February 25, 2005
Case of Former SUNY Official Points
to Ethics Law Loophole
By MICHAEL SLACKMAN
When Karen R. Hitchcock resigned last year as president
of the State University of New York at Albany, she said she was
leaving earlier than expected to deal with family concerns.
But at the time, Dr. Hitchcock faced a state ethics
inquiry into accusations that she offered to steer a campus construction
contract to a developer, who in exchange would pay to endow a
university professorship that she could fill once she left her
job as college president, according to state officials familiar
with the ethics review.
Facing a complaint filed with the state Ethics
Commission, Dr. Hitchcock expedited her departure from the state
payroll, even surrendering accrued vacation time, the officials
said. That action stopped investigators from looking into the
complaint because of a loophole in state law that effectively
grants most employees immunity when they leave the state payroll
- no matter what their actions while on the job.
A lawyer representing Dr. Hitchcock, Michael Whiteman
of Albany, acknowledged that he was aware of an ethics complaint
involving Dr. Hitchcock but denied all the accusations against
her. Now Dr. Hitchcock has a new job, as principal of Queens University
in Kingston, Ontario.
But the timing of her departure from her Albany
post in 2004, along with dozens of other cases in the last decade
in which state employees suspected of wrongdoing left their jobs,
has prompted calls to close the loophole by having the ethics
law cover former state employees, as Gov. George E. Pataki first
proposed in 1996.
Attorney General Eliot Spitzer, who has announced
plans to run for governor in 2006, argued that public officials
"should not be allowed to avoid sanctions for misconduct
simply by leaving state service."
In the last decade, ethics officials said, there
have been about 50 cases that could not be pursued under the ethics
code - those found guilty could have faced fines of up to $10,000
and removal from their jobs - after state employees accused or
suspected of violating provisions of the ethics law walked away
from their positions:
A Long Island Rail Road administrator, Rosanne
Neville, and her husband, Dennis George, a chief engineer, retired
in 2004, avoiding an ethics inquiry after they were accused in
a complaint to the Ethics Commission of accepting free tickets
to the Viennese Opera Ball at the Waldorf-Astoria and after accepting
free meals in New York and Germany. Contacted at her home in Florida
yesterday, Ms. Neville said that she and her husband had worked
for the state for more than 30 years, loved their jobs and felt
that rather than spend a lot of money to prove their innocence,
they chose to retire.
"Our lawyer told us that, 'Look, I can fight
this, I can win this, but it's going to cost you over $20,000,'
" Ms. Neville said. "We have large families, we have
a daughter that we wanted to buy something for. Why would we spend
$20,000 on something that was, what we believed to be nonsense?"
The New York State Canal Corporation's deal to
sell the rights to develop private land along the Erie Canal for
$30,000 was plagued by favoritism and illegal ethical lapses,
but those linked to the misconduct could not be charged with ethical
violations because they had left state service, according to an
investigation completed in November by Mr. Spitzer and the state
inspector general, Jill Konviser-Levine.
A former general counsel in the Department of Transportation,
James B. Cantwell, was caught in a secretly recorded conversation
saying he would give preferential treatment to a company linked
to State Senator Guy J. Velella even if it cost taxpayers money,
according to court transcripts. Mr. Cantwell, who was never charged
with any criminal or ethical wrongdoing, could not be investigated
by the state's Ethics Commission after he retired.
Mr. Cantwell initially declined to comment, but
through his current employer said that he had retired from state
government for personal reasons that had nothing to do with any
potential ethics inquiry. Mr. Velella was convicted of felony
charges in the case.
Despite calls to stiffen the ethics law, no one
has pushed to get legislation closing the loophole through the
Assembly, which is controlled by Democrats, or the State Senate,
which is controlled by Republicans. In the Assembly, such legislation
never made it out of committee last year, and in the Senate, officials
said that it was introduced only as a courtesy to the Ethics Commission
and that there had never been any momentum to get it passed.
"The bottom line is that employees should
not be able to evade penalties under the ethics law simply because
they leave public service," Kevin Quinn, a spokesman for
Mr. Pataki, said.
In recent months, however, the loophole has become
a source of growing frustration among those who must enforce the
law. The attorney general and inspector general recently complained
about their inability to charge former Canal Corporation employees,
and the chairman of the Ethics Commission, Paul Shechtman, recently
complained about not being able to investigate an employee who
abruptly left the state payroll.
Under state law, complaints, or referrals, to the
Ethics Commission must be kept confidential until the commission
issues what is called a "notice of reasonable cause,"
which is similar to an indictment in a criminal proceeding.
Citing the law, Mr. Shechtman refused to disclose
any of the details of the case he had fumed about. But officials
in several government offices, insisting on anonymity because
of the secrecy requirements in the law and the unresolved nature
of the case, said that Mr. Shechtman's ire was directed at Dr.
In the SUNY Albany case, Dr. Hitchcock's lawyer,
Mr. Whiteman, denied that she gave up any accrued vacation time,
and said that she did not in any way move to expedite her departure
to avoid an ethics inquiry. He said the charge that she tried
to arrange a quid-pro-quo deal to ensure a job made no sense,
since as a tenured professor, she would be guaranteed a job at
the university, even after leaving as president.
"She made no such proposal," Mr. Whiteman
said. "She engaged in no conversation along those lines with
anyone and she didn't authorize anybody to engage in one on her
behalf. She is totally unaware of any such conversation."
Dr. Hitchcock took over as president of SUNY Albany
in 1996 and announced her plans to resign in October 2003. During
her tenure she developed a very favorable reputation both with
the business community in the capital region, and with much of
the faculty at the university. She was credited with attracting
outside financing that was used to build technology and research
centers at the university.
But when Dr. Hitchcock first announced she would
step down, she said she would serve until the end of the academic
year. She then announced that for personal reasons she would instead
take a leave beginning in January. Her departure sparked a flurry
of rumors, most of which revolved around the notion that the SUNY
chancellor, Robert L. King, a close ally of Governor Pataki's,
had forced her out.
But the officials who spoke on the condition of
anonymity said that sometime before her planned departure, Dr.
Hitchcock and her husband approached a developer to try to arrange
a deal. The developer would get the contract to build housing
on campus, and in turn would endow a chair for Dr. Hitchcock.
SUNY referred the case to the Ethics Commission, which could take
no action against Dr. Hitchcock because, officials said, she departed
as quickly as possible to avoid liability.
Former state employees can be prosecuted criminally,
if charges are warranted. Officials said that representatives
of the Ethics Commission plan to meet soon with the attorney general's
office to discuss the prospect of criminal charges against Dr.
Hitchcock and any others who may have been involved in the discussions,
but added that no decision had been made in that regard.
Mr. Whiteman said Dr. Hitchcock notified university
officials of what he characterized as "false allegations"
at the time she was appointed principal, which is the equivalent
of a university president.
Michael Cooper and Al Baker contributed reporting
for this article.