Economic development chief steps down

BUFFALO, N.Y. (WIVB) - Controversy has forced the head of Buffalo's main development agency to step down.

An investigation revealed the president of the Buffalo Economic Renaissance Corporation used funds intended to boost Buffalo to pay for health coverage for his girlfriend.

Buffalo Mayor Byron Brown said, "I asked for Commissioner Reilly's resignation."

And Thursday, Brian Reilly handed in his resignation as president of the Buffalo Economic Renaissance Corporation.

He had only held the post for a year, but last month, after the United States Department of Housing and Urban Development raised concerns of how federal funds were being spent by the city's Economic Development arm, the mayor directed his Commissioner of Finance Janet Penska to investigate.

She discovered that back in January, BERC officials switched healthcare plans for the 36 BERC employees without the mayor, who is chairman of the BERC Board, even knowing.

News 4's George Richert asked, "So you were unaware in January that these employees had been switched to a more expensive healthcare plan?"

Mayor Brown said, "No, I was not aware of it."

The switch allowed Reilly to gain city healthcare coverage for his girlfriend. But now effective August 1st, the 36 employees will be switched back to the most common city plan.

Reilly has handed in his resignation letter saying "I would never want a perceived conflict of interest to endanger the success of the organization."

Mayor Brown said, "And we've put internal controls in place to make sure that the agency is not able to operate on remote control."

The mayor says the action did not have anything to do with another BERC scandal regarding funding for the failed restaurant One Sunset. The city is now looking for an interim economic development chief.