Conflicts of interest "will come up" on economic councils

Sep 14, 2011

More than 250 New Yorkers will sit on the regional economic councils.

They come from all over New York, yet many aren’t strangers to working with each other – or with the state.

And those complex relationships mean that no council member will be completely free of the possibility of charges of conflict of interest, as they work to pick the winners and losers in the future of economic development in New York.

Wine and optimism

Duncan Ross leads the way to a special room underground, where dozens of French Oak barrels sit, full of aging wines. The product comes from grapes harvested from the vineyard that hugs his newly-built winery.  

Earlier this decade, Ross found himself laid off, following two decades in information technology. Looking for a change of pace, he bought a sprawling, hilly spread in Niagara County, and began planting grapevines that later became known as Arrowhead Spring Vineyards.

But before becoming a winemaker, Ross rubbed elbows with folks that landed him on the western New York regional council.  Ross is unique in the group: he has a background that includes agriculture, tourism, computers, and winemaking.

And he also has a deep reservoir of optimism about the area.

“The past 50, 60 years have not been kind,” Ross says. “But I see that on the upswing. And I’m hopeful that this council will generate enough ideas to spur some growth.”

“You never want to waste a good crisis”

The councils are still in their infancy. While the concept was announced in January, the bodies weren’t actually assembled until July.

Howard Zemsky, a celebrated developer of historical structures in Buffalo became the co-chair of the western New York council, with only about a half a day’s notice.

“I was asked formally late in the afternoon and the next morning I was at a press conference with the governor,” he says.

In less than a day, Zemsky pulled together a speech and addressed a near overflow crowd at the Buffalo Niagara Medical Campus.

Zemsky accepted the job on short notice because he thought the diverse group chosen by the governor’s office could actually sit around a table and make an impact.

“There’s a saying, ‘You never want to waste a good crisis’. The economy that the whole country is struggling with is, in essence, a call to action,” he says.

“As much credibility as authority”

WNY’s council is chock full of movers and shakers: CEOs of billion dollar companies, politicians, business owners, real estate developers, and a few leaders of non-profits – all of whom accept public money on a regular basis. They serve on boards and committees together and share monetary interests.

This group will recommend how hundreds of millions in state money could be invested. But final choices will be made in Albany by another committee that hasn’t yet formed.

“We have as much authority as we have credibility,” Zemsky says. “Our authority will reveal itself over time based on the extent to which our recommendations are taken.”

Here’s an example of how conflict may arise. More than 80 percent of the western New York council has a degree from the University at Buffalo, whose president Satish Tripathi is also a co-chair. The Cuomo administration has called UB the region’s number one economic driver. And the school aggressively pursues – and receives – state dollars.

Conflicts of interest will come up, admits Lieutenant Governor Robert Duffy, who oversees all councils.

“If you eliminate anybody from any of the regions that at some point could have something come before the panel for state funding, I think you’ll have a lot of empty chairs around the state because by virtue of who you pick, you’re going to have this come up.”

All council members have signed a code of conduct that binds them to self report any conflicts of interest and then recuse themselves from the process. But other than this honor system, there isn’t a clear oversight mechanism.

Back at the vineyard, Duncan Ross will be harvesting his grapes at the same time he’s helping the council work on its five-year plan, due on November 14. Grapevines take three years to bear any usable fruit. And Ross says there could be a similar timeline for the councils.

But like a fine wine, the hope is the councils – and the NYS economy – will improve with time.

The Innovation Trail team has profiled the members of the regional councils in our coverage area – you can read about them here.