Playing petty politics while Nassau burns – By George J. Marlin
The following appears in the July 16-22 issue of the Long Island Business News:
In June, I was honored to be appointed an unpaid member of the board of directors of the Nassau County Interim Finance Authority, which monitors Nassau’s broken finances. While I will not touch upon matters before the NIFA board on the op-ed pages of LIBN or any other publication, I do, however, believe it is my duty to comment on an elected official’s recent outburst unjustly questioning the integrity of NIFA Chairman Ronald A. Stack.
Readers will recall that NIFA was created, by an act of the New York Legislature in June 2000, as an oversight agency with borrowing powers to rescue Nassau County from years of fiscal mismanagement.
Since that legislation was signed into law, NIFA has transferred $105 million of state grants to the county and issued $3.8 billion in bonded debt to help restructure the county’s debt and reduce borrowing costs.
(Presently there are approximately $1.7 billion in outstanding NIFA bonds that won’t be fully retired until 2025.)
NIFA is also mandated to collect and distribute the county’s sales tax revenue (about $1 billion annually), monitor the county’s budget and audit county departments. The most significant power granted in its enabling legislation is the ability to impose upon the county a NIFA control period if:
a) The county defaults in the payment of its debts.
b) The county incurs a major operating funds deficit of 1 percent or more during any fiscal year.
c) The county violates the NIFA Act and substantially impairs the marketability of the county’s debt.
d) The county treasurer certifies that the county financing requirements will not be met.
Fortunately, that power has never been exercised and hopefully it never will.
To avoid a control period, particularly during these difficult fiscal and economic times, it is essential that NIFA board members and county elected officials cooperate for the sake of the common good of Nassau’s overburdened taxpayers. What is not needed is for one of them to issue reckless, irresponsible attacks on another for short-term political gain.
Sadly this has not been the case. On June 29, 2010, the presiding officer of the Nassau County Legislature, Peter Schmitt, filed an ethics complaint with Attorney General Andrew Cuomo and the state public integrity commissioner against Stack, an unpaid citizen volunteer. The complaint alleged that Stack violated the state’s code of ethics because he is employed as a public finance managing director at Wells Fargo, the bank that holds Nassau’s operating accounts.
The charge is baseless; Newsday called it despicable. When Stack joined Wells Fargo in 2009, the state Commission on Public Integrity was notified and it ruled that Stack could continue to serve on the NIFA board even though Wells Fargo had pre-existing agreements with Nassau County.
I have known Ron Stack on a professional basis for years and can attest that his integrity is beyond question. He has devoted many years to serving the people of New York, as a member of NIFA since its inception, and as deputy secretary to Gov. Hugh Carey during the state’s 1970s fiscal crises.
Stack, who is recognized as a public finance expert, also served with distinction as chairman of the Municipal Securities Rulemaking Board, the industry’s oversight body.
Though Stack and I are enrolled in different political parties (I’m a Conservative and he’s a Democrat), I have no doubt that we will work together on the NIFA board to help Nassau County overcome its fiscal malaise.
One can only hope Nassau’s political class will do the same.