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Hundreds of no-bid Nassau contracts kept just below limit for legislative review, investigation finds

Former Republican state Sen. Michael Balboni, left, Oyster

Former Republican state Sen. Michael Balboni, left, Oyster Bay Councilman Chris Coschignano, ex-NYPD detective Richard "Bo" Dietl, attorney Stanley Kopilow and businessman Brian Rosenberg. Credit: Barry Sloan / Jim Peppler / John Roca / Frank Koester / Uli Seit

Hundreds of Nassau County contracts worth a total of nearly $10 million have been awarded in recent years at amounts just dollars below the threshold for legislative approval.

Many of the pacts went to politically connected companies without competitive bidding -- and were never openly discussed, debated or voted on, a Newsday investigation found.

From Jan. 1, 2011, through July, the county issued 4,435 contracts of from $1 to $111 million to private businesses and nonprofits. Nearly 9 percent of those, or 384, fell between $24,000 and $25,000, the maximum value for specialty agreements before they trigger automatic lawmaker review.

In all, contracts in that narrow range totaled $9.5 million. At the same time, only 20, totaling $500,000, were issued in the same range just above the $25,000 approval threshold.

"It would appear an effort is being made to diminish scrutiny on the part of the public and the legislature, in particular," Robert Freeman, executive director of the New York State Committee on Open Government, a state office that advocates for transparency, said in response to Newsday's findings. "If indeed there's an effort to avoid scrutiny, perhaps the practice needs to be revisited."

The vast majority of the contracts of from $24,000 to $25,000 were for "personal services" -- specialized work such as engineering and consulting that Nassau exempts from the competitive bidding requirements it enforces for most jobs. All personal service agreements of more than $25,000 must be approved by the legislature's Rules Committee.

Defenders of the process, which dates to a 1997 agreement between county leaders that subsequently was ratified by voters, say it allows for prompt approval of smaller contracts when time is short, such as those for outside legal work and for in-demand entertainers for free county events.

"The $25,000 legislative threshold predates this administration," County Attorney Carnell Foskey said on behalf of County Executive Edward Mangano, a Republican. "All contracts not subject to legislative approval are noticed on the legislature's agenda where they are free to be questioned."

Foskey was referring to Nassau's practice of listing all executed contracts, including the larger ones already approved by lawmakers, at the bottom of full legislative meeting calendars. For agreements not subject to legislative approval, the after-the-fact listing amounts to their only public disclosure.

Companies with recent contracts that fell between $24,000 and $25,000 include some that employed current or former Republican elected officials and political club leaders. Some of the firms have done paid work for Mangano's campaigns, and several contributed to Mangano's campaign committee about the same time their county contracts were signed.

"If residents feel like government officials are gaming the system in some way, they have every right to ask if current standards, practices and oversight are sufficient," said Brandon Muir, who leads the Manhattan good-government organization Reclaim New York.

Recent inquiries

The issue of contracts narrowly escaping legislative scrutiny arose in June, when Newsday reported that Nassau had given two consulting contracts to Richard "Bo" Dietl, a former NYPD detective who is now a cable television show commentator and product pitchman.

One $24,947 agreement was for a 2011 study of security at a county sewage treatment plant. The other, for $24,000, produced an analysis last year of merging Freeport and Hempstead village's police forces.

Acting District Attorney Madeline Singas, a Democrat, criticized Dietl's merger report as a "cut-and-paste" job. Singas later launched a larger inquiry into Nassau's contract process, with "special emphasis" on pacts that "narrowly escape legislative scrutiny by falling just shy of the $25,000 threshold."

Mangano has since appointed a panel led by Frank Zarb, the first chairman of the state board that oversees Nassau's finances, to examine the county's contracting process and suggest potential reforms.

"The contracts process in Nassau County has been the law for 15 years," said Presiding Officer Norma Gonsalves (R-East Meadow). "We are always interested in ideas to improve this process and look forward to working with the independent contracts panel."

But Legislative Minority Leader Kevan Abrahams (D-Freeport) said he was "completely disturbed" by how many contracts have narrowly escaped lawmaker scrutiny.

"It's clear the system is open to being abused," he said.

Many contracts with donors

Newsday conducted its analysis using annual lists of each contract certified by the county comptroller. The analysis excluded agreements with other municipalities and public agencies to provide certain services or pass through grant funds.

Dollar amounts represent maximum payments; some pacts may never be fully paid.

Of the 384 contracts since 2011 that fell just below the legislative approval threshold, 130 were for exactly $25,000, and 93 were for $24,900 to $24,999.

While a $25,000 contract skirts legislative approval, a vendor with a contract just below that amount potentially could also receive another agreement in the same year without reaching the total annual maximum of $50,000 that also triggers legislative review.

The 384 contracts went to 222 different vendors. About 60 percent of them, through either the company or a principal, have made at least one donation to Mangano's campaign, records show. The percentage does not include nonprofits, which can't make donations.

Politically connected vendors with contracts just below the approval threshold include former Republican state Sen. Michael Balboni's consulting company, which received a $24,500 deal in 2011, and a law firm that employed Mangano before he took office in 2010. Two of the 15 contracts that the firm, Rivkin Radler, received since 2011 were for $25,000, and another was for $24,990.

Ruskin Moscou Faltischek, a Uniondale law firm that employed state Sen. Dean Skelos, who resigned as majority leader this year after he was charged in a federal corruption case, also received three outside counsel contracts within the range just below the approval threshold: for $24,000, $24,900 and $25,000. Skelos (R-Rockville Centre) has pleaded not guilty to the criminal charges, which do not relate to the Ruskin Moscou agreements.

"Political activities are not a factor when the county enters into a contract," Foskey said in a statement. "Our only concern is whether the firm is qualified to perform the services in which we have assigned work."

Many firms that have gotten contracts of between $24,000 and $25,000 since 2011 also received more lucrative work that was subject to legislative approval. But some firms' only work in that time was never subject to lawmaker scrutiny.

They include:

A $24,500 no-bid contract for police consulting to the law firm of Abrams Fensterman of Lake Success, where Bruce Blakeman, a Hempstead Town councilman and former presiding officer of the Nassau County Legislature, was a partner. Blakeman, a Republican who signed the August 2011 agreement, played a key role in the late 1990s in creating the county's plus-$25,000 approval threshold for special contracts.

Abrams Fensterman, a frequent donor to political candidates from both major parties, has given Mangano's campaign $20,550 since 2010, according to the state Board of Elections. Blakeman, who has given Mangano's campaign $6,275 since 2011, did not respond to a request for comment.

Two $24,900 contracts to the political polling and advertising firm of McLaughlin & Associates to produce "media plans" for the parks department. The county said the work, awarded in late 2012 and early 2013, involved "skills that cannot be evaluated through a competitive bid process."

The McLaughlin firm has been paid $3.3 million from the campaign to produce television ads. Company officials didn't return requests for comment.

Two $24,999 contracts for outside legal counsel awarded last summer to the Garden City law firm of Hopkins & Kopilow. Stanley Kopilow, a partner in the firm, is the leader of the North Woodmere/Green Acres Republican Club.

Asked whether his political involvement had any role in the contracts, Kopilow said: "I think we get contracts because we do a good job and we do not engage in inappropriate billing."

A $25,000 outside counsel contract last year to Sahn Ward Coschignano, a Uniondale law firm where Town of Oyster Bay Councilman Chris Coschignano is a partner. The firm has given Mangano's campaign $6,650 since 2010, including a $500 contribution dated in state board of elections records three days after Coschignano signed the contract.

Coschignano, also the North Syosset-Woodbury Republican Club leader, noted that his firm also did work for the administration of former County Executive Thomas Suozzi, a Democrat. He said the threshold for legislative approval never came up in contract talks.

"There was no dialogue or understanding on our part to keep it to any limit to avoid anything," Coschignano said.

Six contracts for between $24,000 and $24,900 since 2011 to Brian Rosenberg, who runs a Garden City marketing and entertainment booking agency. Rosenberg, whose county contracts were largely to secure musicians to play free concerts at county parks, was also paid $20,000 by Mangano's 2013 re-election campaign for consulting and marketing.

Rosenberg defended the practice of allowing such contracts to go through without legislative approval. Hiring touring musicians sometimes requires making contractual guarantees within days of their tentative commitment, he said.

"If this became 'All contracts have to be approved in the legislature,' the next act you'll see will be in 2040," said Rosenberg, who has booked acts such as Taylor Dayne and the Billy Joel cover band Big Shot.

Five contracts of $24,900 each awarded over a three-year period to AndGo Sports, a Hicksville company that has organized an annual county soccer tournament. AndGo gave $775 to Mangano's campaign in 2014; state filings show that $300 of the total was dated the day after company director Scott Knight signed the county contract. Knight did not respond to a request for comment.

Records show that a nonprofit that Knight operates, Sports for the Community, also received a 2013 contract for $24,900 to run a county soccer clinic. The nonprofit gave $500 to Mangano's campaign dated a month after the administration had executed its contract.

The Internal Revenue Service prohibits nonprofits from contributing to political causes.

Some seek transparency

A Mangano administration official who asked for anonymity said campaign donations listed in the state system for certain dates close to contract signings may have been given earlier, but were only deposited on the date indicated in records.

But Dick Dadey, executive director of Citizens Union, a nonprofit good-government group in Manhattan, said political contributions made near the time of government contract awards should always raise red flags.

"At best, it's a contribution made as part of a 'pay to play' scheme," he said. "At worst, it's a quid pro quo. In both cases, it's unacceptable that campaign contributions are flying to officials at the same time contracts are being considered."

Foskey said citizens have the right to support any politician.

"Nearly every candidate, if not all candidates for office . . . have been supported by contractors, vendors and attorneys that appear before them," he said. "If society wishes to change this system, then public campaign finance should be the topic of conversation rather than to throw mud at the present lawful process."

In light of links between politics and contracting, Muir, of Reclaim New York, said the problem could be the process: "When citizens lack trust in such an important aspect of government, all of us should be pushing for greater transparency and other reforms."

Approving contracts: Inside the numbers

Specialty contracts in Nassau County, known as "personal service agreements," only require approval by the county legislature when their value is more than $25,000, or when a vendor wins multiple agreements totaling at least $50,000 in the same year. Between Jan. 1, 2011, and July 31, 2015, Nassau awarded 4,435 contracts*, including:

--310 worth $1 million or more

--317 from $500,000 to $999,999

--384 from $24,000 to $25,000

*Agreements with other municipalities and public agencies excluded

Source: Nassau County comptroller

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