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Erie County's fiscal crisis claimed its first major political figure Monday, when Comptroller Nancy A. Naples told several confidants she will not run for re-election this fall.

Naples, a major local and statewide Republican figure who lost a razor-thin race for Congress last year, has been stung in recent weeks by disclosures that she was late in paying her property taxes and that she directed much of the county's bond underwriting work to a politically connected associate on Wall Street.

Several knowledgeable sources who asked not be identified said Naples has decided that she doesn't want to face the kind of steady criticism that would be directed her way in a re-election battle this fall.

"She's getting bludgeoned," one Republican source said. "There's a real unrest among voters as a whole, and she's getting dragged into it."

Naples did not return phone calls seeking comment late Monday but was expected to officially announce her decision today.

Naples, 56, had proved to be one of the area's most popular politicians after emerging from political obscurity in 1993 and capturing the comptroller's race against then-South Common Council Member Brian M. Higgins -- the man who defeated her for Congress last November.

Since the 1993 race, no Democrat ever seriously challenged her, and she even accomplished the Herculean task of winning in overwhelming Democratic Buffalo during her 1997 campaign.

Indeed, most political observers did not believe her congressional loss seriously damaged her, and she was often mentioned as a successor to County Executive Joel A. Giambra, who has said he will leave the Rath County Office Building when his term expires in 2007.

But Naples was sucked into the black hole of recent Erie County politics that centered around a multimillion-dollar deficit and subsequent layoffs and reduction in services.

While she took the offensive in challenging Legislature Chairman George A. Holt Jr.'s inclusion of a no-bid contract in the budget -- calling it "illegal" -- she has had trouble fending off the newest developments.

The Buffalo News reported last month that Naples and her husband, businessman Thomas H. O'Neill Jr., were late paying county and town taxes in five of the last seven years, accruing almost $8,000 in penalties.

Naples later apologized, explaining that her husband pays the household bills and that she assumed he was meeting the Feb. 15 property tax deadline each year.

"I still take full responsibility because the property is in both our names," she said of the home on Lake Shore Road in the Town of Hamburg.

The News then reported April 6 that since she took office in 1994 and inherited the sole right to pick Erie County's bond underwriters, she awarded 80 percent of the business -- $1.1 billion in borrowing -- to one politically connected underwriter.

The Wall Streeter, Paul Atanasio, is close to State Conservative Party Chairman Michael R. Long of Brooklyn and received 14 of 24 bond deals and $5.25 million in fees over the years -- even after changing firms three times.

The comptroller defended her actions as permissible under state law and not unusual in the business of underwriting municipal bonds.

"My reputation is to do the best thing for the county, and I've always done that," she said. "Every large firm on Wall Street has Republicans who are big, heavy donors to the Republican Party, and they have Democrats who are big, heavy donors to the Democratic Party."

Still, she was grilled by County Legislature Democrats in a Friday session laden with personal animosity on both sides. Sources close to her say she has experienced enough, does not need the aggravation and decided to retire from politics.

The move causes particular problems for Republicans, who have relied on Naples' popularity to preserve the party's 30-year hold on the county comptroller's office, dating to Alfreda W. Slominski's tenure, which began in 1975. No immediate GOP names surfaced Monday.

On the Democratic side, attorney Mark C. Poloncarz announced his candidacy for the post Saturday. Others mentioned include Robert E. Whelan, former State Supreme Court justice and Buffalo comptroller; current Buffalo Comptroller Andrew A. San Filippo; and former City Auditor Richard C. Pawarski.


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