NY Inspector General Cites Waterfront Corruption

"Instead of ridding the waterfront of corruption, this agency itself was corrupt," authorities say

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    NEWSLETTERS

    The state commission established to clean up the New York Harbor waterfront has been plagued by corruption and abuse in hiring, supervision and fiscal oversight, New York's inspector general said Tuesday.

    In a 60-page report, state Inspector General Joseph Fisch concluded former New Jersey Commissioner Michael Madonna, former New York Commissioner Michael Axelrod and former Executive Director Thomas De Maria failed to "adequately or responsibly oversee" operations.

    De Maria resigned in 2008. He was replaced by Walter Arsenault, a former New York City prosecutor. Madonna was fired last week by New Jersey Gov. Jon Corzine, who cited the inspector general's "specific factual descriptions of incompetence, waste and other abuses" at the commission under Madonna. The ex-police detective and former president of the New Jersey State Policemen's Benevolent Association told the inspector general that as a part-time commissioner he shouldn't be held accountable for the agency's failures.

    The report noted licensing a convicted felon, misuse of federal homeland security funds and the failure to issue a single permanent license to harbor companies for more than a decade.

    "Instead of ridding the waterfront of corruption, this agency itself was corrupt," Fisch said.

    Arsenault said new commission officials worked closely with the inspector general, turning over anything they uncovered. Some former staff were fired, left or retired, and in the last few months 14 new detectives and sergeants have been hired.

    "We have basically rebuilt the commission," he said.

    Fisch agreed the agency has changed with the departures and new top staff. His report has been referred to the Manhattan District Attorney's Office, which is reviewing it for possible criminal prosecutions, he said.

    The Waterfront Commission of New York Harbor was created in 1953 to deter criminal activity reflected in the film "On the Waterfront" and to ensure fair hiring at the Port of New York and New Jersey. Each state appoints one commissioner. The agency licenses companies operating in the harbor. It has about 100 employees and a budget of more than $11 million.

    Fisch praised New York Gov. David Paterson for appointing Ronald Goldstock to replace Axelrod, a Long Island labor attorney, as New York's commissioner last year, saying it sparked reform. Goldstock was director of the New York State Organized Crime Task Force for 13 years.
        
    Paterson's office declined comment on the report.
        
    The report also found that the commission failed to keep track of more than $600,000 in homeland security grant money and used a patrol boat funded with another $170,000 homeland security grant to escort guests and VIPs during Fleet Week.
        
    It also said Madonna, who oversaw the commission's police division, interfered with an internal investigation by ordering the chief to retract findings, then punished the whistleblower.
        
    The report also said former General Counsel Jon Deutsch helped Frank Cardaci devise a scheme to keep his port business despite a federal racketeering conviction for storing illegally diverted international goods in his warehouse, and that Axelrod gave official "police" placards to his wife and a wealthy personal friend.