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WATERFRONT STENCH

ALBANY — The Waterfront Commission of New York Harbor, created decades ago in the “On the Waterfront” era to fight corruption, is itself corrupt and mired in illegal conduct, a scathing Inspector General’s report said yesterday.

“This was a total agency breakdown,” state IG Joseph Fisch said in a shocking 60-page finding following a two-year investigation. “Instead of ridding the waterfront of corruption, this agency itself was corrupt.”

The report on the commission, created in 1953 by New York and New Jersey, found that former New Jersey Commissioner Michael Madonna, former New York Commissioner Michael Axelrod and former Executive Director Thomas DeMaria failed to “adequately or responsibly oversee” the commission.

The findings against Madonna, onetime head of the New Jersey State Policemen’s Benevolent Association, were considered so serious that Fisch quietly traveled to Gov. Jon Corzine’s office last month in Trenton to recommend that the New Jersey commissioner be fired, it was learned. Madonna was axed by Corzine last Thursday, according to Fisch.

Among the report’s findings on Madonna:

* He “forced unqualified applications” on the commission’s police department.

* He recommended as a detective James Sutera, who had failed the required police test twice and then passed it with “the highest mark ever recorded by an applicant on his third try.”

“Sutera boasted to commission staff that Madonna had given him the answers, which he then gave to another would-be detective,” according to the report.

The report also found that axed commission General Counsel Jon Deutsch, in direct violation of the Waterfront Commission Act, “helped felon Frank Cardaci concoct a scheme to keep his port business.”

Axelrod, replaced in July 2008 by former state Organized Crime Task Force head Ronald Goldstock, was found to have given official “police” placards that allow access to restricted parking areas in Manhattan to his wife and wealthy friends, and even kept his own placards after leaving his job.