NEW THIS MORNING

NEW THIS MORNING: * Queens State Senator Malcolm Smith has been in talks with Republican leaders about running on the GOP line for mayor in the 2013 race, the Post learns: http://nyp.st/OlVFiS * New York City sold more than 28,000 pounds of the Police Department's spent shell casings to a Georgia ammunition company, which reloads them with bullets and resells them to the public, the New York Times discovers: http://nyti.ms/OmGBBv * Gov. Andrew Cuomo said a bill he vetoed would create a mandate to send special education students to private schools but the bill's sponsor, Assemblywoman Helene Weinstein, will fight on, Wall Street Journal writes: http://on.wsj.com/T2Sxf7 * The New York City Housing Authority board has been hoarding $1 billion in federal funds since 2009, which it is supposed to spend on building renovations and improvements for 400,000 low-income residents, the Daily News discovers: http://nydn.us/MiuxWj * New York City's Campaign Finance Board will require disclosure of independent spending not coordinated with a campaign, including an archive of advertisements run by SuperPAC groups and their backers, the Times notes: http://nyti.ms/Na8lbH * The state's Joint Commission on Public Ethics will keep the identities of wealthy donors, who financed the Cuomo-friendly business lobbying group, a secret, the Associated Press reports: http://nyti.ms/NTDJ0t * Council Speaker Christine Quinn won't use her political clout to pressure New York University to evict a Chick-fil-A restaurant from its building, despite its company CEO's anti-gay remarks, the Post writes: http://nyp.st/QmdG3w * A new state audit found a Long Island special education company owed the city $3.15 million when it closed in April, overbilled another $2.6 million, and allegedly fabricated documents to cover its expenses, the Times learns: http://nyti.ms/M32p8e * The state's Public Integrity Commission fined former Gov. David Paterson $62,000 for taking free World Series tickets last year from the Yankees, the Post reports: http://nyp.st/gSpKh4 * The FBI is so opposed to the NYPD's Muslim spying program its top officials have barred agents from dealing with the police department's intelligence division, according to a new book, the News writes: http://nydn.us/Nl8Dvt