Investigation of the Waterfront Commission of New York Harbor

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pay; shortly thereafter, his suspension was modified to without pay. As described in thisreport, Deutsch was involved in numerous instances of misconduct, notable among whichare the following:• While Deutsch was the Director of Licensing, he inappropriately issued alicense to someone he knew.• Deutsch failed to disclose his familiarity with a consultant when herecommended the company.• Deutsch had a series of violations which involved his relationship with AlCernadas, Jr., Deutsch’s former co-worker and friend. Deutsch conductedthe questioning of Cernadas, Jr.’s father during an official investigation,leaked non-public information to him, and was inappropriately involved ina police investigation for a friend of the Cernadas family.• Deutsch also reportedly brokered a deal to circumvent the WaterfrontCommission Act where the attorney representing the stevedoring companywas the same person who was responsible, in part, for Deutsch beingpromoted to the position of General Counsel.The incidents described above were known to the commissioners of theWaterfront Commission and to Executive Director De Maria at the time of occurrence.Yet, until his suspension on March 6, 2008, Deutsch went virtually undisciplined for anyof his actions. Deutsch’s personnel file includes no documentation of these events.Although De Maria did not have the authority to terminate Deutsch, he did haveauthority to suspend him. Despite multiple instances of misconduct, De Maria never tookany steps to suspend Deutsch until after the Inspector General began its investigation.Axelrod testified that on multiple occasions he wanted to discipline Deutsch, butMadonna refused to agree. After it was discovered that Deutsch released non-publicinformation to Cernadas, Jr. during the initial stages of a Commission investigation, DeMaria suspended Deutsch. In March 2008, Axelrod sought to terminate Deutsch, butMadonna again would not agree.Madonna testified that he did not believe that any of Deutsch’s actions describedin this report mandated his termination. When asked if he also was against discipliningDeutsch, Madonna stated that he could not recall Axelrod or De Maria requesting to takeany disciplinary actions. Madonna stated that the reason he finally agreed to terminatehim was because the new executive director, Walter Arsenault, did not believe thatDeutsch was competent to serve as general counsel.In Madonna’s written response to the Inspector General’s report, he claimed thathe had not been resistant to disciplining Deutsch, but rather did not want to “rush tojudgment.” However, he also criticized De Maria’s eventual suspension of Deutsch,complaining that he was granted no input in the decision; furthermore, he cited amemorandum in which he wrote that Deutsch’s history “does not illustrate a pattern [of]continued egregious misconduct.”45
F. ABUSE OF PUBLIC RESOURCESPersonal Use of Waterfront Commission VehiclesThe Waterfront Commission lacked an official written policy regarding vehicleusage, and Commission officials gave conflicting answers when asked about the vehicleuse policy. The Inspector General found that senior employees were granted unrestricteduse of Commission vehicles, and gasoline was purchased with Commission funds withoutregard to business or personal use of the vehicle. In fact, the Commission failed toaccount for personal use of Commission vehicles as required by federal tax laws.Then-Assistant Chief of Police McGowan testified to a class system for the use ofvehicles, which he stated was “a standing policy that was always in effect.” McGowanstated that while he was acting chief, the policy was written and distributed to themembers of the Police Division. The Inspector General requested a copy of any suchvehicle-use memorandum, but the Commission did not provide any written evidence ofthe existence of such a policy, formal or informal. In any event, neither the generalcounsel nor the executive director ever approved such a policy, which is standardprocedure.McGowan informed the Inspector General that, according to the unofficial policy,class “A” users were entitled to unrestricted use of the Waterfront Commission vehicle,including transport of family members. The Commission’s class “A” users were theexecutive director, general counsel, the chief of police, the assistant chief of police,captains, and lieutenants. McGowan stated that as long as the individual carried hisWaterfront Commission mobile phone, that person was considered “on duty.” Therefore,that person could use the vehicle for “anything,” including personal business on days-offand weekends. In addition, gasoline and tolls were paid for by the WaterfrontCommission, even when the vehicle was being driven for personal use.Class “B” users were detectives assigned to task forces. In addition to businessuse, these individuals were permitted to use their Commission vehicles to commute toand from work. Class “C” vehicles were stored at Waterfront Commission locations andused only by detectives during the regular course of business. All classifications includedcredit cards with which to purchase gasoline.Contrary to McGowan’s testimony, De Maria and Madonna both testified that theCommission vehicles were not to be used for personal business. While Madonna testifiedthat this policy was always in effect, De Maria testified that he believed personal use wasonly prohibited after the enactment of the Commission’s ethics manual in 2005, whichcontained a general provision restricting use of Waterfront Commission property toofficial business. Prior to the adoption of the ethics manual, De Maria stated that it waspermissible to use his Commission vehicle, as well as Commission-purchased gasoline,for personal use. That assertion notwithstanding, De Maria continued to commute in hisvehicle after the adoption of the ethics manual.46
Page 5 and 6: Personal Use of Waterfront Commissi
Page 7 and 8: mandated core responsibilities. 2 T
Page 9: enforcement officer, he was hired a
Page 12 and 13: on August 5, 2009, Governor Corzine
Page 14 and 15: provides no details or guidance as
Page 16 and 17: III. ALLEGATIONS AND METHODOLOGYOn
Page 18 and 19: Police Division was lacking policie
Page 20 and 21: applicant’s prior criminal histor
Page 22 and 23: withdrew,” and that was a clue to
Page 24 and 25: Licensing-Related Abuses by Deutsch
Page 26 and 27: Acting Chief of Police McGowan. Deu
Page 28 and 29: the past ten years because the Audi
Page 30 and 31: een completed, few of the audits we
Page 32 and 33: ASA Apple was permitted to withdraw
Page 34 and 35: Commission’s first Association co
Page 36 and 37: Audit and Control Director Frank Na
Page 38 and 39: Although new hires are granted the
Page 40 and 41: 2008. Overall, while each location
Page 42 and 43: Organized Crime Unit, the US Depart
Page 44 and 45: check, the chief of police would re
Page 46 and 47: take the examination. During the In
Page 48 and 49: asked De Maria if he would be termi
Page 52 and 53: The Inspector General learned that
Page 54 and 55: airport, one in McGowan’s assigne
Page 56 and 57: Federal laws restrict the manner in
Page 58 and 59: The Commission reported to the Insp
Page 60 and 61: In response to the Inspector Genera
Page 62 and 63: A consultant was retained to review
Page 64 and 65: In light of the findings of this re
Page 66 and 67: APPENDIX

Investigation of the Waterfront Commission of New York Harbor

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