updated 10/24/2008 8:31:24 PM ET 2008-10-25T00:31:24

Gov. David Paterson's embattled top aide resigned Friday, after a week of escalating criticism over his failure to pay $300,000 in taxes on time and a questionable excuse for the lapse.

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"Members of an elected official's staff should never distract from the work of the principal who they are privileged to serve," O'Byrne wrote in a letter to Paterson. "It is clear to me that my personal history has become a distraction to the work of your administration."

Paterson wrote O'Byrne that he accepts the resignation, effective Friday, with regret.

O'Byrne, who has ties to the Kennedy family, has said clinical depression kept him from paying taxes between 2001 and 2005, before he took the job as secretary to the governor.

O'Byrne's problems were first made public in the New York Post on Saturday and O'Byrne has been fighting mounting pressure since then to keep his $178,500-a-year job. On Tuesday, lawyers for O'Byrne sought to end the controversy by releasing tax data but ended up intensifying the criticism when they blamed the delay on "nonfiler syndrome" related to his depression. One of the tax attorneys said it was a common mental health problem for professionals, but mental health and IRS officials said they never heard of it.

Paterson administration officials didn't immediately respond to requests for comment.

O'Byrne, a former Jesuit priest who officiated at the wedding of John F. Kennedy Jr. and counseled the Kennedy family three years later after he died in a plane crash, was the top aide to Paterson. He was responsible for mapping out policy and politics as Paterson rose from the near powerless Democratic minority in the Senate to lieutenant governor and then governor after Democrat Eliot Spitzer resigned in March amid a prostitution scandal.

O'Byrne's resignation is a blow to an administration that has fought one crisis after another, beginning with Spitzer's resignation after just 14 months, much of which was spent in gridlock after fights with the Republican-led Senate.

Since then, Paterson, with O'Byrne, has convinced the Legislature to cut Spitzer's last budget, decreased spending in the executive branch by 10 percent and warned of dire fiscal problems months before Wall Street's meltdown.


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