His $106G pension: You pay

The state comptroller's office retroactively gave a politically influential Nassau County lawyer 21 years' credit in the state pension system - even though he had been paid as a private contractor all those years - helping him get a six-figure pension for the rest of his life, records show.

In making the decision in 2000 to give Valley Stream real estate lawyer Albert D'Agostino the retroactive credits that resulted in an annual pension of $106,702, the state relied on letters from two prominent people connected to the Nassau County Planning Commission, as well as D'Agostino's 1099 forms, said the comptroller's spokeswoman, Emily DeSantis.

The 1099 federal tax forms are used to pay independent contractors, not employees. Nonetheless, DeSantis said, "We determined that those [letters and forms] met our questions of whether this person met our definition of an employee. The comptroller's office relied on the veracity of the information that was provided to us."

The retroactive credit covered the 21 years D'Agostino served as counsel to the Nassau County Planning Commission and the six years he served on the Hempstead Public Employment Relations Board. He received full-time credit for Nassau and part-time credit for Hempstead. Records show the commission paid him $1,118,585 in legal fees during that time. Total fees paid by the town were not available yesterday.

In addition, records show, he was not required to make any pension contributions for the retroactive credits. Nassau County paid $102,259 into the pension system on his behalf, according to the state and county comptrollers' offices. Hempstead paid $8,133.

D'Agostino declined to answer questions but said in a statement: "Both positions were approved, and my employment status was approved and appropriate, and that approval occurred at all levels."

Nassau County Comptroller Howard Weitzman, who was not in office at the time, said the retroactive pension was not appropriate.

"Who was watching the store in 2000 when a private lawyer who had county contracts for over two decades is retroactively given 21 years of employment status without the county ever hiring him?" he said. "How many other instances might exist of county contractors converted retroactively to employee status prior to retirement?"

Hempstead Town relied on an opinion by the Public Employment Relations Board's counsel at the time, said spokesman Michael Deery, adding, "We're reviewing the circumstances surrounding the matter."

Howard Blankman, a public relations executive who served as commission chairman and one of the two people who wrote to the state retirement system on D'Agostino's behalf, said he did not know D'Agostino used his letter to get state pension credits. The other letter writer, Herb Libert, former commission director, died in 2005.

D'Agostino, 64, has represented a number of high-profile clients, including former Sen. Alfonse D'Amato, in his private law practice. A longtime Republican committeeman, he ran unsuccessfully for State Supreme Court in 2000. He also currently serves on the Nassau County Empire Zone Board, established in 2006 to manage economic development.

He applied for the state pension credits under laws passed in 1993 and 2000 that allow public employees who meet certain criteria to get additional pension credits, DeSantis said.

Such laws originally were intended to help veterans who had to leave public jobs temporarily because of time spent in the service, said William Friedman, a Hempstead lawyer who has litigated pension cases.

DeSantis could not say how many people have received retroactive pension credits but said, "It was not unusual to grant credit for past years because these laws were designed to that."

The decision to grant D'Agostino the credits was made under previous state Comptroller Carl McCall. In an interview last night, McCall said he had no recollection of the case but added that he "vigorously opposed" granting pensions to persons who did not deserve them.

The letter written by Blankman said the county had intended to hire D'Agostino as an employee in 1978, but that paperwork approving it had been delayed. He said the county then gave D'Agostino an interim contract to serve as the board's counsel.

"Government being what it is, 'interim' became a period of almost 21 years," he said in his March 10, 2000, letter. He argued that D'Agostino should be treated as an employee.

In an interview, Blankman, who is now retired, said he thought the letter "was a very innocent thing."

"He came to me and he said to me that 'They're going to take me off, I'm going to lose my status,'" Blankman said.

Blankman said he could not recall other details of their conversation but said it was related to D'Agostino's decision to run for State Supreme Court in 2000.

D'Agostino secured both Republican and Conservative backing for his run - party lines that frequently give judicial candidates a strong edge in elections. Nonetheless, he lost.

Records show he retired in October 2000, after amassing roughly 28 years in the system from six municipal entities. They included the county, Hempstead, the Village of Valley Stream, and the Lawrence, North Merrick and Valley Stream No. 30 school districts. He also received an early retirement incentive, according to county Civil Service records.

Newsday reported last week that D'Agostino was one of 10 lawyers who have received state pension credits because school districts reported him as an employee.

Records indicate he was reported as an employee of as many as four municipal entities at a time, while he and his firm were paid at least $5 million.

After he began collecting his pension, he continued working for the county commission for about two years. And he and his firm have continued to work for the three school districts.

WEALTH OF EXPERIENCE

OCTOBER 2000

The state comptroller's office calculated Nassau attorney Albert D'Agostino's $106,702 pension using a formula that took into account his average salary in his three highest-paying years along with his years of service. D'Agostino's best years were his last three years of salaries from Nassau County and the Lawrence and North Merrick school districts when he made a total of $661,662. He was credited with 28.16 years of service - 21 of which were granted retroactively. The 28.16 years also included service at Hempstead Town, the Valley Stream No. 30 school district and the Village of Valley Stream.

His employment history, according to state retirement records:

1976-1981 Hempstead Public Employment Relations Board (PERB), $1,560

1978-2000 Valley Stream No. 30 school district, $612,452

1978-2000 Nassau County Planning Commission, $1,118,585

1996-2000 Lawrence school district, $120,666

1998-2000 North Merrick school district, $38,705

Oct. 17, 1996 D'Agostino applies for state pension credit for his six years on PERB.

May 29, 1997 Hempstead Town Clerk Carol Foster signs affidavit that D'Agostino was a town employee.

March 2000 Nassau County Planning Commission chairman Howard Blankman and former commission Director Herbert Libert write to the state on D'Agostino's behalf.

THE STORY SO FAR Week by week

FEB. 14-17: Newsday reports that five Long Island school districts falsely reported to the state that part-time private attorney Lawrence Reich was a full-time employee in each district, enabling him to earn a $62,000 pension and health benefits for life. A federal grand jury in Suffolk opens an investigation into possible fraudulent double-dipping at the districts; FBI agents subpoena the districts' financial records, and the state comptroller's office says it will audit four of the five districts. Newsday reports that Joseph Dragone, the Harborfields school official who made light of Reich's employment arrangement in a letter, retired from that district with a $122,000 pension and today makes $190,000 in the Roslyn school district as an interim superintendent.

FEB. 18-21: State attorney general starts investigation into possible financial misconduct in the districts. His office and that of the FBI and IRS subpoena records at Ingerman Smith, the law firm where Reich was employed. The law firm of Jaspan, Schlesinger, Hoffman suspends Reich, who went to work for that firm in January. Newsday reports that six more school districts listed two more private attorneys as employees, while also paying their law firms more than $1 million in fees.

FEB. 26-29: Newsday reports that attorney Carol Hoffman solicited the Roslyn and Glen Cove school districts in writing, asking to be put on the payroll in order to get more credit in the state pension system.

MARCH 6-7: Newsday reports that Hewlett- Woodmere school officials more than doubled the salary of private attorney Jerome Ehrlich in his last two years at the district - substantially boosting his New York State pension - while paying his law firm more than $400,000 in additional fees. State Comptroller Thomas DiNapoli announces that Reich will have to pay back pension money he's collected since 2006.

MARCH 12: State attorney general and Nassau comptroller ask special districts in Nassau to report any such employment arrangements. Sources say the Nassau district attorney's office subpoenaed various records from dozens of special districts for several different types of professionals.

MARCH 28: Newsday reports that 23 school districts - nearly one-fifth of all the school districts on Long Island - improperly reported private attorneys as employees.