Upton Sinclair famously said that “it is difficult to get a man to understand something when his salary depends on his not understanding it.”
That aphorism would appear to apply in spades to Ken Flood, the County’s economic development czar, as well as other leaders of the Columbia Economic Development Corporation (CEDC).
On Tuesday, CEDC’s board met to grumble and grouse about the recent Authorities Budget Office Report which blasted their handling of the recent Ginsberg proposal in Ghent. And on Wednesday, Flood issued a press release attempting to put a smiling emoji on the bad news.
Patti Matheney of GhentCANN, the group which submitted the complaint which led to the ABO’s investigation, attended Tuesday’s meeting, and has circulated a blow-by-blow email account of their discussion. She writes:
“I attended the CEDC meeting this morning and frankly, I’m appalled at the cavalier attitude of a number of the Board members regarding this report and the requirements to follow the guidelines and policies of the ABO.
“[Ken] Flood stated that he wanted it to be ‘perfectly clear’ to the Board that these new regulations are a result of the ‘NY State Legislature and the Governor.’
“Mary Bartolotta stated that, ‘we were pretty much a private corporation, until a few years ago.’ Many Board members complained about the need to recuse themselves due to conflicts of interests and opined about how difficult it will be for them to do business going forward under these circumstances.”
In fact, the supposedly “new” regulations which appeared to annoy Flood and Bartolotta were passed in late 2009—by a previous governor and legislature—and went into effect early in 2010. As noted in a February 2010 press release from the State,
“The Public Authorities Reform Act of 2009… after years of stalled negotiations, takes effect today. Among its key provisions, the Act creates in permanent law an expanded independent Authorities Budget Office (ABO) with additional enforcement and oversight power over more than 450 state and local public authorities, industrial development agencies, and local development corporations.”
Not only have such oversight and requirements been in place since the beginning of this decade, the ABO has contacted CEDC previously in an effort to bring the agency into compliance. Even before the GhentCANN complaint, Flood alerted his board in September 2013 that the ABO “had requested a meeting”; that they “were interested in understanding... how they spent their money”; and that they “had visited the office twice and were asking for clarification and further information. [Flood] noted they have been focused on deposits and expenses.”
A month later, the ABO issued a report on the CEDC’s activities. The conclusion of that report found that:
“CEDC was created to promote the growth of industry and jobs in Columbia County. It appears, based on the expenditures reviewed for this report that approximately 61 percent of CEDC activity is related to this public purpose, in the form of grants and loans provided to businesses in the County for start up or expansion. However, CEDC also spends its resources on activities that do not directly contribute to CEDC’s mission, such as contributions to other entities involved in economic development in the area. The CEDC board should ensure that these public funds are spent properly and only to advance the core mission and purposes of the CEDC.”
In short, CEDC’s staff and board had to be well aware of these not-so-new regulations. Indeed, past meeting minutes from the previous year, buried on the agency’s website, include multiple indications that the State was keen to have CEDC members submit important financial disclosure paperwork and participate in required training. The repetitive nature of such minute notes over several years suggest that these tasks were not exactly at the top of board members’ to-do lists.
As Matheney noted in her email,
“CEDC and the CCIDA are public entities, using our tax-dollars for economic development. We have a right to full transparency on how these funds are being allocated. But most importantly, we deserve to have confidence in the integrity of the board members and the processes used in their decision-making.”
Nevertheless, a press release today from Flood glosses over or completely omits the most damning portions of the ABO investigation. Ignored, for example, is the use of land donated by CEDC to Ginsberg for $1 as collateral for a loan from one of the CEDC Board members’ bank.
Likewise, past claims by Flood that “Crawford had not taken part in any discussion or vote regarding the Ginsberg’s project” are thoroughly debunked by the ABO, which noted multiple instances where Crawford “did participate in discussions and voted on issues related to the project.”
CEDC’s actions on Tuesday indicate that while a minority of members are mindful that it is time for the agency to fly straight, a majority still wish to continue on as before.
Matheney discovered that there are four vacancies on the Board—an opportunity to serve not known to the general public. Asking after the meeting “how these openings were being advertised, [Flood] confirmed that the positions are not publically noticed.”
Nevertheless, “two potential new Board members were brought to the Board for consideration,” writes Matheney. “The candidates were Supervisor Mike Benson from New Lebanon, and Kim Keil from Valley Energy. Several members felt both candidates would have potential conflicts and would not broaden the demographics of the board. Bill Better and David Crawford, both cited numerous times in the report of having conflicts of interests regarding the Ginsberg project, were the most outspoken in favor of bringing both onto the board immediately. After some discussion, they were approved for CEDC membership by a vote of 9-6.”
The Board did appear a bit more gunshy on another topic, a resolution regarding support for a water and sewer project in the so-called 9H/66 corridor—code, it would seem for the Commerce Park and the adjoining Ginsberg site. Matheney reports that due to the large number of recusals due to potential conflict of interest, the Board did not have a quorum to vote. But those recusing themselves once again did not specify the nature of their conflict, a specific and repeated problem noted in this week’s ABO report.
That does not stop Flood, in today’s press release, from claiming that he and the “Staff and the Board of Directors of CEDC are committed to incorporating these recommendations into the organization’s policies and procedures.”