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Comptroller's audit criticizes ESD over Buffalo Billion project

New York State Comptroller Thomas P. DiNapoli's report

New York State Comptroller Thomas P. DiNapoli's report concluded the Empire State Development agency's "lack of due diligence raises concerns." Credit: Steve Pfost

ALBANY — State Comptroller Thomas DiNapoli on Friday said the Cuomo administration failed to undertake “basic due diligence” that risked wasting more than $2 billion in tax breaks and state aid on companies that promised to create jobs in four high-tech projects, including the Buffalo Billion development.

Much of DiNapoli’s report focused on the Buffalo Billion project, which was first envisioned by Gov. Andrew M. Cuomo in 2014 to revitalize the economy of the city and Western New York by attracting high-tech manufacturers with tax breaks and other state aid. But in 2018, a federal investigation into accusations of bid rigging and corruption in awarding contracts for the project resulted in the convictions of two former aides to Cuomo, who were operating as lobbyists for developers, three developers and the then-president of the SUNY Polytechnic Institute. Cuomo wasn’t accused of wrongdoing.

DiNapoli’s report concluded the Empire State Development agency’s “lack of due diligence raises concerns that, prior to awarding hundreds of millions of dollars, no real scrutiny of these projects is done, increasing the risk that projects will not fulfill publicized high-tech job and private investment goals. Such lack of basic due diligence increases the risk that public dollars will be spent with too little return on investment.”

An Empire State Development spokeswoman said DiNapoli didn’t understand the agency’s limited roles in the project and said all job commitments have been fulfilled or will be met by their deadlines.

DiNapoli also said the accuracy of some ESD data was “questionable” because it conflicted with information in other reports. He said there was a “lack of consistent and rigorous performance and evaluation standards” to determine if companies fulfilled their promises of creating jobs. The report noted that some job commitments were reduced downward after state aid was provided and that records holding companies to their promises were confusing.

ESD spokeswoman Kristin DeVoe said the report failed to acknowledge reforms Empire State Development began in 2016. She said the changes “have yielded increased transparency, oversight and accountability, stronger executive leadership, improved finances, additional research funding and lower vacancy rates, leading directly to upstate commitments of more than $4 billion in new investment and over 2,500 new created and retained jobs.”

DeVoe also said the comptroller’s auditors misunderstood the agency’s limited role in the projects and criticized the actions of the SUNY Polytechnic Institute.

But DiNapoli said ESD was "the lead agency" and had "a significant role in ensuring the projects are successful.”

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