County to get back funds

JOHNSTOWN – Fulton County government is only recovering half of what’s left from the county’s $40,000 contribution to the Fulton County Center for Regional Growth that assisted in a lawsuit that was dropped this fall.

The CRG’s two subsidiaries in October dropped their joint civil lawsuit against their former local economic development executives, Jeff Bray and Peter A. Sciocchetti.

The pair were fired after being accused by the Crossroads Incubator Corp. and Fulton County Economic Development Corp. of taking over $3 million in bonuses not approved by the agencies’ of directors.

The EDC and CIC filed a civil lawsuit Sept. 29, 2011, in state Supreme Court in Johnstown against Schenectady resident Bray and Niskayuna resident Sciocchetti to recover the money. But the litigation was dropped in October, with CRG officials saying they were cutting their losses.

CRG President and Chief Executive Officer Michael Reese said today his agency has probably spent “well over” $125,000 in legal costs for the case, going back to 2010.

But Reese said the CRG no longer is using county funds, now that the lawsuit was dropped.

“We’re not drawing it down for legal costs,” he said.

The Fulton County Board of Supervisors in March had allocated $40,000 in an effort to recoup the millions of dollars in bonuses. The resolution called for appropriation of funds to the CRG for attorney’s fees and forensic accounting services to “pursue recovery of monies taken by former EDC/CIC executives.”

“I know we spent a portion of it,” board Chairman William Waldron said Friday. “We reimburse the CRG some of the money.”

Waldron estimated about half the $40,000 the county allocated for the CRG’s legal fund was spent. He said the remainder now goes back into the county budget.

“The rest will go back into the [county] fund balance for the end of the year,” Waldron said.

When the lawsuit was dropped, CRG board President Dustin Swanger said the CRG is still hoping to recover the bonus money pending the outcome of an IRS investigation into Bray and Sciocchetti.

But Waldron, who says the county funds spent on this matter may end up being a “waste of money,” is skeptical.

“From the CRG’s perspective, they’re still hoping the IRS will rule it was excessive compensation,” Waldron said. “But it doesn’t look like that’s going to happen.”

Michael Anich covers Johnstown and Fulton County news. He can be reached at