Who Controls What?
A document made available to Alt by Nancy Brock, an M&T bank employee and public relations person for the Control Board showed that as of January 21st of this year, the Construction Board and several other City agencies are covered organizations.
The document pointed out that although these various agencies were exempt from Control Board oversight, the Control Board retained the right to terminate any such exemption or exemptions
If the Control board deemed that any of these covered organizations did in fact, materially affect the ability of the City to adopt and maintain a budget, those organizations could be subjected to their oversight.
For some reason, the Buffalo Sewer Authority is still exempt from Control Board oversight. Alt asked Ms. Brock why the Control Board had maintained the exemption of the Buffalo Sewer Authority, especially in light of its serious maintenance problems (see Smell of a Dying City on opposite page), Ms. Brock sent us a recent Control Board document which stated that, It was found that the Buffalo Sewer Authority does not materially affect the ability of the City to adopt or maintain a balanced budget.
In addition, the note read that, The Sewer Authority has been cooperating with the BFSA in keeping us informed about budgetary issues. While its nice to know that the Control Board is on friendly terms with the Sewer Authority, the simple fact of the matter is that the BSA does have an impact on the budget.
Squaw Island Situation: Out of Control
Much of the digester equipment that breaks down sludge at The Buffalo Sewer Authority has been in a state of disrepair for a number of years, but BSA officials haven't addressed the problem, which has resulted in the current stench that periodically wafts over the City's West Side.
The Control Board apparently seems content to hold their noses over the issue of mismanagement at the BSA.
This fresh show of support for the BSA by the Control Board begs several questions: Why do certain politically connected Sewer Authority officials continue to enjoy raises and special perks like brand new SUVs on the Citys dime while other City employees such as the teachers must submit to the BFSAs wage freezes and job cuts?
Why have allegations of no-show jobs and other corrupt practices at the BSA never been investigated? And is there any truth to the rumor that BSA Chief Anthony Hazzan threw Control Board President Thomas E. Baker out of his office in City Hall after a heated debate? Mr. Baker has not responded to our requests for an interview.
All the digester equipment at the Bird Island Treatment Facility is in a state of complete disrepair, despite the fact that millions of dollars have been invested in the facility. Could this be due to the mismanagement of Tony Masiellos boyhood chum and BSA Chief, Tough Tony Hazzan, as many have alleged? The Control Board apparently doesnt want to find out. Where will the money come from to make repairs, if not from the taxpayers?
Is it the contention of the Control Board that the money necessary to repair this equipment will not come out of the Citys budget? Is the City not liable for the very real possibility of another environmental disaster, courtesy of Mr. Hazzan and his crew?
By going after the Construction Board, the Control Board seems to be attracted to a pot of gold. The Sewer Authority is the complete opposite of a pot of gold, and yet it will undoubtedly continue to require large expenditures that will come out of the citys coffers. Concerns over mismanagement even made the front page of The Buffalo News, recently. How is it that the Control Board can look the other way?
Tony Masiello has taken care of boyhood friends like Mr. Hazzan and a host of others. Of course, political patronage of this nature is a tradition in Buffalo politics. By zeroing in on the Construction Board, the Control Board, may simply be honoring another tradition in New York State politics, namely, the manipulation of bonding agreements between State Authorities and the financial institutions that float the bonds.
Since the days of Robert Moses, Public Authorities in New York State have often shaped bonding agreements that would be extremely favorable to the bankers who controlled the boards of these Authorities. While M&T is not underwriting the billion dollar Construction Board bond itself, it's important to note that M&T board member and former SEC Chairman Arthur Levitt, Jr. is a lifelong friend of Sandy Weill, the CEO of Citibank whose investment banking arm, Salomon Smith Barney is handling the bond.
By cutting back on the original construction plans, the offering becomes more attractive to buyers while also reducing the risk to the seller. Slowing down the construction schedule can also be seen as way of buying time for the formation of more charter schools, which in turn, may reduce the workload of the Construction Board further.
Delays have also hurt the Building & Trades Union's minority training center, which lost money by planning its coursework around the original construction schedule. This, of course, plays into the flagrant anti-union animus of Mr. Wilmers and his cronies.
The school construction scandal that took place in New York City in the seventies stands out as one of the greatest wastes of taxpayer dollars. At its root was a political-business-criminal nexus that was above the law and accountable to no one. Perhaps history is about to repeat itself. Between M&T's Control Board agenda and the Buffalo Sewer Authority's stench it's beginning to look like a case of the old boy network meets the goodfellas, all over again. By John McMahon
Recently the Buffalo Fiscal Stability Authority, better known as the Control Board, made news with their announcement that they would become involved in the fiscal affairs of Buffalos Joint Schools Construction Board.
Citing concerns over projected enrollment estimates in City schools as a reason for Control Board involvement, Thomas E. Baker told The Buffalo News, I think it's important that someone like ourselves have some level of oversight."
The Construction Board and its billion dollar-plus bonding capacity falls under the auspices of the Control Board as one of its covered organizations.