Saturday, April 28, 2012

COIB and Martha Stark

On April 24, 2012, COIB issued a press release stating that as part of a settlement it was fining Martha Stark $22,000 for multiple Chapter 68 violations. These violations involved her work for Tarragon Realty starting in 2005 while she was still Finance Commissioner.

Legal Problems Beyond COIB

There are several legal problems with this settlement. While COIB has oversight over Chapter 68 of the NYC Charter, it has no jurisdiction over Chapter 49 of the city charter, in particular, Sections 1100 and 1118. See text below.

§ 1100. Head of department; whole time. Every head of an administration or department or elected officer except council members who receives a salary from the city shall give whole time to the duties of the office and shall not engage in any other occupation, profession or employment.

§ 1118. Officers and employees not be ordered to work outside public employment. No officer or employee of the city or of any of the counties within its limits shall detail or cause any officer or employee of the city or of any of such counties to do or perform any service or work outside of the public office, work or employment of such officer or employee; and any violation of this section shall constitute a misdemeanor.

COIB asserts in its press release that

The Board advised, in writing, that she could serve as a Tarragon Board Member, provided that, among other things, she not use her City position to obtain any advantage for Tarragon or its officers or directors and she not use any City equipment, letterhead, personnel, or resources in connection with her Board service.

COIB, however, does not have the power to suspend the above Section 1100 of Chapter 49.

In the past there has been some mention that the Law Department gave Stark a verbal approval to take a second job. Whether the Law Department has the authority to suspend Section 1100 of Chapter 49, is open to debate. COIB, however, makes no mention of this alleged verbal approval in its press release.

It is clear that in 2005 Stark was in violation of long standing statutory requirement that city commissioners "give whole time to the duties of the office" and not have a second job.

In addition, Stark dangerously admits to the following in the settlement of this issue:

j. Despite the written instructions from the Board, I asked the First Deputy Commissioner at Finance and my Executive Assistant at Finance to perform administrative tasks for me on Tarragon-related matters, which tasks they performed.
It appears that by this admission Stark puts herself at risk of a misdemeanor charge under the above Section 1118 of Chapter 49.

Thursday, April 26, 2012

Paul Marks and Martha Stark

Paul Marks is a lawyer at the Law Department. He represents the city in disputes with city employees. Marks represented the city in a defamation case that I brought against the NYCERS Board of Trustees and Department of Investigation in 2005.

In September 2005, my attorney notified Marks of the following allegations against Martha Stark, the Finance Commissioner and chair of the NYCERS Board of Trustees (The charge was made by an alleged Dept. of Finance employee):

  1. That Stark had been involved with Roberta Hand, an assessor at the Finance Department. Hand was subsequently indicted for bribery by the US government.
  2. That Stark was involved with Dara Ottley-Brown, another Finance Department employee. In January 2004, Stark had promoted Ottley-Brown to the position of Assistant Commissioner of Real Property, a crucial post at Finance.
  3. That in the spring of 2005, Stark and Ottley-Brown had improperly interfered with the tax assessment of the Met-Life Building. In May of 2005, Tishman Speyer, NYCERS, and TRS purchase the Met-Life Building for $1.74B. Stark was chair of both pension boards at the time.

The allegation about the Met-Life Building is a serious charge and has the potential for a major political scandal. The allegation gave specific name s of Finance Department assessors who were being allegedly pressured to alter the tax value of the property.

There was never any indication that Marks took any action on these allegations except to protect Stark from answering questions about her relationship with Ottley-Brown. In April 2009, the NY Post finally confirmed that relationship and the Mayor publicly asked the Dept. of Investigation (DOI) to investigate Stark. DOI has not yet reported the results of that public request.

In May 2006, my attorney notified Dan Castleman, the then chief of investigations at the Manhattan DA’s office, about these allegations.

On September 13, 2006, the City Council confirmed the mayor’s appointment of Ottley-Brown as one of the two non-technical commissioners at the NYC Board of Standards and Appeals. This ended Ottley-Brown's "career" at Finance. In spite of the publicity concerning her relationship with Stark, Ottley-Brown is still at the Board of Standards and Appeals.

Marks sat through Stark’s memory meltdown at her deposition in November 2006.

Marks sat through Bratcher’s false testimony at her deposition.

In addition, Marks handled Karen Mazza's deposition and was aware of evidence that Mazza, a lawyer at NYCERS, tried to destroy incriminating emails concerning Mazza’s communication with Baksh/Ramsami during Baksh’s hiring process at NYCERS.

Marks was also aware of evidence that Carol DeFreitas, a DOI investigator, cooperated with Mazza in trying to hide that evidence and that DeFreitas actually got her paycheck from the Finance Dept. (Stark) and not DOI.

In addition, Marks submitted Kin Mak’s false affidavit about his mythical email search. Mak is an IT worker at NYCERS. Mazza and DeFreitas had pulled him into their attempt to hide the incriminating email evidence.

My attorney notified Marks that the affidavit was false based on the physical impossibility of the statements in the affidavit.

It appears reasonable to conclude that Marks chose to participate in criminal activity in order to shield the city from civil liability in a pending defamation case.

City employees should find it intriguing that their taxes help pay the salary of this “company” lawyer.

Friday, April 20, 2012

Tier 6 - Cost Relief for City and the 8% Assumed Interest Rate

With the new Tier 6 pension benefit provisions in place it's time to check in on the long running circus called the "assumed interest rate". Since the spring of 2009 the NYCERS actuary has been delaying making a permanent recommendation on what is a reasonable expected rate of return for the assets of the city pension funds. Each year he has recommended one year extensions of the the current 8% rate.

The actuary has not yet reported on what the cost savings will be for the new Tier 6 pension benefits. But the tie in with the interest rate is critical.

With the current 8% interest rate the estimated annual cost to the city for the average city worker covered by Tier 6 will be about 1% of payroll. If the interest rate is 7% the cost goes up to 2.12% of payroll. If you want to be even more conservative with a 6% interest rate, then the annual cost goes up to 3.6% of payroll.

The following are estimated total dollar costs with different interest rates for a Tier 6 worker who starts at a $25,000 per year salary and retires with a $45,200 pension 42 years later:

  1. 8%: city = $18,210 worker = $60,127
  2. 7%: city = $38,605 worker = $60,127
  3. 6%: city = $65,556 worker = $60,127

You can easily see how important the assumed interest rate is.