Putnam Visitors’ Bureau Lost Money in 2015

Turmoil at agency led legislators to put limits on 2017 spending 

By Liz Schevtchuk Armstrong

The Putnam County Visitors’ Bureau lost more than $26,000 in 2015, according to newly released documents — one of two shortfalls totaling nearly $100,000 since 2013 that prompted the Putnam County Legislature to keep most of its 2017 appropriation under tight rein.

According to forms filed with the Internal Revenue Service, the nonprofit bureau last year raised $268,154 and spent $294,232. The agency occupies space in the county government office building in Carmel and is accountable to the legislature but operates as a separate, nonprofit corporation.

The Putnam legislature has released only $41,996 of the $141,996 it budgeted to provide the Visitors’ Bureau in 2017, enough to keep it running for the first quarter, while maintaining the rest under legislative control. Lawmakers cited lingering concerns about the bureau’s finances and management following the resignation in March of Executive Director Libby Pataki after questions arose about a separate tourism nonprofit she established that apparently had no functioning board and prompted an ongoing investigation by the state attorney general.

Restricting the Visitors’ Bureau money ensures “a little more oversight going forward,” explained Ginny Nacerino, who chairs the legislature. “As soon as the issues are cleared up and resolved, we’ll release the money.”

The Pataki years

As an investigation by the Journal News revealed, Pataki, a Garrison resident, created a second, largely unknown nonprofit called Putnam Tourism Corp., for which she solicited tax-deductible donations and which paid her a separate salary from that provided by the Visitors’ Bureau. Now defunct, the Tourism Corp. also ran a deficit of about $14,000 in 2015, according to its IRS filing.

This past summer, the Visitors’ Bureau established a new board of directors, which picked Cold Spring resident Barney Molloy as chair. Frank Smith, who had served as an intern and deputy director in recent years (although not named as an employee in the bureau’s 2014 or 2015 filings), became acting director, while the search for a permanent director continues.

Libby Pataki and Frank Smith in a shot from Smith’s LinkedIn page

On a form filed with New York state that is required of all charities, the Visitors’ Bureau stated that in 2015 its revenue included a $146,996 grant from Putnam County and $53,911 from the state’s Empire State Development Corp., which the county matched with another $53,911.

Visitors’ Bureau expenses included salaries for Pataki and Katie DeMarco, who lives in Philipstown. Pataki earned $43,087 for working full-time as director, far less than the $70,000 she received in 2014. However, she spent part of 2015 on leave when her husband, former New York Gov. George Pataki, campaigned for the Republican nomination for president. DeMarco earned $36,600 for working 20 hours a week.

Top Secret: Putnam County Tourism

By Chip  Rowe

While preparing a story on the newly appointed board of the Putnam County Visitors’ Bureau and each member’s background and experience (Meet Your Tourism Board, Sept. 30), The Current filed Freedom of Information Law requests to receive copies of the applications the agency received for the volunteer positions, meeting minutes, a copy of the bylaws and any emails between Acting Director Frank Smith and board members.

Smith, who acts as the Visitor Bureau’s records officer, replied that the minutes had been posted online (they have since been removed) and that the emails are exempt from public disclosure laws. He noted that an appeal could be filed with … the Visitors’ Bureau board.

The bureau did honor the request for the applications, provided with “personal and contact information removed.” Samples appear below.

At the same time, Pataki’s Putnam Tourism Corp. paid DeMarco $50,000 for working 24 hours a week as its vice chair. (The previous year, 2014, DeMarco earned $24,000 for 20 hours per week in the same position.) Pataki received no salary in 2015 from the corporation, which was dissolved this year in the wake of the attorney general’s investigation. The nonprofit took in $72,580 in donations in 2015, spent $1,268 on promotions and gave grants of $21,597, according to its IRS filing.

Meanwhile, the Visitors’ Bureau provided grants in 2015 to the New York-New Jersey Trail Conference ($2,000), the Cold Spring Merchants Association ($700), the Putnam County Joint Veterans Council Row of Honor Flags ($100) and Beatrice Copeland, daughter of then-board member Carolyn Copeland, for a film project ($500).

Its expenses in 2015 included about $95,000 for tourism advertising, $7,000 for events, $4,000 for public relations and $14,000 for its website and mobile app.

Federal filings show that in 2014 the Visitors’ Bureau ended the year with a positive balance of $25,767 in revenue over expenses; in 2012 with a positive balance of $2,872; and in 2013 with a $70,930 deficit.

County oversight

At an Oct. 20 meeting, Legislator Dini LoBue referred to the 2013 and 2015 shortfalls and asked Smith for the agency’s 2016 records, including bank statements. Smith replied that while he signed Visitors’ Bureau checks, he did not have bank statements. He likewise declined to discuss files that Pataki may have left, saying he would have to review them individually before sharing them with legislators.

Nonetheless, Smith assured legislators that he was “doing my absolute best” to straighten everything out. “I apologize if there is anything from the past,” he added. “But I don’t know how I can answer for that.”

Legislator Dini LoBue (File photo by Ross Corsair)

Several legislators commended Smith for his efforts. With LoBue the sole dissenter, the legislature voted 8 to 1 to release all of the bureau’s 2017 funding.

A week later, it changed its mind.

During the Oct. 27 meeting, LoBue urged her fellow legislators to retain tight control over the entire $141,996 appropriation. Citing the investigation by the Attorney General’s Office, she maintained that “we have to keep a close watch on this agency.” She said Smith earned $50,000 for “a part-time position” and that between state and county funding, the bureau receives about $400,000 annually.

“That is a lot of money for the acting director to not know where the bank statements are, to say he signed checks but now he’s not familiar with what’s in the bank,” LoBue argued.

The legislators voted 7 to 2 to approve  a compromise: Holding back $100,000 but releasing $41,996 for bureau expenses during the first quarter of 2017.

Legislator Barbara Scuccimarra, who represents Philipstown and served as treasurer of the previous Visitors’ Bureau board, voted no, protesting that her colleagues were “tying their hands” at the agency. She said the finances had been inherited by the new board, and “they’ve given every indication they will address the issues. I don’t think it’s fair to put any money away.” (Legislator Carl Albano also voted no.)

After the vote, LoBue continued her quest for Visitors’ Bureau financial data. On Nov. 17, she asked Smith for “detailed costs” of spending for a promotion for “Fireball Run,” a car race-cum-scavenger-hunt that stopped in Mahopac on Sept. 30 and Oct. 1.

On Dec. 13, she told The Current that “even after countless letters,” Smith remained “unresponsive to requests to submit financial documents so that I can fulfill my oversight duties as a legislator. Considering the legal problems encountered by the previous bureau administration, I would think that Mr. Smith would make every effort to respond to any and all inquiries promptly and completely in order to regain the confidence that had been lost,” she said.

Smith did not reply to requests for comment on the legislature’s retention of $100,000. However, he said Dec. 12 that the bureau has been “working with New York State and our attorney to revise and update policies.” It also plans new “funding guidelines so that they are consistent and fair to all of our potential partners” and expects to announce its choice of a permanent director after the first of the year.

Board Chair Barney Molloy declined comment, saying in an email on Dec. 21 that he was unavailable until after Christmas. The Attorney General’s Office also did not respond to requests for an update on its inquiry.

One thought on “Putnam Visitors’ Bureau Lost Money in 2015

  1. Many thanks to The Current for the ongoing expose of the cesspool that is the Putnam Visitors’ Bureau. After all that I have been through in the last four plus years trying to get money for Cold Spring, undeniably Putnam’s only real tourist attraction, I can say that what’s been reported so far is just the tip of the iceberg when it comes to the incompetence and malfeasance of this taxpayer-funded agency.

    Kudos to Chip Rowe for exposing the secrecy that has prevailed since political operative Barney Molloy has taken over as chairman of the board. In fact, even when Libby Pataki was director, she at least complied with the FOIL and responded to requests. Not any more. It is almost as if Mr. Molloy has told interim director Smith to simply ignore any and all requests — even if they come from a duly elected county legislator! I have been trying to get the same information for months about where the money is going and have gotten nowhere.

    In fact, just the other day I filed yet another FOIL request with the County Clerk’s office to try and get the information from that agency rather than wasting my time with Smith, Molloy and the phantom board of directors. If I ever do get the info, I will be sure to publish it so that residents and business owners can see just how we’ve been screwed.

    How Mr. Molloy ended up with this job is beyond me and his collusion with Mr. Smith has resulted in Cold Spring losing all its funding for our fall and holiday promotions and advertising. I have numerous emails that I have sent to both these gentlemen, literally begging for money to help with advertising Cold Spring, money that was supposedly already in the pipeline for our projects, and their only response was to cut off all funding with no recourse whatsoever.

    So if anyone is wondering why we are not having as many shoppers or doing as much business this season as we had done in the last couple of years when we got some help from the Visitors’ Bureau, now you know. This year there were no radio ads on WHUD, no print ads in any media, no brochures, nothing — even though the sales tax dollars that our shops and businesses generate contribute mightily to the county coffers. Instead, Mr. Smith unilaterally chose to blow his budget on the other side of the county with the Fireball Run event that apparently was a complete bust.

    Thanks to Smith and Molloy, not one penny was returned to Cold Spring for holiday advertising that would help the merchants who have invested so much of their time, money, sweat and tears into their businesses. The Visitors’ Bureau represents government at its worst — incompetence, cronyism, no-show jobs, secrecy, disregard for the law, you name it.

    If this is what we can expect for 2017, there is no reason for the bureau to exist and the legislature should disband it immediately and stop all funding of taxpayer money. Promoting tourism in our county is much too important to be in the hands of unelected, unaccountable private citizens who have so little regard for the people they are supposed to be helping. The stakeholders of Cold Spring — the residents, business owners and merchants — need to wake up and demand that the county return some of the money that they take from us.