The Nassau County Industrial Development Agency gave $350,000 in termination payments to its staff of five people in January 2018 while all were still working for the agency, and two remain on the payroll to this day, officials said Thursday night.
The IDA’s new chairman and new executive director were alerted late last month to the payments for unused sick days and vacation by the agency’s accounting firm during a routine audit of 2018 financial records. The payments totaled $350,216, according to an April 1 memo from Albrecht, Viggiano, Zureck & Co. accountants obtained by Newsday under the state Freedom of Information Act.
The payments weren’t approved by the IDA board in a public vote, according to Newsday records of board meetings. The payments were made using fees collected from developers and companies that receive IDA tax breaks, not taxpayer dollars.
IDA chairman Richard Kessel said the payments were made on Jan. 4, 2018, three days after Democrat Laura Curran was sworn in as county executive, succeeding Republican Edward Mangano. A change in which political party controls the corner office in Mineola traditionally has meant staff changes at the IDA.
“While termination payments may be appropriate and certainly are entitled to, they are only appropriate when someone physically separates from the agency, not when they continue to be employed by the agency,” Kessel said, adding it was weeks, and in one case, a year before three of the affected employees had left the IDA. None was let go, he said.
“For the prior board to not, for the most part, have known about [payments] and to have not taken any action about a payout that is significant — we’re talking about $350,000 — is very disturbing to me,” Kessel said at Thursday night's monthly IDA board meeting.
Board secretary Timothy Williams, who was board chairman when the payments were made, defended them.
“This was done in full compliance with our policy,” he said, adding the IDA’s accountants agreed with him. “There was no breach of ethics.”
Williams said similar payments were made in 2010 after Mangano took over from County Executive Thomas Suozzi, a Democrat. “We followed the precedent of the preceding administration who did the exact same thing and employees remained for over a year just as they currently do now,” Williams said.
Kessel shot back: “Just because two prior administrations ago [Suozzi] did it doesn’t mean it’s appropriate or right.”
The termination payments were authorized by Joseph J. Kearney, the IDA’s executive director for more than eight years. In addition to Kearney, those receiving payments are IDA business development director Nicholas Terzulli, secretary Cecelia J. Muscarella, chief financial officer Joseph Foarile and administrative director Colleen Pereira.
Foarile and Pereira are still employed by the agency. Both declined to comment on Friday.
Kearney left the IDA in January to become deputy Republican elections commissioner at the county Board of Elections, Terzulli left in March 2018 to practice law with a firm that represents IDA clients, and Muscarella moved out of state. Terzulli declined to comment on Friday, and Muscarella couldn't be reached.
Kearney, in an interview on Friday, said the payments were "perfectly proper" and approved by Williams, then IDA chairman.
"It was done properly, ethically, and all the t's were crossed and the i's were dotted,” Kearney said. "It was something that I thought was appropriate in the circumstances; there was a change of administration" in county hall.
He said board approval for the payments wasn't needed because the board had approved a procedural manual that contained language about the payment procedure.
Thursday, the seven-member IDA board voted unanimously to prohibit future termination payments for IDA employees who remain with the agency and to require that the payments receive board approval.
The board then met privately for about one hour to discuss whether to try to recoup the payments and to decide the fate of the two recipients who still work for the IDA.
The board returned to the meeting room at 10:20 p.m., saying it had directed the agency’s lawyers to come up with recommendations for future consideration. “We are taking no action tonight,” Kessel said.
Curran praised Kessel's stewardship of the IDA.
“I support the multiple changes in transparency and accountability that have been implemented at the IDA under chairman Richie Kessel," Curran said Friday. "That is why he is there. When he finds things, I am confident he will take corrective action.”