February 28, 2008

Widespread district use of law firms suggest need for review

Source: NYSUT Media Relations

ALBANY, N.Y., February 28, 2008 - New York State United Teachers today urged Attorney General Andrew Cuomo to expand his investigation into possible misconduct as to how school districts reward outside attorneys. The union said that the excessive use of expensive outside lawyers appears to be widespread and growing across New York state and raises the possibility that misuse of taxpayer funds might extend beyond the examples reported by Newsday. The Long Island newspaper reports that some districts have arrangements with high-priced law firms that give full-time employment and public pensions for part-time work - all this while these firms charged exorbitant fees for services during the same time period.

"In tough economic times, we need to redouble our commitment to providing the resources and quality education our children deserve," said NYSUT President Richard C. Iannuzzi. "The published reports make it appear that property tax dollars are being misdirected to high-priced law firms, even as districts opt to cap the services provided directly to children in classrooms. If this is the case, then we are calling upon Attorney General Cuomo and Comptroller Thomas DiNapoli to act immediately to stop these practices."

Iannuzzi lauded Long Island's Newsday for questioning why attorneys for high-priced law firms were put on districts' payrolls as "employees" even as they earned millions of dollars in legal fees as outside counsel. The paper reported that as school district "employees," some of these attorneys received pension credits and benefits from the retirement system - perhaps, according to Newsday, fraudulently. In addition to the attorney general's office, Newsday reported that the FBI and IRS are also investigating, and that many Westchester school districts have been added to the probe. The Comptroller's office has announced that it will audit several of the districts involved.

"Newsday has done a public service by questioning special deals which could take advantage of state and local property taxpayers and the state retirement system's rules," Iannuzzi said.

An informal survey of NYSUT's 16 regional offices showed a marked increase in the number of school districts statewide contracting out legal work - such as contract negotiations, grievances and discipline cases - to high-priced outside firms, often with no connections to the local community. "This growing development in labor relations has accelerated across the state over the last five years. In many cases, it has led to contentious stalemates at the bargaining table with no obvious benefit to local school districts or the communities they serve," Iannuzzi said.

NYSUT represents 585,000 teachers, school-related professionals, academic and professional faculty in higher education, professionals in education and health care and retirees. NYSUT is affiliated with the American Federation of Teachers; National Education Association; and the AFL-CIO.


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