Attorney General reported investigating
By Kevin E. Foley
An official with the Putnam County Visitors Bureau issued a statement that dismisses a report in the Journal News that raised questions about a non-profit created and controlled by Libby Pataki that paid her a $50,000 salary beyond the $70,000 she earned from the Visitors Bureau as the county’s tourism director. Neither non-profit appears to have a functioning board, which would violate state and federal law.
David McKay Wilson, who wrote the original story on the non-profit, Putnam Tourism Corp., reported on Friday, Feb. 5, that a source told him state Attorney General Eric T. Schneiderman plans an investigation of the two tourism groups. The attorney general’s office is responsible for the regulation of non-profit agencies.
Attorney General Eric T. Schneiderman
The statement was sent from the county government email address of Frank Smith, who works part-time at the Visitors Bureau. Other than Smith’s name and email on the reply line, it was not signed and did not identify who wrote it or whose views it represented. It did not mention Pataki or County Executive MaryEllen Odell by name. (In the past, the county executive generally has kept a tight rein on county communications.)
Smith has served as an official of the Visitor’s Bureau, according to Wilson’s article, but his current relationship to the organization is not clear. He did not respond to an email sent by Philipstown.info in reply to the statement.
The statement raises more questions than it answers. The following are excerpts and an attempt to clarify.
Wilson … published an article implying financial improprieties of the Putnam County Visitors Bureau. The story was an inaccurate representation, and failed to distinguish between the Putnam County Visitors Bureau and the Putnam Tourism Corp.
Wilson’s report, which is posted at lohud.com, does elaborate on the difference between the two organizations. The central point of his story is that a second organization operated without the apparent knowledge of Odell, the county legislature and apparently some of its board members.
Pursuant to a resolution…, the Legislature dictated that the Visitors Bureau privately fundraise one third of the budget.
The county legislature did do this.
Because private funds needed to be raised, the Putnam Tourism Corp. was born. The Putnam Tourism Corp. was never in possession of a single taxpayer dollar, and operated completely separately from the Visitors Bureau. Never did Visitors Bureau funds end up supporting the Tourism Corp., but many times, privately raised Tourism Corp. funds were used to supplement the Visitor’s Bureau.
The legislature did not mandate that a second non-profit organization be created. As Wilson reported, the organizers of Putnam Tourism Corp. (Pataki and county legislator Barbara Scuccimarra) did not report to the legislature or the county executive that it had been created, or explain why a separate organization was needed to raise funds, although the Putnam Tourism Corp. is a 501(c)(3), which allowed donors to deduct their contributions. By contrast, the Visitors Bureau is a 501(c)(6), meaning it does not pay income tax but donations made to it are not tax-deductible.
Allegations that taxpayer dollars were used to bolster the Putnam Tourism Corp. are erroneous and factually incorrect. The Putnam Tourism Corp. played a pivotal role in being able to provide local organizations with funding in order to advertise, and promote events that would attract out of county visitors. This promotion would not have been possible by relying exclusively on taxpayer dollars, further illustrating the necessity of privately raised funds through the Corp.
There is no allegation in Wilson’s report that taxpayer funds were used by Putnam Tourism Corp. According to its 2014 filings, more than half of the $97,146 it reported in contributions from private donors was used to pay Pataki’s part-time salary as its executive director.
The article was correct in that the Visitors Bureau did not meet the requisite level of corporate governance, and for that we apologize. This is not to say that appropriate levels of oversight did not exist; every purchase made through the New York State Matching Funds program was approved, cataloged, and processed by Empire State Development in Albany. At the same token, we have always expressed an open door policy for residents to voice their concerns, or to provide us with promotional ideas.
The article did raise this governance issue for the Visitors Bureau. But it also raised the same question for the Tourism Corp., which is not addressed here. In particular the Journal News article questioned how Pataki could be paid $50,000 a year through an organization that only she appeared to control. She was paid $70,000 a year from the Visitors Bureau.
In short, the Putnam Tourism Corp. was created in order to serve the people of Putnam County, and to alleviate their tax burden. That purpose was met, and tourism spending within the County has increased without requiring additional taxpayer dollars.
There is no mention here of precisely how the Tourism Corp. alleviated the tax burden or how the money raised was authorized, spent or accounted for.
Excellent reporting, both initially and in follow-up. Let’s see more of this sort of coverage.
There is no need to set up a separate foundation to house funds raised. These monies can be placed in the operating account which already existed and can be used for expenses outside the ramifications of the Matching Funds account. As long as all funds, incoming and outgoing, are accounted for there is no problem. It seems apparent that this foundation was set up for the sole purpose of adding income for an administrator. Furthermore, procedures were in place that required two signatures on all checks over $500 and employees did not sign their own paychecks. I have no idea if those procedures were followed but since the treasurers have said they never signed checks I have to wonder what changed and why since the Visitors Bureau was run by Valerie Hickman.
[The writer is former assistant director of the Putnam Visitors Bureau.]
First of all, why is Frank Smith, a part time employee at best, speaking as the voice of the Putnam County Tourism agency or whatever the correct name for that entity is? Why isn’t Libby writing the press release and dealing with the blow back? Not to mention our wonderful County Legislator Ms. Scuccimarra, whose fingerprints are all over this. The real scandal is that our Legislature at some point approved and/or sanctioned setting up a non-profit corporation to handle the responsibilities of what is rightfully a government agency. There are good reasons why you’d want this most important function that is funded by the taxpayers to be under the direct oversight of our elected representatives.
I wonder if a follow-up story would cover the question of if Ms. Pataki was paid while on leave, which I believe was a period of at least six months, and if all department heads in the county are entitled to paid leave for similar reasons or just “special persons”? If the Visitors Bureau has a total of four or more employees, how is it cannot create a functional tourism website and have given up on the annual bicycle race, which allegedly was the bureau’s chief annual tour de force?
Please keep going on the story including Visitor Bureau employees, their salaries, their responsibilities and their work product, if any exists. I have a sneaky suspicion all the employees are qualified as “special people” by virtue of being Republican party favorites, Pataki or Odell contributors or relatives of the same.