Official muzzled in investigation tied to casino

Marc Humbert

Friday, July 16, 2004 | 8:50 a.m.

ALBANY, N.Y. -- The official who jolted awake the state's once somnolent lobbying commission with hefty fines against such New York institutions as Donald Trump and the Yankees finds himself muzzled by a gag order. He watches as his allies are ousted and wonders how long he'll have his job.

"A large part of what has occurred here has been a reaction to, unfortunately, me being a lightning rod, which tends to happen when you are somewhat colorful and outspoken," said David Grandeau, the commission's executive director since 1995, at a meeting last month with his six-member board.

It was a case of classic understatement from a lawyer with a reputation as a pit bull bureaucrat -- a rolled-up-sleeves regulator who first came to public attention as the short-tenured city manager of financially beleaguered Troy.

In that job, Grandeau put a "For Sale by Owner" banner on city hall and dismissed one critic as a "trained monkey."

He quit after 18 months, just before possibly being run out for not living in Troy. Critics said he was in violation of the city's residency requirement.

"I've been through it before," Grandeau, 45, said in an interview with The Associated Press in his 17th floor office overlooking the Hudson River as he pointed to a framed, Troy-era "Fire Grandeau Now" union poster on the wall.

Grandeau's most recent troubles came into sharp focus in March when the commission imposed a gag order barring him from making "public statement or comment in response to inquiries from the press or any other party on any individual matter not yet placed before the commission board."

The order came the day after the New York Post reported that state Assembly Speaker Sheldon Silver, the Legislature's most powerful Democrat, had been given a posh suite at the Paris Las Vegas hotel in January 2002 for $109 a night. The hotel is owned by Caesars Entertainment Inc., which is trying to break into New York's expanding casino gambling business.

The gag order was pressed by Patrick Bulgaro, a former state budget director and Silver's appointee to the commission, who said the action was prompted by more than the Caesar's investigation.

"In virtually every case where there's any notoriety, there has been a leak," Bulgaro said.

Grandeau told the commission the leaks weren't coming from him.

Nonetheless, Grandeau's negotiations with alleged violators of the state lobbying law had often been conducted against a backdrop of strategically timed news stories about the cases. The subjects of the investigations often quickly chose to settle.

Under Grandeau, the commission has levied major fines in recent years against the Yankees ($75,000), Philip Morris ($75,000), lottery giant GTECH Holdings ($90,000), Trump and several of his associates ($250,000) and the Correctional Services Corp., a Florida-based private prison company ($300,000).

Before he arrived, the lobbying commission attracted little attention.

"It was a nothing commission," said Albert Callan, who has served on the commission's board for the past 17 years. "Now, under David, I think we've become one of the best organizations in the state."

Civil penalty collections by the commission, which regulates a $120 million-a-year industry, went from $11,000 in 1995 to $750,000 last year.