Current and former officials join call to hold agency accountable for “odor” around loan deals
Along with the two corrective resolutions proposed yesterday by Hillsdale Supervisor Art Baer at the County’s development committee meeting, loads of other revelations and opinions were aired about how CEDC conducts its affairs.
An unusual number of past and present County officials joined concerned citizens at the standing-room-only meeting, held at 401 State Street in Hudson. Each group uniformly criticized how the Columbia Economic Development Corporation (easily confused with the County’s similarly-named committee) does business.
Former Stockport supervisor Leo Pulcher urged the County’s leaders to act promptly on the recent, stinging Authorities Budget Office (ABO) investigative report into the Ginsberg land deal and other inner workings of CEDC.
Following Austerlitz Supervisor Rob Lagonia’s demurral that he did not have enough information yet to form an opinion, Pulcher retorted that “You have an independent agency who already did” the investigative work some on the Committee were proposing.
“Look hard at that report,” Pulcher said, “It's been done. Act on what is before you.”
Supervisor Joel Craig had to leave the committee early for a Germantown meeting, but stated that “the ABO report concerns me greatly.”
Former Gallatin Supervisor Linda Scheer echoed Pulcher’s sentiments, cautioning against any suggestion of “just sitting back, waiting, and forming more subcommittees.”
Scheer said that there is “an odor” around “certain projects,” citing not just the Ginsberg land deal but other past projects, such as funding for the Soil & Water building and the aborted purchase of a County building in Hudson. CEDC seems accustomed to “circumventing” usual channels, Scheer indicated. “You can’t just keep saying, ‘let’s look into it. CEDC members will just keep saying, ‘Let me see what happens, whether I get caught.”
As the tidbit was shared that the CEDC’s sister group, the County Industrial Development Agency [IDA], had less than $10,000 in cash to spend, Scheer wondered “how did the IDA afford to pay attorney Bill Better $22,000” as reported by the ABO.
Scheer likewise wanted to know who sold these agencies their insurance policies, and whether there was transparency on such contracts to avoid more conflicts of interest. County economic development czar Ken Flood claimed that the CEDC alone had about eight different insurance policies, but did not name which insurance brokers write these for them.
Near the end of the meeting, Scheer also called for a “point of order” as the Committee was proceeding to vote on Baer’s resolutions, due to Hudson Supervisor Sarah Sterling’s recent appointment as CEDC board secretary. Sterling abstained from the first, but not the second, of the votes, as Scheer cautioned that it was risky business for an elected official to also serve as an agency’s officer.
As a new officer of CEDC, Sterling now sits on the agency’s Executive Committee, which was found in the report to be out of compliance with Open Meetings law. “It was hard to even find out who is on the Executive Committee,” Sterling noted. “There seems to be a revolving cast of characters, though they are supposed to be appointed by resolution. [But] that hasn’t always happened,” she said.
Pressed for names, Flood indicated that at the time of the Ginsberg’s land deal, CEDC’s Executive Committee consisted of its officers—President David Crawford, whose engineering firm has performed extensive work for Ginsberg’s, Vice President and retired realtor Mary Bartolotta, then-Secretary David Colby and head of the County IDA Bruce Bohnsack, plus Republican County chair Greg Fingar of Fingar Insurance.
Baer, for his part, issued possibly the most stern official words about CEDC. He recalled that he had received “two letters from CEDC’s lawyer [Andrew Howard], denying his request for an opinion on the Board’s ethics, calling the request overboard and not warranted. These said that CEDC has complied with all ethical matters. I was not made aware that the ABO had already intervired CEDC. I didn’t know there was an investigation going on,” which would soon find there were “serious conflicts with three CEDC Board members.”
Baer added that a p.r. firm, Behan Communications, was also hired without Board approval to assist with promoting the Ginsberg’s proposal.
“The issue is the process that occurred in this case, and may have occurred in other cases,” Baer continued. “It’s time for the Board of Supervisors to be proactive, not reactive, and restore the public trust about the use of taxpayer money for economic development. We need to show that we are not just a microcosm of the State Legislature, just with fewer zeros. [Board of Supervisors chairman] Pat Grattan said at a recent commencement that students should ‘be true to yourselves.’ It’s time for us as Supervisors to also be true to ourselves.”
Former County attorney Dan Tuczynski spoke at length about how he is “very concerned” by the process CEDC uses to hand out loans and choose development projects for support.
“This is about public integrity,” Tucznyski said, adding that since “we all know the people in this community, it can be cifficult to speak out about conflicts. The average person doesn’t want to do that. But I think it is important now. There is a question about whether everybody can get a fair shake” before the agency.”
“Nobody is disclosing conflicts” on the CEDC board, Tuczynski continued. “In my opinion, it is wrong. You need to get to the bottom of whether this [the handling of the Ginsberg deal] is an aberration or a pattern.” He concluded by stating that the County should not pretend to be powerless in the situation, since they have “the absolute power to make change” through its control of almost all of CEDC’s annual funding.
Current Ghent Supervisor Mike Benvenuto said that he was attending primarily as an observer, but that he was at the moment disinclined to vote for continued County funding of CEDC. Ghent Town Board member Mallory Mort concurred with comments from the audience, including from former Hudson Planning Commission member and business owner Peter Jung, that long-term tax abatement deals put a big strain on local budgets, transferring budgetary burdens from corporations to ordinary taxpayers.
Jung said that “preferential tax deals—ten-year property tax abatements to corporations which gross over $100 million—create a vicious cycle.” He also warmed of the “great danger of this committee kicking the can down the road. There’s a dark cloud over development in this County, and it has to be dispelled.”
Several who attended the last meeting of the CEDC noted that the agency’s leadership showed a dismissive attitude about the ABO report.
Hudson Development Corporation board member Christine Jones noted that “A lot of jokes were made about the ABO report.” The CEDC board “could not have been less welcoming” to the audience.
Despite CEDC being a public agency funded almost exclusively by tax dollars, “They look at you with such disdain, like you shouldn’t be there.... This is a group which is very well-connected among themselves,” she added.
Jones noted that she has taken the State-mandated trainings which some CEDC Board members had been shirking for years, indicating that these take only two hours, and can be completed by conference call. CEDC minutes for years have included perfunctory reminders that Board members still needed to complete such trainings; Flood, said to be the highest-paid County employee, claims that in the wake of the ABO report all but one have now finally complied.
Jones also got into a back-and-forth with Flood, who she said had opened the CEDC’s last meeting by blaming “politics”—“the governor and the legislature”—for its recent troubles. Flood protested yesterday that he hadn’t really been complaining about the laws requiring more accountability from the public, but was merely providing “context,” but the explanation fell flat and elicited groans from the audience.
Repeated statements were made that the laws requiring ethics training, conflict of interest disclosure, and open meetings had only been on the books since 2012, or even less time.
This commenter noted—as previously reported here—that The Public Authorities Reform Act of 2009 which appeared to vex CEDC board members was nearly six years old, and had been in place before either Flood or Crawford assumed their positions.
(Another comment from this corner: Why is CEDC’s microenterprise loan program now offering terms of 7.75% interest, when Ginsberg’s only paid 1% on a long-term $400,000 loan—and a small farm recently was “given” far higher terms of 10%? The agency’s newly-announced rate is all the more baffling, given that commercial banks currently offer more like 4%... Is CEDC gouging local borrowers, or taking on riskier-than-average clients?)
GhentCANN’s Patti Matheney, who attended the last CEDC meeting along with Jones, agreed that the agency literally makes “no room for the public. We are not recognized, and they go into executive session at the drop of the hat.” Citizens who attempt to find out how their tax dollars are being used get the strong impression, she said, that “everything that comes before their board has already been decided in private.”
Committee Chair John Reilly, Scheer’s successor as Supervisor of Gallatin, seemed to take interest when Matheney highlighted a point made in the ABO report. The State’s investigation only provisionally found that there was “no harm, no foul” arising from the potential conflicts of interest in the $1 Ginsberg deal, since the Ghent Planning Board had turned Ginsberg’s expansion project down. But if the Planning Board’s decision is overturned due to the company’s legal appeal—now being considered by County judge Richard Koweek—that would reopen the can of worms. You could no longer say, “no harm, no foul,” Matheney observed.
A back-and-forth between Reilly and Lagonia teased out indications that the roughly $430,000 donated by the County annually to CEDC goes almost entirely to staff salaries, not even including Flood’s pay, said to be well in excess of $100,000 per year. Reilly also stated that his committee’s “oversight role has not be clear, and needs to be better established.”
Lagonia also wondered why the CEDC oversight subcommittee appointed by Grattan had been dissolved “without his knowledge.” Reilly indicated that it had never met.
Matheney continued that the problem does not seem limited to the recent controversy over giving 33 acres of land for $1 to Ginsberg’s Foods. On issues such as the County Airport or the TCI plant—which handled PCBs and caused a Countywide emergency when their building expoded—CEDC showed interest in only the industry’s side. “There was no interest in public input, no interest in hearing the facts. The public has been misled over and over again, and even the ABO report seems to be a joke to them.”
Lastly, Matheney lamented how citizens have to hire lawyers if they want to get any information about these publicly-funded issues.
“Good luck getting anything out of them,” Matheney said. “I feel your pain. It’s almost impossible to find anything out without hiring an attorney, even for a simple FOIL [Freedom of Information Law] request.”
Local farmer and potential Ginsberg’s neighbor Tom Runyon noted that “if you go back and look at some of CEDC’s records from the 1990s,” when it was formed, “you see a lot of the same names” on its Board. “That could be part of the problem,” Runyon said.
This attendee likewise noted that the first (and last) time he was invited to a CEDC meeting was in the Spring of 1999, and that most of the people in the room 16 years ago remain either on the CEDC board, or the IDA, or other positions of prominence in the County. CEDC was led at the time, for example, by accountant Dick Koskey, whose firm is now the agency’s appointed auditor.
Claverack resident Joann Cardiss reminded the Committee that Flood had misled the public about the County’s cost of acquiring the land later to be given to Ginsberg’s for $1. “You said it was inherited, until I brought a member of the family who sold it to the County to a meeting,” Cardiss recalled. (At that County IDA meeting, residents proved with hard documentation that in fact the County paid $110,000 for the 33 acres in 2007.)
Flood claimed that he was “misquoted” in the paper regarding an inheritance, but he never appeared to contact the Register-Star for a correction. And multiple IDA and CEDC board members stated that they had not known the land had cost the County anything.)
Her husband, Ron Cardiss, added that CEDC needs to be completely “dismantled and rebuilt.”
Stockport resident Louise Roback, an attorney, said that she had “never complained before at a meeting, but this is outrageous.” Calling the CEDC’s procecures “a disgrace,” she lamented that the public “likes to presume that everything is regular. But it’s not that way at all. Ken Flood didn’t even mention the ABO investigation at your last meeting. I don’t think the CEDC takes this seriously.”
Regarding the report’s finding that Better was paid more than $22,000 to advance tax breaks for the Ginsberg’s project before the IDA, while he served on the CEDC—a conflict never disclosed—Roback said that “You shouldn’t enrich yourself at taxpayer expense. How can Better stay on the board.” (Note: Better not only remains on the Board, but was promoted to its Executive Committee after the ABO report.)
“What is CEDC doing to address these serious ethical lapses?” Roback asked. “They need to show us why they should still get public funding. The three board members caught enriching themsleves from [CEDC’s] pursuits should resign. They used their positions to help themselves.”
Current Ancram Supervisor Art Bassin noted that the three “members of CEDC who are cited in the report [Better, Crawford, and Kinderhook Bank President Bob Sherwood] have never come before us.” Bassin later motioned to table Baer’s call for the three Board members’ resignations, in favor of inviting them instead to explain themselves at a future special meeting of Reilly’s committee—tentatively scheduled for June 10th.
Regarding Bassin’s deferral of action on the ABO report, Ron Cardiss said that even if they were to take a “polygraph of Crawford and Better,” that they’d just hear some variation on the old slogan that “what’s good for GM is good for America. They’re just going to say that what’s good for CEDC is good for the County.”