Payout probe pact focus of special Long Beach City Council meeting

The Long Beach City Council is expected to approve an agreement Saturday with the district attorney's office as part of the city's payout investigation.

The City Council’s agenda for a special Saturday morning meeting gave no details about the agreement, but council members are expected to waive attorney-client privilege following a request last year by district attorney investigators.

A spokesman for the district attorney’s office declined to comment Friday.

Long Beach City Council President John Bendo did not return a call seeking comment. The special meeting scheduled for 9:30 a.m. Saturday at City Hall was announced Thursday evening.

Assistant District Attorney Christine M. Maloney, chief of the public corruption unit, asked City Council members in a Nov. 26 letter for Long Beach to waive attorney-client privilege in the district attorney’s investigation of payouts to current and former employees under the tenure of then-City Manager Jack Schnirman.

“At this point in time, we are not able to conclude our investigation without knowing, what, if any guidance was provided to the city and the employees by members of its legal staff,” Maloney wrote. “Due to the constraints of attorney-client privilege, we cannot obtain the documentary or testimonial evidence of attorneys who may have  provided such advice on the subject matter unless the city waives the privilege.”

The payouts are being investigated by the district attorney’s office and a federal grand jury in the U.S. District Court for the Eastern District of New York.

The City Council tabled a motion in December to waive attorney-client privilege while council members consulted with their outside counsel John Gross and the city’s outside attorney Anthony Capozzolo, who was hired in 2018 to respond to a grand jury subpoena and represent the city during the investigation.

A state comptroller’s report said that the city improperly paid more than $750,000 to at least a dozen city management employees, including $108,000 paid to Schnirman when he was elected Nassau County comptroller.

Schnirman returned $52,780 to the city in September after a draft audit found he was overpaid for 662 hours of sick time.

State auditors said the city should recoup funds after finding the payments exceeded the city code’s caps on 50 vacation days and 30% of sick time accrued.

 Long Beach corporation counsel Greg Kalnitsky told district attorney officials he was concerned about exposing the city to liability in other civil cases.

Maloney said the privilege was related to this investigation and said the city already waived privilege when the city’s payout structure for the past 20 years was based on an interpretation of former corporation counsel Joel Asarch.  

“Members of the City Council and employees of the city of Long Beach have avowed full cooperation with the investigation,” Maloney wrote. “We request that you consider waiving the city’s attorney-client privilege as to any advice given by attorneys, employed by the city, as to separation payouts. This will aid in moving the investigation forward.”

By John Asbury

john.asbury@newsday.comJohnAsbury

John Asbury is a breaking news and general assignment reporter. He has been with Newsday since 2014 and previously worked at The Press-Enterprise in Riverside, California.