In Upstate Op-Ed, New York State Comptroller Calls for Closing LDC Loopholes Used to Fool Taxpayers

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In Upstate Op-Ed, New York State Comptroller Calls for Closing LDC Loopholes Used to Fool Taxpayers

December 03, 2013 - 17:21

Thomas DiNapoliNew York State Comptroller Thomas DiNapoli has an Op-Ed in today's Rochester Democrat & Chronicle, Let state comptroller audit LDCs in New York.

There is a shadow government operating in New York. It uses billions of local taxpayer dollars with little oversight, and too often for questionable purposes. In Monroe County, it has wasted millions and led to indictments, including of public servants.

I’m talking about local development corporations, commonly called LDCs. They were originally created to help New York’s counties, cities, towns and villages with economic development, but their purpose has run amok in several communities.

DiNapoli's solution?

Under current law, my office cannot directly audit the state’s approximately 270 LDCs, even when they are controlled by a local government. The only way my office can examine the relationship between an LDC and a municipality is as a part of an audit of the local government. Even then, it is hard for us to look beyond the financial or business relationship to examine the overall finances and operations of the LDC.

This is a major loophole in state law that needs to be closed.

New Rochelle already has one of the worst Industrial Development Agencies in New York State.

As regulation as increased on IDA's, municipalities around the state have turned to Local Development Corporations or LDCs as a way to skirt IDA regulation. New Rochelle is among those doing that. The LDC basically operates as an extension of the IDA (their meetings are scheduled together).

While there is no information (yet) that New Rochelle's LDC has been used improperly, the LDC was used for the New Roc Parking Garage and other transactions and would be a likely candidate for misuse.

Given the poor track record of the NRIDA, the shift to using the New Rochelle LDC, and the problems uncovered in Monroe County and Rockland County, I would concur with DiNapoli when he writes:

We can’t fully understand the financial condition and operations of local governments unless we can directly examine the finances and operations of the organizations they control. The recent indictments in Monroe County show how important public oversight is, and how costly the lack of information can be to taxpayers. The expansion of my office’s audit authority over LDCs will enable us to keep an eye on shadowy financing.

Read the entire Op-Ed here.

The paper has a primer on the Monroe County case which is also worth a read:

Sorting out the LDC maze

There is 1 Comment

The Good News is that the Comptroller is already watching the games played in our fair city.
Some of us citizens have kept the pressure on highlighting the gamesmanship with the Comptroller.
The more who do bring these matters to the attention of his office limit the ability for us tax payer to get scorched.
The office admits having to circumvent the politics as the ruling party has power and they are often bridled.
That said it is really time to clean up New Rochelle power brokers and cronies as it stinks to high hell.