Report alleges NYS Department of Corrections’ former Food Production Center director violated the Public Officers Law

Report alleges NYS Department of Corrections’ former Food Production Center director violated the Public Officers Law
Source: The Office of the State Comptroller

The former director of the State Department of Corrections’ (DOCS) prison food production operation and his staff routinely traded favors and gifts with favored businesses that were rewarded with millions of dollars in state purchases according to a report released by State Comptroller Thomas P. DiNapoli and State Inspector General Joseph Fisch dated August 31, 2010.

DiNapoli’s and Fisch’s audit and investigation centered on Howard Dean, the former director of the Food Production Center, and his staff. The Comptroller's Office said that DiNapoli and Fisch have forwarded the findings of their report to the Oneida County District Attorney’s Office and the State Commission on Public Integrity.

Comptroller DiNapoli said “Corruption should never be tolerated on any level. But the abuses we discovered here, at a state criminal justice agency, committed at a time when New York’s taxpayers are finding it harder and harder to make ends meet, are beyond the pale. And all of this mushroomed in a culture of acceptance at DOCS. We’re referring our findings to law enforcement and public integrity officials.”

State's Inspector General Fisch commented that “Once again, we witness another distressing spectacle by this public official who did not hesitate to violate the law and his oath of office in order to reap personal reward and benefits. For 13 years, Dean enjoyed free parties and picnics while not only steering $2.5 million in business to favored vendors, but to vendors who are prohibited from doing business in New York State.”

Among the findings:

1. In violation of the State's Public Officers Law, "for at least 13 years, Dean and other DOCS staff were provided free meals by at least two vendors – Global Food Industries (GFI) and Good Source – that had $2.5 million annually in purchases with the Food Production Center. "

"2. Dean directed Sysco Food Services to use these two vendors as suppliers, thereby guaranteeing them $1.7 million annually in business with DOCS.

"3. Sysco’s purchase of products from the South Carolina-based GFI at Dean’s direction helped Dean and GFI skirt around New York State Finance Law which prohibits state agencies from doing business directly with companies that reside in states, like South Carolina, that discriminate against NYS businesses.

"4. Likewise, Dean directed NYS Industries for the Disabled, a preferred source of state purchases, to purchase products from GFI, again allowing GFI to make money off of state purchases contrary to the law. GFI made $796,000 annually through this arrangement.

"5. Dean and his staff solicited free food and donations from vendors for an annual Christmas party and a three-day-long annual picnic. Any left-over moneys were deposited in an employee benefit fund and used for food production center employee benefits throughout the year, including morning bagels.

"In addition, the Comptroller and the Inspector General stated that 'Vendors often bid on donated items with proceeds going to the employee benefit fund. All Correctional Services employees, including those at the highest levels of the organization, were invited to the picnic at no cost. Management should have questioned how such an event could be hosted by a state agency at no cost to employees or their families.'"

"DiNapoli’s auditors found no documentation demonstrating that millions of dollars in purchases were based on open competition. In fact, one favored vendor was tipped off about the potential missing ingredient essential in the production of cheese sauce the Food Production Center wished to utilize. Because none of the other vendors had this inside information, the favored vendor received the state’s business.

"Internal controls that might have prevented Dean from engaging in this conduct were virtually non-existent at DOCS. One supervisor, Russell DiBello, former Correctional Services Chief Fiscal Officer, stated that he saw no need to monitor Dean – despite that Dean managed a $55 million budget – because he received no inmate complaints about food.

"DiNapoli and Fisch have recommended that DOCS officials institute safeguards to ensure these abuses don’t occur in the future, and assist the Oneida County District Attorney and the State Commission on Public Integrity as needed. State law requires the DOCS commissioner to report to the Governor, Comptroller and leaders of state legislative committees what corrective action the department has taken, and if action is not taken, why."

The complete text of the report is posted on the Internet at: http://www.osc.state.ny.us/audits/allaudits/093010/09s6.pdf
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Commissioner rules excessed teacher’s failure to request or indicate any assumption of the teacher’s retention on the preferred list a fatal omission

Commissioner rules excessed teacher’s failure to request or indicate any assumption of the teacher’s retention on the preferred list a fatal omission
Appeal of Staci Beauchamp and the City School District of the City of Glen Cove and Melanie Tuthill Odone, Decisions of the Commissioner of Education, Decision #16,123

Staci Beauchamp appealed the decision of the Board of Education of the City School District of the City of Glen Cove to appoint Melanie Tuthill Odone as a reading teacher. Beauchamp, a tenured reading teaching, accepted a .4 part time reading teacher position when she was advised that her full time position was being abolished effective September 1, 2006.

Although Beauchamp initially had accepted the .4 part time appointment on June 13, 2006, she submitted her resignation from the position on June 23, 2006. The Commissioner’s decision indicates that the Board subsequently “accepted” the resignation.*

In early 2009, Beauchamp learned of a reading teacher vacancy in the district. In response to her inquiry concerning the availability of the position, she was told by the Assistant to the Superintendent for Personnel that as she had resigned from her [part time] position, “she did not qualify for reappointment.”

Tuthill Odone was subsequently hired to fill the reading teacher position and ultimately the issue was appealed to the Commissioner.

Beauchamp argued that she had been “fraudulently and/or falsely induced to resign by the board’s Executive Director of Human Resources” who had told her that “a resignation was a condition precedent to working in another school district and remaining on the preferred eligibility list in Glen Cove.”

The district, on the other had, contended that Beauchamp relinquished all rights to a teaching position in the district when she submitted her unconditional resignation and “that at no time did any agent or employee of the board make any false statement to [Beauchamp] in order to induce her to resign her teaching position.”

The Commissioner rejected Beauchamp’s appeal commenting that “it is clear that a teacher who severs his or her service with a district, through retirement or resignation, no longer has recall rights pursuant to Education Law §§2510 and 3013” [citations omitted].

Further, said the Commissioner, “[A]bsent a showing of fraud, duress, coercion, or other affirmative misconduct on the part of school officials which renders a resignation involuntary, a resignation cannot be withdrawn once it has been accepted by school authorities,” citing Schmitt v. Hicksville UFSD No. 17, 200 AD2d 661.

The Commissioner said that Beauchamp did not prove that her resignation was involuntary and although the Executive Director’s alleged false statement may have provided motive for her resignation, “it cannot be said that her will was overcome and that she was not capable of exercising free choice.” Thus, the Commissioner ruled, Beauchamp’s allegations of duress and coercion must be dismissed.

The Commissioner also rejected Beauchamp’s claim that her resignation was a nullity because it was entered into under a mutual mistake of fact, i.e. that “she had to resign to work elsewhere and be placed on the school district’s preferred eligibility list.”

Significantly, the Commissioner said the Beauchamp failed to demonstrate that there was a mutual mistake of fact and that the school district justifiably assumed that she, “by submitting a letter of resignation, wished to sever her ties with the district” as her letter of resignation did not indicate that “she wished to remain on the preferred eligibility list, or indicate any expectation that she would so remain.”

* Except where required by law, acceptance of a resignation is not required for it to take effect; all that is required is that the resignation be delivered to the appointing authority before it is withdrawn or rescinded by the officer or employee. An example of requiring the "acceptance" of the resignation for it to take effect: §2111 of the Education Law, "Resignation of district officers." §2111 states that a school district officer "may resign to a district meeting." §2111 then further provides that officer shall also be deemed to have resigned if he or she filed a written resignation with the district superintendent of his of her district "and such superintendent endorses thereon his approval and files the same with the district clerk" [emphasis supplied]. See, also, §2110.3 of the Education Law.

The decision is posted on the Internet at:
http://www.counsel.nysed.gov/Decisions/volume50/d16123.htm

COBRA web page updated

COBRA web page updated
DOL press release

The Department of Labor's Employee Benefits Security Administration has updated its COBRA web page to add a fact sheet and FAQs on maintaining health coverage after the COBRA premium reduction ends. The updates are posted at:

http://www.dol.gov/ebsa/newsroom/fsExpiringSubsidy.html

and at

http://www.dol.gov/ebsa/faqs/faq-cobra-premiumreductionEE.html#section5,

respectively.

Jurisdiction to consider unilateral changes in terms and conditions of employment

Jurisdiction to consider unilateral changes in terms and conditions of employment
Roma v Susquehanna Valley CSD, 92 N.Y.2d 489 [246 AD2d 714 reversed]

The primary issue on this appeal is whether a complaint of a public employer’s unilateral change in a term and condition of employment that is expressly covered by its collective bargaining agreement (CBA) with an employee organization lies within the exclusive jurisdiction of the State Public Employment Relations Board (PERB), or may be resolved through the grievance procedures of the CBA.

The Civil Service Law § 205 (5) (d) jurisprudence of PERB, which in the view of the Court of Appeals correctly reflects the legislative intent of the enactment, points the parties to a resolution of their dispute in this case through the nonbinding grievance procedures of the CBA (subject to judicial review), rather than through an improper employer practice charge before PERB for failing to negotiate in good faith.

Consequently, the high court said that the Appellate Division erred in dismissing the petition on the ground that PERB had exclusive subject matter jurisdiction over this controversy. Agreeing with Supreme Court that the CBA unambiguously precluded the school district’s unilateral action here, the Court of Appeals said that the judgment of Supreme Court should be reinstated.

The text of the ruling is filed on the Internet at:
http://nypublicpersonnellawarchives.blogspot.com/[Registration required]

Vesting health insurance rights

Vesting health insurance rights
Handy v Schoharie County, Appellate Division 244 A.D.2d 842

In the Handy case, the Appellate Division said a legislative body may adopt of a resolution that alters a retiree’s health insurance benefits and that such a change can be legally applied to people who retired prior to the vote to change benefits.

In December 1995, the Schoharie County Board of Supervisors adopted three motions changing its policy with respect to its providing County retirees health insurance benefits.

Under the new policy, any elected County official who completed 10 or more years of service would be entitled to “health insurance” at the County’s expense upon retirement. Prior to this change Schoharie paid the health insurance premiums for the retiree and his or her spouse if the retired employee had completed five years of County service and was receiving a state retirement allowance.

David E. Handy retired from the Board of Supervisors on December 31, 1995, having served as a member since 1978. The Board, however, at its January 19, 1996 meeting rescinded several December 1995 motions relating to health insurance for retirees.

The Board next reinstated its former policy with respect to providing health insurance to its retired employees. Because he was not receiving a state retirement allowance, the County said it would not pay for Handy’s health insurance in retirement.

Handy sued, contending that under the Board’s December 1995 actions he was “entitled to health insurance paid at [Schoharie County’s] expense as [he had] met the requirement of a vested right.”

The Appellate Division disagreed, holding that the County was under no contractual obligation to provide [Handy] with health insurance and, accordingly, it did not act arbitrarily or capriciously in terminating that benefit.

The Handy decision should be contrasted with two other retiree benefits cases: Della Rocco v City of Schenectady and Andriano v City of Schenectady.

The Schenectady cases differed in that they concerned executive action as opposed to legislative action and Taylor Law agreements were involved and held to control.

On August 28, 1997, State Supreme Court Justice Robert E. Lynch ruled that Schenectady must provide fully paid health insurance comparable to that in effect at the time of each retiree’s retirement because the municipality is bound by the Taylor Law agreement in effect when employees retired.

The fact that the Taylor Law agreements had expired did not alter the municipality’s obligations to retirees under them.

The key element was the existence or absence of a contractual obligation to provide retirees a benefit.

The Appellate Division pointed out that an act of a legislative body will be treated as a contract only when the language and the circumstances manifest a legislative intent to create a private right of a contractual nature.

As an illustration, the Court commented that in Cook v City of Binghamton, 48 NY2d 323, the Court of Appeals said that “certain types of legislative acts, including those fixing salaries and compensation ... are not presumed to create a contract.”

Quoting from the U.S. Supreme Court’s ruling in Dodge v Board of Education, 302 US 74 at page 79, the Court of Appeals said that “the presumption is that such a law is not intended to create a private contractual right or vested right but merely declares a policy to be pursued until the [legislative body] shall ordain otherwise.”

The Appellate Division said that it found nothing in the December 1995 actions by the Board that it “intended to fetter its power in the future” with respect to health insurance. “Rather than evincing an intent to create a private contractual or vested right, the motions are more reasonably read as declarations of [the Board’s] policy.”

Notwithstanding the fact that Handy would have enjoyed health insurance benefits at the expense of the County had the December motions not been repealed, the Appellate Division decided that the Board’s December 1995 actions did not create a contractual property right enforceable against Schoharie County.

As to any claim that the Board’s action gave Handy a vested retirement benefit, in Lippman v Sewanhaka Central High School District, 66 NY2d 313, the Court of Appeals decided that health insurance for retirees is not a retirement benefit protected against being diminished or impaired by the State’s Constitution.