Please ensure Javascript is enabled for purposes of website accessibility
Home / News / Government State / Inspector General: Ex-state fair chief diverted funds

Inspector General: Ex-state fair chief diverted funds

ALBANY — 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.

Cappuccilli, a former Republican Party official appointed fair director in 1995 by Gov. George Pataki, said in a statement he will respond “at the appropriate time.” He wants to explain and defend his reputation and character, but has been assured by his lawyer they will have that opportunity, he said.

“I ask that everyone reserve judgment until that time,” he said.

The report said Cappuccilli declined to be interviewed and his lawyer advised that if subpoenaed he would assert his Fifth Amendment right against self-incrimination. Messages left for attorney William Dreyer were not immediately returned.

“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, a 59-year-old 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 1 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, a catering service on the fairgrounds run by longtime friends.

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 cost more than $43,000, but the bride’s father was charged only $20,000, the report said.

The report also said nepotism and cronyism were rampant under Cappuccilli’s tenure, with his and other staff’s 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.