New York Theatre Institute Investigated for Improper Spending of State Funds

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For those of you who don't know, New York State has a fully state funded theatre in Albany. It's goal is to educated students about theatre. The state hand planned to cut their budget by 50% next year and totally the year after.

Press Release: http://www.ig.state.ny.us/pdfs/Self-Dealing%20NYSTI%20Director's%20Improper%20Spending%20Topped%20$1%20Million.pdf

Full Report: http://www.ig.state.ny.us/pdfs/Report of Investigation of the New York State Theater Institute.pdf

Self-Dealing NYSTI Director’s Improper Spending Topped $1 Million

State Inspector General Joseph Fisch found that New York State Theatre Institute (NYSTI)
Producing Director Patricia Snyder repeatedly violated state laws on nepotism and used the state
authority to steer nearly $700,000 in payments and benefits to her husband, her children, and
herself, while overseeing an additional $475,000 in questionable expenses.

As Producing Director, Snyder, 69, had full control of spending and hiring with scant oversight
by the board of directors, the Inspector General’s report concludes. This unbridled control
allowed her to abuse the Troy-based public authority, selecting herself and her close relatives
more than 300 times to work on 92 percent of all NYSTI productions. Under Snyder’s direction,
NYSTI also shelled out nearly $280,000 on meals, chauffeured rides and other indulgences, such
as a state-leased apartment in midtown Manhattan.

“This is an outrageous misappropriation of public funds,” Inspector General Joseph Fisch said.
“A public authority is not a family business, nor a family employment agency.”

NYSTI was established in 1974 to provide theater and education for New York youth. It presents
several stage productions annually, and had a 2009-2010 budget of $3.6 million. NYSTI has 33
staffers and hires actors, creative staff, and technical workers on a per-production basis.

The 127-page report focuses on hiring and spending from 2004 to 2009. It concludes that
Snyder failed to recognize NYSTI as a state entity, instead treating it like a family fiefdom.
While under investigation, Snyder back-dated financial records, made reimbursements more than
two years late, and sometimes gave false testimony. The report details how Snyder:

1. Repeatedly violated the state’s Public Officers Law ban on nepotism and self-dealing by
hiring her son, steering nearly $600,000 in contract jobs and other benefits to her husband,
William Fortune Snyder, two sons, George Fortune Snyder and William Severin Snyder, and two
daughters-in-law, Mary Jane Hansen and Shannon Johnson Snyder. Snyder testified:

There is no law in New York State on nepotism . . . This boy, this man [her son,
William Severin Snyder, 39] is qualified and so am I. When questioned about waste and nepotism, Snyder replied: You know, you are getting
into very dicey waters, artistically. I will tell you, the arts community will be up in arms
with this line of questioning. We are talking about artists . . . Art is not like running an
OGS office.

In all, Snyder paid her immediate family and spouses to fulfill the roles of actor, producer,
director, author, narrator, musician, sound technician, composer, arranger, programmer,
illustrator, instructor and office assistant.

2. Executed highly irregular contracts to benefit herself in the amount of $54,100, in addition to
her $127,050 annual salary. Specifically, Snyder hired herself as director or associate director
for 22 NYSTI productions from 1995 to 2009, receiving $19,500 from the state in expense
payments, $27,700 in state contributions to a secondary private pension and private health
benefits plan and $6,900 in duplicate or undocumented “reimbursements.”

3. Acquired the adaptation rights to “Miracle on 34th
Street” on behalf of NYSTI, then
improperly transferred the rights to herself and her son, William. As a result, the Snyders
privately profited each time the play was staged – earning more than $38,000 each. Snyder also
concealed her royalty payments from the NYSTI board of directors and failed to report this
income on multiple financial disclosure statements to the state Commission on Public Integrity.

4. Had NYSTI spend more than $150,000 in state funds on an unnecessary apartment near
Carnegie Hall which Snyder then improperly used as lodging for friends and family.

5. Launched a money-losing audiobook venture which employed her family, cost New Yorkers
$199,000 and earned less than $8,500in revenues from 2005 to 2009.

6. Approved more than $277,000, in questionable spending for hundreds of restaurant meals,
such as lunch at the Russian Tea Room. The public also funded 83 chauffeured car rides, mostly
to New York City, $1,563 in air fare to Ireland, gala tickets and gifts.

Inspector General Fisch has forwarded his findings to the Commission on Public Integrity to
review possible Public Officers Law violations, to the Office of the State Comptroller, the state
Authorities Budget Office and to the Attorney General for consultation and any further
appropriate action.

The Inspector General also urged the NYSTI board of directors to review Snyder’s conduct and
take appropriate action and implement the following:
• A formal policy to prevent future conflicts of interest, nepotism and self-dealing.
• New safeguards to keep expenditures within state guidelines.
• A review of the necessity of the New York City apartment.

Upon receipt of the Inspector General’s report, the NYSTI board of directors placed an
immediate moratorium on family hiring and terminated the lease on the Manhattan apartment.
 
Update:

Paterson tells 6 NYSTI board members to resign - The Business Review (Albany):
Gov. David Paterson today called for six of the New York State Theatre Institute’s seven board members to step down amid allegations that the nonprofit’s producing director steering $1 million of the state-supported institute’s funds to pay family members and support lavish expenses.
Former NYSTI board Chairman David Morris, an attorney in Saratoga Springs, resigned Wednesday. The resignation came the same day that Morris’ fourth three-year term expired, and before Paterson announced plans to call for the board’s immediate resignation.
Amy Casale, a music teacher in Herkimer County, resigned on Monday.
Earlier this week, producing director Patricia Snyder started an unpaid leave of absence. She was replaced by David Bunce, a 26-year NYSTI veteran who was appointed by the board as the institute’s interim director.
Paterson sent letters to board members Morris, Dora Myers, Eugenia Sperrazza, Wendy Davenport, Kenneth Schmidt and Joyce Shenker, calling for their immediate resignation.
Paterson named seven state appointees in their place: Larry Schwartz, secretary to the governor; Valerie Grey, director of state operations; Robert Megna, budget director; Peter Kiernan, counsel to the governor; David Weinstein, first assistant counsel to the governor; Mark Leinung, deputy director of state operations; and Mary Beth Labate, deputy budget director.
A statement from Paterson’s office said: “The governor has concluded that the board, as currently constituted, cannot be entrusted to oversee NYSTI’s chief executive and to guarantee the effective and ethical management of this public benefit corporation. Gov. Paterson is prepared to use his full authority to remove these board members if they do not resign voluntarily.”
Karin Bowersock will remain on the board. She was named to the position by Paterson last week.
Board spokesman David Catalfamo said Myers, Sperrazza and ex officio member Terry Hettescheimer resigned prior to the governor’s missive.
The Authorities Budget Office, a newly created state agency, on Tuesday recommended that the volunteer board be suspended or dismissed for failing to oversee Snyder’s activities.
The allegations of misspent funds stemmed from a report issued two weeks ago by the state Inspector General’s office that detailed Snyder’s spending habits. The report pointed to a $150,000 apartment in New York City that was used to lodge family and friends, pay for elaborate meals and employ Snyder’s family members for 92 percent of all NYSTI productions.
NYSTI has said that many of the expenses were justified and in keeping with the institute’s policy.
In his resignation letter, Morris noted that the governor never appointed a treasurer and entertainment lawyer to the board.
“The absence of the expertise of such appointees would bring to the board has been a severe handicap to board financial and contractual responsibilities and operations,” Morris wrote.
NYSTI’s board can seat 14 members; its only eight members have been appointed by the Paterson administration. Paterson has proposed merging NYSTI with The Egg in Albany. His budget proposal cuts NYSTI’s 2010-11 budget by half.


Read more: Paterson tells 6 NYSTI board members to resign - The Business Review (Albany):
 

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