STATE OF NEW YORK

OFFICE OF THE INSPECTOR GENERAL

OFFICE OF THE WELFARE INSPECTOR GENERAL
OFFICE OF THE WORKERS COMPENSATION FRAUD INSPECTOR GENERAL 8

EMPIRE STATE PLAZA

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AGENCY BLDG. 2, 16 FLOOR
ALBANY, NEW YORK 12223
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61 BROADWAY, SUITE 2100 (518) 474-1010 65 COURT STREET, 5 FLOOR
NEW YORK, NEW YORK 10006 BUFFALO, NEW YORK 14202
(212) 635-3150 (716) 847-7118
CATHERINE LEAHY SCOTT
INSPECTOR GENERAL

April 18, 2017

Rossana Rosado
Secretary of State
New York State Department of State
One Commerce Plaza
99 Washington Avenue
Albany, New York 12231-0001

Re: NYS IG 3111-040-2016

Dear Secretary Rosado:

On October 3, 2016, the Times Union reported that A week after two executives
from the company COR Development were charged in a wide-ranging corruption probe,
a Cuomo administration employee left a voicemail for a top aide to Syracuse Mayor
Stephanie Miner pushing for an exemption that would benefit the firm. In a letter to
[then] U.S. Attorney Preet Bharara whose office brought charges against the COR
executives a lawyer for Miner alleged the message borders on a threat. Thereafter, I
commenced an investigation.

My investigation found that on September 29, 2016, Thomas DiTullio, a New

York State Department of State (DOS) Division of Building Standards and Codes
regional technical representative, left a voicemail for William Ryan, Mayor Miners chief
of staff, regarding building permit applications for COR Development Companys (COR)
Inner Harbor project, which had been denied by Syracuse in a letter to COR dated August
17, 2016. DiTullios responsibilities as a regional technical representative include
providing direct service to local government officials, design professionals and the
general public on technical issues involving the New York State Uniform Fire Prevention
and Building Code (Code), as well as processing variance and appeal petitions and
serving as a technical advisor to DOSs Regional Boards of Review. DiTullios
voicemail stated:

Good morning Mr. Ryan. This is Tom DiTullio from the Department of
State, Building Standards and Codes. Im reviewing CORs request for a
variance in the Inner Harbor project and I have a letter from you saying
that corporation counsel denied the permit. Give me a call about this
because, one, it doesnt need a variance, two, if we do go to a variance
board, I dont want the city to be in a very poor light, because they wont
suffer fools and it wont look good in the newspapers. Give me a call,
please.

Later that same day, after listening to DiTullios voicemail, Syracuse Senior
Assistant Corporation Counsel John Sickinger wrote to Bharara of what [the City of
Syracuse] believes to be a highly inappropriate communication . . . [that] borders on
being a threat. . . . Sickinger noted that the City believed DiTullios communications
were highly improper, in light of allegations contained in Bhararas criminal complaint
of CORs officers [sic] willingness to call in favors from the New York State
Administration, and resort to other improper means to obtain favorable State action. . . .

Despite the Citys beliefs, my investigation of the events leading up to the Citys
allegations, which are summarized below, found no wrongdoing on the part of DiTullio
and no evidence that DiTullio was working at the behest of COR or the New York State
Administration to improperly obtain favorable State action benefitting CORs Inner
Harbor project. Indeed, DiTullios voicemail to the Citys chief of staff in part reflected
his professional opinion on the matter, and was placed only after DiTullio was unable to
obtain clarification on the Citys position with the Citys director of permits, and his
several telephone calls to the Citys Department of Law went unreturned. Moreover,
DiTullios opinion that a variance was unwarranted was subsequently confirmed. On
November 17, 2016, after hearing an appeal on the issue, the DOS Syracuse Regional
Board of Review voted unanimously to reverse this determination of the City of
Syracuse, thereby allowing the building permits to be issued.

By way of background, in 2012, the City of Syracuse selected COR to develop a

tract of land surrounding the Syracuse Inner Harbor to support retail, office, residential,
educational, and recreational uses. In 2014 and 2015, the City conveyed several parcels
of land to COR for the Inner Harbor project. Also in 2014, after review by the Syracuse
Planning Commission and the Common Council, the Common Council approved an
ordinance to designate four new public streets adjacent to two building sites on the
project. The streets were named and identified on a subdivision map, which was
approved by the Planning Commission and filed with the county clerk. In 2015, after
obtaining site development and street cut permits from the City, COR commenced
construction of these new streets by installing sewer and water lines, fire hydrants, and
compacted gravel road beds. In December 2015, the City issued permits to COR to erect
building foundations, and preparatory building construction began.

In April 2016, COR submitted the building permit applications to the City for the
two project sites at issue. According to COR, in mid-July 2016, COR first learned that
the City had not issued the building permits because of an issue involving the
aforementioned streets and Code provisions dealing with encroachments and fire
separation distances. In a letter to COR dated August 17, 2016, the City of Syracuse
provided an explanation as to one reason for its denial of the permits.1 Specifically, the
Citys Assistant Corporation Counsel, Meghan Price McLees Craner, wrote that CORs
submitted building plans revealed that an adequate fire separation distance, as required by
the Code, could not be achieved. The Citys analysis hinged on its finding that the land
that will eventually be four new streets is currently one privately [COR] owned parcel . . .
[that] is neither a street, nor an alley, nor a public way to which to measure fire separation
distance. The City advised COR to seek a variance to the Code from the Syracuse
Regional Board of Review. Of note, Ryan, Mayor Miners chief of staff, received a copy
of this letter, which is noted after the signatory line.

Shortly thereafter, COR retained the professional services of Timothy

DeRuyscher, Principal and Vice President of GHD Consulting Services, Inc., to prepare
and submit a variance application to DOS. DeRuyscher, an engineer licensed in eight
states including New York, has worked with GHD for over 30 years, and is the New
York State Fire Prevention and Building Code Council professional engineers
representative. When nearing completion of the application, DeRuyscher scheduled a
September 19, 2016, meeting with DiTullio, which was held at GHDs Syracuse office.2
Both DeRuyscher and DiTullio testified to my office that at this meeting they reviewed
the variance application package and the Citys August 17, 2016, letter to COR.

During their meeting, DeRuyscher opined to DiTullio that the City had erred in its
interpretation of a street with respect to the Code. According to DeRuyscher, the intent
of the Code was to create a fire separation distance irrespective of the ownership of the
street. DeRuyscher testified that it is common practice for a developer to convey streets
to a municipality at the completion of a building project. At the conclusion of their
meeting, DiTullio advised DeRuyscher to complete the application, and stated he would
review the Code and local ordinances and contact the Citys Building Department for
further explanation about the Citys stance on the matter.

DiTullio testified that after he reviewed the Code and local ordinances, he
believed that the City was in error and a variance was not needed. Although he
recognized that CORs project would be halted for one-to-two months while it pursued a
seemingly unnecessary appeal and/or variance, he nonetheless advised DeRuyscher to
submit both a variance and appeal application to DOS. This advice is in keeping with
standard practice.

1
The City of Syracuse provided no other reason(s) for denying the permit in this letter.
2
DiTullio testified that the meeting was held at GHDs Syracuse office as DOSs Syracuse office lacked a
suitable space to meet with petitioners. This was confirmed by investigators from my office who visited
the DOS Syracuse office.
 DiTullio also immediately sought clarification from the City on its position. On
September 29, 2016, DiTullio visited with the Citys director of permits as well as its
plans examiner, who both reported that permits would not be issued to COR based on a
determination made by the Citys Department of Law regarding what constituted a
street. According to DiTullio, he then attempted to telephonically contact Craner, the
author of the Citys letter, but was advised by a secretary that Craner was in Washington,
D.C. attending a training session.3 DiTullio testified that he requested of the secretary
that someone in the Department of Law return his call. He also telephoned then-
Syracuse Corporation Counsel Robert Stamey and left a voicemail to return his call.4

As his attempts to contact Craner, Stamey and other corporation counsel in the
Department of Law had not been successful, later on September 29, 2016, DiTullio
telephoned Ryan, who had been copied on Craners letter to COR and was the projects
designated point of contact.5 His objective with calling Ryan, DiTullio testified, was that
Ryan hopefully had some kind of dealings with the corporation counsel and could get
someone to return my phone call, basically. DiTullio also testified that neither COR nor
DeRuyscher requested that he contact the City of Syracuse on CORs behalf about this
matter, and his intent was not to intimidate, coerce or threaten Ryan or others.
DeRuyscher similarly testified that he did not request that DiTullio pursue the course of
action that he ultimately did, and did not provide DiTullio with any benefit for doing so.

Both DiTullios meeting with DeRuyscher and his contact with the City of
Syracuse appear within the scope of DiTullios responsibilities as a regional technical
representative. Additionally, my office found no evidence that COR or others solicited
DiTullio to take any action outside the parameters of his normal responsibilities or that
DiTullio benefitted in any way. However, DiTullio should be advised to act with a
professional demeanor when representing DOS and cautioned to refrain from providing
personal commentary outside his expertise.

Of note, during the course of this investigation it was learned that DeRuyscher, a
2015 appointee to DOSs New York State Fire Prevention and Building Code Council,
had neglected to timely file a Financial Disclosure Statement (FDS) with, and attend
ethics training held by, the New York State Joint Commission on Public Ethics (JCOPE).
To remedy this, on December 29, 2016, DeRuyscher filed an FDS with JCOPE and
scheduled ethics training. As DeRuyschers lapse was not initially discovered by DOS,
relevant internal controls and procedures are lacking. I therefore recommended to DOS
that it review its new employee orientation and onboarding procedures and amend them
to include ethical provisions and requirements applicable to all non-employees affiliated
with DOS and regulated by JCOPE, including members of the New York State Fire
Prevention and Building Code Council. Additionally, I recommended that DOS review

3
DiTullio testified that his attempt to contact Craner occurred on either September 28, 2016, or September
29, 2016. Craner, however, advised my office that DiTullio did not telephone her, leave a voicemail, or ask
her secretary to leave a message requesting that she call him.
4
According to Stamey, he subsequently had a telephone conversation with DiTullio about the matter.
5
DiTullio testified that on September 30, 2016, he had a brief telephone conversation with Sickinger in
which DiTullio advised that a variance was unwarranted. According to DiTullio, Sickinger did not
reference the voicemail DiTullio had left for Ryan the previous day.
the status of JCOPE filings and training for these same individuals, to ensure they are
current. DOS has advised that it is implementing these recommendations.

I request that within 45 days of this letter you advise me of any actions or
decisions taken in response to my recommendations. If you require further assistance or
additional information, please do not hesitate to contact Deputy Inspector General James
R. Davis at 518. 474.1010.

Sincerely,

Catherine Leahy Scott

Inspector General

Cc: Linda Baldwin, Esq.

General Counsel