Charge LIRR Manager Took Bribes to Ease Disability Appeals

A Long Island Rail Road manager has been arrested in connection with the agency's disability payment scandal, the State Attorney General's Office announced Nov. 17.

ANDREW CUOMO: 'Systemic abuse' of disability process.

LIRR Manager of Budget Development and Analysis Frederick Kreuder was accused of helping workers obtain the Federal disability payments in exchange for bribes.

Cuomo: 'Culture of Entitlement'

A New York Times investigation found in September that 93 to 97 percent of the railroad's retirees since 2000 have received disability payments, rates that were far above those at other commuter railroads. Federal agents later that month seized employment documents for review by the U.S. Railroad Retirement Board, and the AG and Metropolitan Transportation Authority launched their own investigations. The findings came to light at a time when the MTA was citing budget shortfalls to justify fare increases and service cuts.

AG Andrew Cuomo said in a statement that the "arrest is the first time that someone is being held accountable for the culture of entitlement and systemic abuse that plagued the LIRR and Railroad Retirement Board."

He continued, "Moving forward, this office will continue to pursue criminal charges against any individual who facilitated such unchecked abuse, and will continue working to correct the systemic abuse in the disability benefits program."

According to a statement from the AG's Office, Mr. Kreuder is accused of accepting payments to help workers with their applications for disability retirement benefits and referring them to doctors who would support their claims.

Unions: An Isolated Abuse

Unions had responded bitterly to the Times's initial findings about the LIRR disability payments. A coalition of 12 rail unions, including the Transport Workers Union of America, said in a letter to all members of the state's congressional delegation that the LIRR was an isolated case and did not signify an industry-wide problem.

"The occupational disability program is financially sound and administratively efficient," stated the letter, a portion of which was printed in the latest issue of the TWU's member magazine. "It continues to provide much-needed assistance to those railroad employees who are no longer able to do their railroad jobs."

The unions also asserted that the controversy was being used to target benefit plans for retirees.

"It is obvious," the coalition said, "from the firestorm of media reports that are being fueled by the rail industry that railroad management is trying to circumvent decades of collective bargaining by exploiting a localized issue and attempting to suggest that there is a national problem."