Investigation of the Waterfront Commission of New York Harbor

Commission Comptroller Irving Wolf did little or nothing to properly track receipts offunds and expenditures and could not ensure that funds were spent appropriately.The Inspector General finds that, as agency heads, both Commissioners Madonnaand Axelrod bear responsibility for the failings of the Waterfront Commission. Inaddition, De Maria lacked control over the agency and failed to use his authority todiscipline errant staff and ensure efficient and effective operations of the Commission.De Maria claimed to be ignorant of many improprieties within the agency, and did nottake action to remedy problems he did identify.In response to the Inspector General’s report, Madonna acknowledged that manyproblems existed in the agency, but refused to accept any responsibility. Instead,Madonna placed the blame on Commission staff, particularly De Maria. While De Mariaand the rest of the Commission staff bear responsibility for their individual failings, theproper functioning of the agency is ultimately the responsibility of the agency head, inthis case the two Commissioners. The abuses and mismanagement identified in thisreport are not simply a collection of individual bad acts, but rather constitute abreakdown of agency functioning. The Commissioners’ lack of leadership andparticipation in abuses of influence and public resources allowed the poor workperformance and improper activities to continue and flourish.As the investigation progressed, the Commission was regularly informed as theInspector General uncovered problems and abuses in order that remedial measures beinitiated as soon as possible. Since the onset of the Inspector General’s investigation, thefollowing changes have taken place with regard to the Waterfront Commission’sexecutives: in March 2008, Executive Director De Maria resigned; upon the expiration ofAxelrod’s term, Ronald Goldstock was appointed by New York Governor David A.Paterson as New York’s Commissioner and, on July 2, 2008, was confirmed by theSenate and assumed his duties; in September 2008, Walter Arsenault was appointedExecutive Director; and, in October 2008, General Counsel Deutsch was terminated aftera lengthy suspension. In addition to the aforementioned executive changes, underArsenault’s leadership, a number of reforms have already been instituted and arediscussed, where relevant, in this report.Following the completion of the Inspector General’s investigation, and prior tothe publication of this report and its findings, the Inspector General met with anddisclosed the findings to staff members of New Jersey Governor Jon S. Corzine.Following such meeting, on August 5, 2009, Governor Corzine informed the InspectorGeneral that he was removing Commissioner Madonna for cause. 33 See Appendix.5