felony and using one’s position as a public servant to commit or conceal a felony or to conspire to commit a felony.

Public officials who abuse the public trust would be forced to pay a penalty up to twice the amount they benefitted from the commission of the crime. In addition, Class A-1 and Class B felons would face increased incarceration time by four to 20 years depending on the severity of the crime. The monetary penalty and enhanced sentencing would be in addition to any other sanctions imposed by existing law. This portion of the bill would be applicable to all public servants in the state regardless of whether they are a member of the New York State and Local Retirement System.

The pension forfeiture provisions in DiNapoli’s bill apply only to prospective members of the Retirement System so the bill will withstand legal challenges.

To view DiNapoli’s proposed bill, visit: http://osc.state.ny.us/press/releases/jan11/forfeiture.pdf.

Clueless Cathie Black at the PEP Attacks LIFO, ATRs and Pensions...

Cathie Black at the Panel for Edicational Policy Attacks LIFO, ATRs and Pensions...She doesn't even know how many teachers or students are in the Public School system...She's totally out of touch (like the Mayor) with the school system she supposedly runs...

BP Faces Lawsuit from New York State Controller Thomas DiNapoli Over State Pension Fund by Kenneth Lovett - NY Daily News

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State Controller Thomas DiNapoli announced he's suing BP on behalf of the state pension fund.

DiNapoli, the sole trustee of the $132.6 billion fund, decided on the lawsuit because the April 20 explosion that sent oil gushing into the Gulf of Mexico has trashed BP's stock.

In a statement, DiNapoli accused BP of misleading investors about its safety procedures and its ability to respond to events like the ongoing oil spill.

"We're going to hold it accountable," the New York Democrat said.

The Daily News first reported the possibility of the lawsuit last week while revealing that state pension fund lost $30 million on its slumping BP shares.

"It's my duty to protect the interests of the fund and the retirees and employees who rely on it," DiNapoli said Wednesday.

DiNapoli hired Cohen Milstein Sellers & Toll to represent the fund, which will seek lead plaintiff status in order to give "the fund and other investors their best chance at recovering damages."

DiNapoli said the fund once held more than 19 million BP shares, before recently selling off 1.5 million shares.

BP stock as of midday Wednesday was trading at $29.67 a share, a huge drop from the $60.48 a share before the catastrophe.

It's unclear whether the city pension fund system will join the lawsuit.

The city's five pension funds, valued at about $100 billion, as of last week held $110 million in BP stock, less than half of the $228 million the city held a month before the disaster.

The city pension funds sold off 10 million BP shares since the beginning of April, and now hold about 15 million shares.

Disgraced Pol Alan Hevesi, Aide Held Pension Talks, AG Andrew Cuomo Says by Kenneth Lovett - NY Daily News

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Disgraced former Controller Alan Hevesi. DelMundo for News

Disgraced ex-Controller Alan Hevesi met regularly to discuss pension fund business with his top political consultant - a key figure in the pay-to-play scandal.

Attorney General Andrew Cuomo charged in court papers Thursday that Hank Morris was "intimately involved in the day-to-day business" of the pension fund.

Hevesi has not been charged in the scandal, though Cuomo has repeatedly said the investigation is ongoing.

Cuomo contends Morris received kickbacks from investment companies - as much as $19 million - in exchange for securing pension fund business.

Morris, in his legal filings, doesn't deny using his connections to get pension fund business. He argues it may have been unethical, but insists it's commonplace in Albany - and legal.

Cuomo disagrees.

Hevesi's lawyer Brad Simon said his client "from time to time" met with Morris in his role as campaign manager. They discussed how to use the pension fund's performance as a campaign issue, he said.

"Alan Hevesi had no knowledge that Hank Morris was acting as a placement agent and personally benefiting in that capacity," Simon said.

Cuomo also charges that a Hevesi staffer gave the names of investors seeking pension fund business to Morris so he could solicit campaign donations.

Public Advocate Bill De Blasio Calls on Goldman Sachs to Disclose Political Spending

Public Advocate Bill de Blasio today called on Goldman Sachs to pass a shareholder’s resolution requiring full disclosure of all money Goldman spends in elections and on lobbyists. At a press conference with elected officials and advocates immediately before Goldman’s annual shareholders meeting, Public Advocate de Blasio presented petitions signed by hundreds of New Yorkers demanding that financial institutions, including Goldman, disclose all their political spending.

“This year the Supreme Court gave corporations the ability to spend without limit or restraint in our elections. With crucial financial reforms being debated in Congress right now, shareholders, consumers, and citizens deserve a new level of openness and accountability from the banking industry. Goldman Sachs has made some progress but today they have an opportunity to commit to an even greater level of reform and transparency.”

"In this era of unlimited corporate spending and influence peddling, we need complete disclosure," said Gene Russianoff, senior attorney for the New York Public Interest Research Group.

Public Advocate de Blasio is a member of the New York City Employees Retirement System (NYCERS), the largest pension fund in New York City. At the close of the last fiscal year NYCERS had $98,714,619 invested in Goldman Sachs.

In response to calls for disclosure, Goldman Sachs last year Goldman Sachs adopted a policy that it will not make corporate political contributions, including to so-called 527 organizations. However, the Company does not disclose its political spending through trade associations, such as the Chamber of Commerce, and other tax-exempt groups, and has not amended its policy to clearly state that the company would not take advantage of the Citizens United decision. At its annual meeting on Friday, the Company will be considering a resolution sponsored by Domini Social Investments, which would clarify the policy, mandating semi-annual disclosure of political contributions including contributions to trade associations.

This year the financial industry has already spent over $120 million on lobbying and has made close to $30 million in political contributions in this election cycle.

NYC Comptroller Bill Thompson Moves to Ban Placement Agents, Asks State Attorney General to Investigate Quadrangle Transaction

New York City Comptroller William C. Thompson, Jr, in the wake of continuing investment scandals involving the State pension fund, is calling for a ban on the use of placement agents in investments with the New York City Pension Funds.

Additionally, Thompson has referred to the New York State Attorney General the issue of whether the Pension Funds “were intentionally misled or deceived” as to the identities of any placement agents involved in an investment by the Funds in the Quadrangle Group.

The New York City Pension Funds invested $125 million in Quadrangle in 2005 and 2006, but at no time did the Pension Funds’ consultant ever identify Hank Morris or Searle & Company as a placement agent in that transaction. In fact, in a due diligence questionnaire issued by the Pension Funds’ consultant, Quadrangle identified Monument Group and Helix Associates Limited as the only placement agents.

“The recent indictment and felony complaint by the New York Attorney General and complaints filed by the Securities and Exchange Commission have called into question the conduct of certain entities and individuals that identified themselves or allegedly acted as placement agents in connection with investments made by the New York State Common Retirement Fund,” Thompson said.

“I am extremely troubled by the allegations and believe that such improper conduct underscores the need for broad and comprehensive reform nationally with respect to the activities of placement agents. At this time, the wisest course of action would be to immediately prohibit the use of such paid intermediaries in connection with our investments.”

Thompson has called a meeting with Pension Fund trustees – who ultimately must approve the prohibition on placement agents. “We need to prevent any recurrence of the type of egregious conduct detailed in the indictment and complaints,” he said.

“The Comptroller and the many other trustees of the New York City Pension Funds endeavor to invest with the highest quality managers, not just in terms of performance, but in terms of integrity and adherence to the highest ethical standards,” Thompson said. “We take any ethical lapses by our managers seriously and will consider any remedies available to investors, and would certainly view any confirmed instances of wrongdoing as a disabling factor in any consideration of future investments.”

Trustees of the Pension Funds include Mayor Bloomberg, his commissioners, and representatives and appointees from labor unions. The funds are the: New York City Employees’ Retirement System, Teachers’ Retirement System, New York City Police Pension Fund, New York City Fire Department Pension Fund, and Board of Education Retirement System.

The Comptroller serves as a member of the Board of Trustees of four of the five Funds and is investment advisor to, and custodian of, the five. The Funds cover more than 237,000 retirees and beneficiaries and more than 344,000 City and City-affiliated employees. The Funds have combined assets of more than $82.5 billion as of December 31.

The Comptroller said the Pension Funds’ assets are invested for the benefit of the plan participants and their beneficiaries. All assets of the Pension Funds are managed by registered investment advisors.

Besides Thompson, the New York City Pension Funds’ trustees (chairs in bold) are:

New York City Employees’ Retirement System: New York City Finance Commissioner Martha E. Stark (Chair); New York City Public Advocate Betsy Gotbaum; Borough Presidents Scott Stringer (Manhattan), Helen Marshall (Queens), Marty Markowitz (Brooklyn), James Molinaro (Staten Island), and Acting Borough President Earl D. Brown (Bronx); Lillian Roberts, Executive Director, District Council 37, AFSCME; Roger Toussaint, President Transport Workers Union Local 100; and, Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.

Teachers’ Retirement System: New York City Finance Commissioner Martha E. Stark (Chair); Deputy Chancellor Kathleen Grimm, New York City Department of Education; and, Sandra March, Melvyn Aaronson and Mona Romain, all of the United Federation of Teachers.

New York City Police Pension Fund: Mayor Michael Bloomberg; New York City Finance Commissioner Martha E. Stark; New York City Police Commissioner Raymond Kelly (Chair); Patrick Lynch, Patrolmen’s Benevolent Association; Michael Palladino, Detectives Endowment Association; Edward D. Mullins, Sergeants Benevolent Association; Thomas Sullivan, Lieutenants Benevolent Association; and, Roy T. Richter, Captains Endowment Association.

New York City Fire Department Pension Fund: Mayor Michael Bloomberg; New York City Fire Commissioner Nicholas Scoppetta (Chair); New York City Finance Commissioner Martha E. Stark; Stephen Cassidy, President, James Slevin, Vice President, Robert Straub, Treasurer, and John Kelly, Brooklyn Representative and Chair, Uniformed Firefighters Association of Greater New York; John Dunne, Captains’ Rep.; John J. McDonnell , Chiefs’ Rep., and James J. McGowan, Lieutenants’ Rep., Uniformed Fire Officers Association; and, Joseph Gagliardi, Marine Engineers Association.

Board of Education Retirement System: mayoral appointees Schools Chancellor Joel Klein (Designee, Kathleen Grimm, serves as co-chair), Alan Aviles, Philip Berry, David Chang, Tino Hernandez, Edison O. Jackson, Richard Menschel and Marita Regan; Patrick Sullivan (Manhattan), Wendy Gilgeous (Brooklyn), Joan Correale (Staten Island); and Dmytro Fedkowskyj (Queens); Anna Santos (Bronx); and employee members Joseph D'Amico of the IUOE Local 891 and Milagros Rodriguez of District Council 37, Local 372 (serves as co-chair).