Senator to Make Criminal Referral to District Attorney
Senator James Skoufis (D-Orange County), as Chair of the Senate Investigations and Government Operations Committee, announced the conclusion of a months-long investigation into unwarranted Industrial Development Agency (IDA) tax breaks, including recently-approved property tax breaks by the Orange County IDA. The 15-year corporate subsidy for a forthcoming expansion of Mack Bros., Ltd./Milmar Food Group (“Milmar”) in Goshen is slated to cost local taxpayers more than $2.25 million over the life of the giveaway–incentives which the company, as the investigative report meticulously demonstrates, lied to acquire.
Skoufis launched this statewide examination of applications for financial assistance made to various Industrial Development Agencies (IDAs) in February 2023. Of particular focus was what’s known as the ‘but for’ principle, a question that should serve as an unequivocal filter for any application for tax breaks: will a project indeed move forward if the IDA doesn’t grant the requested incentives? Skoufis and his Committee sought to understand if and how the ‘but for’ principle was applied by IDAs across the state. In the case of Milmar, the ‘but for’ clause was summarily ignored when the company admitted in their own application that their project would continue regardless of whether they were awarded tax breaks—and the IDA granted the incentives anyway.
The investigation also zeroed in on statements made by Milmar to various public entities in the months leading up to its $2.25 million handout. The findings show a sustained pattern of deception, with Milmar relaying to the Town of Goshen Planning Board in April 2022 that no job creation was anticipated – presumably in order to skirt concerns about water, sewer, parking capacity, and other site planning issues that might slow their process – then, just a few months later, articulating to the Orange County IDA that in fact 50 new jobs would be created – all in order to coax the agency’s support and secure tax breaks.
“What we see here is a very clear, cut-and-dry example of a company blatantly and repeatedly falsifying its own projections to suit its needs at the expense of taxpayers,” said Skoufis, long an outspoken advocate for increased transparency and oversight of IDAs. “We’ve known for some time that when an Orange County applicant comes to town looking for corporate welfare, they’ll say ‘jump’ and the Orange County IDA will always respond with ‘how high?’ without any consideration of the facts.”
“The facts are straightforward in this case,” continued Skoufis. ”Milmar didn’t need these tax breaks. Milmar publicly admitted they didn’t need these tax breaks, then proceeded to lie to the Orange County IDA. Yet, the IDA granted these tax breaks anyway.”
The release comes just weeks before the State Inspector General’s office is slated to embed a monitor within the Orange County IDA to rein in future wasteful corporate giveaways. Skoufis led the fight for this first-of-its-kind monitor – which was supported by over forty local officials, school board leaders, unions, and good government groups – following felony convictions of three former Orange County IDA officials and relentless disregard of taxpayer interests.
Given the findings of this probe, Skoufis has made a criminal referral to the Orange County District Attorney regarding Milmar’s deceitful practices. A copy of this referral can be found here.
The entire report can be found here::
LETTER TO OCDA OFFICE FOR POTENTIAL CRIMINAL PROSECUTION
July 26, 2023
Hon. David M. Hoovler
Orange County District Attorney
255-275 Main Street
Goshen, New York 10924
Dear District Attorney Hoovler:
I write regarding troubling inconsistencies and deceitful narratives that have been provided by Mack Bros., Ltd./Milmar Food Group (“Milmar”) as part of its past statements and formal applications to the Orange County Industrial Development Agency, Town of Goshen Planning Board, and other governmental entities while seeking financial assistance and site plan approval for its proposed Goshen facility expansion. It is clear that Milmar continually and intentionally conformed mixed messaging throughout 2022-2023 related to the overall project narrative, including major discrepancies in active and proposed employment figures depending on which governmental or other entity was receiving and reviewing the information.
In February 2023, the New York State Senate Committee on Investigations and Government Operations began a statewide examination of certain applications for financial assistance made to various IDAs. The Orange County IDA was included as part of that sample of agencies, and the Committee took a strong interest in Milmar’s application from August 3, 2022. As part of its review, the Committee found that Milmar had spent the majority of 2022 spreading divergent accounts as to the following: why facility expansion was generally necessary, current employee headcounts, jobs to be created, and positions to be retained. Essentially, Milmar repeatedly made competing claims while pursuing economic benefits and final project approval. Milmar originally and unequivocally stated to the Town of Goshen Planning Board that facility expansion was solely about creating space and efficiency without any additional employee growth,
presumably to elude further water, sewer, and parking requirements. At the same time, Milmar was stressing job creation to entities offering economic subsidies including the Orange County IDA. Moreover, the Committee found the actions of the Orange County IDA to be deficient, as it failed to procure accurate employment figures. But for the scrutiny exemplified by the Town of Goshen Planning Board, these material irregularities and misstatements would not have been uncovered.
Therefore, I respectfully request your office further probe for potential criminal activity – and prosecute, if warranted – Milmar’s misleading conduct and fraudulent affirmations made to the Town of Goshen Planning Board, Orange County IDA, and other agencies. As you are aware, IDA applications are affirmed under penalty of perjury that statements are truthful and complete. As provided for in the enclosed investigative report, there is substantial evidence across a robust timeline that suggests Milmar purposefully tailored its contradicting commentary in order to exploit public benefits and sidestep planning mandates.
I thank you for your attention to this matter that directly affects the economic interests of the taxpayers of Goshen and Orange County. Please do not hesitate to reach out with any questions, concerns, or requests for additional information.
State Senator, 42nd District