Fiscal watchdog calls on Blakeman to reverse transfer of Nassau opioid funds

Nassau County Executive Bruce Blakeman's decision to transfer nearly $14 million in interest earned from unused opioid settlement funds into the county's general fund is "unconscionable" and should be immediately reversed, according to Nassau's fiscal watchdog.

On Friday, Nassau Interim Finance Authority Chairman Richard Kessel wrote to Blakeman, criticizing the GOP lawmaker for failing to aggressively dispense money from the Opioid Litigation Settlement Fund and recommending the county return the $13.69 million it has transferred into its general fund since 2024.

Those funds, which have been accruing since 2021 and would have been set aside for drug prevention and education, can now be used for any county purpose.

'Unconscionable' decision

"While sitting on the settlement funds in the face of this public health crisis is bad enough, it is unconscionable for your administration to transfer the interest in a backroom manner to prop up the county’s budget," Kessel wrote. "Raiding the interest in the OLS Fund substantially reduces the resources available to support opioid treatment and recovery efforts in the county, especially considering the diminution of the value of money over the last five years due to inflation."

In a statement, Chris Boyle, a Blakeman spokesman, said: "NIFA is supposed to look out for the taxpayer. Instead they toe the Hochul party line. Shame on them."

Blakeman, the GOP gubernatorial nominee, is challenging incumbent Democratic Gov. Kathy Hochul in November.

Internal county finance data reviewed by NIFA indicates the county has deposited $102.9 million into the fund — an amount that does not include interest and is higher than the $95 million previously reported — while dispensing only $16.5 million. Data from the county comptroller's Open Checkbook site, which lags about a month behind, puts the spending at $15.54 million.

In an interview Monday, Kessel said the board was looking at potential options to force the county to put the interest back into the fund, including potentially not approving the county's next budget when it's introduced in September.

Officials with NIFA, which has oversight of the county's finances, said they're unaware of the county previously transferring interest earned from any of its other designed restricted accounts — including funds set aside for settling lawsuits brought against them or for future payments of debt service — into its general fund.

"This is a very unusual practice. We're researching to see whether it's legal and what, if anything, we can do about it," Kessel said. "But it's certainly inappropriate."

In a statement last week, Boyle defended the transfer, pointing to a declining number of annual opioid deaths in Nassau and arguing "the money is being put to good use."

AG says practice is legal

State Attorney General Letitia James' Office confirmed to Newsday there are no legal restrictions prohibiting Nassau from transferring the interest from its opioid fund. 

In a statement, County Comptroller Elaine Phillips, a Republican, said the "use of interest earned from deposited opioid settlement funds is perfectly valid and legal. There is absolutely no prohibition or restriction on the use of earned interest from deposited settlement funds. That is not only my conclusion, but also the New York State Attorney General’s." 

Legis Delia DeRiggi-Whitton (D-Glen Cove), the minority leader who hosted a news conference last week criticizing the transfer, said Blakeman's tactics are hypocritical.

"Bruce Blakeman doesn’t get to pretend to be pro-public safety while starving addiction treatment and recovery programs behind the scenes," DeRiggi-Whitton said. "We will not stop until every dollar is restored and finally used for its intended purpose: saving lives."

A spokeswoman for the Republican legislative majority did not respond to requests for comment.

A spokesman for the State Office of Addiction Services and Supports declined to comment on the transfer as the agency does not oversee the pot of opioid funding money awarded to Nassau.

The opioid funds were part of the more than $2.6 billion that entities statewide received after 2021 settlements in a lawsuit over the opioid epidemic that 46 states and municipalities brought against pharmaceutical distributors and three pharmacy chains.

A December 2024 Newsday investigation found only a fraction of funds from both Nassau and Suffolk had been distributed, although both counties have since increased their respective paces of spending.

To date, Suffolk, which was awarded $120.9 million in settlement funds. has distributed $17.4 million but issued contracts and grants totaling $57.7 million,  county spokesman Mike Martino said. Suffolk has not transferred interest from the settlement fund, he said.

Blakeman's office said $43.3 million from the fund has been awarded to recipients ranging from universities to treatment centers, often in multiyear contracts in which the money is dispensed annually.

By Robert Brodsky

robert.brodsky@newsday.com@BrodskyRobert

Robert Brodsky is a breaking news reporter who has worked at Newsday since 2011. He is a Queens College and American University alum.