Written by Senator Craig Johnson Friday, 28 August 2009 00:00
New York State Senator Craig M. Johnson, (D-Nassau), the chairman of the Senate Standing Committee on Investigations and Government Operations, recently released a report detailing a pattern of flawed judgment and a lack of accountability that led to the taxpayer-funded purchase of an unusable ferry boat by a state subsidiary.
Taxpayers took a nearly $900,000 loss on the 59-year-old vessel, which the Governors Island Preservation and Education Corporation (GIPEC) purchased despite a report from a contractor that “raised serious concerns” about the boat’s condition. Less than 18 months after the July 2007 purchase, GIPEC sold the ferry, the M/V Islander, on eBay for $23,600.
Johnson said the findings of this report show the real need for Governor Paterson to sign historic authority reform legislation that the Senate and Assembly passed earlier this summer.
“The carelessness and indifference to the waste of taxpayer funds that GIPEC exhibited throughout this boondoggle shows just why these authorities need to be reined in,” Johnson said. “We passed legislation that would bring unprecedented scrutiny and accountability to these shadow governments. It is now my hope that the Governor joins us and signs this significant bill into law.”
The reform legislation would empower State Comptroller Tom DiNapoli with the duty to approve any authority contract that is more than $1 million; create strict new rules to control public authority debt; create an Office of Authorities Oversight that would have jurisdiction over authority budgets; and offer whistle-blower protections to authority employees who expose wrongdoing, among other measures.
The report from Senator Johnson’s committee was completed upon the review of 300 pages of documents, interviews, and testimony from a May 7 hearing held by the Investigations and Government Operations Committee.
Among the report’s conclusions:
The GIPEC Board took a passive role in this major purchase and delegated to employees to a “shocking” degree. The GIPEC Board committed to a $500 million expenditure (plus $422,645 in soft costs that accompanied it) without conducting a Board meeting to evaluate the purchase. The sales contract to buy the ferry was signed on July 17, 2007, but the Board did not ratify it until Oct. 17, 2007. Even at this time, board members made this decision with minimal information on the vessel. According to testimony by GIPEC President Leslie Koch, staff did not view briefing the board by producing consultants and circulating their reports as a “customary practice.”
GIPEC erred in relying on a structural integrity report from Marine Safety Consultants. This was the same company that four months earlier was hired to conduct a similar report by the Islander’s seller. The earlier report found the vessel in “good and serviceable condition.” According to the Senate report: “We dispute the existence of any credible factual basis to support this opinion, and consider it unlikely that Marine Safety consultants would submit a report to a prospective purchaser undermining its prior findings on behalf of the very client seller.” A post-purchase assessment showed that the Islander was in “very poor condition” and would require $6 million to $7 million in repairs to make it seaworthy.
GIPEC ignored available information, and failed to appropriately evaluate the potential impact of serious informational gaps. The only documents that GIPEC employees distributed to board members were the Marine report, and a two-page PowerPoint presentation by another firm, JMS, that “provided inadequate information for GIPEC to assess the boat.” Yet, an assessment from another company “voicing strong reservations about the Islander” was ignored and not distributed to board members.
The full report, along with its source documents and video of the hearing can be found at www.nysenate.gov/senator/craig-m-johnson.
This month, through the beginning of September, I will be joining with Gateway Youth Outreach for a Back to School supply drive.
Gateway is a wonderful organization that offers after-school homework assistance for at-risk youth. I am proud to be partnering with them in this effort to make sure that everyone is able to start the school year with the supplies that they need for success.
I am asking residents, community groups, businesses and nonprofits to participate by donating supplies such as pens, pencils, backpacks, glue, scissors, binders, loose-leaf paper, folders, protractors, notebooks, rulers, markers, highlighters and crayons.
Any donation, big or small, would be appreciated. I would like to thank the Mineola Mustang Run Committee, the Ronald McDonald House and the Port Washington Federal Credit Union for their generous donations to this very worthy cause.
Supplies can be dropped off at my district office between 9 a.m. and 5 p.m., Monday through Friday or they can be mailed to the office, 151 Herricks Road, Suite 202, Garden City Park, NY 11040. To schedule a pick-up time, contact my office at 746-5923.
Last week marked the successful conclusion to my office’s annual Summer Sun Safety Program.
During the months of June, July and August, members of my staff and I visited beaches, parks and pools across the 7th Senate District to hand out free samples of sun block and other UV protection. With these samples, we also distributed literature on the dangers of prolonged sun exposure, and how to detect the early warning signs of skin cancer. More than 60,000 free samples of sun block and sun-blocking cosmetics were handed out during this program’s duration.
I would like to thank the Town of North Hempstead, the Village of Stewart Manor, the Village of New Hyde Park, the Village of Williston Park, the Village of East Hills and the Great Neck Park District for partnering with us for this very important program.