Post by ferryfast admin on Mar 29, 2005 23:47:52 GMT -5
Two State Assemblymen Call for Ferry Probe
3/29/2005 11:00 PM
(Rachel Barnhart, WROC-TV)
Two State Assemblymen want an investigation into the finances of former fast ferry owner and operator Canadian American Transportation Systems. They are not alleging any wrongdoing.
Assemblymen Brian Kolb (R-Canandaigua) and Joseph Errigo (R-Conesus) sent a letter today to State Comptroller Alan Hevesi and State Attorney General Eliot Spitzer asking for "an independent investigation and audit to account for all New York State monies expended on this project."
In 2002, the state agreed to give CATS a $7.4 million grant, and a $6.6 million loan to help launch the project.
The ferry to Toronto shut down after 80 days of service last summer, astounding the community and leaving legions of unpaid creditors. The City of Rochester recently purchased the ship at auction for $32 million, more than $10 million less than what CATS paid for the vessel.
"We're not alleging any mismanagement or anything else," said Kolb. "We should at least know where the millions of dollars in New York State taxpayer's money ended up."
"The fast ferry has had a tortured history from the beginning. To me, there are too many questions out there that need to be answered," said Errigo.
Affiliates of CATS
Hevesi and Spitzer have not yet received the letter, which calls on them to also investigate whether funds were directed to sister companies of CATS. Documents obtained by News 8 Now show there are at least 14 CATS affiliates created either together or separately by CATS founders Dominick DeLucia and Brian Prince.
The companies are registered in New York, Nevada, Delaware or Nova Scotia. They include Waterfront II, LLC, Ontario Services Company, LLC, Ontario Technology Company, LLC, Ontario Technology Holdings, LLC, Port Holdings, LLC, Canadian American Fast Ferry Transportation Systems, ULC, Maplestar Development Company, LLC, and CATS Port Real Estate, LLC.
It is not unusual for a company to have many affiliates, said fianancial analyst George Conboy of Brighton Securities, and having a lot of sister companies does not imply any wrongdoing. But he questions why CATS needed so many affilates.
"This was a relatively small company with one project. To have so many affiliates raises a question as to whether the corporate structure of CATS was more complicated than the situation warranted," Conboy said. "It brings up the question of was CATS financially over-engineered. Were they looking to make a deal or were they looking to run a ferry?"
News 8 Now spoke to Mayor William Johnson by phone. He said he was aware of the 14 affiliates, and he said there may be more. He said he asked DeLucia and Prince for an explanation, to no avail.
"These people have very carefully shielded themselves from any public inquiry," the mayor said. "A full-scale investigation would resolve a lot of questions...The only people able to explain are Brian Prince and Dominick DeLucia, and they're not talking."
DeLucia did not return calls for comment. Prince did not want to comment, when reached by News 8 Now.
Loan vs. Grant
The mayor says a state investigation should only focus on the $7.4 million state grant awarded to CATS, which had no strings attached. He says the $6.6 loan was wired straight to Austal, Ltd., the shipbuilder.
Austal, however, invested money in the ferry. The mayor says the money invested wasn't state money. Errigo and Kolb want the audit to include transactions between CATS, its affiliates and Austal.
News 8 Now asked Mayor Johnson, why, if he has unanswered questions, he did not ask for a state probe. He says he spent all his energy trying to acquire and relaunch the ship.
When state lawmakers approved the loan and grant, critics said they did not build in enough accountability for how the money would be used.
"Nobody thought (CATS) wouldn't be able to pay its bills," Johnson said.
"Let's open the books," said Kolb, "and have a full accountability."
3/29/2005 11:00 PM
(Rachel Barnhart, WROC-TV)
Two State Assemblymen want an investigation into the finances of former fast ferry owner and operator Canadian American Transportation Systems. They are not alleging any wrongdoing.
Assemblymen Brian Kolb (R-Canandaigua) and Joseph Errigo (R-Conesus) sent a letter today to State Comptroller Alan Hevesi and State Attorney General Eliot Spitzer asking for "an independent investigation and audit to account for all New York State monies expended on this project."
In 2002, the state agreed to give CATS a $7.4 million grant, and a $6.6 million loan to help launch the project.
The ferry to Toronto shut down after 80 days of service last summer, astounding the community and leaving legions of unpaid creditors. The City of Rochester recently purchased the ship at auction for $32 million, more than $10 million less than what CATS paid for the vessel.
"We're not alleging any mismanagement or anything else," said Kolb. "We should at least know where the millions of dollars in New York State taxpayer's money ended up."
"The fast ferry has had a tortured history from the beginning. To me, there are too many questions out there that need to be answered," said Errigo.
Affiliates of CATS
Hevesi and Spitzer have not yet received the letter, which calls on them to also investigate whether funds were directed to sister companies of CATS. Documents obtained by News 8 Now show there are at least 14 CATS affiliates created either together or separately by CATS founders Dominick DeLucia and Brian Prince.
The companies are registered in New York, Nevada, Delaware or Nova Scotia. They include Waterfront II, LLC, Ontario Services Company, LLC, Ontario Technology Company, LLC, Ontario Technology Holdings, LLC, Port Holdings, LLC, Canadian American Fast Ferry Transportation Systems, ULC, Maplestar Development Company, LLC, and CATS Port Real Estate, LLC.
It is not unusual for a company to have many affiliates, said fianancial analyst George Conboy of Brighton Securities, and having a lot of sister companies does not imply any wrongdoing. But he questions why CATS needed so many affilates.
"This was a relatively small company with one project. To have so many affiliates raises a question as to whether the corporate structure of CATS was more complicated than the situation warranted," Conboy said. "It brings up the question of was CATS financially over-engineered. Were they looking to make a deal or were they looking to run a ferry?"
News 8 Now spoke to Mayor William Johnson by phone. He said he was aware of the 14 affiliates, and he said there may be more. He said he asked DeLucia and Prince for an explanation, to no avail.
"These people have very carefully shielded themselves from any public inquiry," the mayor said. "A full-scale investigation would resolve a lot of questions...The only people able to explain are Brian Prince and Dominick DeLucia, and they're not talking."
DeLucia did not return calls for comment. Prince did not want to comment, when reached by News 8 Now.
Loan vs. Grant
The mayor says a state investigation should only focus on the $7.4 million state grant awarded to CATS, which had no strings attached. He says the $6.6 loan was wired straight to Austal, Ltd., the shipbuilder.
Austal, however, invested money in the ferry. The mayor says the money invested wasn't state money. Errigo and Kolb want the audit to include transactions between CATS, its affiliates and Austal.
News 8 Now asked Mayor Johnson, why, if he has unanswered questions, he did not ask for a state probe. He says he spent all his energy trying to acquire and relaunch the ship.
When state lawmakers approved the loan and grant, critics said they did not build in enough accountability for how the money would be used.
"Nobody thought (CATS) wouldn't be able to pay its bills," Johnson said.
"Let's open the books," said Kolb, "and have a full accountability."