Molloy breaks with ex-legislator Paul Tonna's group after weekly paper's critical reports, Tonna's libel suit against paper

Molloy University has cut ties with the Energeia Partnership leadership organization after it and its founder, former Suffolk County Legis. Paul Tonna, came under fire from a local newspaper he then sued for defamation and libel.

Molloy and Tonna say the split last November, ending a 20-year relationship, was amicable and long contemplated. But it came two months after a series of stories in the North Shore Leader likened Energeia to a “cult.” Tonna denied the claims and in October filed the $50 million complaint. A state Supreme Court judge last week granted a default judgment in Tonna's favor, ruling the Leader and its staff did not respond in time. A hearing to set a schedule for discovery on potential damages is set for Feb. 11. 

Tonna will now operate Energeia under a new not-for-profit entity, the Ethicus Project Inc., which incorporated with the state on Nov. 8, New York Department of State records show. The program will still do business as Energeia, and Molloy will have a member on its board, officials said.

“Molloy University is proud to have provided a foundation for the noble mission and ideals of the Energeia program and its partners in serving the Long Island community,” university president James Lentini said in a statement. “We look forward to its continued growth and impact under the umbrella of this new not-for-profit organization.”

Asked if recent newspaper stories precipitated the split with Molloy, university spokeswoman Jacquelyn Rath said, “I’m not ready to comment further.”

Founded at Molloy in 2005, Energeia has described itself as a leadership academy for people working in the public, private and nonprofit sectors, addressing issues such as regional employment, education, land use, taxes, transportation, poverty and institutional racism.

Energeia enrolls about 30 to 40 participants at a time, at an annual tuition of $3,800 each. It provides them with a two-year program that includes numerous daylong workshops, Tonna said. The nonprofit Rauch Foundation provided “seed funding” to launch the program and continues to pay half the tuition for government and nonprofit workers, said Tonna, who also runs a public relations firm and is currently chairman of the South Huntington Water District.

Molloy’s official sponsorship ended in December, Rath said, and a recent search for the program on the school’s website showed no results.

Molloy hasn't provided funding to Energeia in several years, Tonna and Rath said. Instead, the program is funded by tuition, grants, sponsorships, donations and revenue from golf fundraisers, Tonna said. Those outside funding sources gave Energeia an annual budget of $516,281 as of last June, including Tonna’s salary of $125,000 as the program’s executive director, Rath said. Tonna declined to discuss his salary.

"Financially we were self-sufficient” from Molloy, John Treiber, board chair of Ethicus, the new not-for-profit over Energeia, told Newsday.

“We’ve managed to do well on our own,” he said.

In addition to giving participants a “very, very thorough understanding of the key economic, social and cultural issues facing Long Island,” the program also provides ample networking opportunities, he said.

“You can’t deny the value of that,” said Treiber, who works in the risk management and insurance industry.

September report prompts suit

In his lawsuit, Tonna accused the North Shore Leader, a Locust Valley-based weekly, of publishing in September a “false and malicious article” about the group under the headline, “Two Huntington Pols Enmeshed with $50M Melville Land Fraudster.”

The Leader article called Energeia “a secretive private ‘invitation only’ land developer’s club” and referred to it as “a cult-like program of multi-day initiation and training events to inculcate members and public officials with the dogma of mass housing construction,” court records show.

Tonna’s suit denied the claims and sought $25 million in general damages and $25 million for "special damages," plus interest and legal costs.

Leader publisher Grant Lally, a longtime Republican activist who made his most recent run for Congress in 2014, told Newsday in December that the paper stands behind its reporting.

In an answer to the complaint filed Jan. 7, the same day as the judge's default order, Deborah N. Misir, Lally's wife and law partner, denied most of Tonna's claims and called for the case to be dismissed, asserting that the Leader's first defense was "the truth."

The Leader more recently published stories about Tonna's ties to Empire National Bank. The stories accused the bank, which Tonna and more than a dozen other founding directors launched in February 2008, of having been “shot through with conflicts of interest, concealed private transactions and self dealing” and noted that it had been under federal supervision for a time.

The bank addressed federal regulators’ concerns by taking steps to maintain adequate capital, improve profitability and avoid relying too heavily on real estate lending, Newsday reported in 2010.

The Suffolk County Legislature added Empire to the county’s list of 15 approved bank depositories in August 2008. Tonna had left the county legislature at the end of 2005.

Newsday had reported that federal bank regulators were examining Empire National Bank after finding “unsafe and unsound banking practices relating to earnings and liquidity at the bank.” Federal regulators said in 2012 that the special supervision and other requirements they had imposed in 2010 were no longer required to ensure the “safe and sound operation” of the bank.

The Town of Huntington’s board added Empire to its list of 18 bank depositories in April 2016.

Tonna said he never faced a potential conflict of interest between his role at the bank, which he said did not involve day-to-day operations, and his service as a public official.

The South Huntington Water District, he noted, is separate from the Town of Huntington’s government, and the water district has never used Empire as a depository, he said.

“I have never solicited any municipality for business for the bank,” including Suffolk County, the Town of Huntington or the water district, he said.

Flushing Bank purchased Empire in 2020 for $111.6 million, according to reports. Tonna said his initial investment in the bank was in the low six figures. He declined to say how much he earned on the investment but said he got a “reasonable return.”