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Monday, February 16, 2009

Gov. Paterson Gives Huge Raises To His Staff, While Cutting the Budget

Dismay, outrage, and frustration at the "accidental Governor" has New York City and New York State residents wondering how we will not only get through to the next election for the governor's seat, but whether or not David Paterson's lack of leadership and waffling in political mud will prevent him from moving important matters anywhere.

First, there was the terrible delay as Caroline Kennedy and others waited for David Paterson to "decide" who would take Hilary Clinton's place in the Senate. Kirsten Gillibrand is just too connected politically to political has-beens (i.e. Alfonse D'Amato) for comfort. See this posting:

Democrat Kirsten Gillibrand, this minute's “front-runner” for the U.S. Senate seat which is now the subject of a competitive reality show, won in a heavily GOP Congressional district in 2006 for the first time, a seat that had been held by former Republican state director John Sweeney. Given popular sentiments in her region, it is logical that she hews to a conservative line, such as her 100 percent rating from the National Rifle Association, sometimes out of step with party policy. Does that change once she’s in the Senate, as a rookie under the tutelage of gun-control advocate Sen. Charles Schumer? Probably; it’s usually practicalities before principle in these situations, as the veterans might tell you.

Her family background is of interest. She’s the daughter of lawyer and lobbyist Douglas P. Rutnik, who was steeped in the Albany Democratic machine long before he was clearly an ally of Republican Gov. George Pataki and Republican Sen. Alfonse D’Amato. Her mom, Penny Rutnik, who’d been in the law firm of her husband, is the daughter of Polly Noonan, the longtime close confidant of the late great mayor Erastus Corning.

A clip from June 1988: A company represented by Douglas Rutnik leased property at the publicly owned Port of Albany for a low price and sublet the place for a much higher rent, pocketing the difference. This of course is the very definition of a sweetheart lease. It was one of two firms he represented that drew lucrative terms. If you’re cynical, or even at all skeptical, that’s standard municipal political-machine stuff. Politics ain't beanbag.

A clip from May 1997: The state Metropolitan Transportation Authority dials back on a $95 million contract for data processing with Lockheed Martin, a company barred from city contracts because of its involvement in previous corruption scandals. Mayor Rudolph Giuliani objected to their hiring. From the New York Times: “Lockheed Martin's registered lobbyist in Albany has been Douglas Rutnik, the companion of Zenia Mucha, Gov. George E. Pataki's communications director, and a confidant of Senator Alfonse M. D'Amato. Public records show that Lockheed Martin paid Mr. Rutnik $115,000 for his lobbying efforts of the last two years. But Ron Meder, a spokesman for Lockheed Martin, said Mr. Rutnick was not involved in the efforts to win the M.T.A. data processing contract for Lockheed Martin Integrated Business Solutions.”

A clip from the New York Post, January 2007: “Fredric Dicker spoke to a longtime close Mucha friend, who described her as "off the wall" that Rutnik had replaced her in his affections with his second cousin, Gwen Lee, a lawyer who was a spokeswoman for Gillibrand and now works in Rutnik's office. To make matters worse, Mucha, at Rutnik's urging, hired Lee for several well-paid positions during her six years in the Pataki state house....”

Then, Gov. Paterson nominated Jonathan Lippman to the position of Chief Judge of the New York State Unified Court System, and he was confirmed in a secret meeting rushed through the Senate the day after Wayne Barrett wrote a background expose of Lippman's tie to Assembly Speaker Sheldon Silver. I am one of many victims of Judge Lippman's corrupt management of the Courts in New York City, and can say (and I will), that this choice puts justice in a closet.

Luv From the Guv: Staffers Get Secret Raises: at least a dozen aides get pay increases, report says
Updated 6:30 AM EST, Mon, Feb 16, 2009

Gov. David Paterson issued raises for some of his aides, according to a report in Monday's Post(See article below - Betsy C.)

The state's financial crisis apparently isn't that bad.

In fact, the treasury is so fat that Gov. David Paterson has given raises -- in some cases nearly 50 percent -- to at least a dozen staffers, according to Monday's New York Post.

The pay hikes total about $250,000 annually and were issued just after Paterson's August announcement of a looming financial "emergency" that was going to eliminate raises for 130,000 state employees.

Among the most recent raises was one last month, right around the time when the governor declared the budget shortage had reached a record $15.5 billion, the Post reported.

By FREDRIC U. DICKER, February 16, 2009

ALBANY - Gov. Paterson has secretly granted raises of as much as 46 percent to more than a dozen staffers at a time when he has asked 130,000 state workers to give up 3 percent pay hikes because of the state's fiscal crisis, The Post has learned.

The startling pay hikes, costing about $250,000 annually, were granted after the governor's "emergency" declaration in August of a looming fiscal crisis that required the state to cut spending and impose a "hard" hiring freeze.

One raise was approved as recently as last month - when Paterson claimed the budget deficit had reached an unprecedented $15.5 billion.

The raises, which have stunned the few state workers who know about them, are outlined in data obtained from the office of state Comptroller Tom DiNapoli,(pictured at left and below) prepared at The Post's request.

Two of the raises were tied to publicly proclaimed promotions - granted despite the supposed hiring freeze - of some of Paterson's most important appointees, although the announcements didn't include disclosure of the pay hikes.

The remaining 14 raises appear to have gone to individuals who remained in their same positions, despite claims by a spokesman for Paterson that they had been promoted.

"These are not raises for old positions, rather new salaries for new positions," Paterson spokesman Errol Cockfield insisted.(pictured at right)

But a DiNapoli spokesman, Dennis Thompkins, said flatly, "These are individuals who stayed in their same position and received a salary increase."

Paterson's top aide, William Cunningham, a one-time law partner of the governor's father, Basil, saw his pay jump 5 percent to $178,500 - just $500 less than Paterson himself - from $170,000 on Nov. 7, after he was promoted from a temporary "acting" secretary to permanent.

New York Governor David Paterson (C), New York State Deputy Secretary for Labor Charlotte HitchCock (L) and New York Superintendent of Insurance Eric Dinallo (R) announce a deal to provide loan assistance to insurer AIG, in New York, September 16, 2008. The U.S. Federal Reserve Board on Tuesday said the Federal Reserve Bank of New York will lend up to $85 billion to the American International Group in a plan aimed at saving the insurer from a "disorderly failure" that could wreak economic havoc.

Charlotte Hitchcock, one of Cunningham's deputies and a personal friend of the governor's, received an $18,000, or 11.25 percent, raise on Dec. 22. While a press release said she was promoted from deputy secretary to "chief of staff" and "director of financial regulation," it made no mention of a higher salary.

Cassie Prugh, a confidential assistant, was given a 46 percent pay hike in late November, raising her annual salary to $125,000 from $85,721, while Gaurav Vasisht, an assistant counsel, received a 6 percent, $7,427 increase in December, bringing his salary to $130,279.

Miss USA 2008 Crystle Stewart, Mindy Bockstein, Executive Director of the NYS Consumer Protection Board and Brendan Fitzgerald representative from the office of the Governor of New York State, meet President of the Harlem Children's Zone, Mr. Canada and several children during the launch of her PSA campaign under the Consumer Protection Board’s toy safety campaign.

Brendan Fitzgerald, a special office assistant, received a 21 percent, or $15,737, pay hike only last month, bringing his salary to $90,000, while Michael Deloach, another confidential assistant, saw his pay leap 29 percent, or $18,200, to $80,000 in August.

Lauren Passalacqua, a confidential secretary, saw her salary jump $12,000, or 31.5 percent, to $50,000, while the salary of another confidential aide, Chardee Mendoza, (pictured at right) was hiked $10,000, or 28.5 percent, to $45,000.

Disclosure of the secret pay hikes comes as Paterson is under attack for spending well over $20,000 in state funds on a four-day stay for himself and several aides during President Obama's inaugural last month, and for planning a state-funded junket to Davos, Switzerland, which he canceled only after his plans became public.

Paterson, in his budget proposal outlined in December, demanded that state workers who belong to the Civil Service Employees Association and the Public Employee Federation forgo negotiated, 3 percent pay hikes that would kick in April 1 or face massive layoffs.

NY Governor Paterson Under Fire for Staff Pay Hikes
by Carolyn E. Price,

After mishandling the "Kennedy / Clinton" saga last month, New York's governor, David Paterson has secretly given out pay increases ranging from 5% to 46% to his own staffers after asking state workers to give up their 3% pay increase in April of 2009.

The New York Post is reporting that Gov. Paterson has secretly given staffers pay increases over the last few months, all this after imposing a hiring freeze, proposing billions in dollars of cuts to the state budget and after asking state workers to forgo their negotiated 3% increase slated to come into effect in April, 2009.

The list of increases include:

Paterson's secretary, William Cunningham, received a 5% increase in salary when he was "promoted" from acting secretary to secretary, bumping his salary from $170,000 to $178,500.

Cunningham's deputy, Charlotte Hitchcock, was promoted from deputy secretary to chief of staff and was given an 11.25% increase bumping her salary from $160,000 to $178,000.

Assistant counsel, Gaurav Vasisht, received a 6% pay hike, to $130,279. Cassie Prugh, a confidential assistant, received a whopping 46% pay hike, bumping her salary from $85,721 to $125,000.

Press aide Erin Duggen received a 5% pay hike to $105,786 while special office assistant, Brendan Fitzgerald, received a 21% raise, to $90,000. Another confidential assistant, Michael Deloach, got a pay hike of 29%, to $80,000 and yet another press aide, Morgan Hook received an almost 13% pay hike to $79,568.

A legal assistant, Ryan Dalton received a 17% increase to $52,000 while confidential secretary Lauren Passalacqua was rewarded with an almost 32% pay raise to $50,000. Another confidential aide, Chardee Mendoza, got 28%, to $45,000 while confidential stenographer Erin Donohue received 10% to $43,000.

The increases handed out by Paterson amount to $250,000 per year, a mere drop in the State of New York's $121 billion annual budget, but surely one must see the hypocrisy of Paterson's recent actions. After asking state employees to forgo a negotiated 3% pay increase he hands out raises to his inner staff ranging from 5 to 46%?

The public sector unions in New York have responded to Paterson's requests by flooding the airwaves with advertising and lobbying campaigns. The New York Times is reporting that the radio and television campaigns are costing the health care sector alone about $1 million a week.

NY Gov Staff Gets Secret Raise Amid Pay “Freeze”

Despite asking New York State workers to forgo a 3% salary increase due to the state’s fiscal crisis, Governor David Patterson has granted pay raises to more than a dozen members of his staff totaling US$250,000 annually.

Gov. Patterson declared a “fiscal emergency” in August 2008 when the NY State budget reached US$15.5 billion and ordered a “hard” hiring freeze and cutting fiscal spending.

Those getting a raise include Paterson’s top aide, William Cunningham, a one-time law partner of the governor’s father; Charlotte Hitchcock, one of Cunningham’s deputies and a personal friend of the governor’s; confidential assistant Cassie Prugh; special office assistant Brendan Fitzgerald; and confidential secretary Lauren Passalacqua.

This is not the first time Gov. Patterson has been busted abusing tax payer money during a self-imposed “fiscal crisis”. The governor spent more than US$20,000 on hotels on himself and friends to attend Barack Obama’s innauguration last month, and was forced to cancel a trip to Davos, Switzerland to attend the World Economic Forum, which planned to atttend on the public’s dime.

GOP head: Paterson should return money spend on D.C. hotels
By Jay Gallagher, Ithaca Journal, Albany Bureau

ALBANY — Gov. David Paterson should immediately return the nearly $20,000 he and aides spent on hotel rooms in Washington, D.C., during President Barack Obama's inaugural celebration last month, the chairman of the state Republican Committee said Friday.

"While the governor and his entourage were staying in unbelievably overpriced $1,200-a-night hotel rooms and attending inauguration parties and events, families are slashing their household budgets and making do with the bare-bones necessities of life,'' said the chairman, Joseph Mondello.

"Even worse, while Gov. Paterson and his aides are working the party circuit, he is trying to ram through countless tax hikes that will further constrain family budgets and businesses' bottom lines,'' he said.

Gannett News Service reported Friday that Paterson and three aides spent a total of $19,350 to stay in hotel rooms for four nights during last month's festivities.

A Paterson spokesman defended the spending, pointing out that hotels required a four-night minimum stay and prices were inflated because of the event.

"Gov. Paterson, like many other governors from across the country, represented his state at a moment of national importance,’’ said spokeswoman Marissa Shorenstein. “Due to the overwhelming demand that greatly exceeded supply, hotel rates in Washington D.C. were unusually high and based on several night minimums."

A further check of records Friday showed that Paterson and one of his aides who also went to Washington, special assistant David Johnson, each charged the state $947.04 for airplane tickets shortly before the inauguration. Communications director Risa Heller also charged a plane ticket for the same amount on the same day, according to state records.

There was no immediate word on what other expenses the state officials at the inaugural, which also included Paterson's chief of staff, Charlotte Hitchcock, and his secretary, William Cunningham, might have incurred and charged to taxpayers during the four-day celebration.

Paterson has been saying for months that the state faces an unprecedented fiscal crisis, and has proposed about $9 billion in spending cuts and between $4 billion and $5 billion in new taxes and fees to balance the budget. But it's clear that at least some of those cuts and tax hikes are likely to be rolled back because of billions of extra dollars the state expects to get from the federal stimulus package.

Still, according to Mondello, the spending on hotels in Washington sends the wrong message.

"The only respectable thing for the Governor to do would be to return that money immediately, so that already overburdened taxpayers are not forced to pick up the tab for his overpriced, outrageous expenses,'' he said.

By FREDRIC U. DICKER, NY POST, February 9, 2009

GOV. PATERSON'S top staff is a rudder less collection of indecisive bureaucrats whose day-to-day operations are wracked by internal chaos and fraught with divided loyalties, key insiders have told The Post.


Things have gotten so bad that even some of the governor's most loyal allies in the Legislature have begun clashing on a regular basis with Paterson's staffers, whom they call incompetent and politically tone deaf.

Here's how senior Paterson aides are viewed by the insiders:

* William Cunningham, chief of staff: A secretive Long Island lawyer and longtime political operative. Widely described as indecisive and unfamiliar with statewide issues, afraid to take stands during policy talks, and often seems to be checking with someone other than Paterson before giving directions to staff.

* Special adviser Jon Cohen: A politically ambitious, Long Island-connected physician with no clear portfolio. He has, according to an insider, "an incredibly inflated view of his own talent."

* Deputy secretary Charlotte Hitchcock: A former lawyer for Assembly Speaker Sheldon Silver (D-Manhattan) who handles key financial issues for the governor, she's described as insecure, easily rattled, verbally abusive and still close to Silver's staff. "She's in totally over her head," said an experienced policy expert.

* Deputy secretary Larry Schwartz: A longtime Democratic operative in Suffolk and Westchester Counties, Schwartz began work as Cunningham's senior deputy last week.

While Schwartz is credited with administrative and political skills, he's not a policy expert and has had no experience dealing with the massive problems facing the state.

* Chief counsel Peter Kiernan: A solid, experienced lawyer with little political juice. "He's not in the room at all," was how one source put it.

* Budget Director Laura Anglin: Seen as closer to Silver's "competent" staff than what she sees as her own less-than-stellar Paterson administration colleagues.

* Director of state operations Dennis Whalen: Longtime bureaucrat and son of a former state health commissioner, he's a competent administrator but lacks strong ties and access to Paterson.

Who is William Cunningham?

Paterson's new senior adviser will be a 'No' man
DAN JANISON,, April 14, 2008

As Albany's sudden transition keeps churning the executive personnel at the Capitol, Long Island lawyer William J. Cunningham III is preparing to become a kind of "No" man.

At least, that's how his fans like to tell it. Democratic insiders expect that as senior adviser to Gov. David A. Paterson, Cunningham will take on the role of vetting ideas and strategies. Precise duties of his $170,000 post remain hazy, but sources call him "sounding board," "minister without portfolio" and "confidant" - the opposite of a "Yes" man.

Cunningham, 56, is a longtime friend of Basil Paterson, the governor's father. They worked together until 2002 at the Garden City law firm of Meyer, Suozzi, English and Klein, where Nassau County Executive Thomas Suozzi's father, Joseph Suozzi, is a prominent partner.

"I've known the governor for about 15 years," Cunningham told Newsday. "I got to know David through his dad. I'd say one of the things David and I have as a common bond is we both love his parents Basil and Portia. ... Our paths would cross frequently enough that on Inauguration Day he [the governor] asked to speak with me and took me aside. I met with him the following week."

Cunningham won't oversee agencies but will take on varied projects and, as he puts it, "specific issues as they arise." He's known major-league political tempests. In 2001, fresh from serving as campaign treasurer in Hillary Rodham Clinton's first Senate run, he was thrust into a controversy over two Arkansas clients who received criminal pardons from the departing President Bill Clinton. They'd been referred, he said, by Clinton adviser Harold Ickes, Cunningham's law associate at Meyer Suozzi - whose labor practice Ickes co-chairs with Basil Paterson, while working for the Clinton campaign. Lightheartedly, he recalls that for all the furor, the firm collected a fee of $4,100 for the case.

Thomas Suozzi plucked Cunningham from the firm in 2002 to be his chief deputy. The Paterson hire was announced last Monday - just as Suozzi fervently disputed rumors that he planned to run a primary to replace Paterson in 2010. Suozzi calls the departing Cunningham "an enormously talented person dedicated to public service." He called the appointment "great" for Cunningham, Paterson, Long Island and the state.

Pushed by Suozzi in 2003, Cunningham ran a Democratic primary for county executive in Suffolk. (He lives in Bay Shore with his wife, Terry, a librarian at St. Peter's School). That contest ignited a cross-border clash with Steve Levy, who ultimately won, and his ally Richard Schaffer, the Suffolk Democratic chairman. Both men insist bygones are just that.


A shake-up in Gov. David A. Paterson's inner circle may be in the offing. After communications director Risa Heller (pictured at right) resigned, Paterson said Friday he would examine the "chemistry" within his nearly year-old administration. He should have done so earlier, he said, but was delayed by the recession and the lack of a transition period after his sudden promotion following Eliot Spitzer's resignation.

"I never seemed to get to ... my own little reorganization," Paterson said. "It's not that we haven't had good people but it's the chemistry and the system that you have. And I never had a chance to really look at it and I realize now ... that I should do that."

Paterson was roundly criticized about his selection process in replacing Hillary Rodham Clinton. Heller's departure follows that of homeland security czar Michael Balboni of Mineola, and top aide Charles J. O'Byrne. O'Byrne was replaced by William J. Cunningham III of Bay Shore.

- James T. Madore in Albany

Paterson flak resigns amid trouble for his image

And so, Risa Heller has departed as the governor's communications director. Whether she jumped or was pushed doesn't really matter from the general public's standpoint.

If anyone high up in the Paterson administration thinks they've now solved their image problems rooted in the $20,000 in inaugural hotel costs, the Caroline Kennedy leak fiasco, the zig-zags involving his appointment of a senator and a chief judge, the petty infighting between aides over office space and who-yet-knows-what-else, they are kidding themselves.

Both Heller and Paterson say in the news release she will "pursue other opportunities."

For the full bury-it-on-Friday-evening statement, click 'continued' line below.


Governor David A. Paterson accepted with regret the resignation of Risa B. Heller and issued the following statement:

“My Communications Director, Risa Heller, has told me of her intention to depart state government service to pursue other opportunities. I want to thank Risa for the experience, judgment and counsel she brought to my Administration. She is an exceptional professional who has been an invaluable advisor to me. I wish her the best in her future endeavors.”

Ms. Heller said: “It has been a tremendous honor to work for Governor Paterson during the first year of his administration. He is a tireless advocate for the people of New York, and I am proud to have served him. I have decided to leave the Governor’s office in order to pursue other opportunities. My decision comes after careful deliberation. I am excited to enter this next phase of my career and look forward to many new challenges ahead.”

Ms. Heller’s resignation will become effective after an orderly transition with her successor.

Ex-Suffolk official a new top Paterson aide
Lawrence Schwartz,(at right) a onetime top aide under Suffolk County Executive Pat Halpin, is joining Gov. David Paterson's office as a $178,000-a -year first deputy secretary, reporting directly to the Governor and another Long Islander, William Cunningham, who is secretary to the governor.

Schwartz, who has worked as the $157,000 a year top deputy to Westchester County Executive Andy Spano (photo) for the past decade, will begin in the new job Feb. 2. In a prepared statement, Paterson said his administration “will benefit greatly” from Schwartz’s “insight and breadth of experience.”

Schwartz, 51, who grew up in Port Jefferson Station, was the hard-nosed top political aide who helped engineer Assemblyman Patrick Halpin's upset victory as the first Democrat in 18 years to win the county’s top job. But Halpin lasted only one term in the face of the 1991 economic slump, which like the current crisis, resulted in the first decline in sales tax revenue in decades.

“He has a keen political sensibilities and and an intimate knowledge of Long Island and regional issues which bodes well for both the county and the state,” said Halpin, of his former aide.
Skelos: Paterson lied about attacks on Kennedy
January 28, 2009

ALBANY - State Senate Minority Leader Dean Skelos yesterday accused Gov. David A. Paterson of being untruthful about his support for a property tax cap as well as about attacks on Caroline Kennedy after she bowed out of the U.S. Senate race.

"You see [Paterson's] history of trying to modify history. I'm not going to call him Pinocchio but ...," Skelos (R-Rockville Centre) told reporters. He cited Democrat Paterson's call last year for capping increases in school property taxes and subsequent anger when the then-GOP-controlled Senate adopted the measure.

Skelos also said he didn't believe Paterson's statement of not knowing that his aides leaked information about Kennedy to Newsday and other news outlets after she dropped her Senate bid last week. The aides alleged that her withdrawal was linked to questions about prior tax payments and reporting the employment of household help.

"I think the governor knew of some of the activities that went on. ... I can't prove that, but that's my gut" feeling, he said.

Minutes earlier, Paterson had issued another denial of knowledge of the leaks and condemned the rumormongering about Kennedy. He ruled out an investigation, however.

"I'm not going to hunt down scurrilous rumors from sources I don't know. ... I don't have any information about those types of attacks," he said. "I had nothing to do with any negative characterizations of any candidate, particularly Caroline Kennedy. "

Asked to respond to Skelos' criticism, a Paterson spokesman referred to the governor's comments made before the senator's news conference.

Paterson said that he and top aide William J. Cunningham III had spoken to staff about keeping information confidential.

Paterson also again admitted that his public musing about who should succeed Hillary Rodham Clinton was a mistake. "Revealing how I felt every day confused the process and [I] would have probably acted differently in retrospect. "

As he left the Capitol's Red Room, he would not respond to a question about whether he had apologized to Kennedy.

A Kennedy spokesman didn't return messages.

Separately yesterday, Paterson and leaders of the legislature's majority conferences - all Democrats - predicted they would reach agreement on closing this year's $1.6-billion budget deficit by Feb. 5, four days after Paterson's deadline.

He warned the deficit is growing, though at a slower pace than in late 2008.

Assembly Speaker Sheldon Silver (D-Manhattan) said, "The deficit reduction plan ... we are fairly confident collectively that we will be in a position to act on it sometime toward the end of next week. "

Republican minority leaders Skelos and Assemb. James Tedisco of Schenectady weren't invited to the leaders' meeting, generating outrage from both.

N.Y. comptroller expects massive job losses across the state
Posted by jthompso November 24, 2008 11:11AM

ALBANY, N.Y. (AP) -- New York Comptroller Thomas DiNapoli says the financial crisis gripping Wall Street and the world economy could cost the state and New York City 225,000 jobs over the next two years.

DiNapoli says instability in the securities industry could also cost the state and city $6.5 billion in tax revenue during that same period.

The report issued today suggests the city and state may need a federal bailout despite the efforts of Gov. David Paterson and New York City Mayor Michael Bloomberg to close budget deficits.

DiNapoli says the financial industry in New York City has already lost more than 16,000 jobs and could lose a total of 38,000 jobs by next October.

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