The dark side of public-private partnerships

In western New York, the shadowy world of the Buffalo Billion Initiative is under scrutiny by investigative reporter Jim Heaney of the Investigative Post. When Heaney started looking into the process by which a lead developer was selected for the massive project, he was denied his formal records request. The reason? Fort Schuyler Management Corporation (FSMC), the entity in charge of the selection process, claimed that as a private non-profit it is exempt from the Freedom of Information Law. As a result, last month Heaney and the Investigative Post filed an Article 78 lawsuit with the New York State Supreme Court.  The case is pending.

The documents FSMC refuses to disclose relate to its selection of LPCiminelli as the lead developer of the Buffalo High Tech Innovation Hub at Riverbend, the site of the SolarCity Gigafactory.  According to the National Institute of Money in State Politics, LPCiminelli Owner and CEO Louis P Ciminelli gave $91,800 to various campaigns of Gov. Andrew Cuomo and was identified by the Investigative Post as one of Cuomo’s largest contributors.

In an advisory opinion, Robert Freeman of the New York Committee on Open Government notes that while FSMC may not be a government agency per se, its structure as a SUNY-created entity and its mission engaging in economic development, education and workforce development on behalf of the state and SUNY, make it subject to transparency standards.

When a private company becomes involved in spending public money for economic development there is an inherent risk that the public will lose the ability to carefully scrutinize the project. For transparency and good government advocates, an obvious concern in Buffalo is the suspicion that the state is funneling development dollars to large non-profit institutions in a deliberate effort to keep expenditures out of public view. New York State needs a reminder that maintaining transparency standards is fundamental in all economic development projects, particularly those conceived through public private partnerships.