For weeks now, public officials on the county, state and federal level have been denouncing former LILCO chairman Dr. William Catacosinos for what Governor George Pataki described as "an extraordinary act of greed."

As has already been well broadcast, the inspiration for his and others' ire was the supposedly "surprise" $42 million payout the chairman received from LILCO's board of directors just days before the state was to take over the utility.

Now it appears, from formal documents produced by and submitted to various government agencies over the course of the recently completed state-takeover, that officials knew the deal would result in millions of dollars in benefits to LILCO executives.

All that was missing, it now seems obvious, was a final dollar total.

According to an article by reporter Bruce Lambert in the metro section of Sunday's New York Times, the paper trail for the payouts extends through Securities and Exchange Commission filings, LILCO's takeover agreement, its agreement to merge with Brooklyn Union Gas (to form the company now known as Marketspan), and correspondence from the Long Island Power Authority, the state agency which negotiated the takeover.

Critics of the takeover, who have long contended that the $7 billion deal was a giveaway to LILCO, now charge that the governor and his aides purposefully ignored the compensation issue for fear that it would jeopardize the takeover and its promised 20 percent reduction in energy bills for LILCO's former customers.

In addition to Dr. Catacosinos' "windfall," 25 other top LILCO executives also received sizable compensation packages, payouts that total an additional $25 million.

While neither Dr. Catacosinos, nor the Marketspan board had any public response to the Times article, an angry Mike McKeon, a spokesman for Governor Pataki, denounced it as "pure nonsense."

"Remember," he said. "It was LIPA and the governor who brought these payouts to light. And the governor demanded the money back.

"It's nonsense and silly," McKeon continued. "The fact is, Catacosinos is sitting at the same desk in the same office with the same staff. The only thing that has changed is the name of the company on the front door. There was no termination, and therefore, there is no entitlement to that payment."

By Tuesday morning, the second portion of McKeon's response had become something of a mantra among the elected officials who called for Dr. Catacosinos' ouster earlier this month.

What's now being ignored ¬ or apparently at least somewhat brushed aside ¬ are the early assertions by both the governor and his power authority chairman, Richard M. Kessel, that the payouts were both surreptitious and in violation of the takeover and merger agreements.

According to both men at the time, the large payouts to the LILCO executives completely blind-sided them, and it was this "outrage" that reportedly prompted Governor Pataki to order the State Attorney General, Dennis Vacco, and the Public Service Commission, to investigate the payouts.

Kessel continued to press that version of events as late as Tuesday afternoon, when he testified before the state assembly's energy committee at a hastily called hearing at SUNY Farmingdale.

In addition to the charging corporate skulduggery on the part of Dr. Catacosinos, the governor, joined by a host of other public officials ranging from County Executive Thomas S. Gulotta to State Comptroller H. Carl McCall, has repeatedly demanded that Dr. Catacosinos return the money and step aside as chairman of Marketspan.

LIPA has also begun withholding more than $800,000 a month from the utility, money the agency was paying the utility to continue to maintain the old LILCO system.

Again, LIPA contends that the former LILCO executives were not entitled to severance packages because they all automatically got new jobs with Marketspan.

The also contend that the former board of directors at LILCO acted in bad faith in approving the payouts, as no one was informed of them beforehand.

The documents reviewed by reporter Lambert for The New York Times, however, tell a markedly different story.

As far back as 1984, Lambert revealed, various corporate filings indicated that Dr. Catacosinos had begun building the framework for what the Times described as "a handsome retirement and severance package."

In 1994, during a LILCO takeover bid by then-Governor Mario M. Cuomo, the power authority's counsel, Richard Bonnifield, wrote to Mr. Kessel about what was described as Dr. Catacosinos' "golden parachute."

That memo said LILCO had set aside funds to provide more than $10 million "to fund his post-employment compensation."

The Times' Lambert did more, though, than just look at ancient history. The documents he reviewed of a more recent vintage bring to mind the old Watergate query, "What was known and when did they know it?"

On May 21, 1997, Lambert reported, Richard Kessel sent a detailed response, on LIPA's behalf, to questions about the most recent takeover plan posed by Paul D. Tonko, chairman of the state assembly's energy committee.

Addressing severance pay, the letter said that LILCO officers had individual contracts providing benefits if the company had "a change of control."

Those benefits, said The New York Times, included three years' salary, accelerated vesting of supplemental retirement benefits and three years of life and health insurance.

The letter concluded, "The transactions contemplated with Brooklyn Union and/or LIPA will result in a change of control as defined in the employment agreements."

In June, 1997, the joint LILCO-Brooklyn Union proxy statement contained much the same language, stating that the merger and takeover would "each result in a change in control" of LILCO and, therefore, "entitle each officer to the benefits payable under the terms of [their] employment agreements."

Exhibiting further enterprise, Lambert then turned in his piece to the registration statement LILCO and Brooklyn Union Gas filed with the Security and Exchange Commission that very same month.

"The transactions contemplated with Brooklyn Union and/or LIPA will result in a change of control (as defined in these agreements) and entitled each officer to the benefits payable under the terms of the employment agreements," the statement said and Lambert reported.

Further, the June, 1997 merger agreement states LILCO's responsibility to pay obligations "relating to several change of control or similar payments payable to executives of LILCO in connection with the closing."

Another section refers to the benefits paid "as a result of the termination of executive employment."

After the 1994 Bonnifield memo became public knowledge last March, LIPA chairman Kessel reportedly expressed little surprise about it to a New York Times reporter. Nor did he argue that such payments were prohibited. He also revealed that he had no plans to try and stop them.

"LIPA has nothing to do with this," the Times quoted Kessel as saying.

Just over two weeks later, Kessel told Newsday that the power authority would never make such payments, but he didn't go so far as to say LILCO had no right to do so.

"The bottom line is, whatever compensation exists for LILCO executives, the LIPA plan completely protects ratepayers from having to pay for it now or in the future," he told the paper.

According to Lambert, Kessel now says he does not recall why he didn't take a militant stance in March or April against the planned LILCO payments.

Though Anton Community Newspapers has tried for several days to contact the LIPA chairman and ask him about these issues, Mr. Kessel has thus far failed to return these phone calls.

Since the publication of The New York Times piece, events are unfolding at a pace that makes for gray hairs for weekly newspaper editors.

On Wednesday, as this newspaper went to press, Attorney General Dennis Vacco had a proceeding relating to LIPA/Marketspan scheduled, and on Friday, the Marketspan board is to meet again to reportedly discuss the controversy.

"Officially, Marketspan has had no response to The New York Times articles," said company spokeswoman Elaine Davis. "Right now, we're all waiting for the board of directors to take up the matter on Friday."

As for the state attorney general's investigation, David Corvette, a spokesperson in Dennis Vacco's Manhattan office said, "we're continuing to look at the documents Lambert cited, as well as others, and as of yet we have come to no conclusions."

Last Friday, Attorney General Vacco subpoenaed what Corvette described as "a whole new batch of documents" from the compensation committee of the former LILCO board of directors.

"The latest batch of subpoenas all pertain to documents relating to compensation matters discussed by the former LILCO board of directors between Jan. 12, 1996 and May 28, 1998," he said.

Also subpoenaed were documents from Ernst and Young, LILCO's accounting firm, and SBC Walburg, Dillion and Reed, its investment firm.

No one in the attorney general's office would confirm if documents from LIPA itself were also subpoenaed, though sources say this was the case.

Vacco's spokesman said no timetable has been set for wrapping up the investigation.

"We're not ready to reach any conclusions whatsoever," Corvette said. "I can tell you that there are a lot more documents out there than are being discussed in the media. At present, we're waiting for the receipt of several outstanding documents ourselves.

"I don't think anybody knows the whole picture at this point," he continued.