Normally companies are trying to hide losses not cause them.

[The Wicked Wop]

http://story.news.yahoo.com/news?tmpl=story2&cid=519&ncid=519&e=4&u=/ap/20030423/ap_on_re_us/nyc_transit_10

Transit Agency Accused of Hiding $512.5M

Wed Apr 23,12:49 PM ET Add U.S. National - AP to My Yahoo!

By ELIZABETH LeSURE, Associated Press Writer

NEW YORK - The nation's largest transit agency concealed more than half a billion dollars from the public while it was arguing for a fare increase, the state comptroller charged in an audit Wednesday.

The audit found that the Metropolitan Transportation Authority (news - external web site) kept two sets of books — one public and another for internal use, Comptroller Alan Hevesi said.

The public and politicians were left with "a distorted picture created by the MTA to make it easier to push through an increase," Hevesi said.

Agency officials disputed the accusations Wednesday and said they would provide a detailed rebuttal at an afternoon press conference with Executive Director Katherine Lapp.

"We categorically deny that there are two sets of books," MTA spokesman Tom Kelly said.

Hevesi said he got the internal books by subpoena and said they showed the agency had moved $512.5 million from its 2002 accounts onto the books for 2003 and 2004. As a result, a potential 2002 surplus of $537 million shrank to $24.6 million, the audit says. Similar accounting moves turned a 2003 surplus of $83 million into a $236 million deficit, Hevesi said.

"Our review proves that, in fact, the MTA has a culture of secrecy, arrogance, lack of accountability and contempt for the public," he said.

The MTA had repeatedly said it faced massive deficits while it was arguing for the fare hike, which was approved in March.

The approved changes raise one-way bus and subway rides by 50 cents to $2 starting May 4. They also increase commuter rail line fares and tolls at bridges and tunnels.

Hevesi said the increase may or may not have been necessary this year, but debt payments due next year would make higher fares in 2004 unavoidable.

He said his office is now drafting legislation to give him an effective veto over fare and toll hikes by empowering him to verify the accuracy of MTA budgets and financial plans before any vote on an increase. The majority of the MTA's members are appointed by the governor.

Gov. George Pataki said he hadn't seen the comptroller's report, but "I have tremendous confidence in Katie Lapp and the team that she has at the MTA ... She will tolerate nothing but integrity."

The agency acknowledged this week that it needs to be more forthcoming about its finances. Lapp told a state Assembly hearing, "The MTA must overcome the perception that we are hiding our books."

A separate, city audit of NYC Transit, which runs city bus and subway service under the MTA, also found concealment of funds and overstatement of expenses in the hundreds of millions of dollars, city Comptroller William C. Thompson Jr. said Wednesday.

Thompson asked the MTA to reevaluate its fare increase in light of the audit, he said.

The audits come after weeks of allegations that the nation's largest transit system mismanages its finances. Critics have accused the agency of excessive secrecy and questioned why its deficit estimates have varied from less than $1 billion to $2.8 billion. The agency also used deficit claims to argue against salary hikes for transit workers last year.