My office has completed our investigation into payouts for accrued vacation and sick leave time made to certain former employees of the City of Long Beach. As Comptroller DiNapoli’s audit found, these payments were excessive and inconsistent with the applicable law. Our exhaustive investigation found that these payments were the result of shocking ignorance of the Long Beach laws and ordinances, the incompetence and negligence of the officials charged with executing them, and a total abdication of oversight by the prior City Council.
We found that:
- Most City employees told us they were unaware of the existence of the Personnel Code, which sets the limits for separation payouts.
- Officials charged with following and enforcing provisions of the Personnel Code and other codified laws and rules, claimed to have no familiarity with their contents, instead relying on past practices.
- One high-level employee claimed that the Code of Ordinances was merely a set of advisory guidelines and the City was not obligated to abide by it.
- The City’s former Corporation Counsel negotiated his own contract with the City Manager regarding a payout of compensation and a $119,855 draw-down payment, which was not allowed by the City Charter or Code of Ordinances. The contract included an improper confidentiality clause and was not disclosed to the City Council or pursuant to public records requests, until his resignation.
- The City Council showed an inexplicable deference to unelected appointees, even when they acted in open defiance of the Council.
- Audits by the New York State Comptroller in 1992 and 1997 highlighted deficiencies in City policies regarding leave payouts but the City Council took no meaningful action to correct them.
- Several City Councilmembers told investigators that they had no familiarity with the Personnel Code, even after improper payments received widespread attention.
Still, while we found the justifications offered for these payments to be incredible and inconsistent with the plain language of the applicable laws and contracts, we found no evidence suggesting the leave balances were unearned, nor did we find evidence of the criminal intent necessary to bring criminal charges.
New York law erects an exceptionally high burden to criminally charge public officials with official misconduct, relegating “misconduct [that] was the product of inadvertence, incompetence, blunder, neglect or dereliction of duty, or any other act, no matter how egregious (emphasis added)” to a non-criminal civil or disciplinary forum absent proof beyond reasonable doubt of knowing misconduct or intentional breach of duty.
The Public Corruption Bureau interviewed more than 30 current and former Long Beach employees and reviewed thousands of pages of records. Our investigation was delayed by the refusal of some critical witnesses to cooperate, and questions of privilege relating to certain records.
I strongly endorse Comptroller DiNapoli’s audit recommendations and I am encouraged that the new City Council has appointed an experienced City Manager and proposed structural changes to transfer more authority— and responsibility— to the elected government. Additionally, I commend them for conducting their own internal audit and taking steps to recoup overpayments.
The Council must establish and codify clear policies governing payments for accrued vacation and sick time, and review City operations to identify any other areas where antiquated opinions from former officials or unquestioned longstanding procedures have led to governing and administrative practices inconsistent with laws and ordinances. In addition, it is essential that all employees of the City of Long Beach familiarize themselves with all Charter provisions, ordinances, laws, rules and regulations relating to their work. I also call upon the City of Long Beach to ensure that its Board of Ethics is constituted, active, and prepared to educate employees and officials regarding the Code of Ethics, conflict rules, and disclosure requirements to guard against future abuses and conflicts of interest.
During Mr. Schnirman’s tenure as City Manager, he allowed millions of dollars in improper payments to be made, personally accepted a payment much more generous than provided-for by the plain language of his contract and waited more than a year to return that payout while under state and federal investigation. The taxpayers of Long Beach deserved better.
 People v. Feerick, 93 N.Y.2d 443 (1999)