Republican New York State Comptroller candidate Joseph Hernandez sharply criticized state leadership, accusing top officials of “sleeping at the switch” as millions in taxpayer dollars went unaccounted for at the now-defunct Seneca Babcock Community Association, a multi-million dollar non-profit in Buffalo, New York.
Responding to a South Shore Press investigation that first exposed years of missing financial filings and alarming audit red flags at the Buffalo nonprofit, Hernandez said his initial reaction was “anger,” calling the situation a fundamental breakdown of government oversight.
“This was a program meant to help the most vulnerable people in our communities, and it was abused,” Hernandez said. “You don’t go from 2004 to 2020 without filing required financial reports to New York State unless the people responsible for oversight are completely asleep at the wheel.”
As previously reported by the South Shore Press, the nonprofit failed to maintain basic accounting records and received a rare “disclaimer of opinion” from auditors, meaning its finances could not be verified. Within 24 hours of that reporting, the organization’s executive director resigned and operations began shutting down.
The embattled agency also lost its non-profit status after failing to file required federal tax forms dating back to 2017.
Hernandez placed direct blame on Attorney General Letitia James, and Governor Kathy Hochul, and State Comptroller Thomas DiNapoli, accusing the trio of abandoning their roles as fiscal watchdogs.
“This is despicable. The Comptroller and the Attorney General are supposed to be the watchdogs of taxpayer dollars, and instead they’ve been silent, absent, and ineffective,” Hernandez said. “They didn’t just miss this, they ignored glaring red flags for years.”
He pointed to the nonprofit’s loss of tax-exempt status and years of missing filings as warning signs that should have triggered immediate intervention.
“In the private sector, this would never fly,” Hernandez said. “Auditors would be sounding alarms, regulators would be stepping in, but in New York government, nobody acted. That’s a failure of leadership, plain and simple.”
Hernandez warned the Buffalo case may be “just the tip of the iceberg,” drawing comparisons to the massive nonprofit fraud scandal in Minnesota and suggesting the scale in New York could be far greater.
“When this onion is peeled back, Minnesota is going to look like child’s play,” he said. “We have a systemic culture in Albany where taxpayer money is taken, mismanaged, and in some cases outright stolen, and nobody is held accountable.”
The controversy has already prompted calls for a broader statewide probe into nonprofit oversight, as questions continue to mount over how such lapses went undetected for years. New York State Assemblyman Joe DeStefano and Erie County Legislator Frank Todaro have called for James to investigate.
In a statement to the South Shore Press, a spokesperson for DiNapoli stated the agency that would investigate should be the New York State Attorney General's Office.
"The State Comptroller does not have jurisdiction to examine the financial affairs of nonprofits, such as missing financial filings and lapses in compliance with state and federal nonprofit laws. Legislator Todaro appropriately sent his letter to the Office of the State Attorney General, whose Charity Bureau regulates not for profits in New York and does these examinations. It appears that Mr. Hernandez misunderstands the legal authority and role of this office," said Jennifer Freeman, director of Communications for the Office of the State Comptroller.