Aiello’s response to allegations

The following is the full text of the former MANYS administrator, Joe Aiello’s e-mail to the Associated Press. A few of the points below were in the rebuttal article published in Newsday.com. However, as the majority of my readers are rider educators, the additional detail may give you a broader or deeper—and certainly much longer—basis to judge whether the expenditures sound reasonable or not.

I am retaining the formatting as it was sent to me. Aiello put the AP article in italics. I added “Joe wrote” to indicate his responses. At times I will add something in from what he said in the earlier phone interview or what’s needed for clarification. That text is set off with [square brackets and blue text].

State Comptroller Thomas DiNapoli said Tuesday that the Motorcycle Association of New York State, based in New York City, is losing the contract it first secured in 1998 in the administration of Gov. George Pataki. The audit includes accusations against some of its top officials. Findings are being sent to the state attorney general’s office for possible further action.

Joe wrote: This paragraph makes it sound that we are losing the contract as a result of the audit. Also, untrue. The DMV sent out a press release in late January stating that the contract was awarded because the MSF underbid MANYS. The audit was only released at the end of last week. Details of this are in my previous letter to you. I will also state that the Comptroller’s audit was a year and a half in the making. If we were involved in such nefarious activity, don’t you think that they would have taken action a year and a half ago??

The state’s contract is worth about $6.4 million over five years. The spending by the association came during a period in which Mr. DiNapoli said the association failed to meet basic requirements of the contract including the establishment of enough training sites statewide.

Joe wrote: What the auditors didn’t understand (and apparently, still don’t) is that you just can’t wave a wand and, “Poof”, there is a training site. First of all, NYS has always had higher requirements in their range dimensions. We adopted a 200’ x 300’ minimum requirement for the ranges. The range also had to be free of any and all obstructions. We did not use modified ranges in NYS. This, incidentally, was a standard that was agreed upon with the DMV a number of years ago. I will also state that MANYS has never had a life threatening injury (let alone a death) in the program since it began operations in 1994. I firmly believe that this is because of the quality of the instructors as well as the increased range dimensions.

[It should be noted that, as far as we are aware, most state programs have never had either a life-threatening injury or death yet have smaller ranges. Aiello explained it this way—when he hadn’t had time to think of what he was going to say: He said, “No student has ever run into anything on any of our ranges” and attributed it to the larger range size.]

It wasn’t until October, 2008 that the DMV accepted the use of the MSF compact range to be used in NYS (though it must be noted that the original request from MANYS to have them accept this range was made in June ’08).

As far as opening enough sites…the auditors failed to mention that we did open more sites. However, they looked at sites that closed and didn’t give us credit for reopening new sites and simply offset the numbers.

That being said, understand that even though we didn’t meet the “pie-in-the-sky” numbers of training sites the DMV was looking for…we still exceeded all training numbers during the last contract period. The last contract period stated that a total of 57,000 riders should be trained during that 5-year timeframe. MANYS exceeded all expectations by training over 69,000 riders. This was an increase of over 20% above and beyond projections. All this was done at $1,000,000 UNDER budget. Yes, you read that right…one MILLION dollars UNDER budget.

The association’s contract expired in February.

The spending Mr. DiNapoli questioned included:

-A Ford Lariat pickup truck that was to be used for towing motorcycles. The truck had upgrades including premium wheels, “jewel-effect headlamps” and lots of leather and chrome, but couldn’t tow motorcycles. The truck didn’t fit in the association’s $300-a-month parking garage so parking meters were used daily.

Joe wrote: The Ford Truck is a Ford F-350 Super Duty Diesel truck. We needed a truck that could not only haul up to 14 motorcycles in a trailer at a time, but could also haul thousands of pounds of brochures, literature, give-aways, etc. for each time we participated in a motorcycle awareness event (as were contractually obligated to do). Also, this was not a new purchase but a replacement for a similar truck that MANYS purchased at an earlier time that was destroyed in a road accident. Since the beginning of the contract, MANYS always had a Pickup truck that was budgeted for and subsequently purchased with contract funds. Why is it all of a sudden an issue now?

[In the phone interview, Aiello said that the new Ford pickup was paid for, in part, by the insurance from the totaled pickup—lowering additional monies from the state to pay for it.]

Joe said: Secondly, they actually had the audacity to state we purchased a “tricked out” vehicle! What we boug [sic] was a standard, super duty F-350 that had back seats. The reason for the super duty was already explained. The reason for the back seats was so the truck could be outfitted with a cap and reclassified in its registration as a Suburban. Why? Simple, it would have to registered as a commercial vehicle otherwise which would severely impact where we could use it and even prohibit us from parking it in NYC overnight.

So, we took the lower-end trim level that was offered on the truck that met our requirements. We never added any packages and only took was offered in that trim level…which included bigger tires and the headlamps. Incidentally, the “jeweled headlamps” are nothing more than a fancy term for regular reflector headlamps. They are not HID or other exotic headlamps.

The final point is the parking space. Yes, MANYS rented a parking space in the building in NYC where the main office was located. Yes, the truck was too big to fit in the underground garage there so we utilized meter street parking. Why was it not mentioned that I MYSELF paid for every quarter that went into those meters and did not use state funds? Also, the space was utilized for the staff motorcycle that I explain next.

-A $13,000 motorcycle apparently used for one official to get to work.

Joe wrote: The motorcycle in question is a 2006 Honda ST-1300. With the 2004 contract, MANYS and the DMV budgeted $20,000 for a staff motorcycle. This bike was used (weather and purpose permitting) for travel all throughout the state to the training locations, speaking engagements, program promotions, etc. It was part of the original budget submitted to the DMV with the 2004 contract and approved. Do we even get credit for spending $8,000 less than we were budgeted for?

Oh, and did I mention that the auditors needed an explanation as to why we couldn’t just use one of the training bikes to ride around the state? It seems that they did not understand the issues of driving a 125cc bike, loaded with luggage and equipment, unregistered on public highways.

-A Chrysler 300 sedan one official took to Arizona when he semiretired, at a cost of $36,221 in leases and insurance. The state Department of Motor Vehicles subsequently disallowed reimbursement for the car.

Joe wrote: The former President and CEO of MANYS,[Mike Melis] as per the original cost proposal and budget submitted and approved by the DMV, was supposed to collect a salary of just over $100,000 per year. Also, there was supposed to be a 3% to 5% increase worked into the salary each year and even a budgeted (and approved amount) allocated for a year end bonus. The former President and CEO voluntarily reduced his own salary by 20% in the first year of the contract and then refused to take any increases or bonuses, so he could allocate funds to other projects in the program. The MANYS board of directors met and approved the leasing of a vehicle in lieu of the salary that was given up so the President and CEO did not have to continue using his own vehicle for all company issues.

When the president took ill and had to move (under advice of his physician) to another climate, he elected to reside at his house in Arizona. While he was still president and CEO of the firm, another person was chosen to take on the role of State Administrator of the program here in NYS. The President, believing that the leased car was in lieu of salary (which it was), took the vehicle with him to Arizona. The DMV initially agreed on this arrangement and continued paying the vouchers submitted monthly by MANYS which included the cost of the lease. It wasn’t until months later that DMV reversed themselves and disallowed the payments after the fact and reduced the outstanding vouchers by the amount they wanted to recoup.

-$13,000 for six hotel rooms for a 13-night stay during the State Fair near Syracuse, without a record of who accompanied association officials or the purpose of the trip.

Joe wrote: MANYS, as per our contract obligations, attended the State Fair in Syracuse for a number of years as part of the Motorcycle Awareness Program. Using its 42’ show trailer, it put out a huge display for the program. This display included a video system that would play public service announcements, training videos, etc., an audio system, a DWI awareness demonstration (with the help of the State Police) and even had 4 static demo bikes that are used in the program. MANYS staffed these events with volunteers from all over the state to meet the public, explain the program, give information on training and answer questions. We also hosted news events and interviews with the media.

[Those who attended the SMSA conference in Buffalo, NY, had the opportunity to tour the motorcycle awareness “show trailer”.]

Since people were working this event on their own dime (so to speak), MANYS took a block of room at a local hotel so the volunteers would have a place to sleep. Incidentally, it should be noted that we used the exact same hotel that the DMV used since they had a booth at the Fair as well. We would double and even triple up people in the rooms as they came and went to work the show and we provided a list of these people to both the auditors and the DMV.

It should also be noted that the State Fair is a HUGE event in Syracuse every year for the last 2 weeks of August and hotels generally sold out all rooms by March or April. So, MANYS took a block of rooms for the duration of the fair. If you do the math, for the 14 days (not 13 as reported) we were paying about $150 a night per room. This was well in line with all GSA per-diem expenses.

Finally, they question “the purpose of the trip”. How about “It was the State Fair that we were contractually obligated to attend?” Yes, I told them this over and over. I even reminded them that the DMV and even the Office of the State Comptroller was at the very same event each year!

[Aiello mentioned on the phone that the DMV also booked an adjoining block of rooms for their staff for the State Fair—and that’s how MANYS ended up at that particular hotel. However, I assume the DMV wasn’t using volunteers but paid employees to man their booth. Also Aiello said that tens of thousands of people were exposed to safety messages through the program’s presence at the fair.]

-$1,800 to maintain a trailer in Arizona with no record of its purpose or for who used it.

Joe wrote: For the last time, there is no trailer in Arizona.

Once again…there is no trailer in Arizona.

I can’t even begin to count the number of times I’ve said this.

What this really is: It was for modifications to a room in the then-President’s home so we could incorporate a disaster recovery hot site for all of the student and program records. We reasoned that since the student records were so high priority and held such critical and confidential information that it would be a good idea to use this place in Arizona as a hot site and disaster recovery location for all program records. As such, we put in modifications to the home that included a special air conditioning unit for the servers, fire boxes for storing tapes and DVD’s of the data, new installation of data and power lines for the equipment and drywall/sheetrock to partition the room. The name of the company that did the modifications happened to have the word “trailer” in their name and the auditors seemed unable to get beyond that point.

[Aiello explained this far better on the phone—it helps to remember this is a program centered in New York City after 9/11 and the Northeast Blackout of 2003. He said, specifically because of the black-out, the need for a disaster recovery site out of the area made sense to them—particularly since it didn’t require paying rent.]

-Thousands of dollars in air fare for association officials and their relatives, some of which was eventually reimbursed to the association.

Joe wrote: There are 3 points here and (surprise, surprise) no underhanded schemes.

The first point is that the former President and CEO was reimbursed for his trips from Arizona to NY when company business required his presence in NYS. This was standard practice and appropriate.

[Aiello said on the phone that Melis was running the program from Arizona for a time. He said it was no different than MSF running West Virginia, New Mexico, Pennsylvania—and now New York—from Irvine, California. Certainly, he said, employees of MSF obviously aren’t paying for their own airfare when they need to visit the state. Yet MSF is also receiving funding from the state. Iow, if DiNapoli had a problem with MANYS, just wait till it gets a load of MSF’s expenses.

Though that would depend exactly how the contract is written. In California, for example, MSF receives a fee for each student registered—and that’s where the bulk of the money comes in—rather than is reimbursed for expenses. This allows MSF to make a great deal of money above and beyond their costs.]

The second was a trip to Puerto Rico when the Association sent down members, at the request of the NYS DMV, to help start the Puerto Rico Motorcycle Safety Program.

[What Aiello doesn’t know and surely that this was flagged by DiNapoli’s audit is that MANYS involvement is a sore point with MSF as it wanted to be to be in control over the Puerto Rico program. Buche, according to sources, was enraged that MSF wasn’t put in charge.]

The final point was when an employee of MANYS, upon learning of the death of a family member in the Dominican Republic, booked a flight and erroneously used a corporate credit card instead of her own credit card. This was discovered upon her return only a few days later and was immediately corrected. This also took place a year BEFORE the audit but MANYS, in trying to be as forthcoming as possible, disclosed that the error took place to the auditors. So, yes, we made a mistake and corrected it as soon as it was discovered. As I told the auditors, we would do our best to ensure that any employee that loses a parent ensure that they use the right credit card during their grieving process.

[When Aiello described this on the phone, he said that the flight was booked within half an hour of finding out about her father’s death when the woman was overwhelmed with grief and made an honest mistake. Six days later—just six days later—when the woman returned to NYC, she discovered the error herself, reversed the charges off the corporate card and put it on her own.]

-37 motorcycles worth $47,515 that were missing, although 24 were eventually located and the others may have been dismantled for parts, according to the DMV’s response.

Joe wrote: Another 2 point issue:

First, at the time of the audit, the auditors visited some of the training locations to see if the bikes on record were indeed at the location. In some instances, they noticed the bikes on record were not at the locations and that bikes not on record were present.

The reality of the situation is that many of the Site Administrators in the program had more than one site and at the beginning of the season mixed up the bikes in their possession so some didn’t end up at the training location of record. However, all bikes assigned to them were still in their possession and accounted for.

There were in fact a few bikes that were removed from the program due to catastrophic failures (engine, gearbox, etc.) and these were dismantled and the parts cannibalized for the other machines.

The second point is that this is not something that we should even have to be audited on. You see, each and every bike in question was purchased during the previous contract period. At the end of that period, those bikes, as per contract, became the property of MANYS. So, these bikes in question were MANYS property at the beginning of the contract period we were being audited for and have nothing to do with this audit.

Some of the spending has since been reimbursed, according to the audit.

Joe wrote: Yes, as I explained, some expenses were reimbursed. What they fail to mention is that was done before the audit even took place.

[As a writer, this is just one of the many instances where the author deliberately phrases things to create the impression of wrong-doing. In this case, as Aiello points out the reimbursement proceeded the audit—and, as he didn’t point out, came years before any warning an audit was going to take place.]

Other violations of provisions of the contracted were found in a spot check of 50 of 82 instructors: 26 had no high school or equivalency diploma, four didn’t have current and valid motorcycle licenses, and two didn’t meet the minimum of teaching two beginning rider courses a year.

Joe wrote: Several points to address here.

First, it is a fact that the rules require that instructors in the Program have a High School or equivalency diploma. This is not the problem. The problem is that MANYS didn’t request a copy of that diploma be provided when individuals held jobs or positions that meant they had to have a high school or even a college diploma. So, no, we never asked for a paper copy of a high school diploma from people who were employed as police officers, engineers, educators/teachers/professors, state workers, military, etc. It doesn’t mean they didn’t have a diploma…we just didn’t have a copy of it on hand because their occupations required that they HAD to have one.

Second, the auditors requested a copy of all instructor training courses that were held during the audit period. They then looked at each candidate in those courses and asked for the training records for each of them. What they found was that some people had either stopped training or never pursued training in NYS after the certification course. So those that “didn’t meet the minimum of teaching two beginner rider courses each year” were nothing more than inactive instructors who weren’t teaching (well, in NYS at least).

Finally, when an instructor candidate wants to enroll in a instructor certification course, a copy of their license (or a copy of their abstract if they are licensed out of NYS) is given to MANYS who in turn forwards these records to DMV for approval. MANYS has no access to DMV license records so we rely completely on DMV providing the appropriate check and telling MANYS if the person is approved or denied. A copy of all this correspondence was given to the auditors. If something is wrong with the license, MANYS has no way of verifying this and relies on the approval (or denial) from DMV.

[Aiello also mentioned on the phone that—as all you rider educators know—instructors that don’t teach don’t get paid—so it’s of no “account” to the state if inactive instructors appear on a list.]

The contract provided thousands of motorcyclists with training to get licenses and to eliminate “points” for violations on their licenses.

Joe wrote: Absolutely correct. MANYS has trained over 110,000 students since 1998 and over 69,000 in the last contract period. MANYS is also a member of the New York State Points and Insurance Reduction Program (“PIRP”). This means that students who took the Basic Rider Course received a road test waiver as well as a points and insurance reduction card that lowers insurance for their cars and motorcycles by 10% for a period of three years and removes up to 4 points from their license if applicable.

Since it is mentioned in the article, how about mentioning that the PIRP benefit is no longer available now that the MSF has been awarded the contract?

[Aiello explained more about PIRP on the phone—this isn’t your standard insurance discount that saves a few dollars a year on a motorcycle—it can save drivers hundreds of dollars a year on insurance as well as be much more skill-oriented than “traffic school” while taking off points. One of the restrictions the bill passed in 2008 that allowed MSF to take over the state program was that the administrating organization be a member of PIRP. It’s unknown why MSF didn’t want to be a member. By removing the insurance discount, training, in essence, costs students hundreds more even though the course costs the same.]

The DMV agreed with many of the findings and is rebidding the contract.

Joe wrote: Nonsense! There were points in the audit that DMV may have agreed to but not the points listed in this article! Also, the 5 year contract was over on February 3, 2009 and the bid process started in October of 2008. They are NOT rebidding the contract.

[Once again, the way the writer worded it, it implies MANYS lost the contract because of these things rather than the contract had already been awarded long before the audit was completed.]

Officials for the association couldn’t immediately be reached at phone numbers in New York and in Arizona.

Joe wrote: When I spoke the Associated Press who wrote this article [He tried to find out also who wrote the article and never did. However, he did speak to a “Rick” who was an editor at the Albany desk], I asked what number they tried to call to speak with MANYS, since I contacted them the minute I found out about this article. We weren’t able to determine exactly how they tried to contact MANYS but nevertheless, I contacted them immediately.

[The line in the article above was not in the version of the article I first read before the sun came up. I sent e-mails shortly after reading it to Newsday and the Associated Press. Later in the day, this line appeared as part of the article.]

This concludes Aiello’s response to allegations distributed in the Associated Press.

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One Comment on “Aiello’s response to allegations”

  1. A. Nonymous Says:

    I don’t have personal knowledge about ALL the points listed, but do know about some of them; Joe’s statments on those are completely accurate.

    Sure does make the auditors look like either a bunch of idiots or a bunch of MSF stooges.


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