Levy's wife's business: A question of disclosure

Court reporting firms owned by Suffolk County Executive Steve Levy's wife, Colleen West, have regularly received work from businesses that have been paid millions of dollars in county contracts in recent years.

At least seven businesses - five law firms that have been paid more than $3 million since 2006 and two hospitals that have been paid more than $23 million by Suffolk County for services since 2008 - have hired West's companies Enright Sten-Tel and Enright Court Reporting to provide transcription services during that time.

Records show that one business, Stony Brook University Medical Center's Cody Center, paid one of West's companies $31,906 for work from October 2008 through May 2010. Stony Brook University Hospital, which receives county funding, helps fund the Cody Center. A university spokeswoman said Enright's relationship with the Cody Center was discontinued last week.

No public records could be found that show what other vendors paid her companies. The businesses declined to discuss their relationships with West's firms. In an interview, West said that she has "up to 10" county vendors as clients. She said some of them predate Levy's election as county executive in 2004.

Suffolk County's financial disclosure form requires approximately 650 county officers and employees to report financial interests, including those of a spouse. The form also requires the county employee to report all sources of income above $1,000; all contractual arrangements that produce or are expected to produce income; and all honoraria, lecture and miscellaneous fees earned by the county employee and the spouse. Legal and ethics experts who helped draft the 1988 Suffolk ethics law say this requires Levy to report West's work for county vendors - businesses selected by the county for work paid with tax dollars.

The county Ethics Commission since 2006 has permitted Levy to satisfy the county disclosure requirement by filing the New York State financial disclosure form - one that requires far less extensive financial information than the one mandated in county law. In addition, the county form is a sworn statement, while the state form is not. As a member of a state-appointed Pine Barrens Commission, Levy is required to fill out the state disclosure form. Levy has not disclosed West's work for county vendors in state financial disclosure forms he has filled out since 2006. Walter Ayres, spokesman for the State Commission on Public Integrity, said the state form does not require disclosure of a spouse's clients. 

Levy: Business disclosures not required

Levy said nothing in county ethics law or in the county disclosure form requires him to disclose these business relationships. And the county executive has maintained that he is not required to file the county's disclosure form because state law trumps local law. Levy said he filed the county form his first two years in office, 2004 and 2005, but he has declined to provide those reports to Newsday.

Following a June 7 subpoena to the Ethics Commission and the clerk of the legislature by Suffolk District Attorney Thomas Spota for records related to the Ethics Commission and financial disclosure forms, Levy said he would file the county financial disclosure forms from 2006 to the present. And Ethics Commission director Alfred Lama said Monday that Levy has recently filed the 2009 form. Newsday requested this form, along with the earlier county forms, Tuesday and was told to file a written request.

Late Tuesday, Levy filed the county forms for 2006 to 2008, his spokesman, Dan Aug, said. "We've shown that we were willing to go above and beyond, first by complying with the state law and then by filing additional forms even though it was not required to do so," Aug said in a statement. Aug did not respond to questions as to what information is on the forms.

Wednesday, a newly formed Suffolk legislative committee met to discuss investigating the decision by the Ethics Commission - whose members at the time were appointed or recommended by Levy - not to require Levy to file the county's disclosure forms since 2006. Presiding Officer William Lindsay (D-Holbrook) said the committee, which met behind closed doors, interviewed potential candidates for special counsel and discussed seeking subpoena power for the committee.

SBU ends arrangement with Enright

Records show that West signed an addendum to a business services agreement with the Cody Center at the Stony Brook University Medical Center. Asked Friday to comment on Enright's work, university spokeswoman Lauren Sheprow said the arrangement between the Cody Center and Enright Sten-Tel was discontinued last Thursday.

Late Tuesday, Sheprow provided a second statement that read: "The Hospital was not aware that the Cody Center had enlisted this vendor, and by doing so, the Cody Center departed from University purchasing procedures. When authorities at the University learned of it, the arrangement was discontinued. The Hospital has a state approved contract with a different vendor for transcription services."

Sheprow did not provide details as to how West's firm got the work or why it was discontinued.

In a written statement Wednesday, West said her company had nothing to do with any procedures utilized by the Cody Center in picking a transcription company. She said the Cody Center was told it could pick its own company and used Enright on a day-to-day basis.

Two weeks ago, Levy and West said in a joint interview that she works as an independent contractor and does not have written contracts with her clients. She said law firms call her when needed. Levy also said he sought a ruling from the commission in 2005 as to whether West could bid on a Stony Brook University Hospital contract. A ruling from the commission said that if she won a contract, it would not constitute a prohibited "direct or indirect" interest in any contract or professional dealings with the county.

In the interview, Levy said, as a result of that ruling, he believed West's subsequent work for the hospitals - and the law firms as well - did not constitute a conflict.

In addition, Levy and West said she does not work on county business for these firms. West said she has never looked to her husband for help in her businesses. If anything, she said her marriage to Levy has hurt her business more than it has helped. "We're good people, and we try to do everything right," she said.

Late Tuesday, Levy offered two additional opinions in support of his view that state law supersedes county law in this case. In one opinion, Barry Ginsberg, executive director and general counsel of the New York State Commission on Public Integrity, said state law allows a local municipality to accept the state disclosure form in place of the local form. In the other opinion, Mark Davies, executive director of the New York City Conflicts of Interest Board, said state general municipal law was "crystal clear" in allowing a person subject to two filing requirements to file the state disclosure form to satisfy a local law.

Levy recently switched from Democrat to Republican in a failed bid to run for governor as a Republican. He has not announced whether he will continue as a gubernatorial candidate.

Suffolk County Comptroller Joseph Sawicki, who once served as the ranking Republican on the State Assembly ethics committee and whose office reviews county contracts, said: "It appears to me that he's taken pains to hide these agreements and to avoid publicly disclosing what every other county official has to - as they should."

Experts: Disclosures needed

Anton Borovina, who served as first counsel to the county Ethics Commission and who helped draft the law, said, "The Suffolk County ethics law applies to him, and the Suffolk County ethics code requires all employees to file disclosure forms that include information about the spouse, P-E-R-I-O-D."

Robert Gottlieb, a Suffolk lawyer who chaired the committee that drafted the county ethics code, said Levy is required to file the county form and disclose his wife's business connections. "Hiding the sources of income behind the legal nicety that it's an oral agreement and not a written contract just smells bad," Gottlieb said.

According to Enright's website, West started Enright Court Reporting Inc. in 1991, and bought a franchise for transcription services in 1998, which she calls Enright Sten-Tel. The website states that Enright Sten-Tel is ranked among the top three out of 50 Sten-Tel companies nationwide.

Although Levy and his wife declined to list all of her clients who are also county vendors, at least five law firms that have county business have used Enright, records and interviews show. They include Vecchione, Vecchione & Connors Llp of Garden City Park; Lewis, Johs, Avallone, Aviles & Kaufman Llp of Melville; Vincent D. McNamara of East Norwich; Mulholland, Minion & Roe of Williston Park, and Fumuso, Kelly, DeVerna & Snyder Llp of Hauppauge.

Of the five law firms, West named three that were her clients before her husband became county executive in 2004 and that have remained clients. All five serve as outside counsel to Suffolk County and have been paid more than $3 million by the county since 2006, the year Levy began filling out the state disclosure form, according to county records. At least one of the firms, Lewis, Johs, Avallone, Aviles & Kaufman, did work for the previous administration of Robert Gaffney. Another firm, Mulholland, Minion & Roe, handled cases for previous administrations, according to attorney Brian Davey. The other firms did not respond to calls or e-mails for comment.

Campaign finance records show that the five law firms have contributed $86,950 to Levy's campaign coffers in that time.

Enright's hospital work

Enright has done work for Stony Brook University Medical Center's Cody Center, and Good Samaritan Hospital Medical Center in West Islip. Since October 2008, the Cody Center has paid Enright Sten-Tel $31,906, according to records. During the same period, the county paid the hospital $10.8 million. Good Samaritan has been paid more than $26 million by the county since 2006. Catholic Health Services, which runs Good Samaritan, declined to reveal how much it has paid Enright.

In 2008, after the Suffolk Police Benevolent Association raised questions about Enright doing county work, County Attorney Christine Malafi, Levy said, wrote a letter to law firms receiving county business stating that Enright was not on any list of court reporters that could be chosen by the county or its outside counsel for stenographic service. The letter did not specifically address her firm's work for these businesses on noncounty related business. Sawicki, whose office monitors county contracts, said he never received a copy of the letter.

In the interview, West said she has had a number of the clients who receive county business for years, going back to before her husband was elected county executive, while he was a county legislator and state assemblyman, and even before some of the firms were selected for county work.

Levy said that his wife's work with county vendors had "no relevance to county business." According to Levy's former chief deputy county executive Paul Sabatino, Levy asked him in 2005 if his wife could seek work from hospitals with county contracts. "My response was that it would be prohibited, at which point he told me the county attorney disagreed with me," said Sabatino, who served as legal counsel to the legislature for more than 19 years. "We never discussed it again." Malafi declined to comment.

On Tuesday, Aug, Levy's spokesman, said, "The county executive does not recall any such conversation, and he certainly would not rely on any opinion from Mr. Sabatino on this matter."

Sabatino left the Levy administration in December 2007 after months of discord. Borovina represented Sabatino in his successful overturning of ethics charges filed by Levy against Sabatino over severance pay.

Levy said he asked the Ethics Commission whether West could bid on a Stony Brook University Hospital contract, since the hospital receives county funds. The opinion, which says West asked for the ruling, said that if she won the contract, it would not reasonably create a conflict.

That opinion, dated Oct. 24, 2005, states that the ruling is limited: "This opinion is specifically limited to the issue of whether a prohibited conflict of interest in violation of Suffolk County Administrative Code A30-1 would be created if Enright Sten-Tel Transcription Services Inc. entered into a contract for medical transcription services with Stony Brook University Hospital or other hospitals which have contracts with the County of Suffolk to provide medical care."

In the interview, however, Levy said the opinion was "all encompassing" and would also apply to her work for the law firms.

Ethics law addresses conflict issue

County ethics law bars county employees from engaging in any activity, "directly or indirectly," that could pose a conflict of interest or the appearance of a conflict. Specifically, the law reads that no officer or county employee can have an interest in "any contract or business or professional dealings" with the county. Further, the law defines "interest" to include the activities of a spouse or minor children.

Newsday reported that Levy was one of two employees who filled out the state form in place of the county form. In the wake of the subpoena, Levy has consistently maintained that other municipalities allow the substitution of the state disclosure form for the county form. He has also argued that state law supersedes the county's more stringent filing requirement.

However, legal experts point to an earlier appellate court decision in 2003 on the Suffolk Ethics Commission that found a county can impose more stringent ethics regulations than those required by state law.

Levy's current chief deputy county executive, Ed Dumas, wrote in a June 28 memo he e-mailed to a reporter that the appellate court case did not apply to Levy's situation because state law would trump county law in his case. In a subsequent e-mail, Levy spokesman Aug said they were "adamant" that state law trumped local law in this matter.

George Nolan, counsel to the legislature, issued an opinion June 30 that cited the appellate court decision and said the Ethics Commission is "obligated to follow the county's financial disclosure law and should only accept from officers and employees the county form . . . "

The Ethics panel 

What is the Ethics Commission?

In Suffolk County, it is a board that reviews financial disclosure forms, renders advisory opinions on the county's ethics law, and conducts hearings as necessary to implement the law.

How many members?

Three.

Who picks them?

Under Suffolk law, one is selected by the county executive, one by the legislature, and one by the presiding officer. In practice, the legislature has accepted recommendations from the county executive.

Are disclosure forms available for public viewing?

These disclosures must be requested through a Freedom of Information form. The commission then meets and decides whether to release them. If released, the commission redacts certain financial information.