D.A. cites ‘lack of cooperation’ in Long Beach payout probe

A criminal probe into Long Beach’s separation payouts has been hampered in more than one way, according to Nassau County District Attorney Madeline Singas, whose office is conducting the investigation.

The probe, she wrote in an Aug. 29 letter to the city, has “been delayed by a lack of cooperation by some critical witnesses and the unavailability of certain records that may be material to our review.”

Singas made her comments in a letter, obtained by the Herald, to members of the City Council and Acting City Manager Rob Agostisi, after a draft of a comprehensive audit of Long Beach’s finances was provided to the city by State Comptroller Tom DiNapoli’s office, which began its review more than a year ago in the wake of a fiscal crisis and questionable separation payouts to employees that sparked an outcry among residents.

Singas, whose office has been investigating payments made to certain current and former Long Beach officials and employees for accrued sick leave and vacation time since April 2018, said her office has collaborated with DiNapoli’s office throughout the criminal investigation.

“The OSC audit staff conducted an exhaustive examination and, at our request, delayed the release of their draft audit to accommodate certain investigative steps that we hoped to complete before the comptroller’s findings were released,” said Singas, who added that the investigation was delayed by a lack of cooperation by some witnesses and the unavailability of certain records.

Last year, council members Anissa Moore and John Bendo voted against a $2.1 million borrowing measure to cover payouts in the 2017-18 fiscal year to 57 union and non-union employees — including a number of payments to employees who remained on the payroll, and a $108,000 payment to then City Manager Jack Schnirman, who is now the county comptroller. The dissenting votes led to the rejection of the measure.

Schnirman was overpaid by more than $50,000 for accumulated sick time, according to a Herald analysis of his payout documents that year. Schnirman received a payout amounting to at least 100 percent of his accrued sick days when he left the city’s employ in January 2018, even though the city’s Code of Ordinances states that non-union, or management, employees like Schnirman should be paid 30 percent of total accrued sick days at the time of separation. Schnirman’s employment contract also specified that he should be paid 30 percent.

City officials have said that the city manager has discretion over the code, based on a legal interpretation that dates back to 1997.

Last week, Moore, the council’s new president, called on DiNapoli and Singas to release the results of their ongoing investigations into the city’s payout practices, saying that residents have demanded answers for more than a year. Moore also called for “full restitution” to the city for any overpayments that may have been improperly given to employees.

“At the August 20, 2019 meeting of the Long Beach City Council, Council President Anissa Moore called for information about the status of our criminal investigation and the comptroller’s audit,” Singas wrote. “Council President Moore also expressed concerns about the city’s expenditures for the legal representation of city officials. Because our criminal investigation is ongoing, I must exercise restraint in my comments. However, having reviewed the records obtained by the comptroller and the auditors’ findings and recommendations, it is clear that the city’s policies and procedures are inadequate, that current and former city officials failed to comply with the plain language of the City Code and former city manager’s contract, and the City Council has not adequately exercised its oversight authority.”

A spokesman for the city could not immediately be reached for comment. Singas’s office declined to comment.

In response to Singas, the attorney respresenting the city in the probe, former federal prosecutor Anthony Capozzolo, criticized the district attorney in a letter obtained by the Herald Thursday, saying it was inappropriate of her to express her opinions on the findings of a draft report.

"One purpose of the comptroller providing a draft report ... is to provide the city with the ability to be heard and respond to the report, so that when it is made final — public — it might better reflect a complete picture of what occurred," Capozzolo wrote. "Doing otherwise would deprive the city of its due process before the comptroller's office and fundamental notions of fairness."

Capozzolo added that "at all times," he made "each and every witness" available to Singas's office.

Council members and city officials received a draft of the state audit on Thursday afternoon.

"The City Council will focus their efforts on ensuring that all information requested will be provided to the D.A. and comptroller's offices in a timely manner to bring this long process to a close," Moore said in a statement. "The council remains committed to protecting our residents and restoring their trust in local government."

State says audit is ongoing

Jennifer Freeman, the communications director for DiNapoli’s office, said she could not confirm whether the city received a draft of the report, and emphasized that the audit was still ongoing. The state declined to release the draft to the Herald.
　
“The audit of Long Beach is still under way and we do not comment on audits that are underway,” Freeman said in a statement. “As you may know, as part of the audit process, a municipality is given the opportunity to comment on a draft audit. Until that is complete, the audit is not final.”

Typically, people familiar with the audit process said, the city is given 30 days to review and respond to a draft of an audit and comment on the state’s findings. The comptroller’s office then decides whether adjustments and revisions should be made.

“We continue to work with District Attorney Singas and the Nassau County District Attorney's office,” Freeman said.

In March, DiNapoli’s office said that it expected to release part of what was described as a comprehensive audit of the city’s “fiscally stressed” finances this summer, which was being conducted in two parts.

The first part, an examination of separation payouts and drawdowns of accrued time to union and non-union employees — the City Council called on DiNapoli last year to look at the past six fiscal years to determine whether payouts were proper — was slated to be released this summer, though no specific date was set. The second part, a review of the city’s overall finances, was expected to be released by the end of the year.

Freeman declined to say whether the draft only included a look at
payout practices or the city’s finances as a whole.

“I hope that comptroller’s determination that payments were made in excess of the limits established in the City Code and the former city manager’s contract moves the city not only to take the recommended remedial actions immediately — including seeking repayment to the city for any inappropriate disbursements and implementing reforms detailed in this and earlier audits — but to cooperate fully and expeditiously with our criminal investigation as we seek to conclude it,” Singas wrote.