Mayor calls for Adelphia probe

By Craig Fox / The Citizen

Friday, May 21, 2004 11:32 PM EDT

Auburn Mayor Tim Lattimore has asked the state attorney general's office to investigate whether Adelphia Communications committed fraud by providing the city with false financial documents when Auburn was considering the cable franchise with the company five years ago.
In a March 12 letter, Mayor Tim Lattimore asked for the attorney general's telecommunication and energy bureau about the legal ramifications if Adelphia submitted false information regarding the company's finances when the city was deciding to transfer its cable franchise to the company in 1999.

At the time, Adelphia had just acquired the local franchise from Harron Communications.

The city is now renegotiating a contract extension with Adelphia, which last year filed for Chapter 11 bankruptcy due to financial and legal troubles.

The company's president, John Rigas, his two sons and another corporate official are on trial for securities, wire and bank fraud and conspiracy. They are accused of stealing billions of dollars from the company on such things as building a $13 million golf course. During the trial, company officials have testified that financial documents were falsified, according to Lattimore.

"If that's the case, some of our decisions were made on those finances," Lattimore said.

In his letter, Lattimore asked if Auburn could revoke the franchise because of the alleged fraudulent documents. The city could have also denied the transfer to Adelphia, if the city was able to perform "due diligence" in examining "the moral, financial and technical abilities" of the company, Lattimore said.

"If the local franchise authority (Auburn) had been aware of Adelphia's true financial condition, it may well have been cause for denial," Lattimore wrote to New York Attorney General Eliot Spitzer.

City Manager John Salomone and Auburn Corporation Counsel Thomas Leone Jr. were unaware the mayor had written the attorney general. A Syracuse law firm hired by the city for the Adelphia renegotiations has explored the issue, Salomone said.

"All these legal avenues have been researched and continue to be researched," Salomone said.

At this point, the city probably has no legal recourse because the Rigas trial hasn't resulted in a conviction yet, Leone said. The ongoing bankruptcy also could be hurdle, he said.

A seven-member cable advisory committee is studying whether the franchise agreement should be renewed. The committee will most likely make a recommendation to city council by July 1, Salomone said.

Staff writer Craig Fox can be reached at 253-5311 ext. 237 or craig.fox@lee.net

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