State revokes lawyers' credits

The state comptroller has disqualified two Watertown attorneys from some of their participation in the state retirement system.

Comptroller Thomas P. DiNapoli has revoked state Employees Retirement System credits earned by Watertown lawyers Eugene P. Renzi and Paul J. Dierdorf for work they completed for the Carthage Central School District and village of Adams.

Both lawyers work at the same Mullin Street firm: Brown, Dierdorf and Renzi.

The comptroller's office said both attorneys were listed as employees of the municipalities when in fact, they should have been considered independent contractors. Mr. Dierdorf was hired as the attorney for the school district and village and when he retired, Mr. Renzi took over the positions.

By being considered employees, they were allowed to take advantage of the state retirement program, a benefit not offered to contractors.

"State pensions are strictly for employees of state and local governments," Mr. DiNapoli said in a release. "Independent contractors do not qualify for state pensions. We are continuing to look at lawyers in the retirement system to ensure no one is receiving a pension they don't deserve."

Mr. Renzi said the comptroller's "crackdown" means he'll be receiving a refund for a portion of the contributions he's paid to the state retirement system while working for the school and village for the past six years.

"When they hired me they gave it to me as a part of the package," he said. "Trust me, I'm not making an exorbitant amount from these. I'm actually getting money back for my contributions."

State Attorney General Andrew M. Cuomo began an investigation in April when it was discovered that private lawyers were being hired by Long Island school districts so they could receive hundreds of thousands of dollars in state pensions.

Mr. Renzi questioned the timing of the comptroller's actions.

"These positions have been this way for years and years," he said. "I think it's unfair to these guys who have already retired."

The state is asking that Mr. Dierdorf return a portion of the $24,720 state pension he receives annually. Since Mr. Renzi has not retired, the credits he has earned from his employment in Adams and Carthage are being stripped away.

Adams Mayor Dugal C. Peck said the village also expects to receive reimbursement from the comptroller's office for the funds the village paid into the retirement system for the lawyers.

"It won't amount to much," he said.

The mayor wasn't pleased with the state's crackdown, saying it is politically motivated.

"It's been in existence for at least 30 years and no one has questioned it before," he said. "Suddenly there's a new definition of who's an employee and who's not."

That doesn't square with what the state is saying, however. Earlier this year, the comptroller's office clarified regulations that determine whether someone hired by a town, village or school district, is an employee and can participate in the retirement system. The lawyers did not have set hours or keep time sheets, and did not maintain office space or receive supervision from either entity, all of which are requirements to be considered employees.

Mr. Cuomo said in April that the law on this has a rich history.

"I think the law is very clear on this area," Mr. Cuomo said. "The law between being an independent contractor and an employee is a highly defined, litigated area of law, because it comes up all the time."

Mr. Peck said the village has hired lawyers for more than a decade on a part-time basis, saving the village thousands of dollars.

Nearly every municipality in the north country, and across the state, receive the paid services of attorneys. Only a handful, including the village of Adams and Carthage Central School, have considered these professionals as employees. The comptroller has revoked membership or retirement credits for 26 people, according to his news release.

The attorney general has sent out nearly 200 letters statewide to professionals on public payrolls who may be improperly enrolled in the state retirement system. More than half of those letters have been sent to lawyers.

In the Wednesday announcement, the state comptroller revoked the state retirement system membership of three attorneys and rescinded some service credits of three others, including Mr. Renzi and Mr. Dierdorf. Both men had earned credits in other positions for which they were eligible to be in the state system, and those credits will be honored.