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Updated
September 16, 2011
From the Times Union
Flood district, ex-head faulted
State report criticizes reservoir regulating director's spending, board's "lax" oversight
By BRIAN NEARING Staff writer, Times Union
Published 12:57 a.m., Thursday, July 21, 2011ALBANY -- A cash-strapped state agency that controls Great Sacandaga Lake turned a blind eye for years as its former executive director fudged work hours, cashed out thousands of dollars in unused vacation, and spent public money for lodging, meals and parties, according to a report released Wednesday by state Inspector General Ellen Biben.
The 18-month investigation into the Hudson River-Black River Regulating District and its executive director, Glenn LaFave, painted a picture of an agency that paid little heed to how it spent money and ignored warnings of problems.
LaFave, who resigned in August 2010 after seven years and now collects a public pension of almost $70,000 a year, "exploited the previous board's lax oversight and questionable policies leading to the abuse of public funds -- which is never acceptable and particularly intolerable given the district's fiscal condition," said Biben.
A call to LaFave, who lives outside of Watertown, was not returned. LaFave refused to testify under a subpoena issued late last year, said IG spokesman John Milgrim. He said a "confidential informant" got the investigation started.
The report is the latest black eye for the regulating district, which operates locks and dams on the Black River and Great Sacandaga to prevent flooding of the Hudson River. The district also operates reservoirs in the Adirondacks at Indian Lake, Stillwater, Old Forge and Sixth Lake.
Its finances collapsed in 2008, when the district lost more than 80 percent of its revenue after power companies that use the reservoirs for hydroelectric generation successfully sued to halt fees.
Now, the district owes more than $5 million in back taxes to municipalities and school districts around the Sacandaga, where it still collects annual access fees from property owners. The agency is also fighting in court with Albany, Rensselaer, Saratoga, Warren and Washington counties to pay $4.5 million in new fees to make up for lost hydroelectric revenue.
The report criticized the lack of oversight by the seven-member district board, which is appointed by the governor, to keep track of hours actually worked by LaFave, his annual vacation time buyouts, which stopped only in 2010, and his spending on meals, flowers, hotels and parties. The agency also kept a fleet of state cars at a time when other agencies were cutting back.
The report claimed LaFave collected more than $24,000 for unused vacation time, and instead took dozens of days off to make up for extra hours he supposedly worked. Sometimes, he claimed he worked up to 15 hours a day under a "flex time" policy he persuaded the board to adopt in 2005. This allowed LaFave to take time off and still cash out all vacation time from 2006 to 2009
The report also claimed LaFave was reimbursed more than $45,000 to cover hotel rooms and meals because the board allowed him to have his official work station in Watertown, rather than at agency offices near Johnstown. He also billed the agency more than $4,200 for working lunches for himself and board members.
Even though agency finances were in shambles, the board also approved two parties in April and May 2009 to celebrate the district's 50th anniversary at a combined cost of almost $2,800.
Financial shenanigans at the district are not new. Reforms were instituted in the early 1990s after it was revealed that board members were voting themselves paying jobs and hiring relatives. The wife of a powerful Rensselaer County chairman collected a six-figure commission for brokering the district's insurance policy.
LaFave was hired by the district in 2003, when he stepped down as a district board member; he had been appointed in 2000 by then-Gov. George Pataki. The board gave him the director's job in 2006 when then-Director Richard LeFebre resigned.
During his tenure with the district, LaFave's annual pay ballooned from $60,000 to more than $100,000
LaFave now receives an annual state pension of $69,555, according to the state Comptroller's Office. Pensions are based on the last three years of annual salary.
Among those criticized in the report were three board members also appointed by Pataki: former Board Chairman Philip Klein, a former Republican Saratoga Springs county commissioner; former Chairwoman Anne McDonald, a Ticonderoga resident and wife of former Essex County District AttorneyJohn McDonald, also a Republican; and former Vice Chairwoman Pamela Beyor, who heads the board of Bernier, Carr & Associates, a Watertown engineering and architectural firm. Beyor routinely approved LaFave's time sheets and his vacation buy-back requests, the report said.
Klein was replaced as district chairman in January. When contacted by a reporter, his only initial comment was "the less said, the better." But he called backed to say, "The board continues to make the best decisions that we possibly can based on the information that we have. We have been in a considerable financial crisis." Klein's term on the board expires in September.
Klein said he could "go along" with the statement of current Chairman David Berkstresser, a 2009 appointee of former Gov. David Paterson, who wrote the report uncovered "the facilitating role played by former board members and details lapses in oversight which could have identified Mr. LaFave's actions sooner."
The report said Klein had "ridiculed" austerity measures sought by Paterson's office in 2009 and 2010 to address the state's fiscal crisis, and refused to yank any of the district vehicles provided to LaFave and others.
Another Pataki appointee to the board, Ronald Pintuff, told investigators, "The problem with this district is that the board has been a puppet."
Berkstresser's letter also praised the "courage" of district staff who blew the whistle on LaFave to the board, the Inspector General's Office, and the State Commission on Public Integrity, which is being disbanded, to be replaced by the new Commission on Public Integrity.
LaFave tried to keep district staff from talking with board members, according to the report. He allegedly directed staff not to speak to board members "unless he was physically present, on the phone line, or copied on e-mails." Employees who disobeyed were "upbraided by LaFave and reminded that he could terminate their employment."
Reach Brian Nearing at 454-5094 or bnearing@timesunion.com
Read more: http://www.timesunion.com/local/article/Flood-district-ex-head-faulted-1493356.php#ixzz1SqFivb1F