Nassau drops lawsuit against NIFA takeover

Nassau's legal fight against NIFA is over.

At County Executive Edward Mangano's direction, County Attorney John Ciampoli said Tuesday that Nassau will not pursue its lawsuit against the state oversight agency's takeover of the county's finances.

Ciampoli said the county hopes to work together with the Nassau Interim Finance Authority "to correct the errors of the past and to meet the challenges ahead."

The six-member NIFA board voted in January to impose financial controls after determining the county's 2011 budget had a $176 million deficit. Mangano maintained that his $2.6 billion budget was balanced, and filed suit to block the takeover.

Supreme Court Justice Arthur Diamond earlier this month dismissed the county's claims that the takeover was unconstitutional and that NIFA's authority to impose financial controls had expired. He allowed the takeover, which had been put on hold, to continue.

But Diamond left open the county's argument that the takeover was "arbitrary and capricious," even though he said it did not appear to be. He directed the county and NIFA to submit further arguments on the issue.

While defending the county's reasons for challenging the takeover, Ciampoli said he had told the court that Nassau, "will not pursue further proceedings" in the case.

"We felt strongly that this administration should have the same rules applied to it as were applied to its predecessor," Ciampoli said. "We advanced a case, based upon the law, that would have allowed Nassau County's elected government to do the job they were elected to do and we asked the court to recognize the fact that under ordinary accounting rules and past practice, the budget was balanced. . . . Unfortunately, Justice Diamond did not agree."

Mangano, a Republican, complained that NIFA would not allow him to count borrowed money as revenue as it had permitted the previous administration of Democratic County Executive Thomas Suozzi to do. But Diamond noted that NIFA had always condemned the practice even if it did not prohibit it in the past.

Ciampoli said he and Mangano had talked with NIFA chairman Ronald Stack, "which we hope portends a productive and mutually cooperative effort."

Board member Chris Wright said on behalf of the NIFA board: "We are pleased that the county has decided to heed our call to end this costly and distracting litigation, thereby allowing all of us to focus on the important task of improving Nassau County's financial condition."

Last week, Stack called on Mangano to drop the lawsuit, saying NIFA already had spent $418,000 in legal fees to defend itself. The county said it had yet to receive bills from Rivkin Radler, the outside law firm it hired to file the lawsuit.