ALBANY – The general manager of a state construction fund fired over a contract tainted by charges of favoritism involving Libby Pataki and forgery would get $107,025 in back pay under a settlement proposal, according to a document.

The settlement agreement with the State University of New York Construction Fund obtained yesterday by the Associated Press says Michael Clemente would get the pay because he was fired without the seven months’ notice required by the construction fund’s handbook. The settlement signed by Mr. Clemente, and the acting general counsel of the SUNY Construction Fund also cites civil service rules.

Mr. Clemente, a veteran Pataki administration hand, is now a budget analyst for the Republican-controlled state Senate, which he joined nine months after being fired from the SUNY Construction Fund.

In exchange for the agreement, Mr. Clemente would promise not to sue the state over his termination, the settlement states. He was paid $174,900 a year when he left his job in March 2002, ending his career in the Pataki administration, according to state payroll records.

Mr. Clemente is paid $87,550 by the Senate, according to state payroll records.

A spokesman for Senate Majority Leader Joseph Bruno, Mark Hansen, declined comment. Neither Governor Pataki, nor his wife Libby, were implicated in the investigation.

The state Inspector General’s Office in 2002 faulted top managers in the construction fund for awarding bids without competition to contractors based on personal relationships between officials in the fund and SUNY officials. Specifically, the inspector general said favoritism ruled in the awarding of a $102,000 contract to an architect related by marriage to Libby Pataki.

“These flaws are systemic…and in fact did influence the course of procurements,” the inspector general wrote. The actions of the managers raised “troubling issues concerning their judgment, professionalism, and integrity,” the report stated in calling for top officials to be removed and a criminal investigation to begin in the case of a fabricated document.

“The fact that top agency officials tolerated and, in fact, participated in a process that ignored fundamental guidelines and sound procurement principles is an issue that SUNY and fund trustees must address,” the report stated.

The report found no evidence that the governor or his top aides were guilty of any wrongdoing in the awarding of the contract for work at SUNY’s Old Westbury campus on Long Island.

The 2002 inspector general’s report referred to a memo that indicated the company began work on the project nearly three months before the contract was awarded. When pressed by Newsday following a Freedom of Information Law records request, the SUNY fund produced a different memo dated months before saying Hudson Design won the contract before work started.

The Long Island newspaper had doubts about its authenticity and had it analyzed by experts who said it was a fake.

Hudson Design was headed by James Copeland, whose brother was married to Libby Pataki’s sister. Mr. Copeland lived next door to the governor and his wife in Garrison in Putnam County.