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Long Beach scraps plan to hire counsel to respond to audit

A draft state audit found that Long Beach

A draft state audit found that Long Beach overpaid former and current employees in separation pay. Credit: Newsday/J. Conrad Williams Jr.

Long Beach City Council members will no longer pursue outside counsel to respond to a draft state comptroller’s audit and to recoup overpayments from current and former employees.

The resolution originally put forward by City Council president Anissa Moore, vice president John Bendo and Councilman Scott Mandel declared a conflict of interest with acting City Manager Rob Agostisi — who is also the city’s corporation counsel — to respond to the state audit and investigate payouts.

The state comptroller’s office said the city overpaid 10 current and former employees $513,925. Agostisi, who announced he was resigning from the city next month, received a $128,000 payout at the end of 2017 when he notified the city he planned to take a job with the Town of Hempstead.

Moore had requested a 7:30 a.m. special meeting Tuesday to appoint Hauppauge-based Ingerman Smith as the city’s special counsel to investigate accumulated leave and overtime, as well as advising the City Council on employee and disciplinary consequences.

Moore had signed an Aug. 7 agreement with Ingerman Smith for $265 per hour to provide legal services with multiple state and federal agencies, including the state comptroller, the U.S. Department of Justice and the Nassau County district attorney.

John Gross, a partner with Ingerman Smith, said Tuesday his firm was never officially hired because the agreement was not approved at a public meeting nor by Agostisi.

Gross said Moore told him Monday that she was satisfied after reviewing Agostisi’s separation pay agreement and no longer supported retaining the firm.

The state audit said Agostisi’s contract called for receiving 80 percent of his accrued time in November 2017 and the remaining 20 percent when he left the city. 

The comptroller questioned whether Agostisi's payment violated city code and said drawdowns for active employees should be limited to one week vacation.

Moore did not return multiple requests for comment.

Outside counsel hired by the city manager's office will draft a response to the audit, officials said.

Mandel said Tuesday that various law enforcement agencies encouraged the review of the city’s payouts. He said the review and response to the comptroller’s draft audit is now left to Agostisi’s office, which must submit a response to the audit by the end of the month.

“I’m disappointed the majority of the council believes those efforts are no longer needed,” Mandel said. “Without the ability to hire independent special counsel, we are left with a response by the existing corporation counsel and acting city manager.”

Mandel was an associate attorney with Ingerman Smith 16 years ago, but neither he nor Gross saw a conflict of interest because they said they have no current working or personal relationship.

Ingerman Smith remains the city’s special counsel to address a unionization drive by the city’s exempt management employees in a retainer signed last year by then-Acting City Manager Michael Tangney.

The city continues to contract with a different outside counsel, former U.S. Attorney Anthony Capozzolo, who was hired by Tangney for $450 per hour in May 2018 to respond to the audit and grand jury subpoenas looking into the payouts.

Capozzolo has also represented the city and accompanied employees during interviews with district attorney and U.S. attorney investigators.

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