-- Former Newark Mayor Kenneth A. Gibson today admitted avoiding about $78,000 in income tax under a plea bargain that let him avoid a retrial on accusations of business fraud.

Seventeen charges against Gibson were dismissed, and he was immediately sentenced to three years of probation on the remaining felony charge.

Gibson, 70, a licensed engineer, was accused of cheating the Irvington school district while managing a school construction project five years after leaving office.

He also entered a guilty plea to mail fraud on behalf of his company, Gibson Associates. U.S. District Judge William G. Bassler ordered the company to repay the district $349,000 and barred it from having contracts with other public agencies.

Gibson was mayor of New Jersey's largest city from 1970 until 1986 and was the first black to head a Northeastern city. He was defeated for a fifth term by the current mayor, Sharpe James.

Gibson had reported an income of $23,000 on his 1993 federal income tax return but acknowledged today that he made more than 10 times that amount. Although the charge usually carries a maximum prison term of three years, the sentence was reduced because of the plea, as well as Gibson's age and declining health.

The July 2000 indictment stemmed from a $5 million contract that Gibson Associates got in 1991 to manage the school construction project. Prosecutors charged that double billing and padded expenses cost the district $1 million.

The judge declared a mistrial in November in the first trial of Gibson, partner Camille Savoca and their employee, William Bernowich, after a federal jury could not reach unanimous agreement on any counts.

Jury selection in the retrial began Sept. 30 but was halted, allowing details of the plea bargain to be completed.

Bernowich, 55, pleaded guilty today to a charge of making false statements.