Scozzafava’s brother problem

There’s been a lot of attention already to Dede Scozzafava’s role in the venture capital firm, Seaway Valley Capital Corp., owned by her brother, Thomas Scozzafava. The company owes almost $200,000 in back taxes and is tied up in two civil lawsuits. Democrats and some Republicans have been working to make her ties to the firm a campaign issue.

“There is nothing nefarious here,” Dede Scozzafava told me yesterday, “the public company [Seaway Valley Capital Corp.] I have nothing to do with.” You can listen to Dede Scozzafava explain some of this in this audio clip from our interview yesterday.

Based on that conversation, and an e-mail I received from Thomas, here’s what we know:

• In 2003, Dede and Thomas Scozzafava formed Seaway Capital Partners, or “SC Partners, Inc. LLC”, as an investment firm to create the North Country retail chain, Wise Buys. This happened shortly after Ames department stores closed, and local residents were clamoring for more retail options. (There was lots of clamoring for underwear, specifically.)
• Dede Scozzafava says she was, and still is, the vice-president and COO of “SC Partners”. That’s why she includes it in her official biography and on her resume to Republican party leaders. Scozzafava says another brother, Fred, owns a 51% share of the company and is the president. She says her brother, Thomas, is not currently a shareholder or investor in the company.
• Dede Scozzafava was a board member and corporate secretary of Wise Buys until March 2007.
• In October 2007, Seaway Valley Capital Corporation, with Thomas Scozzafava as CEO, acquired Wise Buys. Investors in “SC Partners”/Wise Buys, including Dede Scozzafava, were given shares in Seaway Valley. Other than this “passive investor” status, Dede Scozzafava says she has no connection to Seaway Valley.
• In November 2007, Seaway Valley acquired Hacketts, the Ogdensburg-based retail chain that’s been around since the 1830s. Hacketts stores have been closing in Watertown, Pulaski, Massena, Canton, and Gouverneur (new reports say Massena and Gouverneur will remain open). Thomas Scozzafava wrote me that Hacketts was “distressed”, with losses of $400,000, when he bought it. Hacketts has been struggling to pay back a $5 million loan.
• In June 2008, Seaway Valley acquired North Country Hospitality, which included Sackets Harbor Brewing Company, Good Fello’s and Alteri Bakery, more distressed companies. Together these businesses owed $192,000 in state and federal taxes. Thomas Scozzafava says he did not know about the tax liens when he bought NCH.

So in summary, candidate Scozzafava owns some shares in brother Scozzafava’s Seaway Valley Capital Corp., but she’s not a director, manager, employee, or officer of the company.

Will Scozzafava still face tough questions in the eventual 23rd congressional district campaign? Absolutely. Will her brother’s financial dealings affect her political aspirations? That’s up to voters.

For the record, I asked Scozzafava if she thought her brother should have to pay back those taxes immediately. She said: “I think he’s trying to turn the companies around and do that. But it’s a business transaction and you should ask him about it.”