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N.Y. Waterfront Commission accused of corruption

N.Y. Waterfront Commission accused of corruption

   The Waterfront Commission of New York Harbor, supposedly a bulwark against crime on the New York-New Jersey waterfront, was blasted in a report released Tuesday by New York State’s Inspector General.

   'This was a total agency breakdown,' Inspector General Joseph Fisch said. 'Instead of ridding the waterfront of corruption, this agency itself was corrupt.'

   The 67-page report said two former commissioners appointed by the governors of New York and New Jersey, the executive director and others “failed to adequately or responsibly supervise the operations of the Waterfront Commission, resulting in neglect and malfeasance ranging from lackluster oversight of shipping companies to conflicts of interest and an abrogation of legal responsibilities undermining the very purposes of the Commission.”

   Established in 1953 by the U.S. Congress to fight mob influence and criminal activity like that portrayed in the movie On the Waterfront, the commission today employs about 100 persons and operates on an annual budget of more than $11 million.

   The commission’s role in regulating the supply of longshore labor on the waterfront has been criticized by stevedoring companies in the past, which argued they should be able to adjust the supply of workers they need to match demand as any other business does.

   After the attacks on Sept. 11, 2001, the Waterfront Commission pitched itself as having an important role to play in fighting terrorism.

   But the Inspector General said he “identified problems which included improper hiring and licensing to fiscal lapses involving the misappropriation of forfeiture funds, unsound overtime pay and misuse of Homeland Security grants.”

   The Waterfront Commission failed to keep track of more than $600,000 in Homeland Security grant money, the Inspector General said. It used a patrol boat — paid for by a second $170,000 Homeland Security grant — to escort guests and VIPs during Fleet Week and other events. The boat was supposed to be 'capable of early detection of a waterborne attack' and used to 'deploy officers ' at high-risk target locations such as the NYC Passenger Ship Terminal, Cape Liberty Cruise Port in Bayonne.'

   Two years in the making, the report has resulted in a complete shakeup in the top leadership of the agency.

   Last week, Commissioner Michael J. Madonna was removed by New Jersey Gov. Jon Corzine with a letter that said the agency “was failing to function properly while under your oversight.” The term of the New York commissioner, Michael Axelrod, expired last year and he was replaced in September by Ronald Goldstock.

   Tom DeMaria, the commission's former executive director, resigned in March and Walter Arenault has been appointed to his post. Jon Deutsch, the agency’s general counsel, was terminated in October 2008.

   The report paints a picture of an agency riddled with problems great and small from allowing a convicted felon to “place his warehouse in his wife's name and continue to operate uninterrupted in direct violation of the Waterfront Commission Act,” to having port police guard parking spots in front of the commission’s office in Lower Manhattan for supervisors.

   Deutsch was accused of not recusing himself from an investigation of an International Longshoremen's Association official, Albert Cernadas Sr., even though he is a friend of his son. Cernadas resigned as an ILA executive vice president in 2005 after pleading guilty to knowing about, but failing to prevent, a mob effort to saddle the ILA with an expensive medical plan.

   The report says all of the 53 stevedoring companies active in the port have been operating under temporary permits for the past decade, which is only supposed to be granted under special circumstances.

   The report says Madonna influenced hiring for the benefit of friends and acquaintances, “using his position to compel unqualified or unsuitable applicants on the Police Division over the objections of the chief.”

   The entire report is available here. ' Chris Dupin

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