Written by Howard Weitzman Thursday, 10 October 2013 00:00
Threat of lawsuit, made at public expense, aims to silence political opposition
Former Nassau County Comptroller Howard Weitzman announced that he received a letter from the law firm Edwards Wildman Palmer LLP, at the behest of the Nassau County Attorney’s Office, threatening a lawsuit unless he retracts a complaint he filed with the Securities and Exchange Commission. The complaint, based on an investigative piece published by the Wall Street Journal, highlights evidence that Comptroller George Maragos’s annual financial report is misleading and that the County Attorney’s office colluded with a partisan Republican judge to ‘cook the books’ and misrepresent the county’s financial condition on the annual financial report.
“It is a new low for Mr. Maragos to use taxpayer dollars to hire an attorney to threaten his political opposition,” said Weitzman. “I have asked the SEC to look at the way Mr. Maragos and the administration manipulated county finances to claim that the county ended the year with a ‘miraculous’ surplus, when in fact the county has gone deeper into debt.”
This is the third attempt Republican leaders in Nassau County have made to keep Weitzman from disclosing the truth about the county’s financial reports. This month alone, Weitzman was twice denied the opportunity to testify at public hearings, even though the hearing notices explicitly stated that there would be time for public comment.
The thrust of Weitzman’s complaint is that Maragos and other county leaders misrepresented the county’s financial condition, thus misleading the public and county bond holders. The county’s 2012 official financial report prominently touts a surplus that is a total work of fiction. On the last business day of 2012, County Attorney John Ciampoli sought a controversial and highly unusual court order to push outstanding property tax refunds from 2012 to 2013, in order to make the county appear to have a budget surplus on its 2012 annual financial report, the last annual financial report before Maragos and County Executive Ed Mangano face re-election. Maragos has repeatedly defended the surplus, which he called “like a miracle,” noting that auditors have certified his report. Auditors never certified the claim of a budgetary surplus.
“Every CPA knows that you cannot hide behind the old ‘the auditors certified it, so it’s correct,’ line,” said Weitzman. “The county’s financial statements are the responsibility of the Comptroller, not outside auditors. Even so, auditors also certified statements by Enron, WorldCom, and Lehman Brothers before their misdeeds were exposed.”
The threatening letter received by Weitzman alleges that his complaint could have “the potential to seriously affect the County’s ability to obtain financing in the near future.” This claim is patently absurd because the only way the complaint could affect the county’s ability to obtain financing would be if the SEC finds that the financial statements falsely masked the County’s 2012 deficit. In that case, Weitzman’s concerns would be validated.
Counsel for Mr. Weitzman submitted a letter responding to the outside counsel hired at the behest of Mr. Maragos. In the letter, Weitzman’s attorney contends: “We will seek sanctions and attorneys fees in the event that you commence a frivolous lawsuit against Mr. Weitzman. We will be glad to use that opportunity to conduct discovery and expose the truth behind the ‘voodoo accounting’ upon which Mr. Maragos’ ‘miraculous’ surplus is based.”
County legislators have started to ask questions about the cost and appropriateness of Ciampoli’s actions. Concerns have been raised about whether it is appropriate to hire lawyers at public expense to intimidate critics of the administration.