Pork Lawsuit Appeal Monday in Albany

[Jim Ostrowski]

Oral argument of the Pork Lawsuit Appeal will be held on April 26th, Monday, at 1pm in the Appellate Division, 3rd Dept. in Albany, NY. The court is in the first building in the Albany Mall across the street from the Capitol.

The Tax Revolt Caravan will leave from Depew at 7am. After court, I will drop off a copy of my remarks to the Albany press corps and then there will be a Dutch Treat lunch at Albany Pump Station (about 2-4pm).

I urge anyone near Albany to attend the oral argument. It is open to the public. Judges rarely see a crowd at these things. Send a message that this year will be different. Be there!

[buffy]

Can you plese give us a synopsis of that day in court?

[Jim Ostrowski]

This is from the Albany Times Union

Deficit invoked in pork lawsuit
Plaintiffs claim economic development grants are unconstitutional
By RICK KARLIN, Capitol bureau
First published in print: Tuesday, April 27, 2010

ALBANY -- The billions of dollars New York sends to corporations each year stand in stark contrast to the current state deficit, noted a Buffalo lawyer who is trying to halt the long-standing practice of pork barrel spending, or giving grants to targeted industries in hopes of spurring economic growth.

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"Schools are being closed. Parks are being closed," said James Ostrowski, who was appealing an earlier dismissal of his suit in state Supreme Court in Albany County.

He was requesting that the state's Appellate Division, Third Department, allow the suit to proceed.

Ostrowski's opponents, including New York state and IBM, had moved to dismiss his suit. Among other points, they say economic development grants aren't actually "gifts" that are constitutionally prohibited, but are instead deals in which companies agree to take certain actions in return for public funds.

"These are either not gifts because there is consideration given in return ... or if it's a gift, it's a gift to a public (benefit) corporation," said Paul Groenwegen, representing the state.

State government is not supposed to simply hand money to private corporations or individuals. The state argued that it uses grants to public organizations such as the Empire State Development Corp., which in turn uses them to lure or keep companies in the state.

That's apparently what happened with a $65 million grant to IBM, argued their lawyer, Teena-Ann Sankoorikal.

In return for that grant, IBM in 2008 agreed to retain 1,400 jobs in New York and add another 1,000.

Ostrowski has been pursuing his "Stop the Pork" lawsuit since 2008. IBM was one of several firms initially identified as pork recipients, although Ostrowski on Monday said he wouldn't object if the company is removed from the suit.

He is suing on behalf of a group of tax activists who believe the state shouldn't be sending money to private coffers and the intermediaries such as the ESDC or other public benefit corporations or public authorities. Those, he contends, are legal artifices for allowing state handouts.

The argument appeared to resonate at least to some extent among the justices. "You are saying that you can do indirectly what you can't do directly?" asked Justice Thomas Mercure, who noted that Ostrowski's legal brief describes public authorities as money launderers.

Ostrowski later said there was no set timetable for a decision, but he believed it could in about a month.

Rick Karlin can be reached at 454-5758 or rkarlin@timesunion.com



Read more: http://www.timesunion.com/AspStories...#ixzz0mPOOt637

[Jim Ostrowski]

Another media report--

http://capitalregion.ynn.com/content...sses/?ap=1&MP4

[buffy]

Paul Groenwegen, Attorney for State of New York, said, "Their claim is economic grants are unconstitutional under a section of the constitution that prohibits gifts to private parties."

He says that's the problem. Groenwegen believes the tax money given to companies is appropriate, arguing it serves a public purpose, bringing jobs to the state.

Groenwegen said, "We're saying these particular transactions are not gifts, which if they are characterized as gifts, they're gifts to a public authority which are permissible under the constitution."

And, Ostrowski argued you can't indirectly do, what the Constitution doesn't allow you directly to do. Put more simply, he believes if it's illegal for the state to give money directly to private businesses, it's illegal to give money to a public agency to then give it to private business.

The argument appeared to resonate at least to some extent among the justices. "You are saying that you can do indirectly what you can't do directly?" asked Justice Thomas Mercure, who noted that Ostrowski's legal brief describes public authorities as money launderers.

To this layperson, you made a good argument. Best of luck - it will be interesting to hear what the justices have to say.

[Jim Ostrowski]

Thanks. I will post my argument shortly too.