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Hevesi agrees to reimburse state $206,000 Probe shows vast underreporting of taxpayer-funded services for comptroller's wife

State Comptroller Alan G. Hevesi vastly underestimated what he owed the state for taxpayer-funded chauffeurs for his wife and, over several years, used four different state workers to perform personal work for her, an investigation by the state attorney general's office determined Tuesday.

Hevesi, avoiding an embarrassing lawsuit by the state against him, Tuesday signed a deal with state attorneys to pay a total of $206,294 to the state -- far more than the $82,689 he had calculated in October that he owed after revelations surfaced of the driver arrangement for his wife.

The investigation showed that Hevesi owes the state $195,000, including interest, for the services of one state worker -- Nicholas Acquafredda -- assigned to his wife and $11,000 for three others who did various work for different lengths of time.

Acquafredda also was a driver for Hevesi's wife, Carol, when Hevesi was New York City comptroller; Hevesi reimbursed the city after that arrangement was revealed.

In October, Hevesi paid the state nearly $83,000 after the scandal broke and later put an additional $90,000 into an escrow account after being ordered by the office of Attorney General Eliot L. Spitzer, now the governor-elect. The deal Tuesday calls for the escrow money to be turned over to the state and for Hevesi to pay an additional $33,605 within 10 days.

Hevesi makes nearly $350,000 a year between his state salary and three government pensions.

Besides driving Carol Hevesi to errands, the state worker assigned to her most of the time over a three-year period appeared to often be an official companion for her, doing everything from eating lunch with her to helping with rehabilitative knee exercises after knee surgery in 2005, the attorney general's report showed.

A defiant Hevesi, while agreeing to the financial settlement with Spitzer's office, insisted he could use state workers to provide security services for his wife because of threats made against him as the state's chief financial officer. In an unusual rebuttal to a legal agreement that ended threats of Spitzer suing the comptroller, Hevesi said he would have owed far less had he kept accurate records that would have showed some of the time required by the drivers to provide what he considered valid security services.

In fact, Hevesi, the state's fiscal watchdog, who has issued scathing audits against state and local government officials for financial improprieties, kept no records at all of the work performed for his wife. That left attorneys in Spitzer's office scrambling to create a paper trail involving parking lot records, computer log-in times and phone calls to come up with an estimate of how much time the workers assigned to Carol Hevesi were actually using to perform valid state duties.

The latest development in the investigation of Hevesi, a Queens Democrat who was easily re-elected last month despite the scandal, comes as the Albany County district attorney is continuing his probe and a special counsel assigned by departing Gov. George E. Pataki is looking at possible proceedings to remove the comptroller from office. The findings of the Spitzer probe were turned over to the two other investigations of Hevesi.

Spitzer, who recused himself from the probe, declined to comment Tuesday evening. "The report speaks for itself," said Darren Dopp, a Spitzer spokesman. Spitzer assigned the case to attorneys in his office, who were given the responsibility of looking solely at the question of how much Hevesi owed the state.

Hevesi has said that the voters spoke in November and that he has no intention of stepping down. That could change if prosecutors here indict him, and there already are names floating around as possible replacements.

If Hevesi resigns, the Legislature -- dominated overall by Democrats -- would choose a successor, though Spitzer, as governor-elect, would likely have a major hand in that decision. Spitzer already has said Hevesi has compromised his abilities as comptroller.

The Hevesi matter began with a phone call to a fraud tip line at the comptroller's office from J. Christopher Callaghan, the Republican candidate for comptroller in November's election, about the work being provided for Hevesi's wife, who has been ill for decades and is now living in a Long Island nursing home. While at first Spitzer supported Hevesi, that soon changed, culminating with a withdrawal of his endorsement of the comptroller just before the election.

The state Ethics Commission already said Hevesi violated the law by securing "unwarranted privileges" for himself. The ethics report, as well as the document released by Spitzer's office, show cases in which Hevesi "omitted the fact" that there were other workers assigned to his wife. In the case of the main worker assigned to her, the driver spent months out of the office and often started his day at the couple's Queens home. The ethics panel said that there was no evidence Hevesi ever intended to repay the state.

Hevesi, in his response Tuesday, said most of the work involved security. For most of the time, however, the worker had no security background and said his response to any emergency would have been to call 911.

Hevesi said the amount he agreed to pay Tuesday included all the time the workers spent with his wife, including providing security services.

He has said he has received many threats over the years. A State Police assessment in 2003 stated that he was subject to threats and that, therefore, "a threat risk is indicated" involving his wife, he said. Other reports, though, concluded that there was no connection between Carol Hevesi's safety and threats made against the comptroller.

"Throughout the process, I have taken full responsibility for my actions and have repeatedly apologized for my mistakes," Hevesi said in a statement. He has described the missed reimbursements as an oversight.

"On Nov. 7, the people of New York State spoke loudly and clearly in my overwhelming re-election. The voters have weighed the facts and decided that they want me to serve another four-year term as New York State comptroller."

e-mail: tprecious@buffnews.com

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