Saying that "every dime counts, every nickel matters," State Comptroller Thomas DiNapoli yesterday announced tougher reporting rules and a new compliance unit to weed out pension cheats.

"I want to make sure that only the individuals who deserve a state pension get a state pension," DiNapoli said at a news conference in Mineola.

The new rules require local governments statewide to pass resolutions establishing a minimum workday of no less than six hours. The regulations also call for appointed and elected officials and professionals contracted to perform certain services to keep a 90-day activity log and make public the maximum number of days reported to the system each month.

The new compliance unit, which will be staffed by about 20 people, will monitor who is being reported as employees and how their pension credits are being counted, DiNapoli said. 
In addition, the comptroller's office will continue its review, begun last spring, of nearly 20,000 professionals in the state pension system, he said.

DiNapoli's announcement came seven months after Newsday reported that five school districts simultaneously falsely reported private attorney Lawrence Reich as a full-time employee, entitling him to a public pension of nearly $62,000 and health benefits for life.

After the story, the state attorney general, FBI, IRS, U.S. Education Department's Office of Inspector General, the Nassau district attorney and the comptroller all launched investigations.

Within weeks, New York Attorney General Andrew Cuomo announced his office had uncovered similar cases statewide, saying, "It was a great scam, and it went on for years."

His office has revoked Reich's pension and ordered him to pay back $83,624. Reich's attorney, Peter Tomao, of Garden City, said Reich maintains that he acted properly and disagrees with the comptroller's findings. 

Several attorneys have argued that their pensions were proper because the comptroller's office approved them. DiNapoli, who was appointed comptroller in February 2007, said yesterday that his office had "taken on face value" the reporting of local governments. "That's why a compliance unit makes sense," he said. 

Newsday also reported that members of elected and appointed boards, which may meet as little as once a month, frequently are given health benefits and credits toward a state pension. In addition, records show that at least 14 special districts and one authority have been reporting private attorneys as public employees.

To date, the comptroller's office has revoked pensions or rescinded pension credits of 35 professionals statewide - most of them attorneys. Auditors decided no action was necessary in 680 cases. In all, the comptroller's office is seeking to recoup $950,000 owed to the state retirement fund, officials said. 

Cuomo's office, meanwhile, has reached settlements covering the actions of more than 65 attorneys and collected more than $935,000.

In May, Cuomo hosted a rare legislative hearing on the issue in Farmingdale. Several legislators there said they had received an onslaught of letters, calls and e-mails from constituents upset about the scandal.

A month later, the State Legislature unanimously approved a sweeping package of pension reforms. The new legislation, among other things, increases the penalty for pension fraud and closes the loopholes that have allowed some retirees to collect six-figure salaries on top of six-figure pensions. The bill has been forwarded to Gov. David A. Paterson for his signature.

Pension reforms

The state comptroller's pension reforms include the following changes:

Establishes a 20-person compliance unit to oversee pension reporting.

Requires local governments to set a minimum workday of no less than six hours.

Requires elected and appointed officials, and professionals contracted to perform certain services, to keep a 90-day log of activities each term. No pension credits will be awarded if the log is missing. 

Requires governing boards to post online or at the main entrance the maximum number of days each official is reporting to the pension system monthly.

The New York State Comptroller's review of professionals in the state retirement fund has yielded the following

319 local governments have been audited for improper pension reporting

35 professionals, mostly attorneys, have had pensions revoked or pension credits rescinded

680 cases that were reviewed required no action 

$950,000 is owed to the state retirement fund