Investigation of the Waterfront Commission of New York Harbor

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Audit and Control Director Frank Nastasi Offered Private Tax PreparationServices during Commission Working HoursEvery member of Audit and Control reported that Nastasi conducted a private taxbusiness. Some members testified to seeing tax clients enter and exit Nastasi’sWaterfront Commission office during the workday. The Inspector General was informedthat Nastasi submitted numerous boxes of his clients’ tax documents to be shredded. Anemployee determined that the boxes did not contain Waterfront Commission material.Nastasi admitted to operating a tax preparation business but denied conducting itduring his regular working hours at the Waterfront Commission. Nastasi didacknowledge that some private clients came to his Commission office “after hours”before his division moved to the new offices located at 39 Broadway in early 2000. 23After the Waterfront Commission moved, Nastasi stated that his clients would only cometo the offices to deliver documents. In response to the auditors’ assertions that he alwayskept his door closed, Nastasi stated that the office was very noisy.De Maria stated that he knew that Nastasi had a private tax business and heardthat a “couple of times” Nastasi’s clients came to the Waterfront Commission.According to De Maria, he instructed Nastasi to stop preparing taxes for his clientsduring Waterfront Commission hours. After that, De Maria stated that he learned of noadditional complaints alleging that Nastasi was operating a tax preparation businessduring Waterfront Commission hours. However, the testimony of the auditors suggeststhat Nastasi continued to prepare tax documents during business hours. De Mariatestified that he did not know if Nastasi obtained permission to engage in outsideemployment as required by Commission policies because Nastasi pre-dated him and,therefore, he may have gotten permission prior to De Maria’s tenure. 24Nastasi Accessed Pornography on His Waterfront Commission ComputerDirector of Information Technology Lee Seeman testified that Nastasi accessedpornography and other inappropriate Web sites on his Waterfront Commission computerover a two-year period. Seeman testified that he informed then-Executive Director DeMaria of Nastasi’s abuse of his Commission computer, but, when interviewed by theInspector General, De Maria denied knowledge of it.Seeman stated from approximately 2006 through about eight months prior toNastasi’s retirement, Nastasi accessed or attempted to access pornographic material.According to Seeman, many of Nastasi’s attempts to access pornographic and lingerie23 The offices of Audit and Control were located at 42 Broadway until early 2000.24 The Waterfront Commission’s Employee Manual, Section K, entitled “Outside Employment,” reads, inpart: “Employment with the Commission is full time and all personnel shall consider such employment astheir sole occupation…. The Commission recognizes that an employee may find it necessary to engage inoutside employment on his or her own time. Before engaging in such employment, Commissionemployees shall state in writing the nature of employment giving details and shall obtain the approval ofthe Executive Director…. No such additional work shall be permitted if, in the opinion of the ExecutiveDirector, it will impair the ability of an employee to perform his or her Commission duties capably andefficiently.”31
Web sites were blocked by software installed on the Waterfront Commission computernetwork. However, Nastasi became more creative and searched for Web sites whichincluded items such as nude art.Seeman stated that he had at least two conversations with De Maria about Nastasiaccessing pornography. After the last conversation, Seeman noticed that Nastasi’sattempts to access improper Web sites stopped. Seeman stated that since the conductstopped, he assumed that De Maria had spoken to Nastasi. Seeman provided theInspector General with internet usage logs which show some of Nastasi’s attempts toaccess inappropriate Web sites. When De Maria testified to the Inspector General, hedenied knowledge of Nastasi accessing or attempting to access pornography.After Nastasi retired on January 31, 2008, two closets full of his personal itemswere discovered in the Waterfront Commission’s New York office by current ExecutiveDirector Walter Arsenault. In total, there were more than 50 boxes. While the closetswere filled with Nastasi’s personal belongings, Waterfront Commission items remainedstacked in the hallway because of a lack of storage space. Included in one of the boxeswere pornographic magazines.Recent Changes Regarding Commission AuditsIn its formal response to this report, the Commission reported that it hasdisbanded the Division of Audit and Control, placing the Commissions auditoremployeesunder the supervision of the Director of Administration. The Commission hasentered into four contracts with outside auditors to assist the Commission in bringing itsaudits up-to-date. The Commission further reported that “Commission auditors will nolonger routinely work from home, will be required to call in from their field assignmentson a daily basis, will be subject to spot checking, and be responsible for deliveringweekly progress reports to [Commission headquarters]. Our revised Travel Rules…nolonger credit travel time as work time for auditors thereby increasing their productivetime by at least an hour a day. Auditors will be rotated from company to company toavoid developing relationships with those they audit and to provide peer review.Auditors will begin “sampling” in an effort to reduce audit times.”D. POLICE DIVISIONWithin the Waterfront Commission Police Division, the Inspector General foundpoor management and improper interference in Police Division business byCommissioner Madonna.The Police Division is charged with investigating criminal activity and criminalinfluence on the ports in New York Harbor. The Police Division is headquartered in theManhattan office and maintains field offices in Newark and Brooklyn. The divisionworks jointly with various law enforcement agencies, and some detectives are assigned tofederal and state interagency task forces.32
Page 1 and 2: State of New YorkOffice of the Insp
Page 3 and 4: STAFF FOR THIS INVESTIGATION AND RE
Page 5 and 6: Personal Use of Waterfront Commissi
Page 7 and 8: mandated core responsibilities. 2 T
Page 9 and 10: enforcement officer, he was hired a
Page 11 and 12: II. BACKGROUNDHistoryIn the early 1
Page 13 and 14: Commission regulates the employment
Page 15 and 16: There was virtually no communicatio
Page 17 and 18: and, therefore, the Waterfront Comm
Page 19 and 20: did identify individual instances o
Page 21 and 22: Maria that he “should have been m
Page 23 and 24: Q.: Why did it change?Deutsch: Beca
Page 25 and 26: all the things that has gone on wit
Page 27 and 28: Police Division. That testimony not
Page 29 and 30: had been completed within the curre
Page 31 and 32: epercussions of his felony convicti
Page 33 and 34: Michael DeCotiis testified to the I
Page 35: offending companies, although Kelly
Page 39 and 40: At all of the police academies, the
Page 41 and 42: epresenting the Waterfront Commissi
Page 43 and 44: training facility has been created
Page 45 and 46: Madonna’s other recommended candi
Page 47 and 48: Madonna denied providing the exam t
Page 49 and 50: which car they would drive, they ne
Page 51 and 52: F. ABUSE OF PUBLIC RESOURCESPersona
Page 53 and 54: A Waterfront Commission Vehicle Was
Page 55 and 56: Wolf also attempted to disclaim res
Page 57 and 58: determining the outstanding forfeit
Page 59 and 60: non-federal share of expense, and t
Page 61 and 62: comptroller received this informati
Page 63 and 64: Commissioner Madonna compelled the
Page 65 and 66: Fiscal Management• The Commission
Page 67: JON S. CORZINEState GovernorOFFICE

Investigation of the Waterfront Commission of New York Harbor

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