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NAPLES WANTS TO EXPLAIN
BUT SAYS LAWMAKERS SHOULD GO TO HER OFFICE

County Comptroller Nancy A. Naples says lawmakers should come to her office if they want an explanation of how she picks bond underwriters and why she has given 80 percent of Erie County's business to one politically connected official.

The Legislature's Finance and Management Committee, however, won't be going to her. Its chairman expects Naples to sit before the members when they meet next week in Old County Hall, probably Friday.

It's the Legislature that grants her authority to negotiate deals to borrow money, and some members imply they will subpoena her if she does not show.

"The Legislature has a County Charter process, which I'm sticking to," said committee Chairman Demone A. Smith, D-Buffalo. "Hopefully she'll cooperate."

"I have been pretty cordial," he said. "My intention is not to embarrass her, it's to ask the questions that are before us. I am not trying to pick a fight."

Since Naples took office in 1994, the county has borrowed roughly $1.4 billion -- 80 percent of it through the services of underwriting firms employing Paul Atanasio of New York City. Atanasio is a Conservative Party activist who maintains a close friendship with party Chairman Michael R. Long and donates generously to Republican causes.

Erie County's business followed Atanasio as he moved through three firms over the past 11 years. Since 1994, roughly three of every five Erie County bond deals have gone to firms employing Atanasio. Naples, in a written statement Wednesday, called him "extremely well qualified and respected in his field."

Atanasio's mother in Queens County also gave $1,000 to Naples' re-election campaign in 2001, though underwriters are barred from donating directly or through conduits to officials they do business with, unless they can vote for them. Even then, donations cannot exceed $250.

Had the donation been found to be illegal, Atanasio's firm could have been barred from doing business with Erie County for two years under rules written by the Municipal Securities Rulemaking Board and enforced by the Securities and Exchange Commission.

So far, Naples has not provided The Buffalo News with records sought under New York's Freedom of Information Law to determine whether she consistently selected the most economical deal. The News asked for the documents March 10, but Naples said she lacks the staff to process the request.

In the year 2000, she selected Atanasio's firm as lead underwriter on a $246 million loan, though his fees cost $500,000 more than the next best offer. Naples argues that an independent financial adviser determined the higher fee was justified.

In her letter to legislators Thursday, Naples said that if lawmakers come to her office at 1 p.m. Wednesday, she and her key staff can answer their questions "while at the same time allowing access to the voluminous files regarding this subject."

"Your misunderstandings and concerns will be dissipated," she said.

Committee meetings are open to the public. Naples did not return telephone messages or e-mails asking whether her staff would bar the press and public from attending if a session were held in her Rath Building office.

"I think she needs to report out to the public," said Majority Leader Lynn M. Marinelli, D-Town of Tonawanda, one of the lawmakers who alluded to the fact they can subpoena Naples to appear, a power the Legislature rarely uses.

The Finance and Management Committee has invited Naples recently to answer questions about the county's borrowing practices, and she has said she would attend. But she canceled Monday, minutes before that committee session was to start.

The panel is to meet twice next week, Wednesday and in a session set for Friday, especially for Naples.

"We will expect to see her at our Finance Committee meeting on Friday," said Legislator Albert DeBenedetti, D-Buffalo, the panel's former chairman.

e-mail: mspina@buffnews.com

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