The Schenectady Access Cable Council is suing Mayor Gary McCarthy and Proctors, seeking reimbursement for equipment and alleging McCarthy concealed information regarding SACC’s role as the city’s public access operator.
In a lawsuit filed in state Supreme Court in Schenectady County on Friday, SACC alleges that McCarthy, as president of SACC and a city councilman at the time, misguided SACC, resulting in Proctors and Open Stage Media taking over public access.
SACC — a nonprofit located at 34 Jay St. across from City Hall — is suing McCarthy, a Democrat seeking a second term as mayor, for damages in an amount to be determined at trial.
SACC is also seeking a total of $157,434 for funds and equipment loaned to Proctors after an agreement in April 2010 designating Proctors as the new public access operator.
SACC currently operates on its own, meeting once a month as a board, posting videos online at SACC.TV and sending copies of shows to Proctors to play on public access.
The lawsuit claims details about the agreement between the City Council and Proctors were withheld from the SACC board.
McCarthy served as president of SACC from March 2009 to May 2010. SACC alleges McCarthy — as a council member and later council president — failed to inform the SACC board about a takeover by Proctors.
“As McCarthy was a senior member of the City Council, SACC relied upon him to communicate with and or inform SACC of issues on the City Council agenda which may impact the organization, in order that it could prepare and proceed accordingly,” the lawsuit states.
SACC claims McCarthy proposed that the City Council consider making Proctors the new public access operator and voted in favor of the resolution to do so, but did not inform SACC of the discussions.
“By reason of McCarthy’s breach of his fiduciary duties of loyalty, candor, honesty, care and good faith, SACC lost its ability to have negotiated more favorable terms with regard to its dealings with Proctors, and by reason thereof suffered substantial financial losses,” according to the lawsuit.
The lawsuit states that SACC was paid $80,000 annually by the city as the public access operator from 1995 to 2009. SACC also received additional income from membership fees, donations and contract work.
“McCarthy’s misconduct as set forth herein was the direct and proximate cause of SACC suffering the loss of its position as PEG [public, education, government] operator, the loss of current and future income, and the loss of opportunity for future income,” the lawsuit says.
McCarthy on Monday blasted the lawsuit as “frivolous” and “politically motivated.”
“It’s largely a group of Republicans,” he said. “I look forward to the opportunity to defend myself. All of the meetings are public, and at the time they were being broadcast on SACC-TV. So everybody knew what was happening.”
McCarthy praised OSM as “a regionally recognized public access operator,” saying that’s why he led the transition from SACC to Proctors.
Councilman Vince Riggi, the only non-Democrat on the council, said he has received numerous complaints about the quality of videos streamed by OSM.
“The next level is not what it is cracked up to be,” he said. “I have never had so many complaints about the quality of what is being broadcasted.”
Riggi slammed OSM as McCarthy’s “personal group paid for by the taxpayers.”
“We pay them $100,000 a year and with that the mayor has his own videographer whenever he chooses,” he said. “You had government taking over a public access station. Government should be hands-off public access. That’s not what it’s supposed to be about.”
Randall Hogue, executive director of SACC, said the board is moving forward with a lawsuit five years later after a discussion with Proctors officials two months ago regarding SACC’s broadcasting equipment.
Hogue said Proctors returned some of the equipment but not everything. He said Proctors wrongfully claims it does not have anything else that belongs to SACC.
“I personally went to Proctors and asked them about the equipment,” Hogue said. “For the last 21⁄2 years we have been talking to Proctors about this equipment. But there’s no explanation about what happened to the equipment.”
Proctors CEO Philip Morris said all of the equipment was returned to SACC and that he doesn’t agree with the allegations.
“I do not know of anything that we have that belongs to SACC,” he said. “The only significant thing we borrowed was a broadcast server. When SACC asked for it back we gave it to them and leased a different one.”
SACC made “multiple demands” to Proctors to return money and equipment after the takeover, the lawsuit states, but Proctors failed to return the funds loaned by SACC.
According to the lawsuit, SACC was under the impression up until January 2010 that it would continue as the public access officer and that McCarthy handed over SACC’s equipment to Proctors without the board’s authorization.
“Beginning in or about April 2009 and continuing up until in or about May 2010 Philip Morris, CEO of Proctors, made multiple presentations and proposals to the SACC board regarding a partnership between SACC and Proctors with regard to the creation and broadcasting of public access television.”
Several members of SACC in 2010 did not know why OSM replaced SACC, rather than the two merging, according to a Daily Gazette article in June 2010.
Morris said when Proctors became the new public access officer, SACC was preparing to discontinue its operations and “were willing to lend us things.”
“But there was a change of heart and they started wanted things back and did so in an irrational way,” he said. “Their board changed so their minds changed. Clearly we don’t agree.”