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Jun 16, 2009 5:31 PMPublication: The East Hampton Press

Lawmakers reflect on East Hampton scandal

Jun 16, 2009 5:31 PM

The reaction in East Hampton Town Hall to the arrest of former budget officer Ted Hults last Thursday was a somber reminder of the interconnected nature of small town life.

As television crews and reporters waited on the grounds outside Town Hall on Thursday because of unfounded rumors that Supervisor Bill McGintee would be arrested that day, Town Board members and employees huddled in their offices, calling and sending letters to other employees to ensure them that the town government would still function despite the uncertainty in the air.

“There was nothing intentional on his part,” said Town Clerk Fred Overton of Mr. Hults. “I can’t believe that there would be. It’s got to be hard on his family. I grew up with Ted. I know in my heart he wouldn’t do anything to hurt the people. He just made some bad decisions, apparently.”

“It had to come to a head,” said Town Board member Pat Mansir. “But I didn’t expect to see that,” she said, referring to photographs of Mr. Hults being led into the East Hampton Justice Court in handcuffs. “He’s such a good-natured guy and there are a lot of people that are very sad about it. People are very quiet around Town Hall today.”

“I didn’t suspect this,” said Town Board member Brad Loewen. “We all knew there were financial difficulties, and mistakes made, things that may have been done wrong. But I never considered that any of the things that were done were illegal.”

Members of the Town Board said that they believed Mr. McGintee plans to stay on in his position. Mr. McGintee’s lawyer, Marc Mukasey, gave an emphatic “no” when asked whether the supervisor plans to resign, citing the fact that charges have not been brought against his client.

When Mr. Loewen was asked whether he or the board would ask Mr. McGintee to step down if he is indicted, Mr. Loewen said that he doesn’t know if it is up to the board to make that recommendation.

“I don’t know if there’s any authority to do that. A man is innocent until proven guilty,” he said, adding that the Town Board could potentially pass a resolution of no confidence.

If Mr. McGintee were to step down, he would be replaced by Deputy Supervisor Pete Hammerle until after this November’s election. Mr. McGintee is not seeking another term.

“I was told we were being investigated for financial impropriety,” Mr. Loewen added. “But what is financial impropriety? To make good out of a bad situation or something done illegally?”

“That’s always been our problem, the need to pay the bills,” he said. “No one has taken a vacation to Rio or has an account in the Cayman Islands. Maybe we were too kind. We should have said no more often to more services. We did it out of a sense of doing the right thing for the people of this town. We were literally in a position where if someone asked for $1,000, we gave them $10,000.”

Rumors that federal agents were planning to arrest the supervisor were rampant throughout town last Friday, but both the FBI and the U.S. Securities and Exchange Commission denied any federal involvement in the case. Mr. Mukasey and the Suffolk County District Attorney’s Corruption Bureau Chief, Chris McPartland, said that there was no federal investigation into Mr. McGintee’s alleged role in the improper transfer of CPF funds and the misleading statements attached to two of the town’s bond statements.

State Assemblyman Fred W.Thiele Jr., who along with Assemblyman Mark Alessi and State Senator Ken LaValle had initially called for an audit of the Community Preservation Fund last year, said that the D.A.’s decision had been a swift and appropriate one.

“We were able to get to the bottom of this very quickly,” said Mr. Thiele, who added that changes implemented in the administration of the CPF since East Hampton’s improper use of the fund was discovered would help to ensure the security of the fund in the future. “We did set up an advisory committee. We’ve got a CPF manager. We’ve got the comptroller. Now they have to do an audit each and every year. We’ve got ample safeguards but no system is foolproof. If someone wants to do something illegal all you can do is put controls in the system so that it is quickly discovered.”

Mr. Thiele said that he is also concerned about $1.5 million in management and stewardship charges to the fund that the state comptroller had never received documentation for. He said that, if the town cannot find that documentation, it will need to return the money, with interest, to the CPF fund.

“At the time we called for the audit, we didn’t know about $8 million” borrowed from the fund, he said. “We were very concerned about the stewardship.”

GOP supervisor candidate Bill Wilkinson also issued a statement about the arrest last Thursday.

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