Ex-State fair chief accused of abusing taxpayer money

Peter Cappuccilli

Update at 5:50pm

Former State Fair Director Peter Cappuccilli is under fire in the wake of a stinging Inspector General's report that accuses him of corruption. Tuesday afternoon, Inspector General Joseph Fisch did not mince words when an Albany reporter asked him about the two year investigation into Cappuccilli's administration. "This is public money and it was treated as if it was their own private preserve, private...piggy bank." Cappuccilli, a prominent Republican, ran the fair for 10 years. He's credited with increasing attendance to nearly a million visitors and generating over $120-million dollars annually in economic development.

But the inspector general found Cappuccilli:

--diverted thousands of dollars for personal use

--misused facilities and labor for the weddings of his two daughters which were held at the fairgrounds

--had a questionable relationship with a catering company

--misspent nearly $1 million dollars

--engaged in nepotism

--provided thousands of free concert tickets to employees and state troopers

--tampered with records.

State Agriculture Commissioner Patrick Hooker who oversees the State Fair came to the fairgrounds Tuesday to praise the Inspector General's report Hooker said Fisch uncovered "a culture of...nepotism and favoritism...that just doesn't fit with the state government need to operate in an open and transparent way."

The Inspector General's report has been forwarded to State Attorney General Andrew Cuomo to decide whether Cappuccilli or others should be prosecuted. If Cuomo launches his own probe he may want to subpoena fair employees. Hooker told reporters, "There were people that knew that this was not the kind of things that should be done." He added, "They have a duty to call out fraud and waste of taxpayer and in this case fairgoers money."

Cappuccilli returned a call to CNY Central's Jim Kenyon late Tuesday afternoon, but said he would have to stand by the statement he's already issued. In that statement, Cappuccilli said he will "respond at the appropriate time and defend his reputation and character." He asked everyone to "reserve judgment" until that time.

In the interest of full disclosure, we should tell you that Peter Cappuccilli was hired last month by Barrington Syracuse, owner of WSTM - WSTQ and operator of WTVH, as an independent contractor. His capacity involves sales and marketing consultation and is in no way connected to the news department.

Update at 9:55am:

State Agriculture Commissioner Patrick Hooker has released a statement regarding the Inspector General's scathing report of the New York State Fair and former Fair Director Peter Cappuccilli's alleged abuse of taxpayer funds. Here's the statement from Commissioner Hooker:

I thank the Inspector General for his thorough investigation of the Great New York State Fair. Shortly after this administration came into office, State Fair Director Dan O TMHara and I noted an abundance of irregularities in the management and operations of the State Fair. There existed a culture of entitlement and nepotism that appears to have lead to issues associated with staffing, vendor contracts, concert tickets and more. We asked the Inspector General to review these issues, and his findings released today validate our concerns. In addition, the Inspector General TMs report also provides us with useful insight on other necessary improvements.

Since February 2007 we have taken several steps to improve the operations at the State Fair and the practice and procedures governing the procurement of contracts and the distribution of tickets for all events. Chief among the steps we took include: enacting a law that abolished the Industrial Exhibit Authority and transferred the State Fair to the New York State Department of Agriculture and Markets; eliminating free tickets for Fair employees and State Police; ceasing the practice of hosting lavish annual holiday parties at the Fair attended for free by hundreds; and moving all employees of the State Fair into the Civil Service titles of the Department of Agriculture and Markets.

"We have also made numerous policy and procedural changes that address some of the other concerns in the report. For example, the Department is in the process of implementing a multi-phase inventory control plan to enhance accountability. We have adopted a new policy that more clearly defines the use of state vehicles, and now the more than one thousand contracts at the State Fair are managed by the Department TMs Office of Fiscal Management. As recommended, we will also be asking the State Comptroller to conduct an audit of the Fair TMs longtime contract with Catering with a Flair.

We acknowledge our lack of internal communication and accept responsibility for the procurement missteps in the handling of the Live Nation and Fight Night contracts. However, as pointed out in the report, at no time were our decisions malicious or self-serving. We take the recommendations of the Inspector General very seriously and have already begun to implement new checks and balances to ensure that our procurement process is fair and transparent.

The events noted in this report that occurred when Peter Cappuccilli was director are extremely unfortunate. The public should have full confidence that we have taken steps to prevent such events and activities from ever occurring again. We appreciate the work of the Inspector General and will take action on all of the steps he recommends as we continue our efforts to make the New York State Fair the best place possible to work, to do business and to visit.

Latest Associated Press article:

The former director of the state fair diverted thousands of dollars for personal use and the fair misspent nearly $1 million during his tenure, which included rampant nepotism and thousands of free concert tickets being handed out to employees and state troopers, New York's inspector general said.

In a report Tuesday, Inspector General Joseph Fisch said the findings about Peter Cappuccilli Jr. are being forwarded to Attorney General Andrew Cuomo for possible criminal charges, including grand larceny and records tampering.

Calls to Cappuccilli, a former Republican Party official appointed fair director in 1995 by Gov. George Pataki, and his attorney, William Dreyer, were not immediately returned. The report said Cappuccilli declined to be interviewed and his attorney advised that if subpoenaed he would assert his Fifth Amendment right against self-incrimination.

"Mr. Cappuccilli treated state coffers like his own, then falsified or discarded invoices to cover his misdeeds," Fisch said. "This was flagrant, chronic abuse."

Cappuccilli, 59, a Syracuse real estate developer, was Pataki's campaign coordinator for Onondaga and Madison counties during his first run for governor. He was director of the state fair from 1995 until he stepped down in late 2005.

The fair, which began in 1841, usually runs for 12 days starting in late August on the 365-acre fairgrounds in the Syracuse suburb of Geddes. The fairgrounds have a 17,000-seat grandstand and 20 major exhibit buildings and generate annual revenue of more than $16 million with nearly a million visitors. The grounds have 60 full-time staff, hiring some 1,700 part-timers for the fair, and have year-round events like concerts and trade shows.

The investigation began in 2008 following an audit. Investigators said misconduct by Cappuccilli, who had an annual salary of about $125,000, was mainly connected to his relationship with the owners of Catering with a Flair, longtime friends who ran a catering service on the fairgrounds.

According to the report, the caterers were required to make $83,000 in improvements to banquet rooms and other leased space, but under Cappuccilli's direction in 2003 that was never enforced. Instead, the state spent more than $6,500 for the improvements. For several years, the caterers put on holiday parties costing about $20,000 each but charged the state only about $2,400, submitting bills only for the gratuity.

They also catered wedding receptions in 2002 and 2004 for Cappuccilli's daughters at the fairgrounds, the latter costing more than $43,000 while the bride's father was charged only $20,000, the report said.

The report also said nepotism was rampant under Cappuccilli's tenure, with his friends and family being hired for more than $829,000.

Investigators said Cappuccilli hired his friend Timothy Kuhl in 2002 as a sales consultant and later manager. Kuhl was paid $35,000 in 2006 after he relocated for a full-time job in North Carolina with the National Hockey League's Carolina Hurricanes.

While Kuhl said he continued to oversee the sales department from afar, other fair sales employees said they were unaware he was still employed after he left, the report said.

Investigators said that from 2001 to 2008, $200,000 worth of free "reviewer" concert tickets were given to state police assigned to the fair as a "perk," with an additional $240,000 worth given to fair employees from 2006 to 2008, along with free parking passes and fair admission tickets for family members. In 2007 alone, 1,100 reviewer tickets were issued altogether for 12 shows.

That has largely ceased under current management, with only three free tickets per show for reviewers, the report said. However, some other problems have cropped up.

Investigators noted a sole-source contract for a boxing show last year with Rhode Island-based Classic Entertainment and Sports Inc. costing $127,500. Only 962 fans showed up for the show, which generated $13,280 in revenue. The planned boxing event for 2010 has been canceled.

(Copyright 2010 by The Associated Press. All Rights Reserved.)


New York's inspector general says the former director of the state fair diverted thousands of dollars for personal use and the organization misspent nearly $1 million under his tenure.

Inspector General Joseph Fisch says the fair gave away thousands of concert tickets to employees and state troopers and that nepotism was rampant.

Fisch says his findings on Peter Cappuccilli Jr. are being forwarded to Attorney General Andrew Cuomo for possible criminal charges.

Cappuccilli didn't immediately return calls seeking comment. He was director of the state fair from 1995 until he stepped down in 2005.

Fisch's report says Cappuccilli declined to be interviewed and his attorney advised that if subpoenaed he would assert his Fifth Amendment right against self-incrimination.