ORDA condo lease raises ethics questions
LAKE PLACID – A condominium the state Olympic Regional Development Authority has leased for years is owned by the family of a former ORDA board vice president, raising questions about a possible conflict of interest.
Serge Lussi sat on ORDA’s board of directors since the 1980s, including some time as vice president, until the town board replaced him last month. In the past 15 years, while he was on the board, his family business made hundreds of thousands of dollars from the authority.
According to ORDA’s code of ethics policy, board members should “be certain that a position held with ORDA is never used to obtain unauthorized, illegal or questionable benefit as it would apply to a sponsor, supplier or other party doing business with this Authority.” However, it exempts business interests owned prior to joining the board.
Section 74 of the state Public Officers Law, which applies to ORDA board members, is more broad. It says state officials are not to engage in behavior that creates an appearance of conflict.
Jon Lundin, ORDA’s communication director, said the business arrangement was not a conflict of interest.
Town board member Derek Doty said he was unaware of the condominium and thought it sounded like a conflict.
“You bet,” Doty said when asked if the agreement appeared to be a conflict of interest. “I don’t think it’s appropriate for sitting board members to be in that position because it compromises their ability to make unbiased decisions.”
“ORDA’s success is extremely important to Lake Placid, North Elba, and the region,” town board member Bob Miller wrote via email. “The Comptroller’s Report is obviously of great concern.”
The Enterprise reached out to each town of North Elba board member, but the other three did not comment on the situation.
Lundin said the authority’s records show it has been leasing the condominium, owned by the Lussi family corporation Placid Gold LLC, for 15 years, including into 2014. The condo cost ORDA $30,000 annually from 2010 to 2013, according to the comptroller’s office. Placid Gold owns 87 properties in Lake Placid, many of them rentals, according to the Essex County Real Property Tax Service.
Lundin said the authority solely dealt with Art Lussi, Serge’s son, on condominium business. Art Lussi confirmed that.
Lundin wouldn’t give the condo’s address, but Art Lussi said it was the PlayHouse Condominium on Lake Placid Club Way. He said Placid Gold charges ORDA $2,500 a month now and charged $1,400 a month 15 years ago.
Serge said his children Art, Cristina and Katrina own the company.
“It’s owned by my kids,” Serge said. “That would be my children. I have no idea about that. Talk to them, and see what they say.”
Serge hung up the phone when asked if he thought the business deal could be seen as a conflict of interest.
This is not the first time a question of this nature has arisen for Serge Lussi. Back in 2006 the state Assembly inquired into business arrangements between ORDA and two local hotel owners who were on the authority’s board, Serge Lussi and Ed Weibrecht.
“There are conflicts of interest and appearance of conflict with respect to ORDA Board Members doing business with ORDA,” the Assembly reported.
In 1995 a conflict of interest was investigated by the state comptroller’s office, and it found “transactions between ORDA and venues owned by Board Members were not properly documented and approved by the Board,” according to the 2006 state Assembly report.
Lundin said in 2009 the state inspector general’s office investigated the matter and found there was no conflict.
Art Lussi said the condo’s lease to ORDA was awarded annually through competitive bidding.
“My sisters and I, we owned Placid Gold from the start in 1996, when my family bought the (Lake Placid Club) property,” Art said. “The three children were the purchasers of the property. My mother and father were managers.”
The New York’s State Department does not have a CEO listed in its files for Placid Gold.
Art said when the agreement started, Placid Gold was making around $16,800 annually from the ORDA lease.
“I’m a lawyer, so I am very very cognizant of these laws and that’s why I was very by-the-book that we would do this annually,” Art said. “(ORDA has) rented different things over the years. First it was one of the cottages called Thorn Cottage, and then I think they rented Outlook one year.”
Serge Lussi listed Placid Gold as his business affiliation when he donated $2,300 to former Sen. Hillary Clinton’s presidential campaign in 2008, according to the Federal Election Commission’s political contribution database.
The Enterprise asked Pat Barrett, chairman of the ORDA board, about the Lussi-owned condominium.
“I didn’t know. I don’t know anything about it,” Barrett told the Enterprise.
Barrett said he was on his way to Lake Placid and would read the comptroller’s audit report soon. The Enterprise asked Barrett if he thought the situation was a potential conflict of interest, but he did not answer.
In June, at the most recent ORDA board meeting, Barrett said he would continue to discuss ORDA business with Serge Lussi and Ed Weibrecht as unofficial advisors. Barrett and Weibrecht are business partners, part-owners of the Whiteface Club and Resort.
Serge Lussi and Weibrecht were voted off the ORDA board by the North Elba town board last year. Bloomberg Media Group CEO Andy Lack and Joe Lamb, president of Lamb Lumber, replaced them in June. The town appoints three of ORDA’s 12 board members.
Lamb’s appointment was originally to be filled by Jim McKenna, CEO of the Regional Office of Sustainable Tourism. However, McKenna stepped down from his appointment after the state Joint Commission on Public Ethics raised red flags over a possible conflict of interest with his job at ROOST. Town board members Bob Miller, Doty and Supervisor Roby Politi all said they did not believe a conflict of interest existed with McKenna.
State comptroller’s auditors examined the authority’s sponsorship deals with corporations such as Coca-Cola, Chevrolet and J. Lohr Vineyard, finding that the authority could increase its income and listed specific instances in which ORDA could have managed its corporate sponsorships better. The auditors stated that three of the seven sponsors they reviewed received longer stays at the Lussi-owned condominium than were called for in their agreements. One of the sponsors received 45 excess stays during the audit period, the three sponsors together received an additional 54 nights total, valued at $13,500. The audit of sponsor’s stays at the condominium spanned the three fiscal years ending on March 31, 2013.