Folder# 633
Word's Fair: World's
Fair Corporation's
Motion to Quash
Beame Subpoena
1965
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MEMORANDUM
NEW YORK WORLD'S FAIR 1964-1965 CORPORATIO
TO:
Executive Committee
DATE: February 9,(Hl6f)
~
FROM: Robert Moses
I I\
v
SUBJECT: Fair Corporation's Motion to Quash Beame' Subpoena
So that you will be fully informed as to the issues raised
by the City Comptroller's subpoena and our motion to quash it,
I enclose herewith copies of the affidavits which we and Mr.
Beame submitted to the court.
)
At a Special Term, Part U
Present
of the Supreme Court of the
State of New York, held in
and for the County of New York,
at the County Court House in
the City of New York on the
J.jif(aay of February, 1965.
Hon, ,Y9tlveL bOLl) , Justice
.
................... -x
In the Matter of York World's
Fair 1964-1965 Corporation,
Petitioner,
against
Abraham D, Beame, as Comptroller of
'I he City of New York,
Respondent,
ORDER TO SHOW
CAUSE
Index No, j /,>);;)7.' .
Upon reading and filing the affidavits of Charles F, Preusse,
andErwin Witt, sworn to the 4th day of February, 1965, and upon the
exhibits annexed thereto,
Let respondent or his attorney show cause before me or one of
the Justices of the Supreme Court, at a Term, Part I thereof,
to be held at the County Court House, No, 60 Centre Street, New York,
New York, on the .8th day of February, 1965, at 9:30 o'clock in the
...
.e.
forenoon of that day. or as soon thereafter as counsel can be heard,
why an should not be made herein pursuant to the provisions of
.
Section 2304 of the Civil Practice Law and Rules, quashing and vacating
a subpoena duces tecum served upon petitioner on the 2nd day of
February. 1965, on the ground that respondent lacks the power and
authority to issue such a subpoena duces tecum, and granting such other
and further rellef as to the Court may seem just and proper.
Sufficient cause appearing therefor, let service upon said
a copy of this order and the accompanying
papers on Wi}-day of February, 1965, be sufficient,
in the meantime. and until the hearing and determinaUon of this motion
to quash and vacate the subpoena duces tecum eDJ.il:;;:tbe eatz::y d '"'
ar
let all proceedings on the part of respondent.aail Mt&!!neUen
$such subpoena duces tecum be stayed,
New k, !ie\tmc.ntk
Febf'ua., r-li19Gi-
I r J,S,C,
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
.
x
ln.the Ma.ttor ot New York World's Fair
19641966 CorporO-tlon,
:
Attldavlt ln
. PoUtloner,
I SUl)POl't of moUo
to qunsh
a duces tecum
Abt>a!lam D, lh8lllo, as Compt'!.'Ollo.-. vl
Tha City ot No.1 York,
STATE OJ' NEW YORK )
' sa. a
COUNTY OY NEW YOBK )
BespoD<Ient.
' Index No.
CHARLES F. PREUSSE, belnJ duly awom, deposes and
8&)'81
1. I em a member of Wbltuu1n. Ransom & Coulson, counsel
for the New Yor.k World's Fair 19841965 Corporo.tlon
(harelnatter called "the Fair Corporation''). I am also a member of
..
the Board ot Dh--ectoraand 'Jtxocutlve Commlttoe of tho Fair Corporation.
a. I am t'"miUar with tho tact& hore!nattor set forth.
On Febl"U4ry 2, 1065, the Fair Corpont1on WBB served
wfth a document labelled "Subpoena Duces Tecum , wblch was siczncd
by respondent Abraham D. Boa.me, as Comptroller of The City ot
New York. A copy of tbi& is annexed hereto as "Exhlbit A .
Tho sald subpoena duces tecum wbicb, incidentally,
the rw.me ot tho Fair Corporation to which it ls addressed -
pl1rports to command the Fair Corpo1ation to produce what amounts
to practically all of its bootes and records in the Comptroller's of'fice
on Februo.ry 8, 1985, and "to testify under oath in tho mattar of an
lnvestlgaUon and audlt by the Comptroller ot The City ot New York,
pursuant to the provisions cf Ne\V York City CharterS 93, subdlvistons.
b and c thereof. " For fallure to comply wltb this command, the
ComptroU"r states that
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an appUcatlon will be made to the Supreme
Court the State of New York to compel compUance. aad to impose
coats, and for the issuance ot a warrant cUrectin1 the Sherlff to bring
)'0\1 befo" the underalgnod. "
4. On February 3, 1065, I caused to be deUvered to
respocdent a writ.ten request to withdraw his subpoena duces tecum
on the ground that he baa no authority or power to laauo auch a subpoena
duces tecum under the provlalons of Sectlona 93 (b).or 93 (c) ot The
.I '
Now York City Charter, or under any other provision ct law. DespUo
that request, respondent baa failed and retuaed to withdraw aald
. aubpoena tecum.
6. I make this affidavit in support of the Fall' Corporatf.on'a
moUon to quash reapondonta subpoena duces tecum, of tho Fair
Corporation's order to show oauae herein, and of the
of all proceedings on the part of respondent and tho operaUon of the
subpoena duces tecum pending the determlno.Uon of the moUon to
quash.
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"
l)
The issue presented
6, A: the outset, 1t should bo emphasized that tho Fair
.
Corporation's opposition to tho Comptroller's ascertf.on of power to
audU subpoena ita books and reef'rds is not an attempt to voillts
financ1al affairs and problems from autho':"ized scrutiny. As the o!'.t'i
davit of Mr. Witt polnUJ outJ the Fo_ir Corpo1s.tlor has expanded some
000 its fo;r i:he sorvtces ot Peat,
& Co. , uno oi r,nd moat reputable !irma
c.f publlc accountant..C'! and ln the -:ountry. Exhibits
I K
'o Mr. Witt's aUldavlt, arc
an:-:ql, cartf.tled ntatemet:.ts ut the Fair Corporation which
prepar;d by .that firm, and wert" wWely d1str1bu!ed by the lialr
Co&'p0rat1on. to lte many note holders and others. Certitled statements
p!:'epared by that same fb'\ll for the yenr 1904 wm be avallab,le and will
e.lso he dJ.strlbutod on or February 5, 1961\.
The baa that ho ,eu.eves it "to be ln
the beFt interest of the City as woll as of the Fo.lr
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that his office
"un.d!l:lrtake o.n audlt " of th.9 Fulr Corpo:-:-atf.on
1
a books so tho.t he may
properly "tavaluo.to tbQ .. te" being prepared by Pent,
& Co, tor 1964 (Letter January 26, 1965,
ann'lxod to Witt's aifldnv!t aa L ). While one might
ask whether an audit to eva:uate 11nother audit can truly
o.nd ratlono.Uy he the Cf)mptro11er
1
n objecUvP or the explanation for
hla ex+raordino.ey subpoena duces hcum, we recognize that public
a&P., ln leg.1l contemplation, acting in good
faltb, e.Dd that, accordingly, this Court cannot be called upon to
deteX"mlne tho Comptroller Is conccmed with the publicity
3
,,
wblch attends biG demands and P.erhapo serves .his poUUcal ambltlona
rather than with the best interests of the City and the Fair,
The simple and sole l.oouo hero preoented is whether the
Comptroller baa been granted the power to audit tho Fair Corporation's
booka and records and to issue a subpoena duces tecum to effect such
an audit. An examination of the Fair Corporation's en:lbUng legislation,
the baste lease between the City and tho Foir Corporation, the provisions
of the Membarablp CorporaUons Law under which the Fair Corporation
was the prov1s1ona of the New York City ChD.rter spccit;y
lng the p?wers of thu Comptroller, the provisions ot the ClvU Practice
Law ancl Dules aovemtng the issuance of subpoenas duces tecum ln non
judicial proceedings. all unmlstalteably demonstrate that tho Comptroller
almply.doea not have the power which he here seeks to exercise.
Motives aside, the Comptroller is here playing the role of
a eeltappolnted guardian. The Fair Corporation, oft1c:ors, Its
. .
prominent members and directors, its execuUve committee and
its notebolders, have the same right as anyone else to go about their
taska tree ot the uninvited and unlawful vlsltat1ons, excursions,
maneuvel"8 and lntruslona of any aeU'appointed champion or prd1an,
tree of unauthorized audits and subpoenas to evaluate authorized audits,
I
ancl free ot wild accuaatlons and innuendoes whlch causo harm beyond
the abiUty ot any answer and demonstration of fact to repair,
The Fair Corporation's cnabUng net
and its baslc leaae with the
'1, An exnminatlon of the comprehensive State logf.sltlt1on
which authorized the creation, operation and ma.lntonnnce of a World's
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\
Fair by n non-profit membership .su'bjec! to specified con-
clHiona, C!.n.d of the basl.c lens<. -.en the City and the Fair Corporation
detaUing the conditions und :>.rwMch Flushing Meadow Pa:rk was lensed as
the cite c.f tha Ful:-. clearly show that neither the State Lngislaturo, nor
tho o Estimate which authorized the lease with the FalX" Corporation,
C1Jidonced the remotest intent to gl"ant to the Comrtroller the broad powers
ho here seekr to These erlabllng acts unmistakeably and
unn-ublguou.aly. provided for tho creation. and operation of the Fair by a
non-profit membership 'corpore.tion. subject to the comprehensive'rights
of visitation, !nvest1gat1on and fina1. e.ccounHng by the Supreme Court of
t:1e State of Ne:w Yo:rk, as provlded by Sections 26 and 56 of the Member-
ship CorpoY."atit)ns Law ... 11nd not by a 'O'I'Jnbipal agency subj')ct to audit
8. The basic which authorized the creation of
the Fair was enacted l:y the Legismture !n 1060 (.'Laws ot New Yorlc,
. .
l9C10, Ch. ). T.bat legishtio;'l provid,.cl:
(a) That the Com.n:.issioner of Parks of The City of .f\Tew York,
wHh the approval of the Board c: Estimr..te, could, without public bidding,
lease Flushing Mr.adow Pa:-lt to the Fair Corporation,
11
a non-profit
zr,emhm:ahip co:cpoxation no part of the net ear.1ings of w.1icb inures to
the benefit of e.ny n1cmber thereof * * * for the purpose of holding a
world'"' fai ... for educational purposes the area covered by the lease
rlr lie, wl\ich or ita are hereby authorized to
lease the s :me, nnd conduct thereon any and all the activities pertaining
to a a ;"air the issuenc:o oZ permits to exhibitors and
crmcea.. .... 1onair- s, the charging tor and all other -uatters that
..
..
may bo n tor or apporta.Wng to the successful complcUon and
operntion of a world a falr. "
(b) That so.id teaso shall contain, nmong othorD, provioions
tor the Commissioner ot Parltts approval of aU permanent structure.s;
an lndomnUication by the Fatr Corporo.Uon holding the City hnrmlcss
agaln.ut aU on account of tho Wio of the lensehold1 o. requiremetlt
that tho Fair Corporation, -at its own coJt and expenso. remove all
temporary otructuros and restore tbo park to a condition to
tho Comm.lso!oner of Parks; the carrying ot fire and Uabtl!ty lnsur:mce
paynblo to the City. such companies as are approved by tho City, on
all permanent structures, and tho dopoait ot such with tho
Comptroller; tho use of all net :revenues.- :remaining to tho .Fair Corporation
credit "after the close ot the fair and after the payment by tho corporation
ot all its the"l outstanding bonds, obUgaUonJJ, UablUtles ot every kind and
nature, lncluC:i.ng the discharge of aU its obUgattor.s uridcr the lcaGo, "
the rostorotioB and improvement of Flushing Meadow parlt, " and
the lx..lance remaining t.hcreattor to bo "uaed by the City of Now York for
educational purposes" tho Fair Corpo1at1onta supplyinc of Adcq\UI.te
pollee and fire prctecUon; and the Commissioner ot control.over
existing permanent Clty llnd State buildlncs.
(c) That the Fail' Corporation shall prepare n special code
ot !awo deallng with health, aanlta.Uon and building, to be G\1bm1ttcd to
the City Council for approval.
(d) That tho Board .ol Estimate shall hnve power to reaulAte
and Um.it algno and billboards 1n tho bnmcdft.to viclnity of the Fatr.
-o-
'"
(e) That 1t was In the pubUc Interest that the Fair CorporaUon
"employ as certain top executives persona with el..'Porlcnce in pubUc ottlce
and eapecia.lly wlth experlonco ln tho adminlstro.Uon of the pa.rk system ot
the Clty of New 7ork, " and to exclude such executives from tho operation
of various enumerated statutes,
Pursuant to thls enabling legislation, and with tho npprowl
ot the City's BOard of Estimate, the Fair Corporation tho City cntor.od
lnjp a .agreement lease, .dated llay 2'1, 1960, .A-Gow-of
. . ).
An examln:at!on of this lease shows that It follows quite
closely tho State's enabling legislation. that lealslatton, it contalna
' .
no provision tor audit ot the Fair Corporation's books by the Comptroller.
Indeed, tho only reference to the Comptroller in tbe entlro lease appearo
in the article whlcb provides tor tho deposit of inaurance pollcloa with
blm (Art. 'I ). .
Nowhere in the enabUag net or 1rl the basic leaao 1a then
any provlaion tor an audU auch as tho Comptroller hera aooka, All
concemed the State Legislature and the Board of EaUmllte rocoa
nized and agreed that the F::: lr Corporation was a nonproftt momborahip
corporation, which, Wee all ouch corporations, 1a subject to visitation,
investigation and a final accounting by tho Supreme Court undor the
provlslons ot :.3 Membership Corporations Lclw, and that no municipal
officer or agency was to have tho power- to review and approve tho
reasonableness of tho Fair Corporo.tlons expondltures.
'1-
The Court of Appeals has recently stated that ( Hntter
ot New Poat Col)?,: v. 10 N.Y. 2d 199 .203 ( lOGl) ) :
"Decisions such .Benz v. l:'Tcw York Thru-
way .1\uth. ( 9 N.Y. 2d 436 ) :.'i.re cxprcsBivc of n const1
tutioml o.nd policy that public
should be subjected only to those proccdurco which
been specifically mnnclatcd. * t!t *
11
(Emphasis .supplied.)
Since the Fair Corporntion is not a public nuthority, l:lut
n prlw.te corpora.Uon1 there is still greater reason why it "should be
subjected only to thoac procedures which have been specifically numdated."
Those proc9durea. ns I have emphasized, are tho ones set fo1
1
tb in the
Memboral1ip Corporations Ln.w. Ao tha Court of Appoaw lona aco
stated, in tha cou1sc of rejecting an attempt by tho State Board ot
Charities to inspect tho boolm nnd recorda of tho New Yorlt Socloty for
t.he Prevoution of Cruelty to Chi.ldrcn, a. nOll-proiit membership col"'-
poration ( Pco. ex ral. Bd Charities v. N, Y. Soc. P. C. C.; 161 N.Y.
233, 247 [ 1900 J) :
"* * aet Tho legislature evidently unc1orstood
thnt corporotiona of thin arc not subject
to the jurisdiction of tho abtc board of chlritics
alncc it has provided tho.t they nro subject to vioito.-
tion by the Supreme Court, nnd it nppcarn that this
powor lms been exercised with l'cspcct to thiu por-
corporation (Lawn liJDO, chap. 300) [ l'viom ..
bcrship Corporations Law ]. It 15 scarcely concdv
nblc th:1t it waa intended to ::;ubjcct the dci'ct1::Jo.nt to
two distinct and different methods of ctatc cupcrvbion.
11
(Emphasis supplied.)
Finally, 1 abould adil that tho procedute catablishcd for this
Fair was tho onmc as that followed by tiHl lnst Fair. Under tho
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provisions of Membership Corporations Law. tile Now Yorit World'o
Fair 1040 Incorporated, presented its peUtlon and account to tllo Supremo
Court, QuecllEJ County, which was granted and o.pprovcd by tho Court on
July 8, 1946.
Tho provioions of the New
City Charter under which the
2.toptrollc1 pu1yorts to act
I
9. In his lettor to tho Fair Corporation's prcsl.clont. dated
January 26, 1965 ( Exhibit L , a.nnoxcd to Mr. Witt's affidavit), the
. Comptroller l"oferrcd to Secti011 93 (b) of tho New York City Cha ten in
apparent aupport of his claim of power to audit and subpoena. tho Fair
Corporation's boolts and records. The Comptroller's subpoena ducea
tecum refers to and audit under Section 93 (b) o.nd (c)
ot the Cb:J.rter. An examination of Section 93, readily shows
that it ls no support whatooewr tor either tho subpoena duces tecum
which tho Comptroller has here purported to ioauo, or for his claim of
power to audit tho books and records ot tho Fair Corporation.
Section 03 of the Charter, which specifies the "Powers and .
duties" of the Comptroller, provides tba.t:
"n. Tho comptroller from time to tlmc ln his
discrcUon may, and whcnover required by law or requcated
by the mayor, the board of caUmate or the council, ah.."l.ll
advise the mayor, the board of eatim.ntc ancl tho council
on the financial condition of th0 city or any pbnso thereof
and mokc ouch rccommonda.tion.s, comments and criticisms
in regurd to tho operntiona, fiGcal policies a.nd financial
transactions of tho city as ho may deem advisable in the
pubUc interest.
-o-
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...
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.. "b. He shall hnve power to investigate all matters
relating to or affcctinz the flnnucca of the city, lncludlng
witbl.)ut limitation the p(:riormance or co:ltrncts and the
receipt and expenditure or city funds, and for such purpo!:e
he shall h:lVe power to require the attendance and examine
and take the tctitimony w1der oath of Guch persons as he may
deem neccseary.
"c. He shall have power and it shall be his duty to
audi.t all vouchers before payment and prepnre warrants, to
nudl.t o.ll offlcia.l nccow1ta ond to audit annually the accrual
and collection of all revenues and receipts and to prcacribe
methods of recording, reportlng a11d accounting in the several
agenclcs.
"d. He shall have power to settle and adjust all claims
ln favor' or or againat the city in such manner as sbnll be
prescribed by law and for that purpose mny administer oaths,
except that, with regard to and non-property taxes,
such power shall be vested ta the director or
"e. He shall admlnloter and mano.ac the several sinldng
funds ot the city and all other trust funds held by the city,
a.ld provide for the receipt and safelteeping of all monoys in
such runds, except as provided in subdivision three or section
four hundred fourteen of this charter, and in such administration
be shall be deemed to be actlng ill a fiduciary capacity.
"t. He sho.ll keep the or the city and shall at
least once ln each month render to each agency o. summary
statement of so much thereof as relates to such agency.
"g. Withln tour months arte1 the clo:;e or each flacal year,
he shall publloh a statement for fiuch year, including a full and
detalled statement or the 1. .. eceipts nnd eKpendlturca of the city
and the cash balnnce or surplus at the end or tbc fiscal year,
an itemized statcmtmt of all ta:ces due and uncollected at the
close ot the flscnl year, o.n itcmlzed c;tatcment of the condltLon
or the sinldng funds, the street and parlt opening funds and the
6trcet improvement funds, so long as auch runds shall be
continued, and any other naaessnble improvement and
of the Ul:< appropriation a11d general fw1d atc.bllizlltion re:;ervo
fwtd ao at the close of he fiscal year, the different sources or
city revenue and tho amount received from each, the several
appropriations rmde for the flsca.l year, the objects for which
they were mnde and the amount or moneyo e.:.cpendod under each,
the money borrowed on the credit of the city, the amoutlt or cncb
loan, the authority W)dcr whlch lt waa tnD.de and the termo on
whlch lt waa obtalned, and such one r information ln rc.zard to
such flsco.l year as may be dotermtned by the comptroller or by
law.
-to-
polDts.
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h. He shall establish ror hls office and for city o.aencles
a sy$te1n o accounts which shall, r;o far as pro.ctlcable, be'
Wlitorm.
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1. He shall prescribe systems or nccountlng for ctty
agencies, includlng but not limited to the department or
water supply, aas and elcctrlclty and the department or
marine and o.vintion, whose revenues nrh;lng out or ;.he use
or raciUtlea and oorvices supplied by such agency constitute
fifty per centum or more of the appropriation provided Cor
the operation of auch ngcncy, whlch systems or nccountlJ)g.
shall conform so far as practicable to standard public
utll1ty accounting practices. The comptroller shall pllblish
1n his annual report statistical dnta ln rcgtud to the financial
operations of such city agencies. IQI o
11
analysis these provisions clearly establishes the following
J.i'lrst, neither sllbdivlalon b nor subdivision c, nor any other
sllbdlvlslon ot Section 93, refers to or grants the power to issue a
subpoena duces tecum. Whlle subdivision b delegates the "power to
require the attendance and examine and take the testimony under oath
ot such persons as he may deem ln on illvotltigatlon ot a ma,tter
"relating to or atfecUng the Clnancoa of the City'', 1t nowhere grants the
power to compel the production of books and records. Moreover, lt no-
where refers to the power to issue a subpoena, let alone a subpoena duces
tecum, the observance or enforcement of which may be compelled by the
lmposlUon of fines or personal attachment.
In the past, the Comptl .. oller did have the power to lsaue a subtoona
duces tecum ln any lnvestlgatlon "relating to or o.ffecttng tho finances ot
the City." But he ho.d such power under the provisions ot Section 406 ot the
Civll Practice Act, read in conjunction with the provisions of Section 03(b)
ot the Charter. Sectlon 406 or the ClvU Practice .Act fo1mcrly provided
that:
-u-
"Subpoena issued by judge, arbitrator, rercree or other
persons, in certain 1. When a judge, or an arbl
trator, referee or person, or a board or committee,
hns been heretofore or is herenfter expressly authorized by
law to hear, try or determine a matter, or to do any other
act in au official capacity, in relation to which proor may
be to.lten, or the of a person as n witncus m:ly be
required; or to require a person to attend, clthcr before him
or it, or before another judge, or officer, or a person deoienatcd
ln a commission issued by a court or another state or country,
to give testimony, or to have hls disposltion tal,cn, or to be
examined; a subpoena may be issued by and under the hand or
the judz:c, nrbltrator, referee other .e.erson, or the chair
mall or a majority or the board or committee, requiring the
person to attend; a..lCi also, 111 a proper case, to bring with him
a boolt or a paper. Tho subpoena must be served in the same
manner as prescribed for tho service or a subpoena lssucd out
or a court of record. Thls section does not apply to a matter
ariab1g, or an o.ct to be done. in an action in a court of record."
(Emphasis ouppl1ed)
In Matter o.r HlrshticJsi v. Craig, 209 App. D1v. 555 (1st Dept,
1924), .rev
1
d ln..Jlart, 239 N.Y. 119 (1924), the Commissioner or Accounts
or tbe Clty of New York had issued subpoenas and subpoenas duceo tecum
against other City officials in an lnvestlga.Uon under Section 119 or the
Cbnrter, Tbat Sectlon granted the Commissioner the to examine
the accounts and methods of various departments and oftlces of the City
and to make such other examinations as ho deemed to be or the beat
interests of the .City, It o.lso provided that ln connectlol'& wlth tllese exam-
. fnatlona "he &hall bave full power to compel the attendance of wltnesaes,
to administer oaths and to examine such persons as he may deem
necessary.
11
Addressing 1tself to this last-quoted provLelon or Section 119, which
is practically identical with the provision of Section 93(b) of the Charter,
the Appellate Division, quashing. the subpoenau duces tocum, stated
(209 App. Div. at p. 557):
12
.... '
"It will be observed thnt thlo secU011 confers 'ftO
-authorlty upon the comm.iasioller to subpoena books,
papers or dacumenta; and while some expressions of the
courts appear to take tor granted that such power exlsto,
we cannot o.ssent to that view. * "
The Court or Appeals found that the power to issue a subpoena duce
tecwn existed, _Eut it fo1;1nd that power in the pt:ovlslons of Section 406 or tho
Civll Prnctice Act, providing for the lsouance or a subpoena or subpoena
duces tecum by any "other person
11
authorized by law to do nny ottlclnl
act ln relatlon to whlch proof may be taken or the attendance of a witness
may be required (239 N.Y. at p. 117). Since the Commissioner or Accow1ts
qualified as an "other person" under Section 406, the Court of Appeals
held thnt he had power to issue a subpoena duces tecum,
Under this and other authorlties (see, !:..&:.. Matter ot Foster, 130.
App. Div. 760, 7734 (2nd Dept. 1910); Matter of E ~ ! ! ! 176 Misc. 887, 092
(Sup. Ct. N.Y. Co. 1941}), the Comptroller's power to isaue a subpoena
duces tecum clenrly stemmed from rmd depended upon the provlolons ot
Sectlon 400 or tho C1v11 Practlee Act. Thls statutory basis, however,
was erased by the Legislature in ita ellactment of the Clvll Practice Law
and Rules-
S11ch of the provisions of Section 40G(l) of the Civil Practlco Act
as the Legislature declded to maintain, plus modifications thereto, are
now set forth in Section 2302 (n) of the Civil Practlce Law and Rules.
That Section, however, no longer provides for the lssuance or subpoenas
or subpoenas duces tecum by "other peraons", but specifically enumerates
thoso who are entitled to issue subpoenas ln non-judlclal proceedings, It
states tbatz
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...
''Subpoenas may be issued without a court. order by
clerlc or the court, a judge where there is no clcrlt,
the attorney general, El.ll ot record Cor a party
to nn actlon, an admlnlstro.tivc proceeding or sin
arbitration, o.n arbitrator, a rcfcrco, or any member or
a board, commis::;ion or committee authorlzed by l:l.w to
hear, try or determine a matter or to do any other net,
ln an offlclal capacity, ln relatlol'\ to which proof may
be taken or tho nttendanco of a person as a witness may
be required, u
Clearly, the Comptroller does not into nny of the enumerated
statutory categories. He ls not a clerlt or the court, a judge, the attorney
general, an o.ttorney of record for a party 1n a j1.1dlclal action, admlnlstra
tlve proceeding or arbltratlon, an arbitrator, a referee, or a member or
a board, commlasion or commltteo. (See Mtr. of s2cur1ty Adv. Co. v.
42 Misc. 2d 333 (Sup. Ct. N.Y. Co. 1064), rev'd, 20 App. D!v,
2d 860 (1st Dept. 1964)),
Moreover, the omission of the words "other persons" was not
inadvertent. As a lending treatise states (2 Weinstein,' Korn, Miller,
New York Clvll Practice, S 2302) &
"* lf.l CPLR makes no reference to persons other than
those expressly 1t bas omitted tho troublesome
phrase, 'other persons'."
And lli!,. at f. n. 22) a
"Compare the language a peraon a11thorlzed by law to
receive evidence 1n the original draft (1 N.Y. Adv. Comm.
Rep. 162 (1957)) that ulthnately adopted." 'J
...
the Comptroller, it appear.!J to is aware or tbls
vital change in the former provisions or tho Clvll Practice Act. Thus,
ill Matter or Tully & Di NnpoU, Inc.
1
146 NYLJ 11 (11-2?-Gl, Col. SF)
(Sup. Ct. N, Y. Co. 1961), when the Comptroller sought to subpoena a
contractor's books and records to determine whether lt had been overpaid
tor \YOrk done for the City, he did GO pursuant to the provisions or Sectlon
408 of the Civil Practice Act, read in conjunction with Sectl011 03 (b) or
the Charter, To illustrate this point, there is annexed hereto as I!;xhiblt C
a copy of the subpoena issued by the Comptroller in that case.
The Court will notice that tho subpoena in that case stntes that
"Whereas, pursuant to Section 406 ot the Civil Practice Act, the
Comptroller may demand the attendance of a person to give testimony
under oath", and that for failure to attend and produce "you will be
declared guilty of contempt and reported to one of the J:ustlcos of the
Supreme Court, and pursuant to the provislono or Section 406 of tho Civil
Practice Act a warrant shnli ba obtained to commlt you to jall, there to
remain untll you have complled wUh all the terms ot this subpoena."
The Court will also notice the subpoena duceo tecum ln our
case does not purport' to state the section ot law under whlch it is issued
and will be enforced, and makes no reference to Section 2302 of the Clvll
Pr11ct1ce Law and Rules. Surely, all thls lays ba.ro the totalnbsence ot
any statutory basis for the power here asserted by the Comptroller.
-15-
,
Third, U1c in Section Dl (c) empo\.rcring the Cor..1ptrollor
to nudit before payment, nll ofticial accoui"lts, :md the o.ccrtl!ll
and collection or all revenues ond receipts is manifestly not a grant or
power to audit the Fnlr Corpolatio!1 's books and The Fnlr Corpo-
rnt1on is not Gecldng any po.ymcnt f1om the City whlch cnlls fo1 tho audit
of a voucher; o.nd the provision for auditinz
11
official accow1ts
11
and tho
11
accrual nnd collection or all revenues o.nd receipts", as well as the gra11t
of power to the Comptrolle1 to prescribe "methods or recordinc, repo1tlng
and accountln{!
11
all manife.:::tly relate to tho auclltlng or the official books
and accounts of the City, not of a private corporation which migllt ult1-
mately owe the City money. As the Report of the New York CUy Charter
Revision Commlsalon of Aucust 17, 1036, stated (p. 26):
"The Comptroller is to remain an elective officer
to be elected for a term of four years at the same tlmo
the Mayo1 is elected.
"All experts on municipal government agree thnt the
buslnc!JS of nhould b!! an officer \VhOls
not ndruintstcrillf! nr.y considerable portton or its business.
The clty'G
Cornetrollcr. nnd it was deemed advisable to continue hlm
na the lndcpendont nuditor oo r;cncrnlly desired. To aid
hlm in his audltlng, he ls given the power to subpoena and
to examine under oath." (Emphasis suppllcd)
Sectlon 03 (c), 1t should finally be emplmsized, rorern to the power
nnd the dut;y of the Comptroller to audit. If the Comptroller seriously
believed that Scctio:1 93 (c) was applicable to the books nnd records or the
Fair Corporation, he hns been derelict in the performance of the audlting
duties 1mpo::;cd upo:1 him, cinco helms never sought the audit he
now .so assiduously seeks. 1 submit th:lt the Comptroller hns not been
derelict in his past course or conduct, nnd that hto attempt to now audlt
- lG -
...
tho Fair Corporation's booko and records represents an assert1o11 ot a
power and a duty which he simply dooG not have.
Fourth, the provisions of Section 93 (b) authorizing an
invostir;:ltlon into all mattero af!ecting the finances or the City.
including the perrormance of contracts and the receipt and expenditure
or clty funds, 1s equally inapposite to suF.;taln the audit here sought.
The Fatr Corporat1011 h:l.s, as obliged under lta lease with tho
City, created and 1s operating a World'n Fair wblch baa greatly
benefitted and will continuo to beneCJ.t the people or the City and the State
of New York. It is, 1n obort, performing ita basic obligation under tho
contract, and an audit of the Falr Corpora tlon s books and records hns
no conceivable relationsblp to the performance ot that obllgat1on.
The City, moreover, is not presently a creditor or the Fair
Corporation. Newspaper reports notwithotanding, the Fair Corporation
is not obliged to ro1mburso the Clty for the $24,000,000 ot permanent
irnprov'oments which tho City installed in Flushing MeadGw Park prior
to the opening of the Fair, o.nd no one has ever pointed to any provlaton
of law or contract whlch requires relmburserAent.
Under the with the City, tho City becomeo oatlltled to any
net revenues remalning to tho eredlt of the Falr Corporatlon o.rter utho
payment of all proper, necessary and reasonable charges of
premises
ope1aUon, maintenance, nnd repair of the lcnsecf and improvements
and the preparation, adminLstro.Uon and opera.tlon or the World's I'alr,
and for the payment of interest on and for retiring tho prln.clpnl of
all debenture bonds issued by the Corporatlon, and for the performance
-17-
..
....
of all obllgntions or the Corporation nrlcing out of thlo lease. or by
reason o :he conduct of the: Fair", and
11
lhe rcotoratlon nnd im?rove-
mcnt of Flushing :1\Icadow Po.rl .. ". Clcnrly. these nrc contract 1ichts
in futuro, nnd there ia no quostion of the Fair Corporntlon's pcrformnnce
hero and now.
Once aca.Ln, from newspaper reports (N.Y. Times. 3.
1965,. p. 17), I zather that tho Corporation Counsel has etnted that "the
City's contract requires tho fnlr to usc lts funds prudently." It this
statement menns thnt the Corporation Counsel and tho Comptroller read
the lease as providing that the Comptroller has the powor to detcrmlne
that the Fair Corporation was imprudent -- and,. presumnbly therefore,
tn breach ot its lease - ln hiring the large security rorce tlult lt has,
or Ln loanlng money to exhibits that the li'alr Corpo1aUon thought
important to keep going. or ln paylnz the salrarlos whic.h 1t pald or pllya to
its offlcers. then their reading baa no support ln the provisions of the
enabling act,. tile langunge ot tho lease or the prior course or events.
'l'ho prudence of the Fair Corporatlon
1
s mnuy expenditures was
and ls a matter for its reaponalble officers. executive committee nnd
Llltlmately Ua board or directors, a board whlch. Mr. Witt's nfCidavit
points out, rntlfied marly e,.:penditures while Mr. 13eame was a member.
And, as I have emphasized. the provision!:l of Section 26 the Membership
Corporations Lnw and the broad powers granted therein to the Supreme
Court, are nmple protection against any mlsnpproprintlon of the funds or
property of the Fair Corporation, or of the diversion of its assets from
'
the purpose ol its incorporation.
- 16-
... J
Finally. lt llould be emphasized U1.:.t whc1c the Legislature
intended to cstnbll!:h the Comptroller as an audltinz orriccr, it did so in
plaln nnd language. Thus, Section 1130 or the Charter
provides that "All books and records of the (Housina and Redevelopment)
board shall be subject to pariod o.udlt by the comptroller." Section 560
or the Public Authorities Law provides, with equal clarity, tlm.t
11
the
comptroller and his legally authorized arc hereby
authorized and etnpowercd from time to time to examine the accounts
and books of (Triborough Bridge and Tunnel) authority, h1cludiug
its receipts, dlf'bursements, contracts, bases, sinking Cunds, invest-
menta and otber matters relating to ltB rinancl.a.l standing.
11
There la
no comparable grant ... or nny grant- ot power to the Comptroller to .
audit the books and records of the Fair Corporation,
Conclualo11
-
10. Tho Fair Corporation bas been served wlth a document which
purports to be a subpoena duces tecum signed by the Comptroller or
the City or New York. The document ln question does not refer to the
statutory provision under whlch it is issued nnd under whioh the
Comptroller proposes to er.rorcc Lt. As I have shown, there la no
prov1slon of ln.w which o.uthorizes the issuance of thls subpoena ducoa
tecum by the Comptroller or the extenDive audlt which he proposes to
undertake,
This subpoena was served lathe afternoon of Fcbrunry 2, 1965,
returnable :February 8, 1065. have moved na promptly as was
physlcp.lly possible to qunsh nnd vacate tho subpoenn, but it ls impossible,
- 19 .
..
in of the chort notice given, to obt.-nn nn or the validity
of this purported snbpocnn. duces tecum bc.lora its return dc.tc. In flUch
a oituation, o.ncl ccpccin.lly in the nb:::cncc of tmy dcmcnotrotcd need for
o. stay is t-cquired to the ri,ahtD ot the Fair
Corporation. o""ld the orcler to show cause a st:ly
of the operil.tion of tho subpoenn. the he01ring nnd determination
of our motion to qunsh. That motion ia returnniJlo February fl, Ul05.
Ho previous baa been mude for tho relief sought
heroin.
WIIEREFORE. I rctJpcctfully request that the order to obow
rause bo and that on the return do.y of tho Fair Corpo1at1on1s
moUon,
tho subpoena duces
Sworn to before me thiG ,
f\
rJay ot J
1
.{._ ;>;z; c:''--!..lc::zl uL.'h-/
DANIEL F. CALLAHAN
Notary Pub:ic Stato of New York
4l0540d25 Qual. In Quoens Co.
Cert. fllco In Now York County
nls::lon xr'as 30, 1!.165
20-
..
SUPllEME COUri.T O:i' THE STATE OF NEW YORK
;
1
COUNTY x;EW YORK
-. ..
----- - - --- -- ---- - --- -- -- . -
In the MD.ttc;o or New York World's r.'air
19G4-l9S5 Cor(lornti.oa,
Pctitio<'ler,
-against-
.L\b:ru:.IUm D. Be:io.<'l'4&, au of
rfhe Clty or New Yorl;,
ReClf.tOndcnt.
- - - - - - - - - - - - - - - - - - - - - - - Y.
as.:
.Affidavit in
support of motion
to qunsh cubpocna
duces tecum
Index No,
lCR-vV'll1 Wi'.rT, be duly sworn, dc:>o:Jes and says:
1. I am Comptroller of the z;.etitlonei". New. Yorlt World's Falr
Hl64-WG5 C"rpolution culled "the Fail Corporatlon"), and its
chief financial officer. I :make this affidavit ln sur>pol.t of the Fair Corpo-
ration's motion to the respondent Comptroller's subpoena duces
tecum ond in support or the order to show co.uoe submitted herein, and the
otay of all on the part of reflpondent and the operation of the
uubroe:l9. duces tecum pcndin{! the detcrmir!ation of the motlon to quash.
2. I received a Bachelor's degree ln Dusiness AdminlDtration
from the College of the City of New Yorlt in 1925, and thereafter a J. D.
degree lr. law from New University. After some years or service
with independent accow1ting flrms, I was employed by the City of New York
1.
II
O
.tt ''1,. l.;-'i'' r"co,....,.q,....l t'" v:"l'"' I .-.-....... -.-' '- " cc,-"ttl .......... }
"'..,. ... .....,. wt,J .. '--.'9",."" "V .... ... v-'-- ..- u. ....... ..... ,.,. .,..., "\ooa"
and othCJl'
coaunittec nod oficc:ro. hcrc;to o.s E,.:h!bit A:is a li.:Jt ot tho
board Qf dircctor3, all of whor.a are: ::tbo n1cmbors of the Corpor.:ttion
.Anno::cd bercto no E:-;IJ.ibit 13 ia a lt::t of' udditicnal porcons -.,ho :::.ro mcmbc:t,.;
but cot directors.
will be noted th::.t r.'lcmbcrs .and hoard of directors
inclu:.lo ot the r .. 1o:::t p:..c-c'lincnt clti:!cru: ot tho City, St.ltc and
The E:.;ccutivc Ccl-:'lmittcc of tho Fair consisto
...__._,_
-- --------------
I
I
Cornpr.ny. 'inc.
L:o:1. .r. r: ''.nchc,
l1l1dc:-... ..
The trnttnd
Hr.m. 1'. Cnv::l.r.,.zh, J1.
Dcptty .r"3.ycr Ot
'l'i.tr:: Cit;t ofl\",z;w Yor!t
Lou R. Ch:lirm::J.n
t3cr.nr.c J.\.
i1:Ju. J:n:ne:l!: ;r. Dc; ..
',1P.mb:Jl' ot of
. .Jot'Ul
/"1.,
Th Cticr. -.Colil Co:rp,
:F.
Gimbol j.:,&n.
\Vt".U.lr.' K.
Hs!riuon t.
Mro D. L!wlcer
A7"Jert & Mary
J ... tu::k.\'lr ...
:a.
Forme:.' Pros!1cnt
The Ik:i'.i'"St Corpor:!.tlon and
New Yorlt Mirror
J:o:acrt
:i:lC\'1 Yor:: \'lc:itiiOI-titr fbo4-1DG5
..
l.:..rt!!tu.- -r-r.
Inc.
C. Pcttcrc on, J1. ,
_
Ym:it City
Pub!t.c
Ch:.u-lcs Pr,lcttJ., V lee I'tco:slecnt
c.ncl E .;hib!ts.
New Yo:k World's Falr 19041005
Col
E. Potter
Vice Proa1dollt
York
1
Jilorld'a Fab
CorporaU.cn
ChArles 1:', Prot1aee, Esq.
Harso:n & Coulson
L1'lmuet I9 Rosc:traan
roUn Ktay<?' l?OtrPchok
e..
:Io::1. 'Pat'l n. Sr.;ravane
Pr(;sldcllt
o! 'l" . e City or New "iork
Dr. W. Socltm!ln
.i'.:11ntst<:ro." I: mer ltus,
Ch:..-ist cmd P:-csldcnt,
Coll...'lcii. 011 and
Arfalra
'/tlry -c:.r:,:. i..c u
4
e:1ce ,l, l\tcG'.nley, S. J.
T?:--ezice .... t; F
MOSC(I, ?rsid.:L'lt
\'.' tllinm E. Potter, E:-:cclttivc V lee President
C:n:.-.lc.:; P -.lotH, Vice
.:ll Arrntro :i.:::.J1io:ts
C:mstable, Vlco O;;>cl.;tt'ons
'Et;:in W :tt,
...
.... 4. 'l'Jlo e: .. ocutlvo comnlittce meets l'cgulnrly. , Under the by-l:lws
oi the I-' air it nets "on bchnlt or tho Ln a.ny
when the of D1rectorEJ lG L10t ln t;ccsicm," Purou::mt to that provlc::lon,
the C:>n'lmittcc hc.s dctc1'ml.nou nll m.o.ttc1s of policy. It n::thorlzca
maintcmance contracts, ecurLty contracts, contio.cts for
scrvlceo, constructlotl contracto, ndverttsiug Wld promotion
admtssion pr!ccw c.nd il.n4nc1llg a.rranr:cmcnts.
Tbo rainutco or the executive ... which, c':clua1vc or
tho volumlnouo colla.tera.l documenttJ and reports refel'rcd to therein, Cl:cccd
1, 000 paaoa the i."clr Corporatlon'a lncejJtlon ... al"e aubmlttcd fol"
. . . .
approvo.l to the board of dlrectora ot 1ta moettngs C'ld are ma.Ued to the
for their C:l:a.rntnatton well In ndvanco ot such meetings. "fhccc
mlnutoo ln all easeD been approved. Th.o bo:lrd of dircctoro also
recolvea reports or tho o(tno F'alr Corporctlon.
Tho enlo.rlcs ot the ot't!cers of the Corporation lmve been fixed by the board
of
Tho minutes of tho Board of Directors Oi'C ln turn, submitted
to tb.o mcmbc1s of the Fr.Lr nt r.nambero zncct1:1a13
o.nd tmvo been in r..ll casco '.'hey are mnUccl tho mGmbc:c-s well
ln advance or the meetings. Tho memboro nbo rccoLvc thf.! Pl.O[;.'TC!:a
reports abov13 rcto:.rcd to. At the armU!ll ot me:-nhcr::: tllalc is
presented a the directors pur.sll:lnt to Scctton 46 of tho
Law, wh!ch l'CiJOl"t il:i m:::.Ucd to tl1e mombcra prtor to Duell
nnnw report is prepared verLficd by the prcoident
c
,
the Fair a.1d n:e c.nd is ior approvc.l to botb the
dlrectortl and the n1cmbers. such report h:;.::. been uuly
by tho dlroctoru and r.nettll,crs, Tllo l4'lo;;:t recent Cll.nu.;"l.l or
lllOnlbors was held on Jtml!:U"y 26, 1065, 'Ihe dt:.ectol's for tl1o
year ended Docet::lber 31, 1064 was npproved ct Guch mcct1t1g,
. ...
Anne:<cd hereto arc co;>les oY the directors' report for the
period Aullust ta. 1959, to October 31, lD60 (Exh1bit C), tor the po1icd
Au[!ust 18, 1959, to September 30, ltl61 (Exhibit D), for the period Aur;;u.:t
18, 1050, to December 31, 1962 (E;:hiblt E), fo1 the pcrlod 18, W50,
to December 31, 1063 (El<hlblt .Atso annc:{cd 1a the dbeeto1s1 report
or tl1e pe&"lod ended December 31, 1064 (Exhibit G). It \Vill be uot.ed tbt
these reports contaln principally financial informatlon, 'l'hey nre, ot
course, propa.red wlth the advice and assistan.ce ot tho l"alr Corporatlon'u
Independent auditors.
'tbc City's Comptroller la fully iamill.r.lr with the aforeaaid
procedure. He was a member ot tllo beard or dh:ccto1s or the Fnlr Corpo
ration vlrtunlly rrom its lnception untU Jnntmry, 1062, .a. period or .zon'le
two end onohall yc:ars during which rr&G.ny ot the Fair Corporatton's bnalc
contracts weu.e a.uthortzed. He wna a mernber or tho Fetr Corpom. Uo.'l
durlna this sa.rne porlod.
s. :'Hnce ito lnceptlon, tho Fair Corporation's
c.udltors h:).ve been Peat, Marwick, Mitchell Co. , wh:> were selected by
tile Boa.rd of Dircctor.o. Peat,. Ma:rwick, Vlitchcll ... Co. ls ono of the
leading firma oll.ndepcr.dent publlc accountants and e.uditors ln the country.
5-
COl'"i'Olations, U!1.d Lt;l o.udUcd been o.cccptcc! by
tllrouzhout the
Pco.t, Murwic;t, Mitchell&. Co. hnvo ho.c.l a start
engo.I;cd ln auditlng wo:r:t directly on tl'lo Fair's and
periods have had a:J many aa 25 mo11 working on the Fal.r Corporntio!l's
w1tb tbeir recommendations and has been contb.uously by them.
1'helr tees for services hnve aggregated approximately $1!00, 000.
In acldltlon to asslsting in the preparntlon or the directora'
reports above :refcr1cd to, i'ent, Marwlclt, Mitchell & Co. have mo.cle a
full audtt of the Fa.lr accounts cncll year and hnve corti!tcd
lta Clncmc!al I and my staff hnve ccopcratcd t:ully with them,
.
as evldenced by their letter to me ot JanlW.t'"y 1
1
1, 1065, a copy of which
anne)ted hereto as H. Ann<::xetl hereto is the cortfJled stlltcmont or
nseets, lncomo nnd e.:-:pendlturos for the pedod rrom Augt.:Zt 16,
1050, to December 31, 1961 (Exh1bit 1), for tho period Augu:rt 16, 1959, to
December 31, lt'IG2 (Exhibit J), and tor the perlod .August 10, to
December Sl, 10G3 (Exhibit K).
'l'ho nttditors are now en:;agcd in col:.lplcthlg their nucUt !or tbe
year endlng December 31, lOG4. I have o.dvi:3cd th:lt au<llt wlU
.
bo fillishod Ol1 or about 1'cbrl13ry 5, l9G5, 11t whlch tirna the cc!. .. titiod .
at&temc:mts wal be !l..ltnnHtcd to the Fair CorpOl"::.tlon. This te eo.rltor
than tbo d:1te o.l wlli.cll such etntcmcnta wero ready ln provlou3
-6-
"'Onl . , . - '"'L' .. , ' C''. -r .. l"'"'..,t"'l "' ,., .,,, t'h ., ,., 'lJ C ''"' "'1 n
I' ' ..................... h ....... .:. ........ l..i ................ .; ......... t .... : ' v . .. .:;. "'.J"' :'-
p:>.:..ld.:lJ i'cc:3, llcc.>;;;c rc-c:::, bc.r.:c o: U
'lOt" J., .. J ... .,. i1 o:t c.'.!10 00' r."':Q u, ..,. :,, t:r:::
"' _.,..._.... t. ... ....... -..1. ... J v ..
1
"'' v- .............. ..>.""
1
"'y"'
Gl!C!'t\:t' o!.' the Pl'Omissory note lsfjue h.'lc been pa.id orr.
corporntLons.
to the ptovit.tlr>ns or the n;;:rcamcmts witb the holdcto
ot tho notes, Sl\Ch holdera hava been furn1sht::d w1tl1 the certified
have been raised by any cf the .. S With respect to thc.cc
1'ho c:erUflcd fino.n.clo.lz;:tatom.cnts f:lr the year ended Dccem.bc1' Sl, 113Gl,
will bo dictributcd to t:to notoholdcrs u,9on their completion.
6. 1n October, 19G4, the City Compbollcr wroto to the
of the Fnil Corporc.tton requooUng dcttl.Ucd fin::mcial cuncnts
covering tho Fair's OJ?crattons during lts fltst Eea.so.n. Tho president or .
the Fo.lr Corpolntton informed tho City Comptroller tha.t the ::tud1tors were
revLcwl.n.z tho 1n order to provlclo ccrUriod f.i.ni;lnCi:ll statements,
c.ntl tlw.t !oz tho ended December Sl, lDC4
avo.ilabl1.1 o.ftor the close of the ycru-. 0.;1 I{mcml>or 17, 1004, the City
Co:nptrollct .. rcpllod that wculd apln .. eciato copioa or the
\"lhcn they bcc::une av:L!l:lblo :lftcr the clo::.1o or the ye::1r,
"I-
I
...
On Jo.uuo.ry 11, 1903, th" City Comptroller lnquttcd whether th.c
certified fl!'.nuc!c.l Gt.:l.tcir.e.-:.ts were yot o.vailn'ble, c.nd wns info;orncd tr.::1t
Uley v:e.:-c not
Oll Jnnuary 20, 1QG5, tbo Cor..iptrollc .. tucldcnty nnn.;)u.ncod, in o.
letter to tbc l?olr Co1.pola.t1o11
1
s president .. that the ccl'tlrlcd
which were clo:&c to nnd clict1ibutlon would not be adoqu:lto Cor
hla purposes, t.nd th!lt 1t would bo neccssa,:y for hls ortlce to co1-:duct aa
nu<llt ot th.e Fair CorporaUo11
1
u books and roco1ds ao that nc could cvaltmte
th.c ccrtlrtod stD.tcments being prepared by l"ea.t, Marwiclc, Mitchell & C),
Th1o rec,tued, whiell purpotted to be made "in the best interest or the City
a11d the Fair", wa.s relca.:Jecl to the prcso before it wna rcceivc(t by tho
CorporaUon. Annc:-:ed beroto I:xbibit L i:J the Comptroller1.s letter or
January 26, 1965,
a statement in reply to tb.e lctto1 of Jnnl13ry 2G, 10G5. A c:opy
On Fcbrua.ry 2, e. documtmt purporting to be o. Gtilipocml
duces tecum, lsoucd by the Comptroller, \;as scrvod on the Fclr
Uon. Said subpoan:\ duews tocum to 1cquire tho 'Fatr
to produce at the Cou'lptloller's ofrice 0:.1 February 8, lOGS, practtcnlly nll
tts books 0:1d reco1.ds.
7. The .tppcllnto D1vt,;ion, Second lms :recently
takan "judic!o.l notice" ot the fo.ct tr.at the Ftlir crcnte<l nnd
operated by th.c ?air CorporOJ.tion U:llvcrzally nccl::t.bl'!.Cd a.s O!'le of tbo
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t(- ,'
world's p,reatal3t in Fair 1964-1965
Co_ry.:. , 21 App. 2d 385 [ 2d Dept. 1964]). The
Courts, : am confidei'l.t, would a!.r-o take Judicial notice of the fact that
the Fai:r has br,er of great to the City and <'t' New York, in
of inC;:cascd er.1ployment for ti:e :!Onstruction and other industries,
tt>.onie:1 by for hQtel rooms and on:-er needs, increased tax
tAVnues, n? "'nd internation:>.l 'l;'ecogn5.tion and goodwill.
Th';l J.i'aj.r Corporation's revenues curing 1964 were less than
ast.imat..:d r.dnci:,--nJly teceuse the p..:ic! attend::mce of mol a than
. .
/.7 000 . COO wc,s 3
1
lbstantie.lly below the projections of its revP.nue engineers
and Pair CCIX'i..,:Jra'ion 's expenses were in exce>r.s of The Fai
Ccrpo::--ation is ct.:-iving 1.ncreased 'evenues and de-
c'urine this 's ot:erations.
Wll;h the C'orr.ptroller s den1and for au aJdit of the Fair Corpo ...
ration a and cords pur:-.orts to be "in the besl: interest of the City
and t!te Fdr", I ca'1 state, as th<;l Fair chief financial
off:cflr and ONl. ent:lrely fo2-.mi.li11r. wtth its C:..9piraUons, needs, successes
ari r.lisa,r f1at t' "l engendered by this demanu in
inimical planning, fir.ancing and promotion required
'he crucial rc.onL1s before thr.: Fair' opening.
'l'he F'.\i:r