Cuomo: Lawyers to pay $100,000 to close school pension cases

By MICHAEL GORMLEY | Associated Press Writer

May 8, 2008

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ALBANY, N.Y. - A New York Public Service Commission member has agreed to pay $50,000 to end an investigation into state benefits she was improperly awarded while working as a school district lawyer, officials said Thursday.

Maureen Harris, who was appointed to the utility regulator in 2006 by former Republican Gov. George Pataki, agreed to the settlement that ends the investigation into her past private practice, Attorney General Andrew Cuomo said.

PSC spokesman James Denn confirmed Harris is paid $109,800 and is eligible for a state pension in the PSC job in which she rules on utility rate increases and other regulations.

Harris, a former partner with the Girvin and Ferlazzo firm in Albany, agreed to forfeit pension benefits she was given as a contract employee of the Hamilton-Fulton-Montgomery BOCES who was improperly classified as a district employee, Cuomo said.

Cuomo, a Democrat, didn't mention Harris' current paid role with the PSC when he announced the settlement. Cuomo spokesman John Milgrim later said her role with the PSC was common knowledge and on the front page of a local newspaper.

"It didn't come up in this event because the PSC was irrelevant to this conduct," he said.

"This settlement occurred based upon events prior to her joining the Public Service Commission and has no bearing on her role as a commissioner," said her attorney, Michael Koenig of Albany.

"As is clear from the settlement agreement itself, Maureen received a benefit from her partnership of a limited one-year period based upon a long standing arrangement her firm had with BOCES."

Although Cuomo called the conduct fraudulent, Harris wasn't accused of fraud. Many of the arrangements have gone on for years, even gaining approval by government officials who Cuomo said should have known it conflicted with law.

Maureen Harris is the sister of Pataki's former counsel, Michael Finnegan.

Harris' husband, John S. Harris, contributed $500 to Cuomo's attorney general campaign in 2006 among many contributions to Democrats and Republicans, state Board of Elections records show.

He is a partner in a law firm in Albany that specializes in public policy and regulatory affairs and represents clients to state agencies on issues including energy and utility legislation, according to the firm's Web site.

Maureen Harris' 2006 state ethics disclosure record shows her husband also is a shareholder in the Plunkett & Jaffe law firm, to which Pataki and his chief of staff used to belong.

Thursday's settlement doesn't affect her job at the PSC, Denn said. He said neither John S. Harris nor his firm have appeared before the PSC since Maureen Harris joined the commission.

Cuomo also settled a case against the Hodgson Russ law firm in Buffalo. The firm will pay $50,000 to end a probe into lawyers who worked for five BOCES districts in western New York. Although the lawyers didn't collect benefits, they were improperly listed as BOCES employees, Cuomo said.

Cuomo says the payments more than compensate for taxpayers' losses. He said the BOCES districts received "minimal" additional state aid for listing the contract lawyers as employees.

Hodgson Russ plans to continue to work for school districts, but under the conditions of the settlement, said Gary Schober, the firm's CEO.

"We will, without admitting any wrongdoing, discontinue the practice of permitting our attorneys to be placed on the payrolls of any BOCES," he said.

Cuomo's investigation continues into school districts and local governments.

"This is the tip of the iceberg," Cuomo said.