Anda di halaman 1dari 56

Box# 32

Folder# 633
Word's Fair: World's
Fair Corporation's
Motion to Quash
Beame Subpoena
1965
... ------- - .... --..... ~ - . : . . . - ~ .. -... .. .. . ~ .. . -- .... - .. "'.
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
11
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.
2-
"
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
11
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
..
\
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
-13
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-
..
...
. .
.. "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.
11
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.
11
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
-13-
...
''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

-----
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

books and r"cords, as I have


enpha c-:zed, r' rc to contint<ous audit by its ent auditors.
To another ::\'ldi.: by a roun!cipal officer or his representaUves --
at a tl.n .. e \Jhen t;1e Fair Corporation is in of preraring
:for 'ltr; &easCon would chaos in Fair Corporation's

-9-
..
.
.
Just yesterday, the Mayor of the City of New York, commenting
tha.t th.e Fair Corporation had "no legal obligation" to repay the
$24. 000, 000 which the City expended h1 m.aldng permanent improvements
at Flushing Meadow Park, and pointing out that "The improvements at
Flushing Meadow \yill continue to be used after the fair closes",
emphasized that the important thing was to "get on with the things that
Will make it a successful fair
11
(N.Y. Times, February 4, 1965, p. 27).
The Fair Corporation, as I have is trying desperately to get
on with the important things which will make the Fair a complete success,
and it is entitled to do so free of illegal and unauthorized audits and
auopoenas.
a. I have been informed by counsel, and do believe, that there.
is no basis in law for the subpoena duces tecum which the Comptroller has
here purported to issue.
WHEREFO:RE, I respectfully request that the order show.
cause be signed, and that on the return day of the Fair .
. . '
motion, the subppena duces tecum be vacated and quashed.
Sworn to before me this
\
'4th day of 1965.
.. )/'
( . -;/ .
}'\;n z.' t. ... /'-<:;;.-v./
PANIEC f, CALLAHAN
Public Sr:ne ot N'W York
No. 410540825 Qul. in Q:.H:::l.IJ :..
Cert. fii<JcJ In f\l.:;w ......... ,
Commlulon Exp;res 3J. l !;1..,!,
-10
'
SUPREHE COURT YOI\K COUNTY
- - -- - - - --- --- - . - --
In the Mttter of YOHK HOilLD' S FAIR
19641965 CORPORATION,
Petitioner,
aga.innt
ABRAHMl D. BEA11E, as Comptroller of The
C1 ty or Nevt York,
Respondent.
. --- - -- - - -- - --
S I R S :
I
'
.
i
I
I
I
I.
'
i
I
I
PLEASE TAKE NOTICE that upon the W."mOXed nffidnvit
of Abraham D. Bcamc, sv10rn to on the 5th cloy of February, 1965
I
and upon all the papers and p:::-occodinr;s hn.d her0in the undcrr
.
I
signed will cross-move this Court nt a .Special 'l'er:n, Part I i
thereof to be held in the County Courthou:::;e in the Borough
Hanhatte..n, City of Nevr York, on the 8th do.y of li'cbrJ.nry,
'
' the return da.y of the motion herein o.t 9.30 o'clock in the
forenoon of that day or &s soon thereafter ns counsel c&n bo,
!
heard for on ord0r directing the Ncl-r Yorl-:: :-rorld' s Fa.ir 1964
Corporation to appear before the Comptroller of the City of I
j
Nev: York, on a. da.te to be set in the order, pt:.::.':;uant to the
I
subpoena duces tecum heretofore served on said corporc.tion
the 2nd day of February, 1965, to be
'\d th tho finoncinl interest of tho City of HmJ York in the
------:---....-- ._,_,. __ ...... oft _ _,_-....... ... ... ....... .._._,.
of lense tho City of ::m-I Yor1: 8..;-Ci-t.Eci':o\-:
York \:oild-rsF-;:r;; ..
,.
..,. ........ ...
................ _ .... ,. .,. ,,.,._,, '*"''" - ' ............... ...._.... ,, ....... .
to the Co::1ptrcllor all books and records r .. ll personnel
'\-Ihom he nicht deora necessn.ry for inspection .::nd intcrrocntion
......- 1111 ........... _...,._. .. ,.., - ... 1-t-oo ....... .. ---- _.,..,_..... +,,, .... , ....... - .... - .. . .... -., . . . ,,._, ....... (' ............ t, ...
in connection t.i th the investi;.:-lticn L:ir.;:: c:;;"dt:.ctcd by hi!ll : .....
-,...-------___,..,. ...... .... _ .,..J ............ w..... ...... :-\ ..... . . -,
pursuant to 93, subd. b, of the 1:c'l:r Yor:: City Chc.rt2r nnd
!: I
'I I
i I
IJ !
/ I
II .

Jill*... ... ..
tor such otllor and further relief as to tho Court !'.lay seem
and
)' Dated, Ne.; York, n. Y.
1
Feb'!'Uary 5, 1965.
I
I
I
.I
,,
II
I
TO:
Yourc, etc.
L:t:o f,. I
Corporut:I.on Cou.nsol !
Attorllcy for t!'lc Cor.1ptrollor!
of' the City of HcH Yorl: i
Office nnd P. o. Address j'
Building
Dorough of r!r.nhuttan I
City of Not.,r Yorlt
I
HH1'l'HJIJ1, RAHSOH & COULSON,
Attorneys for Petitioner
Fith Avenue
New York, N. Y. 10036
I
,l
I
I
I
. I
I
II ..
;: SUPREHE COURT s N E\ol YORK COUUTY
--------------------
In the Matter ot NEW YORK WORLD'S FAIR
196lt-1965 CORPORATION,
Petitioner,
against
ABRAHAM D, BEAME, as ot The
City ot New York,
Respondent,
------------- ....... ----
STATE OF NEW YORK )
I SS,a
COUNTY OF NEW YORK )
.
.
ABBAliAM D. BEAME, being duly cwo:rn, S&JI thrt he ia
the Comptroller of the City of New York and is tull7 familiar
with all the facta and circumstances herein,
1, This attidavit submitted 1n opposition to a
motion, by the New York 1 Fair l961t Corporation pursuan
to CPLR 2301t, to quash a subpoena duces tecum heretofore
served on that corporation on the 2nd d8J ot February, 1965'.
2, This subpoena vas issued pursuant to Ne"' York
City Charter 93, aubd. b, Which proVides that the Comptrolle
haa the power to 1nvesticate all matters relatinc to or
attectinc the finances ot the Citr inclwUng without lim1ta ..
tion the performance ot contracts and the receipt and ex-
J?enditure ot City tunda and that tor that purpose he shall
have the power to require the attendance and examine and take
testimony under oath ot such persona as he shall deem
necessary,
3, The subpoena reqUires the corporation to appear
at the ottice ot the Comptroller in the Municipal Bu1:d1ng,
Borough ot Manhattan, City ot New York, on February 8, 1965' a
10.30 o'clock in the forenoon and bring With it all
minutes ot the Board or Directors or the corporation, all
I
contracts tor construction and maintenance, all other contracls
I
negotiated by the corporation, all cash journals, all purchase
journals, all general journals, all general ledgers, all
accounts receivable ledgers, all accounts payable lodgers,
all bank statements together with cancelled checks and
vouchers, all payrolls and all correspondence now in its
custody.
The facts under which this subpoena was issued
are as follows& On May 27, 1960, an agreement of lease was
executed between the City of New York acting through Newbold :
Morris, Commissioner or Parks the City of New York,
the approval ot the Board ot Estimate ot said City and Now
York World's Fair Corporation, a non-profit membership
corporation organized and existing under the laws ot the StaJe
ot Now York, Whereby the City demised and leased to the
corporation tor a period commencing on the first day or June,,
1960 and expiring on the first day ot January, 1966, certain
land with improvements 1n Flushing Meadows Park and Kissena
Corridor Park, more particularly described in a map annexed
to the agreement, tor the purpose ot conducting a world's fair
during the years Article 9 thereof provides that
the City should supply water and sewer service to the demise
premises without water charge or sewer rents therefor rund
that the corporation could charge by meter or otherwise its
concessionnaires, sub-lessees or licensees tor water supplie
to them.
5. The lease also provides (Article 15) that tho
corporation within tour months after the oloso of the fair,
at its own expense, shall demolish and remove all buildincs,
structures, pavement, nnd other facilities and clear the sit
or all such buildings, structures, pavement and tac111t1es
2
... ,
not tor park purposes as certified by the Park Com-
missioner and restore the demised premises to a condition
aatistactor,y to the Commissioner. All ot this restoration
work shall be done at the corporation's oost and expense and
1n the event the corporation or its concessionnaire, licensee
sub-lessee or contractor should tail to perform these obliga-
tions, then the City could the same at the expense ot
the corporation.
6, Article 16 ot the lease provides that all net
revenue derived trom any source by the corporation and remain
I , I
ing to 1 ts oredi t attar the close ot the tair and after payiucnt
by the corporation or all proper, necessary and reasonable
charges ot construction, operation, maintenance and repair, a
well as then outstanding bonds, obligations, liabilities ot
every kind and nature including the discharge ot its obliga-
tions under the lease, shall be paid to the Oi ty and shall be
used tor the restoration and improvement ot Flushing Meadows
Park, and the balance ot such revenue remaining thereafter
shall be used by the City ot New York tor educational purposes,
1. Article 19 provides that it the corporation
default 1n the performance ot any ot the coveruonts and agreel
menta in the lease the City may at any time thoreatter termina-
te the lease by giving to the corporation or its legal rep-
resentatives 30 days notice of such termination.
a. Subsequent to the execution ot the lease, the
City of !lew York made available 1n each or the Capital Budge s
tor the years 1961, 1962 and 1963 an appropriation ot
$8,ooo,ooo or a total or tor permanent park
improvements in connection with the world's tair. These
improvements were constructed by the Department ot Parks 1n
accordance with an informal arrangement worked out w1 th the
New York World's Fair 1964 Corporation.
3
#
.
..
9. It is clear rror:1 the above that tho method
ot performance by the He\1 York liorld s Fair 1964 Corrurntion
ot its agreement under the l0uso is directly related to
the amount or "net revenues" \-rhich shall be payable to the
City upon the oxpira.ticn of the lease.
10. 'l'he proper per.formunce by the corporation or
its under tbe lease is therefore a matter "relat
ing to and at't'ecting tho finances ot the City" and is w.ithin
the scope of the term "performance or contracts and the re-
ceipt ot City funds" as used in New York City Chartoi'
93.
11. On January 20
1
the corporation issued
a preliminary report on a proposed Post World's Fair Procram.
This report contained a statement of the fixed obligations an
balances which might be available tor park purposes. In this
report it was estimated that $49
1
725
1
000 would be available
as net proceeds at the termination ot tho fair.
12. However, subsequent to that date a series ot
events occurred which made it incumbent, under the powers
vested in me as Comptroller under 93 ot the New York City
Charter, to eommence an investigation ot all matters relating
to the pertor,mance ot tho subJect contract.
13. On October 13 1 196lf. the corporation published
an interim report tor the period August 18, 1959 to August 31
1964 which indicated that there was a balance on hand to the
credit ot the corporation in the sum ot $12
1
651,396.?2.
14. On October 26, 1964 after a careful study of
this report, I addressed a communication to Mr. Moses in vhlc
I requested that the following information be made availablez
1. A detailed statement of income and
expenses to the end or tho first Fair season.
.
, .
. 2. A detailed balance sheet as or the
end ot the first Fair season.
3. A detailed statement ot cash
and disbursements tor the same period.
I also requested estimates ot the anticipated receipts and
disbursements and an estimate or the financial surplus tor
the :remainder ot the period during which the tair would be
in operation.
tollowaa
1;. On November 16
1
1964 Mr. ltoses advised as
"As you know the fair's revenues during
were less than estimated--principally because
paid attendance was some 13
1
000,000 below the
projections of our revenue engineers--and the
fair's expenses, both capital and operating,
were in excess ot estimates.
Upon completion ot the review and audit
above referred to, I suggest that you not
include in your estimate any revenues based
on the assumption that thoro will surely be a
return of the entire million expended by
the City tor permanent improvements in Flushing
Meadow Park although it is possible that a sub
stantial portion or even all or this mwm might
ultimately be returned"
(The review and audit referred to were reports ot auditors
retained by the corporation.)
16. No fUrther information vas submitted by the
Pair Corporation until December 31
1
When the following
appeared iu the New York Herald Tribune or that daya
"Horld s Fair officials considered early
this veek requesting industrial tenants
to pay rents in advance so that the tair would
not have to borrow money to meat operating
it was learned today."

"In its interim report, issued a week before
the 1964 season closed
1
the Fair Corp. listed
a surplus or $12.6 million as of Sept. This
surplus stayed constant, a Fair cpoltesman said,
until the closing. The surplus has apparently
been expended for maintenance,
payrolls and housekeepine."
I
II
il
II
,I
.
..
: On January 191 196.5'1 the Neu York Ilerald Tribune attributed
I
the following quote to Goorgo s. l:oore
1
President of the First
National City Bunk and Chairmrun of the World's Fair Finance
1 Advisor, Committee&
"You know, baclt in June they said they
would have a $50 million surplus. Somethinc
has happened to that surplus. \oJhat? I don't
know."

"He sold he absolutely would not comment on
or roply to two questions Is the fair brokf.?
Is there reason to suspect hanky.pnnky?
[In words or one
When you seek verification or figures which run
so far over the original forecast, and you get
nothinc 1 then you can't operata as an advisor,y
group, he said. You can't help if you don't
know the score. The Committee has had
1
I believe,
no readings with the Fa1r. 11
The New York Times ot the same date contained the following
report a
"Five of the nine bankers on the World's Fair
Corporation's Finance Advisory Committee resigned
yesterday 1n a dispute of what they call the
Fair's failure to provide them with detailed
information about its finances."
"\.Ze feel that by remaining on the committee
we permit tho implication that the Fair ia in a
satisfactory financial condition, said Georee s.
Moore, President of the First National City Brunk."

"Resigning besides Nr, Moore were s.
Renchard, President ot the Chemical Bank
New York Truot Company; David Roclcefeller,
president of the Chase Manhattan Banlq w. H.
Moore, Chcirmnn ot the Bankers Trust Company
and D. E. Shnrp
1
Vice Chllirman of the
Guaranty Trust company."

wont to be helpful, Hr, Hoore said, but we
have to know the score and we do not."
"He said that fina.ncinl. information sought
by his committee has not boon provided. t\\'e nre
resienine because of the "vtay finances are being
handled he addod.
11
. . ... . .
6
.
, .
. : "Hr. Hoore \1hen aslted l-thy J7. 5' millions
of" the fair' t> million in bonds had
been paid ott lest in the licht of
the fair's 1'1nanc1al difficulties, replied
that the CO!:l.::li ttee had been told the fair
had million surplus cmd would be able
to pay ott all its bonds by the end ot
October."
"From August 18, 1959 when the fair
set up shop, and /.ueust 31
1
l96lt, the
Fair Corporation took in ;;;;111.2

and disbursed ,;.104.5' rnillion. Tho
million difforance indicates that profits
woul.cl be conniderably below the million
predicted for the two years,"
17. I have now obtained copies of letters addressed
to Robert Moses, President ot the corporation and Thomas J.
Deegan, Chairman of the Executive Committee, dated December 2 ,
and Januar,y 16, 1965' respectively. The letter dated
December 22, 1964 to Hr. from George s. foore, Chairman
ot the Finance states 1n part as tollowsa
"Since the general dimensions of the Fair's
tinanoial problems are now apparent tor
first time, we feel the following steps are
essential&
1. That the Executive Committee be
advised immediately ot the current financial
condition of the Fair.
2. Thnt no turther financial statements
or reports be issued certification
by the Fair's auditors, Peat, Marwiclt, lUtchell
& Co,
J, Thnt tho Fair Corporation develop
and install procedures for fiscal and
budgetary controls including personnel, which
\1111 provide assurancas thnt aJ.l financial
commitments will bo approved budr;et
limits, under audit control
Unless these matters ccn be dealt with
our satisfaction, we do not feel that we
can effectively continue our adviso17 functions
in relation to the Fair's finances,"
A copy ot this letter is annexed hereto and roarkod E.."<hibit A.
18. The letter dated January 16, 1965, signed by
the resigning members ot the Advisory Committee and addressed
7
.
t'
to J Deegan, Chairman of the Executive Committee,
New York World's Pair Corporation, states in parts
"Hoanwhile add1 t1onnl financial intormat1on
has been developed which increasingly
emphasized the need tor prompt action.
have not received projections
prepared by auditors, it is clearly evident
that the tair Will need substantial amounts
ot outside tunds between now and its open-
ing date
He feel that the only means at our
disposal to bring about the action necessary
to safeguard the essential interests ot the
City the State and tho thousands directly
involved--employees, exhibitors, investors
and others--is for us to resign from the
finance committee." 1
i
A oopr ot thia letter is am1exed hereto and marked Exhibit B.'
19. On Januar,y 27
1
the following appeared in
the Wall Street Journal&
"New York s -Fair Doesn't Hope to
Repay $24 Million City Spent"
"Robert Moses, President ot New York World'l
Fair Corp. disclaimed any hope or repaying
million apent by Now York City on permanent
World's Fair site improvements. Yesterday
morning Mr. Moses told directors and eXhibitor
of the tair that it has had to abandon some ot
ita t1rumoial goals. "
On Jmuary 27
1
1965'
1
tho following appeared in the New York
World Telecrama
"Just a year and a few days ago on Jaua1'7
22, 196lt the financial outlook tor the
world's tair could hardly have been rosier
according to ono of Robert Moses top aides.
'At the end ot the Fair
1
said George E, Spargo,
then Finance Committee chairman, the City ot
Uew York will have been repaid the million
1t spent tor permanent park improvements 1n
the f'nir site and a substantial balance
will be available for park improvements.
Even as recently as last fall Moses h1mselt
saida 'a substantial part or even all of
the sum million) may ultimately be
returned to the City,'"
........
8
... ..
"Today 1 t \as plain that the 'net revenues'
and the 'permanent park improvements and
the 'substantial balance' were all dreams
and so was the $ 2 ~ million repayment to New
York City.
"At best Moses admitted yesterday the Fair
note holders would be paid back and Flushing
Meadow Park would be restored and improved.
But the City would have to whistle for its
$ 2 ~ million and its substantial balance.'"
In the New York Times ot January 30
1
1965', the following
appeared a
"Thomas J. Deegan, Jr. indicated yesterday
that two basic disagreements with Robert
Moses had lead to his decision to drop the
world's fair as a client of his public
relations and promotion orgaaization.
"One was Mr. Moses refusal to provide five
commercial bankers, members or the tair's
finance advisory committee, with auditors
figures on the fair's financial position,
The f'ive subsequently resigned."
In the Hew York Herald Tribune of February 2, 1965', the
tollow.tng appeared 1n a letter by Mr. Moses to Mr. Deegan,
Chairman of the Fair's Executive Committees
"Incidentally the least sati sfaotory information
we have received as to budgets and budget cuts
has been 1n the case of your promotion division."
On Februar.y 2, 1965, Mr. George s. Moore, the resigned chairm
ot the finance committee, was quoted, by the new York Herald
Tribune, as tollowsa
"I don't know anybody who really knew what
was going on in the fair's financial setup.
This is a one man show.
11
20. It is thus apparent that conflicts exist
among people at the executive level in the Fair Corporation a
to the proper administration and control or its finances,
Under these circumstances 1 t 1s my considered jtrl gment that
as Comptroller of the City of l ~ e w York it is incumbent on me
under the powers and duties vested in me pursuant to New York
City Charter 93, subd. b, to investigate the methods or
9
..
.
"
performance ot the contract br the Fair Corporation. It ia
my 3udgment that these procedures are necessary becnuse the
manacement or the fair is a public trust since under the law
the agreement or lease and the agreement itself,
tho City ot Now York 1s to receive any net protit realized a
a result ot the operation or the fair.
21. It is my intention in the course ot this
investigation to determine Whether the fair has complied wit
the following prov.tsions of the agreement ot lease contained
in Article 16 thereotc
"The corporation shall apply all receipts
from admission fees, rents, license tees,
or trom other source to the payment ot
urope;, necgegnty ggd reasonab1e chatgft4
tor construction, operation, maintenance and
repair to the leased premises and improvements
and the preparation, administration and operation
ot the World's Fair, and tor . the payment or
interest on and tor retiring the pr1no1pal or
all debenture bonds issued by the corporation,
and tor the of all obligations
to the corporation arising out or this loase,
or by reason or the conduct or the tair."
22, Accordingly on Januar.y 26
1
196; I addressed a
commWl1oat1on to Hon, Robert !otoses
1
President ot the World a
Pair Corporation in which I requested him to cooperate with
my ott1ce in an audit or the books and records ot the a
Fair Corporation so that I would be in a better position to
evaluate certain statements which I expected htm to forward
to me later that month, No reply was received trom Mr, Moses
and on February 11 1965
1
I instructed Mr. Swnuel Shatran,
a member or my starr, to contact Mr. Erwin \vitt, Comptroller
or the World's Fair Corporation, to make the necessar,y
arrangements tor such an aUdit, Mr, Witt informed my rep-
resentative that counsel to the corporation had advised him
that the Comptroller of the C1 ty of llew York had no po'Wer to
conduct such an audit, I thereupon issued the subpoena duces
tecum now under attack,
10
I'
.
..
II
'I 23. Despite the fact that 93, subd. b, of the
Now York Charter provides that in the conduct of such
1nvnst1gnt1on the Comptroller shall have to require the'
o.ttendance and examine nnd tal<:e the testimony under oath of
such persons as he tttay dee!ll necessary, the corporation now
moves to quash this subpoena upon the ground that it was
issued without authority bJcauso of a change in la.nguaeo 1n
the proVisions for issuance ot subpoenas 1n the provisions of
the Civil Practice Act when the Civil Practice Law and Hulas
were enacted. I am advised by counsel that tho right to
compel attendance of witnesoes in this investiGation is a j
substantive right granted under the New York City Charter which
in and of itself empowers me to compel the attendance or
witnesses on an investication or the ot contracts
to Which the City is a party. In any event, I respecttullz,
submit that this Court should disregard any tochnicB]. objections
- L R '"R P',
to the issuance or the subpoena herein since the Fair Corpora
orr 1 u atJ u 11 aeas me
......, a
tion is 1n eftect operating as a public trust for tho benefit
IIJIIIIII$1RIIIIt'IIMM YF.II1 ..
ort"ne ... e ... or New York and tor the
benefit o1: New Yorlc city, It
1
... ..__. .....
to attempt to take advantage of technical dcfons}s
.... , .. ,

;mposo.d, .rux..c.harte,r:.,._
2't. Under these. circumstances it is respectfully
submitted that t;h1s Court should, 1'lnder 2308 CPLR, direct
compliance With the subpoena duces tecum heretofore served on
the Fair Corporation on the 2nd day or Fobruary, 1965, or in j
the alternative direct the corporation to make its books and
records as well as those persons whom the Comptroller or his
representatives may deem necesr.ary
1
available for inspection
and interrogation tor the purpose or assisting him in completing
11 I
I
I

fl
' '
the 1nveat1sat1on which he deems now to be mandated under the
provialona ot New York City Charter 93t aubd. b.
WHEREFORE your deponent respectfUlly asks this Cour
ara ordar d81111ng the a motion and 1n the
alter.nat1ve d1reot1ns the Pair Corporation to respond to the
aubpo&D& or b7 arrangement vi th tba Comptroller and his
:rep:reaentativea make the books and records, as well as those
persona VhOJD he might seek to 1ntenosata
1
ava11able to him
1n the cour ot the proposed 1nvesticat1on.
Swm to. before me tb11
dq ot February, 1965,
SUPREME COUnT 01;- THE STATE OF NEW YORK
COUNTY.OF NEW YORK
X
In the Matter of New York World's
Fair 19641986 Corporation,
Petitioner.
-against-
Abraham D. Beame, as Comptroller
of The City of New York.
Respondent.
I
X
STATE OF NEW YORK )
I I
COUNTY OF NEW YORK )
AI" FIDAVlT lN
OPPOSITION TO
TO
ENFORCE SUBPOEN
DUCES TECUM AND
lN SUPPOHT OF
MOTION TO QUASH
Index No,
CHARLES F. belng duly sworn, deposes and says:
1. I am a member of the flrm of Whitman, Ransom and Coulson.
counsel for petltloner, New York World's Falr 1964198& Corporation
(herelnarter called "the Falr Corporation"). I am also a member ot the
Board of Directors and the Executive Committee of the Fair Corporation
and am famlllar with the facts Involved ln tbls proceedlna.
2, I make this aflldavtt 1n opposition to th:. cross-motlon of
respondent Abraham D. Beame, as Comptroller of 'T.'he City of Y\lrk,
"for an order dlrectlna the New York World's Fair 1984 Corporation to
appear before the Comptroller , pursuant to the subpoena duces tecum
heretofoN served on sald corporation, or ln the alternative for an
order directing the said corporation to make available to the Comptroller
all books and records and all personnel whom he deems necessary for
inspection and interrogation, " I request that my affidavit also be
,. , I
received by the Court in support or the Fair Corporation's motion to
quash the aforesaid aubpoena duces tecum.
s. Although the notice of cross-motlon states it is made upon
"the annexed affidavit of Abraham D. Beame, sworn to on the 5th day of
February, 1965," the purported affidavit, as served upon petitioner,
contains 4elther an original s tgnature or Mr. Beame nor a conformed or
other copy of such signature and neither an original jurat of a notary nor
a conformed or other copy of such jurat. Also, although Mr. Beame
1
s
affldavlt ls referred to ln the notice of crossmotion as being submitted ln
support of such crossmotlon, lt states on Ita face that lt "La submitted h
opposltlon to a motlon, by the (Falr Corporatlnn] to quash " The notice
of cross-motion and Mr. Beames affidavit continue to misstate the name
of the Falr Corporation.
4. The Falr Corporation is not ralsln& any objections based upon
the aforesaid defects ln the Beame affidavit or :he mlsdescrlptlon of its
name alnce such objections do not go to the heart of the issue and can
lesltlmately be characterized as "technical." The Fair Corporatlon does,
however, take strenuous exception to the City Comptroller's astounding
statement that hla clear and evident lack of statutory power to issue the
subpoena duces tecum ls only a "technical objection" -- a mere "technical
defense" which "thls Court should disregard" (bls affldavlt, p. 11). It ls
shocking to hear such assertions ln a country which has a traditional dis-
taste for tyranny and scrutinizes with utmost care the statutory credentials
or publlc officials who claim roving commlsslons to investigate.
5, It wlll be recalled (Mr. \Vltt
1
s affidavit or February 4, 1965,
-2-
~ ' ..
p. Et that Mr. Beame, while purporting to be gllf.ded only by nthe best
Interest of the City and the Falr," issued hls lettre de cachet demanding
an audlt to the press before it was received by the Falr Corporation. In
view of thls procUvlty for exercising his functions through the fourth estate,
lt is not surprising that a substantial part of Mr. Beame'a affidavit consists
ot selective excerpts from newspaper articles. It ls &llrprlslng, however,
to flnd an ofllclal who follows the newspapers so closely misquoting them
and dlatortlng their contents. Accuracy and fairness, llke the absence of
subpoena power, are apparently mere tecbnicalltles which must yield to the
omniscient "judgment" of this lnqulaltor that "these procedures are necea
aary" ln "the lnvestlgatlon which he deems now to be mandated" (see Beame
affldavlt, pp. 1011).
8. Thus, on p. 8 of hls aftldavlt, the Clty Comptroller refers o
an article from the Herald Tribune. He quotes the part of the article which
s t a t ~ d that Falr Corporation officials bad "considered" requesting exhlbltora
to pay rent ln advance but omlts the part of the article which contained the
positive and uncontradicted statements of the Falr Corporation's president
and comptroller that there had been no need to make any such request and
that no such request had been made.
On p. 8 of hla affidavit, the Comptroller, agaln cltlng the
Herald Trlbune, quotes the former Chairman of the Falr Corporation's
Finance Committee, Georges. Moore, as stating that he "would not
comment" on a reporter's questions as to whether the l.,alr was "broke"
and whether there was reason to suspect "hanky panky." The Comptroller
immediately follows up thls Tribune quotatlon with various excerpts care
fully culled from a New York Times article published on the same day.
3-
<( I 9
Significantly, however, the Comptroller leaves out of his Times quotation
the statement by Mr. Moore that "he was confident that the Fair would
obtain whatever funds lt needed and that it would reopen on schedule."
The Comptroller likewise omits Mr. Moore's sharp "Absolutely not"
rebuke to a questioner who asked him l! he had any information to turn over
to the district attorney tor lnvestigatlon. Quite obviously the Comptroller
was attempting, by artful innuendo, to suggest that Mr. Moore believed
the Fair was in danger or not opening because of "hanky panky" -- this
belna precisely the opposite of what Mr. Moore actually said.
7. Further examples of the Comptroller's use of selective and
mltlleadlng press quotations from the statement& of Mr. Moore and Mr.
Deegan, Chairman of the Executive Commlttee of the Fair Corporation,
could be clted, However, unlike Mr. Beame, the Fatr Corporation ls not
interested ln trial by newspaper. Suffice 1t to say that, in virtually every
one of his newspaper quotes, the Comptroller baa taken out of context
seemlngly unfavorable statements by Messrs. Moore and Deegan concerning
the F'alr and omitted the contemporaneous favorable statements made by the
same persona.
While l do not believe lt has any legal relevancy to this proceedln
I am, ln view of the Comptroller's tactics, annexing to this aftldavlt copies
of the full text of press statements Issued by the Fair Corporation in respo e
to the press statements of Mr. Moore and Mr. Deegan,
annexed, respectively, as Exhibits A and B hereto.
8. The plain fact is, however, that any ditferences o! oplnlon
which may exist between the tive eminent bankers who resigned from the
-4-
.. . .
& '
F'alr Corporatlon's F'inance Committee and the four equally eminent who
did not resign or between the president of the Fair Corporation and the
chairman of its executive committee, however newsworthy they may be,
are no legitimate concern of the Comptroller. He ls an orrtcer of llmlted
powers. These powers are not enlarged because internal corporate
dlsaareements become the subject of news reports. They do not include
any power to issue the subpoena duces tecum here in question.
9. lntracorporate differences are, of course, nothing unusual tn
bualnesa corporations or ln membership corporations. They happened a
quarter century ago ln the 19391940 New York World's Fall". They have
happened ln the 198419615 New York World's Fair. They wlll doubtless
bappen a quarter century hence lf there ls a 19891990 New York World'
Fair. The only easentlal difference is that, at the tlme of the 19391940
Fair, City Comptroller McGoldrick followilll the precedent of hts
predecessor, Comptroller Taylor ... served on the board of directors and
the executive committee of the Fair Corporation all through the period of
tts flnanctal dlff1cultlea and 118ed hls expertise to help it aurmount such
dlffloultles. The present Comptroller reaiped from the Falr Corporation '
board of directors early tn 1982. Now, eltber through misguided zeal or
political ambltton, he prefers to compound the Fair Corporation's financial
problem rather than help solve them.
10. Mr. Beame refers at the bottom or p. 3 of his affidavit to
the $34.000,000 appropriated by the City for permanent improvements at
Flushing Meadow Park. Immediately following this reference be states
(top of p. 4) that lt "ls ~ l e a r from the above" that the method of pertormanc
by the Fair Corporation of lts lease with the Clty ls a matter "relating to
5-
.. .. \ , ... I
and affectlng the finances of the City." In view or this assertioAl and the use
by the Comi)troller or a number of newspaper quotations relative to this
$24,000,000, I believe it ndvlsable to set forth in more detail the facts
concerning the $24, 000, 000 whl.ch has repeatedly been misdescribed by the
news media as a "loan
11
from the Clty to the Fair Corporation.
Thls $24,000,000 was appropriated by the City under regular cap-
ital btadget procedtares. It was expended by the City under City contracts
let by the Clty ln accordance with usual City procedures. Not one cent was
loaned or otherwise turned over to the Falr Corporation. Not one cent was
expended for any F'alr Corporation strtacture. The contracts were admin-
Istered by the Department of Parks, not by the Falr Corpo:-atlon. All of
them covered permanent improvements which, as Mayor Wagner has pointed
out, "tbe City would have bad to make anyway, since Fltashlng Meadow
Park, one of the clty
1
s largest, had long been scheduled for renovat1o11
11
(N. Y. Tlmea, Apr115, 1961, p. 73). The Mayor and the Comptroller have
both expllcltly stated that the Fair Corporation baa "no legal obtlgation" to
relmbiU'&e the Clty for the $24, 000, 000 (N. Y. Tlmes, Feb. 4, 1985, p. 27 J
Feb. 7, 1965, p, 42). Wbat the City did was analogous to what 1t did ln
advance of the 1939 World's Falr when it spent approximately $50,000,000
on permanent improvement ot Flushing Meadow Park.
The permanent improvements produced by the $24, 000, 000 of
City flllldB consist of such things as roadways, utLllty facillties, planting,
pools, fountains, overpasses, a botanical garden and arboretum, a tide
gate and dam, some fencing, dredging Ln Flushlng Bay, and the Hall of
Science --a permanent City science museum. Such items were paid Cor by
the City only ln cases where they were of permanent use. Many of them,
such as the work at the marina and ln Flushlng Bay and the botanical garden
-6-
......
.. (
and arboretum, are not eve11 inside the Fair's gates. Temporary planting,
temporary pools, temporary parldng flelds, etc. -these and all other
temporary facUlties were paid for lOOo/o by the Fair Corporation,
Indeed, far from receiving a loan from the City, the l"alr Corpo-
ration eJo:pended approximately $5,000,000 of lts own funds to facilitate the
completion of the permanent City improvements above referred to. All
the fees of the City's engineers for planning and supervising the worlt under
these City contracts were paid for by the Corporation, not by the City,
Such fees aggregated nearly $2,000,000. Moreover, because the City
contracts ... administered by the Department or Parks -- were not being
completed In accordance with thelr contract dates, the Falr Corporation
had to pay the City's contractors and other contractors some $3, 000,000
ln overtime, premium time, etc,, to expedite the contracts. Had the
Corporation not done so, the Fair would not have opened on Ume, with
consequent great damage to the prestige of the City and the l'l"atr. Thus,
the City baa already received the benefit of $5,000,000 paid directly out
of the F'atr Corporation s treasury in addltlon to many other millions
which lt has received through increased sales taxes and other benefits
engendered by the l''atr.
11. There are annexed to Mr. Witt's affidavit 1n support of the
motion to quash (Exhibits I through K) copies of the financial statements of
the Fair Corporation for 1961, 1962. and 1963 certified by the Fair Corpo-
ration's independent auditors, Peat, Marwlck, Mitchell & Co, As stated
ln my affidavit of February 4, 1965 (p. 3), the certllied statements prepared
by that same firm for 1964 were scheduled to become avallable for dlstrl-
butlon on or about February 5, 1965. Such statements did become available
-7-
I;
(fl . f
on February 5th a.nd were widely ditztributod to. o.:monz others, tho
approximately 400 noteholdcrs of tho Fair Corpo1o.t1o11 and tho public press.
A copy of such st:ltements, together with the trn11smlttallottcr to note-
holders. 1s annexed hereto as Exhibit c.
WHEREFOUE. I respectfully renew my request that the l<'nlr
Corporation's motion to vacate and quash the oubpoena duces tecum be
granted ln all respects, with costs, and I request further that the
Comptroller's cross-motion to enforce the subpoena duces tecum be
denied 1n all respects. with costs.
Sworn to before me this 7th
day of Feb1"uary, 1965
. 1/.tJ
PAUL M. O'CONNOR, JR.
Public of Now
No. 602937702
fluallflod In WllstchostN Coun;y
&:erlilicale lilcd in fle11 Cour.ty
lerm Expires March 3'J, 1965.
-8-

Anda mungkin juga menyukai