MAHOPAC, N.Y. - The Town Board has been notified by the state comptroller’s office that it will be subjected to an audit sometime later this summer that will evaluate the internal controls within the town government, and, depending on who you ask, that audit may or may not be the result of allegations of “corruption” made by Councilman Mike Barile earlier this year.
Barile wrote letters to the attorney general and comptroller in April requesting that they investigate “corruption in the town of Carmel.” Barile said his complaint centered on the Town Board and its relationship with engineer John Folchetti, the principal owner of J. Robert Folchetti and Associates, who also serves as the town’s consulting engineer. In his letter, Barile noted that the board entered into two contracts for approximately $1.2 million with Folchetti and contended that the terms of those contracts were “unethical at best and illegal at worst [and were] in gross disregard of the town’s adopted procurement policy.”
The letter from the comptroller’s office, dated July 11, is signed by Tenneh Blamah, chief examiner. Blamah told Mahopac News that the audit was indeed “routine” and not the result of Barile’s complaint, of which she said she was unaware.
However, Barile stood by his assertion that the audit is indeed the result of his allegations, saying he’s been in communication with Blamah via phone calls and emails and that she is aware of his allegations.
“She called me and said [the audit] was connected [to the allegations]; they don’t do routine audits [like this],” Barile said. “The state has only been here two or three times over the past 30 years [for such an audit.]”
Barile said that when Blamah told Mahopac News it was a “routine audit,” it was a “just a standard answer that I would give to the press, too.”
Barile said that he believed such audits focus on, among other things, contracts and procurement procedures—how department heads make purchases.
“[Blamah] told me she was shocked that there were so many people who could do things independently without going through the Town Board,” Barile said. “She is known for her toughness.”
However, other board members disagreed with Barile’s assessment of the letter from the comptroller’s office—which does not specifically reference his charges of misconduct—saying it was something all municipalities within the state are subjected to every few years.
Councilman John Lupinacci asserted that the audit is completely routine and is the third or fourth he is aware of in Carmel and is part of a “cycle.”
“I don’t know where he comes up with this stuff,” Lupinacci said of Barile’s contention that the audit is the result of his allegations.
Barile has argued that the consulting engineer contract gives Folchetti exclusivity over too many jobs, which, Barile believes, should be sent out for bid. He also contended that the consultant has too much sway over the town’s engineering department and it has become a case of the tail wagging the dog.
But Lupinacci said there is nothing untoward about the contracts the town has signed with Folchetti over the years. In fact, he said, they have become more restrictive with each subsequent agreement.
“This contract is almost identical to two other contracts that [Supervisor Ken] Schmitt signed [with Folchetti],” Lupinacci said. “They are not bad or illegal. All of them have had some type of [exclusivity] clause. Other towns do this. Lawyers have exclusivity clauses in their contracts. This is not an uncommon practice.”
Lupinacci noted that the contract stipulates that if the cost of a job exceeds a certain threshold, then the work must then be put out for bid. He said that with each new contract the town has signed with Folchetti, the threshold triggering a request for bids has gotten lower and lower.
Lupinacci said he retained an attorney for himself in defense of Barile’s corruption allegations.
“In essence, what the attorney will do for me is he will submit several pieces of data that Barile omitted and ignored,” he said. “The first is, [town attorney] Joe Charbonneau gave an opinion on the contract and that it was fine; second, [Councilman Jonathan] Schneider called the attorney general’s office before we awarded the water district No. 2 job [to Folchetti] and did his due diligence and we followed their advice. Mike was aware of this, but still wrote the letters.
“I look forward to having the comptroller here and will be happy to provide those pieces of data,” he added.
Councilwoman Suzi McDonough said she wasn’t sure if the impending audit and Barile’s allegations were related, but said she welcomed the scrutiny.
“They have had auditors down here before,” she said. “The way I read [the letter from the comptroller’s office], is it doesn’t specifically say that it’s because of [Barile’s allegations]; it’s a routine-type procedure. I welcome it. If something is being done wrong, it should be corrected.”
Councilman Jonathan Schneider said the recent letter from the comptroller’s office looks the same as letters in the past announcing impending audits, leading him to believe it is just a routine procedure.
“When you compare the letters from 2015 (the last time the state audited Carmel) and 2018, they are almost verbatim and signed by the same person,” Schneider said. “And when it comes to these, it’s not a question of if they will find something that needs to be corrected, but what they will find. They all show something, it is just a matter of what. I would never expect a clean bill of health. But this is something where I think there is more drama than what is really needed.”
Town Comptroller Mary Ann Maxwell also said she believed the audit was routine state business.
“I think it is probably routine,” she said. “We had one in 2011 and another in 2015, so I guess it’s our time again.”
At last week’s Town Board meeting (July 18), Barile made two motions regarding the consulting engineer contract. The first called for the town to terminate the contract with Folchetti, which failed to pass, 3-2, with Lupinacci, Schneider, and McDonough opposed and Barile and Supervisor Ken Schmitt in favor. The second motion called for the town to renegotiate the contract and remove the exclusivity clause, a motion that Barile eventually rescinded.
Barile contended that without better oversight, the town has no way of knowing what work Folchetti is performing and how it’s being billed. McDonough said that while those concerns may be legitimate, it would have been better to call in the engineer and address it in an executive session before excoriating him in an open meeting.
“You have to be respectful and you have to communicate,” she said. “We are here to get the best work we can with the best people. What is good for one vendor is good for all vendors. Maybe there are a few things we should put in all our contracts. But if you have a problem with a vendor, call them in and go over it. I wouldn’t go out to the public first. How do you know you are not getting [the services agreed to] if you don’t ask them first? You work it out.”
Though Schmitt has signed the contracts in years’ past, he has recently sided with Barile on the issue and refused to sign the most recent contract, forcing McDonough, serving as deputy supervisor, to sign the agreement in his stead. The supervisor said he also believes that the audit is the result of Barile’s allegations.
“My belief is that Barile’s letters triggered it,” the supervisor said. “We were just audited a few years ago and they generally don’t come back this quickly. While I don’t know it for a fact, my speculation is it is because of [Barile’s] letter.”