Superintendent Contract Pitfalls

By Susan Black

It started as an anonymous tip sent to reporters at Newsday, a regional newspaper based on Long Island. The result, months later, was a series of reports on pervasive pension abuses involving multiple school districts.

The tip, submitted in early 2008, hinted that a private attorney was on the payroll of more than one school district. Through the Freedom of Information Act, reporter Sandra Peddie found that the attorney was on the payroll of five Long Island school districts as a full-time employee, all the while collecting millions of dollars in retainer fees.

The attorney also received a fraudulent annual $62,000 state pension and health benefits for life. In truth, the attorney was a part-time private contractor in each district, and was thus barred from collecting state benefits.

When the news broke, the FBI and IRS launched criminal investigations, issuing subpoenas for the five districts’ financial records. Newsday identified six more districts that had listed two other private attorneys as full-time employees while paying their law firms more than $1 million in fees.

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