Bernardo Watch: Conflict of Interest, Anyone?

A conflict of interest is defined as a situation in which a person has multiple interests, one of which could potentially corrupt one of the others. And if you want to see a textbook example of this, plain as day, take a look at David O'Halloran and the weight he's throwing around as the head of the Ulster County Industrial Development Agency. O'Halloran, for example, has been using his position as chairman to go after developer Steve Aaron. Just last week, Aaron was hauled before the IDA to pay an allegedly delinquent tax bill (see previous post on the subject). Aaron bit the bullet and paid, despite what appears to be unequal treatment at the hands of O'Halloran.

For example, the Bernardos are also IDA loan recipients, in this case for their Skatetime 209 business in Accord. The funny thing is, they too are under an "action plan" by the IDA, as Skatetime's jobs claims -- the number of jobs the IDA was told Skatetime would provide to the local community -- have never really added up. Thus, the IDA has Skatetime on this list (along with Aaron and a few other developers). According to minutes for the IDA meeting this past August, there were a number of issues with Skatetime:

TLB Management (Skatetime 209)
o Jobs issue - specifically the interpretation of what a full-time equivalent employee is
  • Subsequent to this application the Agency has defined a full-time equivalent employee so that situations such of these no longer occur
o This year they reported the equivalent of 12 full time employees
o The project created a destination venue and has generated tourism activity for the county
o Independent contractors should be defined as the federal government is looking at this to generate more tax revenue
o Currently the extent of the PILOT, sales tax relief, and mortgage relief is based on the type of project and the number of jobs - there is a Matrix in place
 • In the past, when some of these projects were started, it was not as clear from a legally enforceable standpoint - our actual agreement did not make the number of jobs created a legally enforceable provision in the way it does now
 • If there is a default now, we have a Project Benefit Agreement, that if they do not make their job levels we can claw-back these benefits
 • The older projects did not sign the Project Benefit Agreement
o Currently under-performing with their job numbers
o ACTION PLAN: No further action at this time - they will remain on the list. CEO Matteson will follow up via telephone regarding the independent contractor issue.

In other words, the IDA took no action against the Bernardos, though it did decide to go after Aaron. I wonder why this could be? Oh, maybe it had something to do with the fact that O'Halloran is good buddies with the Bernardos. It's O'Halloran, after all, who is holding the Friends of Terry Bernardo fundraiser at Hillside Manor on February 28 at 7 p.m. RSVP to O'Halloran at (845) 853-4967 if you're interested in attending. This is also the same David O'Halloran who is angling for a position on the newly constituted Ulster County Local Development Corporation, a position over which the Bernardos -- totally coincidentally, I'm sure -- wield an enormous amount of power. This conflict of interest, in fact, has begun to rankle some of the folks in the opposition:

As members of the Ulster County Legislature stand ready to appoint their representatives to the Golden Hill Local Development Corporation Board, Minority Leader David Donaldson has made his own suggestions as to eligibility.

Anyone that is affiliated with any hospital has a potential conflict if placed on the LDC board, Donaldson wrote in a letter to all lawmakers sent by email.

As an example, he said that Ellenville Regional Hospital President Steven Kelley and County Industrial Development Agency President David O’Halloran should be disqualified as candidates, Donaldson said. Any member of the IDA should not be on the board as they may be involved in both the sale and possible financing which he said may create a conflict.

Donaldson, a Democrat said he also agrees with Health Committee Chairman Robert Aiello, a Republican, that anyone who is a licensed real estate agent should be excluded for consideration because they could use their position to help steer a sale of the property.

The Bernardo Junta, of course, sees nothing wrong with this. Hey, if everyone makes a little cash on the side, what's the big deal? Right?:

Republican Legislature Chairwoman Terry Bernardo, though, said the county has “highly qualified resumes from across the county” including experts in finance, healthcare and human services. “While Legislator Donaldson plays politics, we will be working to ensure qualified people sit on the LDC,” she said.

Bernardo said the legislature will review all resumes and make a collective decision. “I care about a fair, non-politicized process which allows everyone who is interested to be considered fairly.”

Yep. Fair and balanced. It's all good, as long as elected officials don't -- gasp! -- engage in politics (which is rather an odd suggestion, given their chosen profession), and the Bernardos get to appoint their handpicked flunkies to these plum positions.

Kemble Has it in for Aaron

What is it with William J. Kemble's dislike of Steve Aaron? The sarcasm practically drips off the page:

Developer Steve Aaron has met the deadline for paying nearly $77,000 due for 2010 on his Birchwood Village housing complex under a payment-in-lieu-of-taxes, of PILOT, deal.

[. . .]

On Wednesday, Aaron’s latest deadline, an Ulster Savings Bank check for $76,937.30 was hand-delivered to the city of Kingston, which will pass part of the money to the other two entities that tax properties in the city: the Kingston school district and Ulster County.

The amount paid was actually 7 cents short of what Aaron owed, but the head of the Industrial Development Agency seemed unfazed.

So, the check was seven cents short? I think Kemble should investigate this immediately. Probably another nefarious plot by Aaron. I'm sure he'll get to the bottom of it one of these days.

Or maybe it was a simple clerical error? Yeah, I know. Aaron couldn't be reached, yadda, yadda.

Maybe Jonah Mandelbaum knows where Aaron hid the seven cents?

Freeman Does Some Real Reporting

Kudos to the Freeman's Patricia Doxee for telling it like it is. The Bernardo Junta is doing everything it can to consolidate as much power as possible into the hands of the Independence Party. The Democratic Caucus isn't taking this lying down though:

The Ulster County Legislature’s Democratic minority is considering legal action against Legislature Chairwoman Terry Bernardo and the Republican caucus in an ongoing dispute over appointments to the Golden Hill Local Development Corporation’s board of directors.

Minority Leader David Donaldson said he is furious that a resolution appointing Legislator Jeanette Provenzano to the board did not go before the Legislature’s Health and Personnel Committee on Feb. 6. He says Bernardo, R-Accord, purposely kept the measure off the committee’s agenda because she opposes the appointment of Provenzano to the board.

[. . .]

“No chairman has ever refused to hear a resolution,” said Donaldson, D-Kingston. “They’re basically denying the minority any way they can.”

Donaldson said Democrats will discuss during their caucus today the possibility of going to court to force legislative committees to consider resolutions that are submitted in a timely fashion.

This is par for the course with the Bernardos, who seem to be good only at intimidation and pissing people off.

And it's nice to see that there's at least one reporter at the Freeman who knows how to do her job.

County GOP Committee List Controlled by Independence Party?

It looks like the thugs from the Independence Party are continuing to take control over everything they can. The latest move was to have Fawn Tantillo, Bernardo's personal flack, pay for an annual GOP newsletter subscription service with Tantillo's personal credit card -- which now means that the Independence Party has control over the county GOP committee email list.

If I were a Republican in Ulster County, I'd start asking serious questions about whether it's a good idea for someone from a competing political party to have control over the County GOP committee's internal email list.

Bernardo Watch: Will She or Won't She?

Everyone's favorite Independence Party puppet, Ulster County's own Sarah Palin, our new Fearless Leader of the County Legislature Terry Bernardo, is having a little fundraiser at Hillside Manor in Kingston on February 28 at 7 p.m. The get together is allegedly to celebrate Bernardo's 46th birthday, but there could be more to it than that.

Bernardo has indicated privately that she intends to run for Congress someday, so now would probably be a good time for her to throw her hat into the ring. If she does, she'll be competing with George Phillips and Tom Engle for the party nod, both of whom are heavy-hitters who already know how to run a big campaign.

If she does get in, she's going to be beaten badly by these guys. And, give the dinner's entrance price -- a mere $46, which is symbolic of her 46th birthday -- my guess is she's not going to do it (I would expect a congressional fundraiser to charge more, like $250 at least).

At this point, no Democrats have announced, but all eyes are on Mike Hein and Kevin Cahill to go after Hinchey's old seat -- assuming NY-22 doesn't disappear completely, something that appears more and more likely given the silence from the Dems' side of the equation.

But I hope she gets in and that the campaign happens. It'll be entertaining as hell to watch her get trounced by the other two GOP contenders.

What's a Jail "Taboggle"?

Someone should ask Len Bernardo how to spell debacle.

Journalistic Malpractice at the Kingston Freeman

Does anyone at the Freeman do actual journalism anymore? Or is it simply a mouthpiece for the shadowy forces that want to take down developer Steve Aaron? Sure looks like the latter.

The Freeman has run several stories regarding back taxes Aaron has allegedly refused to pay (this assertion is absolutely false, by the way, and I'll get to that in a minute). There was this story by Paul Kirby on Dec. 13, 2011:

The Ulster County Industrial Development Agency moved on Wednesday to revoke a payment-in-lieu-of-taxes plan for developer Steve Aaron if he doesn’t pay, within four months, more than $330,000 he owes on his Birchwood Village complex in Kingston.

Aaron shot back that the threatened action smacks an “anti-affordable housing” sentiment.

Industrial Development Agency Chairman David O’Halloran said the agency knows the importance of affordable housing but needs to protect taxpayers’ interests, too.

He said the agency’s board voted unanimously on Wednesday to issue a “default notice” to Aaron informing the developer that if he does not pay the $331,236 he owes to the city under the payment-in-lieu-of-taxes, or PILOT, plan within 120 days, the Flatbush Avenue property on which Birchwood Village sits will be assessed at full market value, resulting in standard property taxes that will cost Aaron more.

“He needs to pay all outstanding taxes under the PIOLT agreement,” O’Halloran said, adding that the agency will be aggressive in enforcing the demand for payments in light of benefits afforded to Aaron.

Read the whole thing. There isn't a single quote by Aaron. Why? They never talked to him, that's why.

Or, what about this story, also by Paul Kirby, about the $50k offer Aaron made to the City of Kingston regarding these alleged back taxes:

Mayor Shayne Gallo has rejected developer Steve Aaron’s offer to pay part of the back taxes he owes the city in exchange for Kingston granting him an additional tax break.

The mayor also hinted at beginning foreclosure proceedings against Aaron’s Birchwood Village complex if the developer doesn’t pay the $330,000 he owes the city.

In a Dec. 28 letter to then-Mayor James Sottile, attorney Kyle Barnett wrote that attorney David Lenefsky, representing Aaron, was proposing that Kingston allow Aaron to pay just $50,000 of $330,000 owed under a payment-in-lieu-of-taxes agreement for Birchwood Village, which is on Flatbush Avenue. In return, Lenefsky proposed, Aaron would be allowed to take advantage of two tax-break programs for the property, retroactive to 2009, instead of just one.

Yep, the poor, put-upon City of Kingston is being held hostage by the mean-old developer.

And there have been several other stories in the past few days regarding Aaron's dispute with the IDA and its board chairman David O'Halloran, who is a part of the Town of Rochester cabal who wants Aaron out:

Developer Steve Aaron on Thursday paid $9,848.27 to the Ulster County Industrial Development Agency to cover legal fees tied to a dispute over back taxes he owes on his Birchwood Village affordable housing complex in Kingston.

The agency board voted on Wednesday to revoke the payment-in-lieu-of-taxes, or PILOT, deal for Birchwood Village if Aaron did not pay the legal fees by Thursday.

But Aaron isn’t out of the woods yet. He still faces a Feb. 15 deadline to pay $76,937.37 owed for 2010 under the PILOT deal and an April 12 deadline to pay $132,523.93 for 2009 and $127,742.07 for 2011. (The 2009 and 2011 deadlines are later because they are the subject of a court challenge filed by Aaron.)

Again, the story here appears to be that the developer is just a greedy money-maker who cares only of himself. How will the ravished City of Kingston ever recover from this scourge?

The problem with this story is that is it totally, one-hundred percent wrong. The Freeman knows this. Aaron is involved in what is known as "tax certiorari" litigation to have the taxes on Birchwood Village reduced. Aaron even wrote a letter to the Kingston Times outlining the nature of the dispute:

The reported amount of payments due in lieu of taxes is based on an unlawful assessment by a former City of Kingston assessor who refused to follow the New York State Real Property Tax Law (RPTL) in reference to affordable housing projects. As a result, we have legally challenged the PILOT bills from 2009 on. Once the Kingston revaluation hit in 2008 it became clear that the taxes on the property were considerably more than could have been anticipated in estimating a PILOT payment; considerably more than the New York State Division of Housing & Community Renewal approved budget called for; and considerably more than the ability of the state rent-controlled Birchwood Village complex to pay. As a result of the acknowledged flawed revaluation, the assessor had raised the Birchwood Village assessment valuation by nearly double.

Pretty simple, ain't it? Aaron thinks the assessment is unlawful. And, ya know what? In our amazing legal system, there is a way to deal with this. You ask the taxing entity, politely at first, to reduce your taxes. If it refuses, you take it to court and have an impartial judge decide.

This alleged dispute is nothing more than that. Aaron feels his taxes are to high, which may or may not be true. This is the crux of the issue. This is not something that can be tried in the press, but should be done in an actually court of law. Aaron, whether you like him or not, has rights, people -- as do we all, and we should all sit up and take notice when a group of powerful interested trample on those rights, even if you think that the person is in the wrong. Due process.

The Freeman should stop printing this half-true garbage and do its damn homework on this stuff -- especially when it's printing falsehoods that are borderline libelous.