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Zito focus of probe into Power Coalition Questions remain on $1,000 overpayment

The Niagara Power Coalition's probe into its financial history has revealed that in at least two years, money that was meant for its former director instead was reported as income on other people's tax returns.

In one year, Mark Zito's $23,410 payment was reported to the Internal Revenue Service on the tax return of his fiancee, Susan Ross, coalition attorney R.J. Stapell told board members at a hastily convened meeting Monday.

In another year, Stapell said, money that was supposed to go to Zito was included in his son's tax return.

After a week's investigating, Stapell said, there are still no answers on why Zito got $1,000 more than the board agreed to pay him -- four years in a row.

Also Monday, the board unanimously voted to ask that State Comptroller Allen G. Hevesi audit portions of the coalition's financial affairs.

"Public money is a public trust," said Chairman William Ross, who is not related to Susan Ross.

Zito could not be reached to comment Monday.

Zito, paid about $140,000 by the coalition from 2001 to 2005, was authorized to draw checks on his sole authority until September 2005.

The revelations Monday were the latest in a chain of tax reporting issues involving Zito.

In 2001, Zito was paid $20,100 but was issued no IRS Form 1099, according to the board's investigation. In 2002, he was paid $23,410 -- $1,000 more than the board authorized -- but the 1099 was made out to Ross. In 2003, Ross was issued the check; Zito, the 1099.

The coalition's finances were handled by the Niagara Falls School Dis
trict, where Zito has been a board member since 1993.

His fiancee, Susan Ross, has a $58,154-a-year Niagara Falls School District job. In 2003, she was the recipient of a check for $23,410 from the Niagara Power Coalition, despite the fact that the coalition had never authorized paying her.

Stapell has recommended that the coalition ask for that money back, and install standard bookkeeping measures.

Steven Brown, whose accounting firm was hired to review the coalition's finances in a procedure that stopped short of a regulation audit, answered questions from the board Monday. He explained that the review did not check whether invoices were justified.

Also Monday, the Niagara County Board of Elections received a faxed letter that said Mark Zito was resigning his position as chairman of the Niagara County Independence Party. Zito was elected chairman in 2004, and during his term the party usually supported Republican Party candidates.

"There were no indications as to why, just a very plain simple resignation," said Republican Commissioner Scott Kiedrowski. He said that he wasn't sure how the succession process works, but the party's bylaws suggest that the vice chairman takes over chairman duties.

The vice chairman is 24-year-old Maria Roscetti, the daughter of noted Niagara Falls attorney James C. Roscetti, who among other clients also works for the Niagara Falls School District.

The Niagara Power Coalition's next meeting is April 5, and several board members expressed hope the body could turn its attention to other issues soon.

"The Town of Lewiston has been asking for answers about the coalition's finances for more than a year," said Lewiston Supervisor Fred Newlin. "Finally, we're starting to get some answers."

Gail Franklin of the News Niagara Bureau contributed to this report.

e-mail: agalarneau@buffnews.com

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