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Cuomo nixes donations from supporter tied to probe

BY MICHAEL AMON AND RIDGELY OCHS | michael.amon@newsday.com and ridgely.ochs@newsday.com

11:28 PM EDT, September 19, 2007

Attorney General Andrew Cuomo's re-election campaign announced Wednesday that it had stopped accepting donations from his Long Island finance chairman.

Contributions from Lake Success attorney Howard Fensterman -- a prominent Democratic Party fundraiser -- pose a conflict for Cuomo because Fensterman is trying to buy a stake in Excellent Home Care Services, a Brooklyn company under investigation in a sweeping probe of the home health care industry, Cuomo officials said.

"His contributions will not be accepted," said Amy Dowell, finance director for Andrew Cuomo 2010, the attorney general's re-election fund.

"In conducting investigations, the attorney general's office follows the facts wherever they may lead" and without regard to campaign donations, said Steven Cohen, chief of staff for the attorney general's office.

The separate statements were issued after inquiries last week from a reporter.

Fensterman said he raised about $25,000 for Cuomo's election in late October, including $5,000 from his wife. In July, Fensterman's law firm also .donated $5,000.

Fensterman said he "wholeheartedly agreed" with the campaign's decision. He said he will not raise money for Cuomo until the probe is over.

"I think it's very important to avoid even the appearance of impropriety," said Fensterman, who said Cuomo gave him the Long Island finance title as an informal, unpaid position after the November 2006 elections.

Fensterman is also Sen. Charles Schumer's Long Island finance chairman and a leading fundraiser for Nassau County Executive Thomas Suozzi.

The campaign's statement did not address contributions made by Excellent Home Care itself, which gave $5,000 one week before the November elections, or the $2,500 donated by four nursing homes owned by Benjamin Landa, the owner of Excellent Home Care Services. Fensterman is the attorney for Landa's nursing homes -- 10 on Long Island -- and taps them in fundraising efforts.

Excellent Home Care Services is a certified home health agency that cares for developmentally disabled patients in New York City and Nassau. It has been under investigation since 2005 as prosecutors probe its billing practices, according to Health Department records. "Questions have been raised regarding the medical necessity of services" and whether the company is treating populations it was not approved for, said a Health Department memorandum issued last year.

Jerome Levy, Excellent Home Care Services' attorney, said he told Fensterman about the investigation. But Fensterman "unequivocally" denies talking to Levy about the probe and said he was unaware of it while he was raising money for Cuomo.

Fensterman applied in March to the Department of Health -- which must approve all investors in such companies -- to buy a 13.5 percent stake in Excellent Home Care Services. He signed paperwork as early as July 2006, indicating his intention to become an owner, Health Department records show. Department spokesman Jeffrey Hammond said the application won't be acted upon until the attorney general's .investigation is resolved.

The attorney general's office issued 58 subpoenas to home care agencies last month in an investigation called Operation Home Alone. The probe has resulted in indictments and convictions of aides, staffing agencies and schools that issued false certification.

Two sources with knowledge of the investigation said prosecutors are probing Excellent Home Care's ties to Immediate Home Care, a licensed staffing agency that pleaded guilty to grand larceny last month for bilking Medicaid of $12.5 million. Immediate supplied health aides to Excellent and has worked with Landa's nursing homes, court records show.

Landa said Excellent Home Care's billing practices are proper and that Immediate Home Care represented less than 2 percent of the business it did with staffing agencies.