Newsday (Nassau Edition) from Hempstead, New York • 12

Jl IHttil mmmmmk i mOiZik £111 REGION US to Suffolk: Grill 2 Cops other narcotics investigators took drugs seized as evidence and diverted them to their own use A state investigation is also under way Treder and District Attorney Patrick Henry are scheduled to appear before the county public safety committee Monday Michael (C-East Northport) chairman of the committee meeting said questions dealing with policy decisions will be answered in a session open to the public Questions regarding the ongoing FBI and SIC investigations will be held for closed-door sessions he said In another development in the investigation State Supreme Court Justice George Mclner-ney on Thursday refused a request by the Suffolk Benevolent Association to bar examination of internal records by investigators It was the second Buch ruling by Mclnemey who denied a similar request from the One of them James Kuhn who was in a locked psychiatric ward until recently contacted the department late last week and said he was ready to return to active duty said Chief Insp James CapleB As a result a physical examination was scheduled The exam was routine Caples said conducted in all cases where officers return after extended illness Barry Agulnick lawyer said that Kuhn had told him he did not contact the department He refused to allow reporters to speak to his client who he said is out of the hospital and has been living at home for several days Agulnick reportedly contacted the office of Assistant US Attorney William Cunningham who said yesterday "In light of Suffolk having asked us to conduct the investigation we asked them today not to have any ccntact with Kuhn or Police Officer Raymond He declined to comment further The department is under investigation because of allegations that Kuhn Gutowski and possibly By Robert Kessler and Tom Demoretcky The US Office yesterday asked the Suffolk County Police Department to refrain from any contact with two county officers who are key figures in a federal probe of alleged corruption among the department's narcotics investigators Tne request came after police scheduled a physical exam for one of the officers who the department said had asked to return to work The lawyer denied his client had contacted police Insp Peter Murray assistant chief of headquarters said it was the policy to cooperate with all investigations He said the request would go directly to Commissioner DeWitt Treder who was no: available for comment last night Tm certain he would go along with it Murray said He said the request in effect prevents the department from taking either man back to work The two officers are on extended sick leave at full pay 2-Year Probe Forecast in City Scandal is accused of fraud corruption and racketeering calls into question his judgment and integrity in business matters involving governmental entities "Beyond that it is reasonable to conclude that Mr complex legal problems will consume most or all of his time and attention leaving him little if any time to devote to the project There is no room in this important public project for a delay involving one site because of the personal problems of one developer" In a statement lawyer Victor Rocco said: "Both the UDC and the city acknowledge that they are pushing Mr Lazar out although there is not a hint of wrongdoing associated with this project and de-ite the fact that Mr Lazar was the highest bidder on is project which be pioneered and has been working on for four years While claiming to be anxious about Mr ability to perform they have refused even to listen to his assurance that he is ready willing and able to complete this project The four theaters are the Lyric the Apollo Sel-wyn and the Times Square All but the Times Square "which was to have been used for retail space were to be redeveloped as legitimate playhouses Representatives of the City Planning Commission and the city Public Development Con also signed a letter withdrawing city approval of Lazar Ijinr was indicted last week on four counts of racketeering conspiracy and mail fraud in connection with the PVB case Lazar a former city councilman transportation commissioner and taxi and limousine commissioner is charged with bribing city officials The UDC decision "offends the most elementary considerations of lawyer said Cambridge Investment Group had been chosen in August 1984 to renovate four 42nd Street theaters as part of a massive red evelopment plan that also calls for construction of four office towers a merchandise mart a hotel and other theater renovations The 42nd Street redevelopment is a joint city-state venture involving billior of dollars in public and private expenditures aimei at pushing out pornography crime and drugs from Times Square In a memorandum to the board of directors UDC Chairman Vincent Tese said "Although the indictment does not arise out of any alleged wrongdoing in connection with the project the fact that Mr Lazar Continued from Page 3 judgment on what Ehould political leaders have known I think going a little bit too fast on what should have been known I feel uncomfortable almost demagogic in saying when somebody should have Asked about organized crime Giuliani said "It shouldn't surprise us that organized crime is involved or might be involved in corruption almost by definition what thev try to do To successfully run an organized-crime family you have to corrupt You have to pay off law enforcement You have to pay off the political establishment You have to try to infiltrate the The lack of a strong two-party system here is partly to blame for corruption he said "When one party is in power for decades it almost inevitably leads to corruption and where government jobs are turned over in blocks to political Koch said he agreed with Giuliani Asked if he is using the cases to bolster himself for higher office Giuliani denied political motivation: Giuhani a Republican also denied that the Reagan administration may have political aims in pressing federal investigations of Democratic officials ir major cities To combat corruption Giuliani said several things must be done: "Eliminate systemic or giving a political leader blocks of government jobs to fill as happened with the Parking Violations Bureau "Review salary levels of public officials so you pay them reasonable amounts of to diminish the temptation to seek outside income "Ekminate the ability to profit privately from publc A state legislator can legally represent an agency or individual seeking to do business with the state but a congressman doing the same thing would be guilty of a felony he said "Campaign contribution laws have to be tightened Situations as on the Board of Estimate in which elected officials dependent on campaign contributions also vote on contracts should be Govern leaders of political parties by the same laws and regulations that cover public officials Finally he said that "New York State has an awful lot to do amending criminal laws and procedures so they act as a deterrent to Ron Dot is contributed to this report Scandal Figure Out of Project 0 By Carol Polsky New York T'rifc state Urban Development Corp's board of directors voted unanimously yesterday to drop developer Michael Lazar indicted last week in connection with the city Parking Violations Bureau scandal from the 42nd Street redevelopment project Gitliani delivers speech on corruption at City Club nr.