Inspector general dismisses ‘threat’ by top Spitzer energy aide

The state inspector general reported Thursday that she found no proof a top Spitzer administration a

The state inspector general reported Thursday that she found no proof a top Spitzer administration aide threatened the job of a regulator appointed by former Gov. George Pataki.

In a long anticipated report, Inspector General Kristine Hamann says there is no conclusive proof that Spitzer energy adviser Steven Mitnick threatened the job of state Public Service Commission member Cheryl Buley. Buley had said Mitnick threatened her so she would leave her position to make room for an appointee of Gov. Eliot Spitzer.

But the 130-page report is critical of how Mitnick and Spitzer’s nominee for PSC chairwoman operated during his brief tenure as deputy secretary for energy. Mitnick resigned in August to return to the private sector.

Buley made her claim in a dramatic statement at an April PSC meeting involving a New York City blackout, recounting private conversations with Mitnick over the previous months.

Hamann also said there was insufficient evidence to prove Spitzer’s then-nominee for chairwoman of the PSC, Angela Beddoe, violated any criminal or ethics statutes.

But she said Beddoe — while still an executive at the PSC-regulated utility company Energy East Management Corp. — inappropriately targeted for demotion or firing several state workers who had clashed with Energy East or were critical of her nomination on ethical grounds. Energy East subsidiaries include New York State Electric & Gas Co. and Rochester Gas & Electric. The report said Beddoe declined an “acting” role in the administration because she didn’t want to immediately sever her ties with the company.

Beddoe also interviewed a state administrative law judge, Eleanor Stein, for a possible promotion even as Stein was presiding over matters involving Energy East and its subsidiaries, according to Hamann.

Beddoe withdrew her nomination in June rather than face a likely difficult confirmation hearing run by Senate Republicans.

As for Mitnick, Hamann’s statement reported that “there is no dispute that Mitnick requested Buley to resign from the PSC based on his belief that she was unqualified.” But such a request is permissible — even common — for an incoming governor, Hamann said.

Hamann said interviews, including those involving Mitnick and Buley, also showed Buley was seeking another state job. She once asked a friend to see if Mitnick could help return her to the state Racing and Wagering Board job she left to join the PSC, according to the report.

“I’m feeling elated,” Mitnick told The Associated Press, adding that he planned to release a formal statement.

Spitzer spokesman Errol Cockfield said the administration is pleased the Mitnick issue is resolved.

“The Inspector General’s report makes clear that incoming administrations are permitted and in fact expected to bring new leadership to government agencies,” Cockfield said. He declined to comment on the Beddoe case because it is pending before the state Public Integrity Commission.

There was no immediate comment from Spitzer or Buley. Beddoe couldn’t immediately be reached for comment.

The conflict over Mitnick was among the first of many that arose in 2007 between the new Democratic governor’s administration and the state Senate’s Republican majority, which immediately called for an investigation of Buley’s claim.

In September, Republican senators accused Hamann of failing to do her job so she could protect Spitzer when she investigated another scandal that had snared two other Spitzer aides. In that case, she found no evidence that the two aides misused state police in a plot to smear Republican Senate leader Joseph Bruno. But she was criticized for not producing her own report, instead concurring with a report by the state attorney general’s office.

In the report released Thursday, Hamann said witnesses believed Mitnick exercised poor judgment when he told Buley the governor could rely on a little used state law to remove her from office, even though he knew Spitzer had ruled that out.

Hamann said witnesses described Mitnick as “impatient, overbearing and even aggressive” in dealing with state employees.

And “Mitnick created a climate fraught with apparent ethical conflicts” by holding inappropriate meetings involving Beddoe with staff, according to the Inspector General’s Office statement.

Hamann hinted at why the investigation took as long as it did, citing the number of interviews and conflicting testimony, including Buley’s statement at one point questioning whether she was threatened.

“Testimony gathered during this investigation sheds doubt on the credibility of both Mitnick’s and Buley’s version of events,” the report stated. “While Mitnick used the words ‘careful,’ ‘circumspect,’ and ‘sensitive’ to describe his actions, others called him overbearing and bullying. On the other hand, a number of witnesses, including Buley’s fellow commissioners, expressed doubt about her credibility.”

Hamann sent her report to the state Public Integrity Commission for review. The commission, run by a board with a Spitzer-appointed majority, could sanction any current state employees.

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