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23 LI school districts have private lawyers on rolls

BY SANDRA PEDDIE AND EDEN LAIKIN | sandra.peddie@newsday.com
eden.laikin@newsday.com

March 28, 2008

Twenty-three school districts -- nearly one-fifth of all the school districts on Long Island -- improperly reported private attorneys as employees, which helped the attorneys earn public pensions totaling more than $342,082 a year, plus health benefits worth thousands more, a Newsday review of records has found.

In some cases, a town, village, library, special district or county also reported the attorneys as employees, often as full time, even though records show they did not always work full time. By being reported as employees at these other agencies, while also working in private practice, they were able to enhance the size of their state pensions.

The employment arrangements -- some of which started in the early 1970s and continue to this day -- enabled a select group of 10 attorneys to garner generous public benefits, even as they earned millions in legal fees as well, state and school district records show. Three of the 10 have not yet begun receiving their pension.

Among the attorneys is one currently collecting a six-figure public pension, a Republican Nassau County legislator and a member of a prominent Republican law firm. Although most of the attorneys declined to comment, those who did speak with a reporter said they were following previous practice when they got onto the public and school district payrolls. Two recently changed their status from employee to independent contractor.

Called into question

The issue of independent contractors being treated as employees so they could obtain public benefits has been called into question after Newsday reported on the case of Centerport attorney Lawrence Reich. Five school districts falsely reported him as a full-time employee, enabling him to collect a pension of nearly $62,000 and health benefits for life.

About three weeks ago, the New York State Comptroller's office found that Reich did not meet the standards used by the Internal Revenue Service to determine whether someone is an employee. As a result, he must pay back the pension he has been collecting since September 2006.

The FBI, IRS and New York Attorney General's Office all have launched investigations of lawyers being carried as employees by school districts.

The group of 10

The attorneys uncovered in state, district and county records are:

Private attorney Albert D'Agostino, 64, who has served on boards in Nassau County and Hempstead, currently collects a public pension of $106,702 -- thanks to the fact that three school districts, and a village, town and county all claimed him as an employee. His pension was based on his three highest years of salary, which he earned at three school districts and Nassau County. After he retired in 2000, D'Agostino's firm has continued working for at least three school districts, earning more than $2 million in fees.

Nassau County Legis. Richard Nicolello (R-New Hyde Park), 48, has been carried on the payroll of the New Hyde Park-Garden City Park school district for more than 20 years -- receiving health benefits for part of the time, as well as pension credits -- even while the district paid his law firm tens of thousands of dollars in fees.

Gil Henoch, 75, a partner in a prominent law firm that includes state Republican leader Joseph Mondello, earned a public pension of $11,561 after the Hempstead and East Meadow school districts reported him as an employee. State records show Henoch was paid $30,344 for a single day's work at the Hempstead school district in 1995. State records show he worked a day or less each year for Hempstead from 1988 through 1997, although Henoch said he worked more than that. Hempstead also paid his firm retainer fees, he said.

William Englander, 81, of Port Washington, was reported as an employee of six different school districts -- three of them full time -- in the same year. He retired with a public pension of $25,292 in 1996 and went right back to work for three school districts, earning more than $268,000 through the 2002-2003 school year.

Lloyd Harbor attorney William M. Cullen, 56, has been accruing pension credits since 1983 because the Franklin Square school district and the Brentwood and Half Hollow Hills libraries reported him as an employee. State records show Cullen began as a Franklin Square school employee in 1990, collecting an annual salary of about $20,000. Since 1998, the earliest year for which school records are available, the district has also paid his firm, Behrens, Loew & Cullen, $564,530. After Newsday reported on Reich, Cullen changed his status from employee to independent contractor, school and library officials said. He left the Half Hollow Hills Library in 2002.

Dominick Minerva, 67, former mayor of the Village of Valley Stream, currently collects a state pension of $97,185. After starting a law practice in 1975 with D'Agostino, Minerva was reported as an employee of one school district, two authorities and a sanitary district at the same time, which augmented his pension.

LeRoy Van Nostrand Jr., 90, retired in July 1979 with an annual pension of $5,855, after he was listed as an employee of the Plainedge, Amityville and West Babylon school districts at the same time.

Those seven attorneys are in addition to the three attorneys reported on earlier by Newsday -- Reich, Jerome Ehrlich and Carol Hoffman -- who earned public benefits while in private practice.

Nicolello, Hoffman and Cullen have not yet begun collecting pensions, records show. Nicolello gave up his school health benefits after being elected to the Legislature, which provides benefits, he said.

In an interview, Nicolello stressed that he never claimed more than part-time credit for his schoolwork. He said he recently changed his status at the district to independent contractor from employee.

"I looked at what the comptroller said, and it was a matter of elevating form over substance," he said.

Henoch, who started as an employee of the Hempstead school district in 1971, said in an interview that he received health benefits from the district. But "I never asked to be in the retirement system. When I was hired, they put me on. ... Many districts did the same things with their lawyers."

The other lawyers did not return repeated calls for comment.

Reviewing the records

Records reviewed by Newsday show that at least 23 school districts carried the private attorneys on their payrolls, and in most cases, also paid them retainer fees. Thirteen of the school districts are in Hempstead town, three in Babylon, three in North Hempstead, two in Oyster Bay, one in Smithtown and one in Huntington.

Most districts carried only one lawyer on the payroll at a time. But state pension records show that one district, Bellmore-Merrick High School, carried two lawyers as full-time employees at the same time. From 1991-1993, the district reported both Reich and Englander as full time.

District officials issued a statement asserting that the employment arrangement was established under a previous administration.

At least one other district carried two lawyers on the payroll at the same time, according to state and school district records. Lawrence reported both D'Agostino and Minerva as part-time employees 1997 to May 1999.

David Sussman, former Lawrence board president, said he was unaware of their employment status, but added, "I don't know if we would have done anything different if we were aware, unless we were told it was not a legal arrangement."

State pension records also show both D'Agostino and Minerva were reported as employees of a number of other municipal entities, sometimes four at the same time, and in some cases, full time.

Minerva retired in May 1999 and began collecting his $97,185 pension. D'Agostino retired in October 2000 and began collecting his $106,702 pension.

Despite retiring, D'Agostino and Minerva's Valley Stream law firm has continued working for the Lawrence, Valley Stream No. 30 and North Merrick school districts on retainer, according to records and school officials.

Valley Stream District No. 30 board president Maria Fletcher said she was unaware that the district had reported him as a full-time employee from 1979 through 2000. "That's not accurate. He was a part-time employee," she said.

Attorney Englander built up his pension solely through working for school districts since 1979, records show. Most years he was reported as an employee of multiple districts, often four or five at a time.

State records show him as an employee of six different school districts in 1994. That year, three districts -- Mineola, North Bellmore and Bellmore-Merrick High School -- reported him as full time. Three others -- North Merrick, Bellmore and Smithtown -- reported him as part time.

Former Smithtown board member Maryann Zumpano said Englander's status as an employee never came up.

"Board members are lay people. They're not equipped to run a school district," she said. "The board at its annual meeting usually appoints the attorney; but the business office handles all the arrangements, and the superintendent and auditors have the ultimate responsibility to assure the board that everything is done appropriately."

Staff writer Robert Kessler contributed to this story.