LIFT Will Lose if Politics Play a Role

Long Island Business News
By: Carl Corry
July 6, 2001

The battle is heating up for the state and federal funds under New York's regional technology development center program for Long Island.

On one side is the scrappy underdog incumbent, the Long Island Forum for Technology. For years, the technology trade organization has been awarded the funds without contest.

On the other side, the hulking challenger, the Long Island Association, the region's largest business group with powerful political connections.

The folks at the New York State Office of Science Technology and Academic Research - which doles out the money - will tell you that those connections will have no bearing in deciding who gets the funds.

In fact, they'll point out that there's a whole formula with which a peer review panel must base its recommendations.

Sure, sure, that may be so, but as insiders will tell you, recommendations often take a back seat to politics in the final decisions of state grants.

According to the request for proposals for the money, NYSTAR's Executive Director, Dr. Russell Bessette, has the last say in who gets the funding. Bessette can overturn the committee's recommendations if he deems them against the "best interests of the state."

NYSTAR spokesman Jim Denn said that hasn't happened yet, but the language leaves a huge opening for politics to enter the process.

And if that happens, you can make a safe bet that LIFT will lose against the LIA, which has state Sen. Kenneth LaValle, R-Selden, solidly in its corner. LaValle has said he would only support an LIA proposal for the funds and believes that both LIFT and the Long Island Software and Technology Network should be incorporated as parts of the LIA.

The Long Island region is just one of 10 areas in the state that get regional technology development center funds. The contract up for bid is worth $1 million over nine months starting Oct. 31. Not a lot of money, but enough to have a huge impact on LIFT's operations. The organization's annual budget totals about $4 million.

"We're concerned about it," said LIFT Chairman Frank Otto of the possibility that the LIA's political connections could sway the funding decision. "The LIA is certainly well connected politically upstate."

To avoid a nasty fight, the leaders of the two organizations recently met to discuss possible ways to collaborate on the funding proposal.

"It was a possibility from our perspective," said Mitch Pally, the LIA's vice president for governmental affairs, "but they have since indicated to us that they are not interested."

The reason? LIFT officials say the LIA had an unwelcome stipulation: LIFT must be absorbed as a committee of the LIA, taking away the power of its board. "That's not acceptable," Otto said.

To hammer home his displeasure with the idea, Otto last week signed an agreement to officially merge LIFT with the LISTnet to form the Long Island Technology Network.

Pally disputes the assertion that the LIA had introduced a merger stipulation or that it had gotten into the funding fray because of the merger with LISTnet.

"This was the first time in 15 years that the state of New York has put (the funds) out for bid - it just gave it to the same recipient for 15 years. This is the first time that anyone else has been able to look at an RFP to see if it could do a better job. We made a determination that we could provide every service in the RFP." He added that the LIA would not impose any of its political clout on the process.

The two sides are now creating their own separate proposals. The LIA's board is meeting July 11 to vote on whether to submit a proposal.

If it loses the funds to the LIA, LIFT officials say they will continue to provide services to the area's manufacturing base. In fact, the organization - without certain constraints imposed by NYSTAR to solely serve Long Island - would be freed up to offer it's services to the whole state and beyond.

Richard Lippe, a partner at Meltzer Lippe Goldstein and Schlissel and a member NYSTAR's board, said he "would be shocked if the LIA received the grant" and "would be prompted to make some serious inquiries."