HOW MUCH GOVERNMENT is too much? We don’t know the half of it. Forget the legislature, governor’s office and high-profile agencies. Think about authorities. What’s with them?
Start with $60 billion in spending each year across all 1,172 authorities, most of which are local entities set up for a specific purpose, like the Columbia Economic Development Corporation (CEDC). They spend or control large sums of taxpayer money, but the public used to be kept in the dark about how much they spent and where the money went. But that changed in 2009 when the legislature created a new agency with power to investigate authorities and hold them accountable… kind of.
The agency is called the Authorities Budget Office (ABO) and this week it released its findings on how CEDC has handled the proposed expansion of Ginsberg’s Foods, a local company based in Claverack. It found CEDC has a dark side.
The ABO investigated CEDC following a complaint lodged last fall by the community group GhentCANN founded by Ghent resident Patti Matheney. GhentCANN opposes the plan by Ginsberg’s to build a 65,000 square-foot, $12-million facility on a 33-acre site that straddles the boundary between Claverack and Ghent. The empty lot for the project is assessed at $280,000. CEDC sold it to the Ginsberg’s project for $1.
The ABO says that’s okay as long as CEDC justified the sale as consistent with its mission to encourage and retain businesses in the county and with assurances that Ginsberg’s will create of jobs. CEDC didn’t make this up. It’s the law. So you have to wonder why there was such a fuss about the sale… until you read the rest of the ABO report.
Much of the report focuses on “potential” conflicts of interest by four senior members of the CEDC Board of Directors. The first mentioned is David Ginsberg, CEO of Ginsberg’s. He was on the CEDC board in 2013 when the expansion plan began to percolate. But he resigned later that year, and before that did not participate in discussions of the plan. The report suggests that Mr. Ginsberg was remiss because he didn’t file a written statement of his financial interest in the project that bears his family’s name. That’s like accusing Donald Trump of failing to disclose his interest in Trump City. It’s true, but what does it prove?
The case of David Crawford is quite different. He didn’t file a written statement of his financial interest, though his engineering company was working for Ginsberg’s. The investigators heard from people who say he verbally disclosed his involvement. These same character references said Mr. Crawford didn’t discuss the project or vote on it. But the minutes of the meetings show that Mr. Crawford did discuss and vote on the project. Mr. Crawford is the president of the CEDC board.
CEDC Treasurer Robert Sherwood voted for the project and didn’t file a written disclosure. Somebody might like to have known that Kinderhook Bank, where Mr. Sherwood is president, made loans of $9.5 million to Ginsberg’s using that $1 property as collateral. Mr. Sherwood acknowledged to the investigators that he should have recused himself.
(Disclosure: Kinderhook Bank is a customer of this newspaper, and we have accounts at the bank.)
Attorney William Better also provided no written disclosure that he was being paid by the county Industrial Development Agency to negotiate a financial assistance package with Ginsberg’s Foods.
CEDC members told investigators they didn’t know the disclosure rules or thought they didn’t have to follow them. That’s the way exclusive clubs work. They make things easy for insiders and the suckers never know how the game is rigged.
But the CEDC club doesn’t play with its own money. It’s money suckers like us have paid in taxes.
This crony favoritism reveals that leading members of the board have no faith that their colleagues on the board will make wise decisions about the use of public funds. Self-dealing, lax rules and secrecy are so much more efficient. Now they may have poisoned the Ginsberg’s deal, especially if other state agencies follow up on the ABO report.
The county Board of Supervisors appoints two members to the CEDC board, and one of them should be assigned to monitor compliance by CEDC with its Code of Ethics and state law, reporting failures to the ABO.
The ABO report doesn’t allege CEDC engaged in criminal behavior. So maybe civic virtue is just an illusion. But do you think CEDC leaders would allow others to handle their money the way they handle ours?