During two years of Nassau County’s tax system overhaul, unusually high assessment reductions were awarded to a large number of clients of the county’s two biggest and most politically connected tax appeal firms, and unusually small ones were awarded to others who challenged their assessments, including thousands of homeowners who represented themselves, Newsday has found.

The large reductions on homeowner grievances filed in 2012 saved the big firms’ clients about $7.3 million more than they would have obtained under a blanket reduction formula that Nassau officials and appeal firm representatives had negotiated to save the county money by encouraging homeowners to settle their grievances before tax bills were sent out.

Under that initiative, called Carry Forward, nearly every other appellant who qualified received a 9 percent reduction on assessed value, but thousands of clients of the two firms received reductions of 11 percent and 18 percent — and the companies made out handsomely as well, billing for up to $3.7 million in extra fees, according to the latest findings in Newsday’s continuing examination of outgoing County Executive Edward Mangano’s tax program.

The Newsday analysis identified 20,461 properties represented by the largest tax firm, Maidenbaum Property Tax Reduction Group, that likely qualified for the 9 percent reduction. But more than a third of them, 7,655, obtained 11 percent reductions.

The second-largest firm, Property Tax Reduction Consultants, obtained 11 percent reductions for more than half the properties that likely qualified for Carry Forward, 6,808 of them. It also won even larger reductions — 18 percent — for nearly a third of them, 3,585. Only 6 percent of the firms’ cases were settled at the negotiated 9 percent reduction.

The numbers of the companies’ clients who won larger-than-usual reductions dwarfed those of all their competitors, with only two law firms with a few hundred clients matching the proportions of big cuts that they won. As with the major tax companies, which contributed hundreds of thousands of dollars to Mangano and GOP campaign funds, both law firms were large contributors to Republican campaign committees.

The Newsday analysis reveals that the big reductions granted to the tax firms came to an end after that one, lucrative year, without explanation from county officials. But a year later, in 2013, many of the firms’ clients benefited once more in a different way, and many homeowners who did not use them paid a price.

In that year, when the negotiated reduction was 5 percent, nearly all the claims identified in Newsday’s analysis that were filed without hiring a firm and about half of those filed by smaller firms obtained only a 2 percent reduction. That disparity resulted in 5,743 challengers paying $2.3 million more in taxes than they would have if they had received the 5 percent cuts. Meanwhile, the vast majority of the big firms’ clients received the 5 percent reduction and nearly all those who got less ended up with a 4 percent reduction.

Making these determinations all the more critical is that for most homeowners the varying savings were locked in by a county assessment freeze and became the starting point for any future assessment reductions.

The emergence of these multimillion-dollar variations is the latest ramification of Mangano’s massive overhaul of the county’s $6 billion property tax system to emerge in Newsday’s 28-month investigation. The investigation found that while the overhaul has saved the county between $115 million and $299 million, it also caused a cumulative shift of $1.7 billion in tax burden from those who have appealed successfully since the overhaul to those who did not.

Sean Acosta, who owns Property Tax Reduction Consultants, said he did not know how only 6 percent of the 2012 cases identified by Newsday got the negotiated reduction of 9 percent.

He said he would have fought for any homeowner deserving a larger reduction and that back then officials were more willing to negotiate under Carry Forward. The program covers about half of homeowner appeals each year and assumes that, with some exceptions, a home’s value hasn’t changed if there was a successful appeal in the prior year. That allows tens of thousands of homes to qualify for what essentially is a negotiated discount, but it leaves open the question of how large numbers of 2012 appeals obtained larger discounts and, in the following year, large numbers received identical smaller discounts.

“If I felt it was not a good offer,” Acosta said, “I would have gone back to them.”

In interviews with past and present county officials, no one provided a detailed explanation of why the big tax firms’ clients were rewarded so well one year and why other homeowners came up short the next.

In response to a request for interviews with several officials, Deputy County Executive Ed Ward provided a statement from County Attorney Carnell Foskey, who wrote that the county saved millions of dollars on property tax refunds and other costs by settling assessment grievances before they ended up in court. Without providing further detail, he said county officials dispute the conclusions of Newsday’s analysis and that the reductions awarded by the commission were justified.

“All offers made by the agency were done equitably for all taxpayers, regardless of the status of the grievant,” Foskey said, adding that the commission “did not provide greater reductions in assessment to any particular grievant without legal and evidentiary substantiation.”

Tax-appeal firm owners said that while officials rarely negotiate Carry Forward offers without evidence of an exceptional circumstance like a damaging fire, they were more willing to engage in give-and-take in the first two years of the process. They said that is why they were able to use hard-bargaining to win larger reductions for worthy clients.

Shalom Maidenbaum, who runs the largest firm, which also operates under the names Maidenbaum and Sternberg and Long Island Tax Reductions, said he couldn’t reveal proprietary negotiation tactics or comment on specific cases out of concern for his client’s privacy, but that he fights hard for every one of them and that’s why the reductions were so large.

“There’s absolutely nothing automatic about this business,” he said. “We use the evidence in front of us and we go to hearings when we are not satisfied with offers and results.”

Left unexplained is why all the unusually large or small reductions were granted at uniform percentages, regardless of what presumably would be differing individual factors that would cause them to rise beyond or drop below the standard negotiated figure at varying rates. Newsday does not have access to some information used by appeal firms, but available data reveals nothing to justify the large quantity of uniform reductions, such as the properties all being in a neighborhood with a depressed real estate market or all having building permits that might indicate damage or demolition. Superstorm Sandy damage, which could result in larger reductions, occurred after the 2012 appeals were filed.

Unexplained, too, is what officials did to verify claims before awarding those reductions. In a cost-saving move, most of the appraisers employed by the Assessment Review Commission, the county agency that decides on grievances, were laid off. In their place, officials developed Carry Forward, which allowed them to settle tens of thousands of grievances each year without the need for appraisals normally necessary to determine how much reduction a property is eligible for, if any.

Also unknown is why homeowners who represented themselves almost all fared so poorly on their 2012 appeals and why officials stopped granting bulk offers beyond the standard reduction. While Newsday’s analysis shows homeowners who didn’t hire a firm achieved wildly different results than the firms did years ago, it also shows that is not the case more recently.

In the two years after Robin Laveman became involved with the commission, first as counsel in 2014 and then as chairwoman from 2015 to now, 98 percent of cases Newsday identified in its analysis as likely being eligible were awarded the negotiated reduction.

“At least during my tenure — I can’t tell you what took place before I was there — it’s no different between the pro se and the firms,” Laveman said, referring to the Latin term for homeowners who represent themselves in the appeals.

Darlene Harris, who was chair of the Assessment Review Commission in 2012 and 2013, did not respond to requests for comment.

In a legal notice of claim, which is required to be filed with a government agency before it is sued, a former counsel to the Assessment Review Commission asserted that there was pressure to award greater blanket reductions to at least one firm that had contributed money to Mangano. William E. Pries filed the notice in 2014 and alleged he was fired without explanation weeks earlier for arguing on several occasions against such special treatment.

In his claim, Pries alleged that Foskey pressured him and Harris to award 24 percent reductions to all of Acosta’s clients, which Acosta had been arguing for, in meetings in December 2013 immediately after Foskey took office. Pries said he told Foskey in one conference call that awarding such large and what he termed “unlawful” reductions to a major political contributor would “create a media firestorm, and that criminal charges and indictments would likely follow.” Foskey, the claim alleged, told those on the call to give Acosta “anything he wanted.”

In a statement released by Ward, Foskey declined to comment on the assertions.

The 24 percent reductions were never awarded, Newsday’s analysis shows, and no records turned up in state or federal court indicating that Pries followed up on his claim by filing a lawsuit. Pries declined to be interviewed.

Acosta said he did pursue 24 percent reductions for his clients in 2013, but he described it as an example of the kind of tough negotiating he does with the county. He said he argued at the time that the commission should take the negotiated reduction for that year off market value figures listed on the county website. The values have not been accurate for years due to the assessment freeze and the overhaul’s reductions. The result would have been exactly 24 percent reductions for his clients.

Acosta said he had not seen the Pries claim and could not comment further on it, but that any allegations that he made political contributions in exchange for favors were untrue and offensive.

“There’s nothing pay for play. There’s nothing going on there. I represent the taxpayer. It’s whoever is helping the taxpayer, that’s who I’m backing,” Acosta said. “I don’t do contract work with the county. I sue them.”


Long Island’s tax appeal firm industry, which handled most of the more than 200,000 appeals filed in Nassau this year, is a major generator of political contributions. Newsday linked at least $2.4 million in contributions made since 2006 to the seven largest residential tax appeal firms, their owners and employees, and their owner’s spouses and other companies. Of that amount, $2.1 million was paid to Republican candidates and committees, including $401,000 to Mangano’s campaign committee and $1.2 million to Nassau Republican Party committees and clubs, which then regularly contributed funds to Mangano’s campaign.

More than half of the funds paid directly to Mangano’s campaign were linked directly to either Acosta’s firm, which contributed $121,000, or the Maidenbaum firms, which contributed $105,000.

Maidenbaum and a second representative of the largest firms were on a Mangano-appointed commission in 2010 that shaped the residential tax overhaul. Newsday estimated the tax firms have billed their clients $502 million since the program began, $167 million more than they stood to earn under the old system.

But Maidenbaum and his business partner Ilyse Sternberg, like Acosta, said their contributions had nothing to do with the unusually large reductions their clients received in 2012.

Instead, they said, the contributions were in good part targeted at replacing former County Executive Thomas Suozzi, who fought their claims so aggressively that Maidenbaum said it was putting him out of business. They said they and the five other largest residential firms formed a political action committee to support candidates whom they described as being friendlier to taxpayers, huge numbers of whom are their clients.

The overhaul

With their support, Mangano was elected in 2009 on a promise of reworking the assessment system. By the time he entered office, the county owed more than $1 billion it had borrowed to pay for property tax refunds, a problem that once contributed to Nassau’s near-bankruptcy.

The refunds occur when tax bills are sent out using assessments that are later reduced in grievances appealed in court. Under state law, the county is required to refund taxes overpaid not only for its own budget, but for the budgets of all the government agencies using its assessment system, among them towns and school districts. The cost reached $100 million a year before Mangano’s election.

Mangano formed his assessment reform team, which included Maidenbaum and the owner of what was the seventh-largest firm at the time, Paola Orsini of Reassessment and Evaluation Services. Orsini is the treasurer of the large firms’ political action committee.

The team recommended negotiating lower assessment rates with the tax firms, and the county has done so every year since. For Carry Forward properties, the percentage change in the rates negotiated each year essentially results in an automatic, blanket assessment reduction for those who agree to accept the offer and not challenge their assessment in court.

Since the county started negotiating the rates, 78 percent of all appeals, including those eligible for Carry Forward, have resulted in reductions, Newsday reported in its investigation. The reductions reversed years of efforts to improve the accuracy and fairness of Nassau’s assessments, according to extensive data analyses performed in the investigation.

But by inducing the settlement of appeals before tax bills go out and through other cost-savings moves, the county also has saved an estimated $115 million to $299 million since the overhaul began depending on a variety of factors, Newsday found.

Though not mentioned by county officials or appeal firm owners, a possible reason for the larger reductions is that the county felt it had to offer them to prevent the large firms from appealing thousands of cases in court.

Maidenbaum said that he has never used his large caseload as leverage in negotiations with the county.

“We never made any such threat,” he said. “I guess implied in not settling their case, of course, is that homeowners have their remedies, but we never said that.”

The assessment rate negotiations that the large tax firms hold with Nassau County officials each year have a dramatic impact on the tax bills of property owners, but the officials have declined repeatedly to make details of them public. They have refused to reveal the rates agreed to, which Newsday has determined through court records. They don’t make public who is involved in the negotiations or how the determinations are arrived at.

Tax appeal firm owners have not been much more transparent, but in interviews for this story new details emerged.

Fred Perry, who owns a prominent residential tax firm company, said representatives of the firms meet to discuss and share their views on what the rate should be for each year. Then, some of the firm owners do the face-to-face negotiating with county officials, but Perry said he did not know exactly who. When all firms agree with the negotiated rate, they sign an agreement with the county.

Sean Acosta, who heads the second-largest residential appeal firm, Property Tax Reduction Consultants, said meetings in which the rates are discussed are often attended by representatives of several firms. He said he is always there and at a lot of the meetings he is “primary.”

“It’s not a one-day process. This goes on for a while, I’m talking for months,” Acosta said, adding that negotiations for next year’s rate have already been underway.

Newsday filed a public records request last year for records related to the negotiations and the county’s first response was that no such records exist. County Attorney Carnell Foskey later said in an emailed statement that records do exist, but would not be provided because he considered them to be attorney-client work product. Among the withheld documents are the final agreements. Newsday is appealing a similar denial of an updated request for the records.

The heads of the largest firms that Newsday spoke with for this story were under the impression that all appeals benefited from the negotiated rates they agreed to. The Newsday analysis shows that did not happen in 2013 when about half of homeowners who hired a smaller firm and nearly all those who did not hire a firm received 2 percent cuts, rather than the 5 percent ones negotiated for that year.


To investigate whether tax firms got better reductions for their clients than the essentially automatic ones applied during the Carry Forward process, Newsday set out to establish which properties were likely eligible for the process. It did this by first identifying properties that met the most important and recurring criteria the Assessment Review Commission uses in determining which appeals are eligible each year, which is that the property must have obtained a reduction from the commission in the prior year.

Newsday found that if such a property then obtained another reduction, that was an almost certain indicator it had qualified for the program. In fact, 98 percent of such properties obtained the negotiated reduction in the two most recent years examined. The remaining 2 percent were deemed ineligible for Carry Forward but still obtained a reduction different than the standard one.

After establishing this universe of properties likely to have qualified for Carry Forward, Newsday determined the percentage reductions worked out in 2012 and 2013 for homeowners represented by large tax firms, smaller firms and those who represented themselves.

To figure out how much the unusually large or small reductions awarded to homeowners cost or saved them, Newsday recalculated their tax bills using the assessment they otherwise would have had at the negotiated reduction. That process was similar to the one tax appeal firms use to determine how much to bill their clients at rates up to 50 percent of first-year tax savings.

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