Hold Adelphia responsible if promises don’t pan out

June 15, 2000.  A call for accountability from Buffalo News columnist Rod Watson.

OK, let’s make a deal. You give me mucho, mucho bucks  and I’ll give you . . . what? A promise? Sound good? Do you know of any business that does business like  that?

No, only government does business like that. So welcome to the  Adelphia Communications waterfront project.

New York State already has tossed $75 million of public money  into the pot, $50 million of it new dollars, to help get the new  communications center erected on the waterfront. And that’s not all. Erie County  and the city are being asked to kick in additional government support to  woo this private venture to the People’s Republic of Buffalo.

In fact, the company’s refrain brings to mind the Edward G.  Robinson character in one of his old gangster movies. When asked what he  wanted, he thought for a minute and came up with a one-word summation: more.  That’s the Adelphia mantra as negotiations proceed.

And what does the public get in return? Supposedly, 1,000 new, good-paying jobs downtown.

All right, if that’s the tradeoff, it’s a decent deal for a  job-starved town. There’s only one catch: Who’s going to make sure that  happens? And what if the jobs don’t materialize?

It’s a question public-interest and labor groups have been  asking more and more in recent years as they examine deals made by the  alphabet soup development agencies with weird acronyms. The agencies hand out  public money to entrepreneurs whose main skill seems to be giving the  public the business.

It’s why some skeptics are pushing so-called “clawback”  legislation that writes into such deals specific job targets, pay scales and,  most important, penalties. Companies that don’t keep their promises  would have to give back the money – just like other welfare recipients.

“Some of the industrial development agencies in New York State  are starting to do it,” said Mark Dunlea of the Hunger Action Network,  part of a coalition called the Fair Budget Campaign that’s trying to  reform such practices.

Assemblyman Mike Bragman, the recently deposed majority leader,  has been pushing legislation for years to make all of the development  agencies have a plan for recouping aid if the companies don’t live up to  their rosy promises. His Financial Incentives Accountability Act has passed  the Assembly the past several years, only to die in the Senate.

So where does that leave Empire State Development Corp., the  lead state agency on the Adelphia project? It insists it can and will make  Adelphia create all of the promised jobs.

“It’s something the Pataki administration has taken a very hard  line on, given the history of this type of thing,” said agency  spokeswoman Maura Gallucci.

That “history” raises lots of questions. Some who watch this  sort of thing say that the state agency is more conscientious in writing  such agreements and following up than local development corporations.  And Gallucci says companies getting ESD aid have exceeded their job  targets by 8 percent in the latest report.

Still, not all firms keep their promises.

“If they are not in compliance, they must reimburse the  funding,” she said.

There’s only one problem. No one – not Empire State nor the Washington-based Institute on Taxation and Economic Policy’s Good  Jobs First program, which studies subsidized job projects – could  immediately come up with examples of projects in which governments have  actually made companies like Adelphia give back the money.

Perhaps that’s not surprising. A government that decides a  company needs help in the first place will be loath to bring down the  financial hammer and drive the firm further into the red when it fails to  grow jobs as promised.

But if any firm could withstand that kind of pressure and  should be held accountable, it would be the nation’s sixth-largest cable  company.

Asked whether Adelphia will agree to clawback language,  Executive Vice President Timothy Rigas said, “It’s hard to answer that without  having the whole deal completed.” The state should insist on it and taxpayers  should insist on a very public scorecard. Even with the good-faith show  of 60 new jobs the company recently brought here, this deal needs some  enforceable guarantees to make sure the public gets its money’s worth.

As things stand now, it reminds me of the taxpayer dollars  shelled out for the downtown baseball stadium while the Rich family verbally  dangled the prospect of Major League Baseball before a gullible community.

The stadium was built, fans flocked in, dollars flowed into  Buffalo Bison coffers (while the city lost money) and suddenly all of that  talk about bringing in a major league team was just that – talk.

It brings to mind the old joke: A verbal agreement isn’t worth  the paper it’s written on.

The question this time around is simple: Will the written  agreement between the taxpayers and Adelphia be any better?

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