Download issue (PDF) - Nieman Foundation - Harvard University

Public Health, Safety and Trustand, in some cases, formal appealswhen requests were denied.Within weeks of gaining all of theserecords, the full story emerged. Fiveschool districts—at the same time—had falsely reported that the attorney,Lawrence Reich, was a full-timeemployee, while also paying his lawfirm $2.5 million in legal fees. As aresult, Reich retired with a pensionof nearly $62,000 and free healthbenefits for life. Then he returned towork for the districts as a consultant.The abuse was so flagrant that he wascredited with working 1,286 days ina single year, according to records.What upset our readers the mostwas that state auditors knew aboutthe arrangement—which is barred bythe Internal Revenue Service—yet didnothing to stop it.Reich agreed to be interviewed anddefended the arrangement as commonpractice, but he did not agree to bephotographed. So we assigned one ofour photographers to watch his homeand office; eventually we got a shot ofhim in his office parking lot. He wasn’taware that he had been photographeduntil his picture ran on the cover ofNewsday with the headline, “Who arethey kidding?”Readers Respond,Legislators, TooNewsday’s front-page story set off afirestorm. Readers were furious. TheFBI and IRS subpoenaed the schooldistricts’ records the next day, andNew York Attorney General AndrewCuomo launched a parallel investigationdays later.My colleague, Eden Laikin, thenjoined me. Often we worked eveningsand on weekends. Our challenge wasto break new ground with each investigativepiece as we kept up withfast-breaking news developments.The story built its own momentum,which helped ratchet up pressure onofficials, who were feeling the heatfrom constituents.Shortly after Eden began workingwith me, many of our newsroom colleagues,including a longtime editorwho had helped shepherd the Reichstory into print, left. Economic pressureshad forced Newsday to makepainful cuts in staff and news hole.Fortunately for us, however, Newsdayremained committed to the story.Within weeks, it became clearthat Reich’s arrangement was not anisolated one. Records showed that 23school districts—or nearly one-fifth ofthose on Long Island—had improperlyreported their attorneys as employees,entitling them to good-sized benefitpackages. This prompted New YorkOne of Newsday’s “double dippers.”Comptroller Thomas DiNapoli tolaunch a review of every attorney ona public payroll statewide. Meanwhile,Cuomo’s investigators were expandingtheir probe statewide—netting, amongothers, the brother and sister-in-lawof a top state judge.All of this investigative action bypublic officials meant that we had tomove fast simply to not be beaten onwhat had been our story. The pacewas daunting. We requested morerecords, including vendor records andpayments to all professionals employedby 124 school districts and 96 villages,meeting minutes, Civil Service records,and pension databases from the state’stwo largest retirement systems, amongothers. We built our own databases,as well.After prodding from readers, wealso decided to write about a differentkind of pension abuse, one thatstunned the public with its scope andcost. At least 40 Long Island schooladministrators were “double dippers,”meaning they had retired and thenreturned to work as so-called interimemployees. Pension and payroll recordsshowed that they were paid six-figurepaychecks on top of equally lucrativepensions, collectively reaping at least$11 million a year.We found one superintendent collectinga pension of $316,245 andreturning to work as a superintendentfor an additional $200,000. Anothersuperintendent, convicted of stealingmore than $2.2 million from his schooldistrict, was collecting a pension of$173,495 in prison. In several cases,administrators literally retired one dayand returned the next day to the samejob. These double dippers had turneda system meant to provide security inretirement to one that minted millionairesonce they turned 55.Our stories hit a nerve. Newspapersthroughout the state, as wellas national law journals, picked upon our reporting. In New York, likeeverywhere else these days, there is agrowing divide between the public andprivate sectors, as public-sector salarieshave risen and private-sector benefitsare disappearing. On Long Island, theaverage public-sector worker makes$10,000 a year more than the averageprivate-sector worker and gets aguaranteed pension and health benefitson top of that. Taxpayer resentmentruns deep.Readers deluged state legislatorswith letters and e-mails, and a rarepublic hearing on the issue resulted.Although the New York legislaturehas been branded as “dysfunctional”by some, the clamor was too much toignore. In June 2008, the legislatureunanimously passed sweeping pensionreforms. The state’s comptroller andthe education department revampedtheir rules and beefed up enforcement.A few months later, state officials andlegislators proposed an additionalreform measure to address abuses inNieman Reports | Summer 2009 75