Attorney General targets pension fraud

Pension fraud, taxpayer's wasted dollars, and government complacency was not a joke for this April Fools day message.
New York State Attorney General Andrew M. Cuomo began a four-city tour Thursday morning at UB's Charles B. Sears Law Library. Cuomo announced his primary initiatives to protect taxpayers' dollars through his ‘Pension Padding' investigation.
Cuomo's investigation commenced this past March, where letters were sent to seek payroll and related data for pension recipients from localities across New York.
During the press conference hosted at UB, Cuomo announced that the investigation has expanded to include more than two-dozen additional localities across New York State.
According to recent census data, pension payments to retirees in the Employees' Retirement System and the Police and Fire Retirement System have increased from $3.5 billion in 1999 to more than $7.3 billion in 2009.
According to Cuomo's press release, New York taxpayers end up bearing the burden caused by excesses in pensions through increases in their property taxes.
"There are no shortages on the challenges facing the United States, in New York State or locally like the city of Buffalo," said Stephen J. Acquario, executive director of the New York State Association of Counties."
As the comptroller for Eric County positions himself behind the podium as the next speaker, the importance of this issue for the benefit of the taxpayer is evident to the gathered observers.
"Taxpayers and homeowners cover burden of out of controlled budgets," said Erie County Comptroller Mark C. Poloncarz. "These concerns have been on the backburner for too long."
John B. Simpson introduced Cuomo, along with Maria Vullo, executive deputy attorney general for economic justice, Mark Poloncarz, Erie County comptroller, and Stephen Acquario, executive director of the State Association of Counties.
The attorney general began his speech by applauding UB for its UB2020 efforts and explaining the rewards of moving from the private to public sector of law by mentioning Vullo's rewarding experience in the state government. Cuomo went on to explain the foundations of the pension investigation and the fraud that had gone unnoticed for years.
"Things that were okay for a lot of years are not okay today," Cuomo said. "We have to take a new look at everything we do and find out if there is a better way to do what we are doing. Everyone has to do this: families, companies, local and state governments have to do this."
Cuomo explained that in order to find the inefficiencies in our system, you must ‘follow the money.'
"You start with the big numbers, you follow the money," Cuomo said. "A very large number that jumps off of the paper at you is the pension system, which is $130 billion and is about the same size as the annual budget for the entire state."
Taxpayers pay for the pension fund and their contribution rate has doubled in the past 10 years, leading to an investigation into the situation.
"The cost per person for the pensions is around $486 per year," Cuomo said. "We found that there was fraud and inefficiency all throughout the system. So far, six people have pled guilty and we have recovered $100 million for the taxpayer from firms that were acting illegally."
Cuomo mentioned that the majority of fraud was found on the local level, from lawyers who maintained a public employee title in order to receive health care and pension benefits. There were also a major number of inefficiencies in the system where employees inflated their income in the last three years of their career in order to inflate their pensions.
"This situation, like many situations you find, has been going on for a long time," Cuomo said." Everyone knows it, but no one has done anything about it. Our point is, ‘Enough is enough.'"
Cuomo has issued letters to a total of 64 localities so far in order to address these inefficiencies with ‘pension padding.' Erie County and Roswell Park Cancer Institute are among the 28 local and state agencies throughout New York targeted in the investigation.
Cuomo plans to make progress in gaining control over pension plans through investigating localities that have some of the highest proportions of pension costs in the state.
"The first pledge of the government is that we are going to use it as a vehicle to do good things and to make a stronger community," Cuomo said. "We are going to do this as respect to the taxpayers because at the end of the day, that's who we all work for and if we aren't delivering for the citizens, then who are we delivering for?"
Local elected officials were also in attendance this morning, including Buffalo Mayor Byron Brown, Assemblymen Sam Hoyt and Dennis Gabryszak, and State Senators William Stachowski and George Maziarz.
After the press conference, Cuomo was probed as to whether or not the conference could have been done in Albany rather than through a four-city tour, inferring it amounted to a political campaign.
Cuomo, however, refused to mention whether he was planning on running for New York State governor, insisting that if that is his decision, he plans to make a political announcement closer to the election.

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