Rogue NY Dem senator's health center owes back tax

ALBANY, N.Y. - The dissident Democrat who made a New York state Senate coup possible runs a health care center in the Bronx that owes the state at least $162,000 in taxes and may owe the IRS more than $185,000.

Bronx Sen. Pedro Espada was paid more than $450,000 to operate the Soundview Healthcare Network, which gets state Health Department funding. The state Department of Labor said Soundview currently owes $88,000 in unemployment insurance taxes. The group has repaid four different warrants since 1995.

Espada says his company is not delinquent in taxes and that $88,000 of what it owes is for penalties that the clinic is disputing.

Soundview also owes $58,557 for failure to pay withholding taxes dating to late 2008, and $15,285 for failure to pay withholding taxes from April. The health care center owed and repaid $600,000 worth of withholding taxes and penalties from 1996 to 2007 under previous warrants. he discrepancies were first reported Thursday by the Times Union of Albany, which also reported that Soundview owes $185,000 to the Internal Revenue Service. Kenneth Brennan, the nonprofit's chief financial officer, said officials aren't sure how much they owe the IRS, but acknowledged they have a federal debt that might be more than $185,000. Soundview is working out a payment plan with the federal government.

Espada says that as a "break-even organization" for poor neighborhoods, any disruptions in state Medicaid payments can pose major challenges.

"In aggravating circumstances with Soundview Healthcare Network, we had serious problems with our billing network and had difficulties collecting Medicaid payments for two months and various other collectibles," Espada said. "So we sought a payment plan to meet our obligations."

The health care centers have made Espada popular in the communities it serves, providing services to about 25,000 poor people each year, according to a report by The New York Times. The population Soundview cares for is predominantly Medicaid and uninsured patients, who otherwise might avoid treatment or wind up in emergency rooms for health problems.

Attorney General Andrew Cuomo has announced he is investigating managers at Soundview. Cuomo is looking into allegations that state money for programs serving poor women, children and people with HIV and AIDS were instead diverted to political campaigns.

Citing privacy laws, tax department spokesman Tom Bergin wouldn't comment on whether Espada's company is repaying its debt. He said, speaking generally, that a company or individual would still have a tax warrant outstanding even if the debt was being repaid under an agreed-upon schedule.

The business paid Espada nearly $460,000 in 2007, which included deferred compensation. The amount was initially omitted from a 2007 IRS form, an oversight that Brennan said is being corrected. Espada says he makes about $200,000 now.

Soundview has been promised a $3 million grant from the state Health Department, but hasn't received that money yet, Espada said. They were also promised $200,000 in computers and equipment to convert to electronic medical records systems, but have collected less than half of that so far.

"We stay in touch with the state and try to meet obligations," Espada said. "We don't put our head in the sand, we have caught up (before) and we will catch up on these various filing issues."

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