Erie County Comptroller Nancy Naples denies she has sent 80 percent of the county's underwriting business to one man. She defends herself by saying only 60 percent went to one underwriter who, by the way, has contributed not only to Naples, but other Republican causes. The technical term for this is called missing the point.
When will politicians ever learn (no need to answer; it's a rhetorical question) that giving business to people who give you money is a practice that corrodes confidence in government and ought to be avoided?
Some municipal finance experts say that dealing with one person carries certain benefits if he or she has a history with the government's financial dealings, and therefore might be better able to serve the client in terms of knowing what's going to work best for that municipality. Perhaps.
But that still doesn't remove the odor attached to sending lucrative underwriting business to someone who contributes money to you and your party. Adding to the aroma of favoritism is the fact that the underwriter's mother, who lives in Queens County, sent Naples $1,000, which appears to be a violation of Security and Exchange Commission regulations.
The only defense for one man getting so much county business is that taxpayers enjoyed a savings that could be achieved from no other underwriter. That's the case Naples needs to make, not parsing percentages.
Moreover, such parsing is specious. Not all bond deals are created equal. Some are worth more than others. Naples is aware that 60 percent of the deals that went to the underwriter, Paul Atanasio, were worth 80 percent of the $1.4 billion in borrowing. And more to the point, the underwriter's fees are determined by the amount of borrowing, not the number of deals.
Since taking office 11 years ago and getting the sole right to choose the county's bond underwriters, Naples has given most of the work, in terms of dollars, to Atanasio regardless of which of the three firms he was working for at the time. One deal cost the county $500,000 more than a competing bid.
As detailed by News reporter Matthew Spina, each time Atanasio went to a new firm, the county's business went with him. This amounted to $5.25 million in fees over the years.
State law does allow Erie County to dismiss competitive bidding on bond offerings in order to allow the comptroller to negotiate the best deal. So, in essence, she did nothing wrong -- if taxpayers benefited from the relationship.
Naples, in an e-mail to the media, defended her practices. She said the selection of underwriting firms is made after much research, thorough review and analysis, and "with only one primary requirement: What's best for the taxpayers of Erie County."
That's the case Naples has to make to convince taxpayers that they did get the best deal. So far, she has refused to provide documents that would prove her contention. She said her staff does not have the time to gather the information. She needs to find the time.