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State's economic development agency gains board seats on SUNY entity involved in upstate development

ALBANY – The Cuomo administration is taking steps to oversee the work of the embattled Fort Schuyler Management Corp., but it is stopping short of an outright takeover of the entity’s board of directors.

Empire State Development, the state’s chief economic development agency, announced Thursday it has been given authority to select some of the board seats on the SUNY-created Fort Schuyler panel, which has become embroiled in the controversy surrounding the federal corruption investigation of projects that included the Cuomo’s administration signature Buffalo Billion project at RiverBend.

Though the new bylaws promise more transparency, the changes in the governance structure of an entity that has steered billions of dollars in state spending came not in a public meeting but via written consent, officials said.

Starting earlier this year, Fort Schuyler had been holding its board meetings in public. The bylaws OK's Wednesday were done, instead, in writing between two SUNY entities. Officials noted the bylaws ensure future meetings will be held in public.

In September, following the arrests of several people either tied to Fort Schuyler or the recipients of Fort Schuyler-run projects, Gov. Andrew Cuomo ordered his economic development czar, Howard Zemsky, to have his agency take a direct role overseeing projects run by SUNY Polytechnic Institute.

That SUNY campus in Albany had been run by Alain Kaloyeros, one of eight individuals, including Buffalo Billion contractor Louis Ciminelli, arrested as part of a federal bid-rigging and fraud probe.

Fort Schuyler, an entity created by SUNY to run Cuomo’s upstate economic development projects including the Buffalo Billion, technically had 11 slots on its board, all previously made by the SUNY Research Foundation or SUNY Polytechnic.

Under the new arrangement, announced Thursday by Zemsky, his Empire State Development agency will select two members of the new board. His agency must also agree to the appointment of three others, two of which will be designated as board chair and another as vice chair. Zemsky, or his designee, will also have an ex-officio – non-voting – slot on the Fort Schuyler board.

A statement by Zemsky’s agency said the changes have already been approved, though it was unclear when they happened and whether they occurred during an open meeting of the Fort Schuyler board. That board had kept meetings closed to the public until earlier this year.

Members of the reconstituted Fort Schuyler board will have to sign annual disclosure of any possible conflicts of interest they might have with their fiduciary board duties, and a new, three-member audit committee of the board will be formed. Zemsky’s agency said the revised Fort Schuyler board has adopted “key provisions” of the state’s open meetings law, including providing advance public notice about items on the agenda of an upcoming meeting; the interpretation of such “agenda notice” requirements can vary widely among state agencies.

SUNY Chancellor Nancy Zimpher said the changes today “will ensure transparency, accountability and integrity” of the projects overseen by Fort Schuyler.

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