Court Gives Green Light to Oneida Employees’ ‘Double-dipping’ Lawsuit against State Officials


The New York State Supreme Court has ruled that two Oneida Indian Nation employees can move forward with their lawsuit against Madison County Attorney S. John Campanie and New York State Comptroller Thomas DiNapoli over allegations of improper “double-dipping” payments from the state and a private firm for the same work.

Steven Mahler and Daniel Garrow, both Madison County residents and employees of the Oneida Nation Enterprises, LLC, filed the lawsuit last April. According to the lawsuit, Campanie “doubled-dipped” by improperly reaping more than $800,000 from the Rochester, New York-based Nixon Peabody, a law firm he helped select to represent Madison County in its fight against the Oneida Indian Nation’s land rights claim while being paid by the state for the same work.

The lawsuit seeks restitution to taxpayers of at least $800,000 and possibly more than $1 million in taxpayer funds that have been allegedly illegally disbursed to Campanie or his law firms, the Kiley Law Firm PC and Campanie & Wayland-Smith PLLC over the past 13 years in violation of a conflict of interest law that prohibits him from receiving additional compensation for representing Madison County.

George Carpinello, the attorney who represents both the Nation and the two workers who filed the suit, said Nixon Peabody collected $12 million from the State of New York in legal fees over 13 years, about $1 million of which went to Campanie, according to News Channel 2 in Utica, New York of neighboring Oneida County. Carpinello investigated the case based in part on Nixon Peabody bills he obtained under the Freedom of Information Act. "[Campanie] had a financial interest to maintain the litigation involving the Oneida Nation,” Carpinello told Channel 2. "He had an interest in making sure that Madison County did not settle any litigation with the Oneida Indian Nation.”

The suit charges that DiNapoli failed to stop the illegal payments. “As against the State comptroller, plaintiffs allege that it [the State comptroller] should be ‘permanently enjoined from making those payments, and compelled to bring an action under Public Officers Law 67 to recoup those funds already wrongfully paid,’” the ruling says. Public Officers law 67 “prohibits Campanie, as county attorney, from receiving additional compensation for representing Madison County, thereby separating his legal advice from any financial interests,” according to a statement posted on the Oneida Nation’s website.

DiNapoli moved to dismiss that case based on claims that the court cannot order him to bring an action under Public Officers law 67; that Mahler and Garrow do not have standing to bring the case forward; that he, DiNapoli, is not a “proper party” to the action; that the claim against him is not “ripe” for review; and that the plaintiffs did not include the Governor and Nixon Peabody as defendants. The judge upheld DiNapoli’s claim that he cannot be ordered to take action against Campanie and therefore cannot be forced to repay the disputed taxpayer funds, but denied all other claims to dismiss the case.

Campanie also claimed various reasons to dismiss the case, among them that Madison County was not a party to the agreement with Nixon Peabody, but Lynch granted only that Mahler and Garrow can only challenge the payments made before April 11, 2010 when they field their action.

Oneida Nation Public Affairs Manager Dan Smith said in a statement on the Nation’s website that the January 24 court ruling “affirms what we have said all along. Madison County Attorney John Campanie and New York State Comptroller Thomas DiNapoli provided no legal basis for why this suit should be dismissed. By rejecting the efforts of the Madison County Attorney and the New York State Comptroller to avoid answering the charges in these lawsuits, the court has made it clear that this case should proceed on its merits,” Smith said.