The public service ads were initially put on the back burner, only to come out this past winter causing some local political insiders to criticize the County Executive’s effort as little more than self-serving campaign ads in the guise of public service. Dan Ward, the Democratic County Executive contender has said as much as have Buffalo Comptroller competitors James Pitts and Barbara Kavanaugh.

To make matters worse it’s rumored that the spots were done with money from the $246 billion landmark national tobacco settlement, an agreement reached between 46 states and the four biggest tobacco companies to help the state governments recoup the costs of treating poor and uninsured people who fell prey to big tobacco’s illegal business practices and aggressive marketing.

Despite the assurances of the state attorneys general the final agreement never incorporated specific provisions aimed at curbing smoking and treating addicts. Across the nation settlement money has been spent on everything from infrastructure repairs to filling budget gaps and, in states like North Carolina where tobacco is the leading cash crop, subsidizing and promoting tobacco production.

While things here in Erie County might not be as absurd as the tobacco growing South, there is very little money going towards tobacco prevention measures. Instead, as reported by the Buffalo News, the majority of the County’s portion of the settlement has gone toward capital projects like suburban road and bridge repairs.

This is perfectly legal and acceptable according to Erie County local law 4-2000, the act that created the Erie County Tobacco Asset Securitization Corporation (ETASC), a not-for-profit corporation formed by Erie County in 2000 to securitize the tobacco settlement money in the face of concerns that the tobacco companies might default on their payments at some time over the 25 year term of the national settlement.

What isn’t acceptable or legal is the Giambra administration’s failure to comply with the spirit and letter of the law that created ETASC. According to that law, in addition to the securitized $211.7 million ETASC is directed to pay Erie County a much smaller sum of money annually from a business trust set up under Delaware state law. This residual fund provides $3-$5 million to the county annually, according to our sources.

The law states that half of the annual residual payments should go toward economic development and the other half toward Mr. Giambra’s regionalism projects. Out of the portion for economic development half is to go solely for economically depressed areas like the City of Buffalo- over three years that amount is somewhere between $2.25 and $3.75 million.

How much has been spent toward this end? Not nearly enough to comply with the law, depending on how closely one pays attention the number is either $1.9 million or $0.

According to a Buffalo News article from January 13, 2003 Budget Director Joe Passafiume claims $1.9 million of the County tobacco residual fund went to fixing the East Side Transfer station after it partially collapsed following the December, 2001 snowstorm.

Our sources don’t back up that claim. According to the minority leader of the Erie County Legislature, George Holt, the Federal Emergency Management Agency (FEMA) has allocated $1.4 million to reimburse the City of Buffalo for the $1.9 million spent on demolishing and reconstructing the station. After discovering that the city and FEMA were covering the costs Mr. Holt sent two letters, one on May 5, 2003 and the other on May 8, 2003, to Mr. Passafiume to inquire what was going to be done with the $1.9 million pledged for city economic development. Mr. Holt said Mr. Passafiume has failed to respond to the query. Other county government officials reported that Mr. Giambra’s administration has failed to provide an account of the $1.9 million as well. Attempts by Alt to get a response, an explanation or a retraction from Mr. Passafiume were unsuccessful. Alt was told that Mr. Passafiume didn’t want to be quoted, could offer no information and would be unavailable to us. Attempts to get a response from others in the Giambra administration were unsuccessful as well. None of this surprised the members of the County Legislature contacted for this research, nor did they surprise Dan Ward, the Democratic contender for County Executive, who said that Mr. Giambra appears to have nothing but disdain for open governance.

“I’ve seen all kinds of administrations,” said Mr. Ward. “Some lazy, some inept, but this is a sinister enterprise put together to fleece government of everything it can. If he is in violation of County law the first thing to do is get a new County Executive, I certainly wouldn’t run a pirate or corrupt regime.”

The County Executive’s unethical use of the tobacco settlement money extends past the small residual fund, according to many in county government. When ETASC was created by the county Mr. Giambra put himself, Mr. Passafiume and County Comptroller Nancy Naples on the board of the corporation that now has the rights to the county’s portion of the settlement, $646 million. As of press time the other two board members remain unknown to Alt. Meanwhile the administration has been burning through the securitized tobacco money, according to budget documents and county officials. One knowledgeable source within the County Legislature said that the $211.7 million was supposed to be available for about ten years and would be used to create two $100 million trust funds, one for rising Medicaid costs, the other to fund maintenance, repair and restructuring at the Erie County Medical Center.

Turns out this never happened. According to documents received by Altpress about half of the money is already spent or allocated to be spent this year, mostly on capital projects and to replace the county’s traditional subsidies to ECMC and Erie Community College.

Additionally the County Executive, with the support of the Republican controlled County Legislature, has been using the tobacco settlement money to pay for recurring county expenses like County Fleet Operations (between $800,000 to $1million a year since 2001), county office equipment ($420,000 in 2001 and $600,000 this year) and operating Dunn Tire Park ($1 million this year and last), according to publicly available budget information.

The list is large and repetitive but the income isn’t. At least $127 million is spent and the County is poised to spend well over $30 million more of the settlement, according to our sources there will only be $56.7 million left at the end of the 2003 fiscal year- at the rate Mr. Giambra is burning through the tobacco money it will all be gone in two years.

Unfortunately tracking the spending of County government is becoming very difficult as the Giambra administration has refused repeated requests by County officials for information on County revenue and expenses. Additionally County Democrats no longer have access to the county accounting database. According to our sources only those in Mr. Giambra’s good graces can access this information anymore- information that was available to all legislators prior to the ascendancy of the County Republican machine.

Alt has copies of three letters sent to Mr. Passafiume by Mr. Holt. In addition to the two cited above another includes 13 simple questions about ETASC and tobacco revenue. This letter too remains unanswered, according to Mr. Holt. We have also learned that Legislator Al DeBenedetti has sent several letters asking similar questions, he too said that no one in the administration has answered his questions.

Mr. DeBenedetti took special issue with the Executive’s spending practices, claiming that capital spending has been excessive, especially since the overwhelming majority of the money has went to suburban projects at the expense of the ailing City of Buffalo.

“It’s election year ribbon cutting,” said Mr. DeBenedetti of Mr. Giambra’s road, bridge and culvert repair projects. “He’s spending the tobacco money like a drunken sailor when he could be using it to pay down some of our debt. We’ve increased our capital expenditures over what was approved on budget solely because of amendments. It’s a shame that the legislative body that’s supposed to provide checks and balances isn’t because they fear there’s going to be retribution if they don’t rubber stamp the amendments.”

Mr. Giambra’s office declined to comment on his use of securitized tobacco money even though a July 28, 2003 press release from County Comptroller Nancy Naples stated that using non-recurring revenue sources to cover recurring expenses is an unhealthy practice. Phone calls to press Secretary Jeff Hammond have gone unreturned as have requests to speak with Deputy County Executive Carl Calabrese.

(Editor's Note)

Mr. Giambra’s manic spending habits, evasion of facts and petty crime all mirror symptoms of addiction as defined by the American Medical Association. We here at Alt feel that addicts need treatment rather than incarceration and urge Mr. Giambra to seek help before this problem spirals out of control. Disinformation, Misinformation, Lies and Lawbreaking in Service of the Noxious Weed

By Brendan Coyne

Shortly after winning the County Executive race in 2000 Joel Giambra was informed by his doctor that he had throat cancer that was most likely caused by over three decades of cigarette smoking. Face to face with death the new County Executive forswore tobacco a week before he went under the surgeon’s knife.

Giambra’s triumph over a drug that most health officials agree is more addictive than alcohol, heroin and crack was lauded throughout the community, in the media and by anti-tobacco advocacy groups who asked Mr. Giambra repeatedly to do public service spots on radio and television to inform the public of the dangers of smoking and to show that the addiction can be beat.