Pay Dispute Drives Paterson’s DOT Pick off the Road

david paterson getty Pay Dispute Drives Paterson’s DOT Pick off the Road It’s now been six months since the top job at the State Department of Transportation fell vacant, and, despite a giant capital plan being formed for the state roads and bridges system, the commissioner’s chair still sits empty.

The Paterson administration has clearly had trouble filling numerous top positions—anyone wanting long-term security would avoid a job that looks likely to end on Dec. 31, 2010—and the DOT job is hardly the only one to sit vacant for months. But this case is different in that the holdup is outside of Albany: The administration’s choice has run into a financial dispute with his former employer, forcing him to reconsider, according to multiple people familiar with the situation.

During the summer, after a long search and a series of interviews, the administration honed in on, though never formally nominated, Frank McArdle, a longtime transportation pro—and Ed Koch’s environmental protection commissioner—who was actually willing to take the commissioner’s job at the DOT.

But there was a potential snag. In 2005, Mr. McArdle, who for two decades led the General Contractors Association, a trade group representing public works contractors, had been granted six years of pay at $130,000 annually to consult for the group, an agreement that seems to have served as a severance package given that he has not been used as a consultant.

If he were to take the DOT job, which oversees the state’s sprawling road system and sets transportation policy, he would, as a top public official, have to give up the GCA salary. Mr. McArdle seemed to assume he could receive the balance of his two-and-a-half-year payment in a lump sum, and then take the top state job.

But the GCA board apparently didn’t want Mr. McArdle to change his contract. It voted that if he wanted to end his contract, it would give him the remainder of his 2009 salary, cutting off the additional $260,000 it would have paid through 2011, according to a person familiar with the offer.

“We made an offer to Frank to settle his agreement,” said Denise Richardson, managing director of the GCA. Still, the GCA supports him as a commissioner, Ms. Richardson said, and the association is “disappointed that the Governor’s office is not moving the appointment.”

Mr. McArdle did not accept the offer, apparently preferring a guaranteed two years of $130,000 annually to the guaranteed one year of a commissioner’s salary (the last DOT commissioner made $136,000). He involved others in the matter—including Congressman Jerry Nadler, the transportation wonk who urged the administration to offer Mr. McArdle the job—but neither he nor the GCA have budged, and few involved seem to think there is any hope left for him.

“I am disappointed that the association has taken the position they have,” Mr. McArdle said, “because its position on terminating what I truly believe is a severance agreement precludes me from consideration as the DOT commissioner.”

A member of a federal commission on transportation financing, Mr. McArdle is generally well respected in the transportation world—not always the easiest find for the Paterson administration—though those who work with him describe him as having a strong personality.

Still, a lump sum payment to Mr. McArdle by a contractors’ group just weeks before he took a public-sector job that sets policy and construction budgets could raise eyebrows.

A spokesman for Mr. Nadler, Robert Gottheim, said the congressman supports Mr. McArdle and “we encourage the General Contractors Association and Frank McArdle to settle their contractual issues so that he can return to public service.”

The governor’s office had no comment on the dispute with GCA. As for the status of the DOT job, a spokeswoman said the administration is “actively engaged in a search for a new Commissioner.”

ebrown@observer.com