Mayor Bloomberg (Photo: Getty)

After a group of unions angry over the passage of the Tier VI pension reform plan pulled support from the Somos El Futuro's annual Legislative Conference, Governor Andrew Cuomo and Mayor Michael Bloomberg gave the organization a pair of hefty donations.

"We think the unions' actions are unfortunate, and don't want the conference to suffer as a result. We both support the Somos El Futuro Conference and, as such, we will be donating $72,000 to Somos El Futuro and the scholarship to make up for the donations that the unions withdrew," the mayor and governor said in a joint statement.

Unions including the United Federation of Teachers and the New York State United Teachers announced they were pulling support from the conference Tuesday.

"The elected officials who are aranging the Somos festival this year all voted on Tier VI for the union pensions and voted for one of the worst redistricting plans I've ever seen," UFT President Michael Mulgrew told the Daily News' Celeste Katz about the reasons behind the withdrawal.

Though hugely unpopular with unions, pension reform was top priority for Governor Cuomo in his agenda for 2012. Mayor Bloomberg was a strong backer of the proposal. The joint statement from the mayor and governor noted Assemblyman Felix Ortiz, chairman of the Legislature's Puerto Rican & Hispanic Task Force, "was instrumental" in securing the donation for Somos.

Peter Abbate (Photo: NYS Assembly)

Against the backdrop of the contentious turf war over Governor Andrew Cuomo's pension reform plan, a trio of Democratic Assemblyman and several labor leaders are calling for passage of the Institutional Investor Recovery Act. This legislation would allow the Attorney General to seek damages and recoveries when public pension funds suffer losses due to securities fraud. Currently, the Martin Act gives the Attorney General broad powers to prosecute securities fraud, but it does not allow the State to recover losses on behalf of public pension funds. Pursuing losses from financial firms is a favored topic of opponents of the governor's pension reform push who argue the focus should be on penalizing Wall Street firms that lost money from the pension fund rather than cutting benefits.

"All the focus on the issue of pensions has been on the benefit side of the equation. We need to look at what happened on the investment side. It simply doesn't make sense that the pension funds have no practical way to recover investment losses caused by fraud," said Assemblyman Peter Abbate the lead sponsor of the bill to update the Martin Act.

Proponents of Governor Cuomo's pension reform plan, including Mayor Michael Bloomberg, argue the Wall Street meltdown isn't the sole factor behind ballooning pension costs.

The Institutional Investor Recovery Act was also sponsored by Queens Assemblyman Rory Lancman.

"For years, Congress and the courts have systematically eroded the ability of defrauded investors - including pension funds - to bring civil cases to recover their losses, putting the retirements of countless hardworking New Yorkers at risk," Mr. Lancman said. "Reforming the Martin Act would protect both retirees and taxpayers, and bring some much-needed accountability to Wall Street."

Brooklyn Assemblyman Joe Lentol is also backing the legislation.

"As elected officials, it is incumbent upon us to safeguard public investments, such as contributions to the pension funds," Mr. Lentol said. "If fraudulent activity jeopardizes these funds, then we must make sure that there is a reasonable remedy. Giving the Attorney General that power on behalf of the funds does just that."

Several labor leaders released statements praising the Institutional Investor Recovery Act. CSEA President Danny Donohue, who's currently campaigning to lead AFSCME, hoped the legislation would help people see the growing cost of the retirement fund came from "companies that scammed New York taxpayers" rather than "overly generous benefits."

"The public needs to remember that much of the current pressure on the retirement fund is not a result of overly generous benefits, it's a result of the Wall Street collapse in 2008 and the greedy schemes that led to it," Mr. Donohue said. "Companies that scammed New York taxpayers should be held accountable."

United Federation of Teachers President Michael Mulgrew said the act would stop workers from paying for mistakes made by Wall Street.

"Wall Street gambled with other peoples' money and lost. If I were a Wall Street billionaire, I'd love the idea of having somebody else pay for my mistakes," Mr. Mulgrew said. "We need Martin Act reform to help make sure that the firms who engaged in reckless behavior pay for their mistakes, rather than dumping that burden on the workers."

Scott Stringer (Photo: Facebook)

Manhattan Borough President and possible 2013 mayoral candidate Scott Stringer blasted the New York City Department of Education at a press conference today following the publication of a New York Times report documenting the DOE's failure to claim millions of dollars in federal Medicaid reimbursements for services provided to students with special needs from 2006 to 2010. Mr. Stringer called for hearings investigating the missed reimbursements, which he described as a missed opportunity to curb school budget cuts and evidence of widespread problems at the DOE.

"This calls out for state and city hearings immediately, there's no time to waste. This agency has been going down this perilous path for many years, but nobody could have imagined that, when it came for reimbursement, they would fail so miserably. I am shocked and I am outraged," Mr. Stringer said. 

Mr. Stringer was joined at the press conference by United Federation of Teachers President Michael Mulgrew who said the failure to claim federal reimbursements for special education was particularly egregious since city schools are currently being forced to trim budgets by cutting staff and services.

"This is money that we have all paid for through our federal taxes and we have a right to get it back," Mr. Mulgrew said. "The class sizes in New York City are now at levels that we have not seen since 1978. We have--every school has been cut to the bone and, at the same time, the Department of Education is leaving  hundreds of millions of dollars of our children's money at the federal level."

Mr. Stringer said other school districts around the state received $558 million in federal reimbursements for special education costs during the same period. He sent Department of Education Chancellor Dennis Walcott a letter in October expressing his concerns and asking for information about steps the department is taking to improve the Medicaid reimbursement process.

"They never responded to us, never acknowledged the letter. So, they've known about this and we've tried to get answers for many months," said Mr. Stringer.

DOE spokeswoman Barbara Morgan told the New York Times that the department didn't file claims for all of the funds it could have received because the reimbursement process has become "increasingly cumbersome" since new regulations were adopted in September 2009. The DOE recently spent $80 million on a computer database called the Special Education Student Information System that it expects to improve the reimbursement process. Mr. Stringer compared this approach to another city technology initiative-- the CityTime payroll system, which cost $700 million and was plagued by fraud.

"You've got to admit it's kind of embarassing for Buffalo to get this right and Syracuse to get this right--major cities with less of a population than we have of special needs kids," Mr. Stringer said. "We have 168,000 special needs kids. Two-thirds of those kids would be eligible for this reimbursement and then their answer, like CityTime is to come up with yet another computer system at the cost of $80 million to try to fix this problem."

Mr. Stringer said he blames the Bloomberg administration for this problem rather than Chancellor Walcott, who took office back in April after his predecessor, former Hearst Magazines exec Cathie Black, stepped down after a stormy 96 day tenure.

"This is not about Chancellor Walcott, who I happen to have great respect for. This is about an administration that is charged with running the school system and, when that system fails the taxpayers and the students, then we ask for more oversight," Mr. Stringer said. "I mean, City Hall laid off 700 school aides with a straight face saying we had no choice to lay them off because we don't have money and here, they've known all along that this money is sitting at the federal level."

Mr. Stringer also made clear he plans to continue focusing on the problems he sees with the Department of Education as he gears up for a potential mayoral bid.

"If it was up to me right now, I would close the Tweed Building, get these bureaucrats to a system that actually works and stop throwing everything onto computer systems that are untested, listening to outside consultants that have actually taken New York City for a ride," said Mr. Stringer. "This is not the end of this story today, this is a beginning that we're going to be able to show time, after time, after time that the Department of Education has now become a bureaucracy of its own that's now out of control."

Michael Mulgrew (Photo: UFT)

United Federation of Teachers President Michael Mulgrew sent a letter to all 51 members of the City Council asking them to support the "Fair Wages For New Yorkers Act," better known as the "Living Wage Bill." "Millions of New Yorkers are struggling just to make ends meet, and our members–their teachers and other educators–are seeing the effects of that harsh reality in our classrooms everyday. Children who are not being fed, clothed or housed properly cannot hope to concentrate," Mr. Mulgrew wrote. "The passage of the ‘Fair Wages for New Yorkers Act’ would be a step towards improving the lives of millions of New Yorkers, and consequently, their children," wrote Mr. Mulgrew.

Mr. Mulgrew described the bill as especially necessary due to the wide gap between the rich and poor in New York City.

"New York City has earned the dubious distinction of being America’s income disparity capital; Nowhere else in this country do we see such extremes separating the 'haves' and 'have nots,'" wrote Mr. Mulgrew. "This ‘living wage’ legislation is one crucial component to reducing the number of poor NewYorkers."

The UFT has endorsed the living wage bill, which would require employees to receive minimum wages of $10 an hour with benefits or $11.50 per hour without benefits on city-subsidized project. Currently, the minimum wage in New York is is $7.25 an hour.

A majority of City Council members also support the bill, but Mayor Bloomberg is opposed and Council Speaker Christine Quinn has not come out for or against the measure. Speaker Quinn's support is crucial as she can prevent the bill from being passed by not bringing it to a vote.