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Cuomo to investigate salaries at not-for-profit organizations

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Governor Andrew Cuomo has announced an investigation into executive pay at not for profits in New York that depend on government money. This action follows published reports of excessive salaries and compensations at some Medicaid funded health centers.

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Reported by

Karen DeWitt
NYS Capitol Correspondent

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Cuomo has appointed a task force, which includes his own Inspector General and the Medicaid Inspector General, to look into executive and administrative compensation levels at not for profits that receive taxpayer support from the state.

Cuomo says the probe was prompted by a New York Times story that alleges two owners of not for profit homes for the developmentally disabled, financed largely by Medicaid, each received an annual salary of around a million dollars, and received compensation that included payment of college tuition at private schools for their children.

Cuomo, in a statement, says “there is a whole range of compensation levels and extremes that have existed for too long and must be reviewed”.

“The use of taxpayer dollars must be scrutinized at every level,” the governor continued. 

Sue Lerner, with the government reform group Common Cause, says it’s an “absolutely appropriate inquiry”, in a time of record executive pay packages in many organizations. 

“Right now in our society as whole there’s a question in about whether compensation is correctly adjusted based on the actual skills and services that any employee is providing,” said Lerner. “That goes for the heads of investment banks and hedge funds just as it does for tax payer supported non profits.”

Banks received government funding as part of the federal TARP bail out program.

Common Cause is a not for profit, but it receives no government money. Lerner says the salaries of Common Causes’ executives are available on the groups’ website to be as transparent as possible to donors.

She says there is a potential downside to the probe, though.  It could, if not done properly, take on the aspects of a “witch-hunt”, and result in badly managed not for profits that do, after all provide essential services.

“If you are only in a race to the bottom dollar, then you’re not going to attract the top notch people that you need,” said Lerner.

But Lerner says nearly everyone can think of an example of a politician accused of syphoning off money from public funds.

“That’s simply wrong,” Lerner said.

Last year, the former Senate Majority Leader Pedro Espada, was accused by then Attorney General Cuomo of bilking $14 million dollars from his Soundview health care center in the Bronx, a clinic largely dependent on Medicaid.  Espada, who is facing federal charges, was defeated in a primary.

Governor Cuomo points out there are currently no state rules governing executive and administrative compensation for not for profits that receive state support. But he says the State’s Medicaid Inspector General, who will be involved in the probe, has the authority to revoke Medicaid payments from providers if they are found to be committing fraud.

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