State spending related to “Buffalo Billion” probe could approach $7 million

State spending related to “Buffalo Billion” probe could approach $7 million

In late May, the state comptroller’s office approved a one-year extension of SUNY Systems Administration’s contract with Kelley Drye and Warren LLP, a law firm the university retained in mid-2015 amid the federal probe into matters related to SUNY Polytechnic Institute. The contract is now valued at a maximum of $3 million; more than $600,000 has been spent on the contract to date.

The agreement’s new maximum value makes it potentially the largest, publicly known, state-funded contract related to the state or federal probes, which resulted in corruption charges against a total of 10 men from the public and private sectors last September. But it is not the only contract. The Alt’s recent review of available public records and news articles indicates that the cost of state-funded, outside counsel related to the investigations may now approach nearly $7 million.

That figure, as indicated in the above chart, does not include the value of the contract between SUNY Poly-affiliated nonprofit Fuller Road Management Corporation and Goodwin Procter, which does not appear to be publicly known. Reached by phone, an assistant of Richard Strassberg, an attorney with Goodwin Procter who issued a statement on behalf of Fuller Road back in May 2016, said that the firm continued to represent the entity, but did not disclose any other details.

A spokesperson for Empire State Development, which has a $1,895,000 contract with WilmerHale related to the probe and also oversees Fuller Road Management Corporation, did not return requests for comment.

A spokesperson for SUNY Systems Administration did not return requests for comment; we had specifically sought to determine if the university expected to spend the maximum amount permitted by the amended contract. A spokesperson for Gov. Cuomo’s office also did not return an email asking if his office expected to extend its contract with Morvillo Abramowitz Grand Iason and Anello PC for legal services related to the probe.

Of the five contracts, at least three have been amended to increase in maximum value. For example, the executive chamber’s contract with Guidepost Solutions, which eventually yielded new vendor payment-related protocols for state agencies, was initially valued at only $450,000; its value was amended to exceed $1 million. (The contract’s scope turned out to be “wider than anticipated,” an Empire State Development spokesman previously told The Alt.)

While the precise extent to which the charges and pending trials toward the end of this year may increase these outside legal costs is unclear, we do have at least one clue. According to a January POLITICO story, as of Sept. 12—ten days before charges were filed against former SUNY Poly president Alain Kaloyeros and a host of other Cuomo associates—the state university system had paid just under $90,000 to Kelley Drye and Warren LLP.

It is also difficult to determine the extent to which the outside legal costs incurred by these agencies were related to matters that ended up not appearing or factoring into the criminal complaints. As the Times Union has reported, a discovery index included with a defense motion last month in the federal case suggests the investigation was far more wide-ranging than the eventual charges filed.

On Friday, federal prosecutors proposed to split the wide-ranging corruption case into two trials—one that would center on alleged illegal payments to Joseph Percoco, a former top aide for Governor Andrew Cuomo, and another that would center on certain upstate development deals connected to the Buffalo Billion that were administered by a nonprofit affiliate of SUNY Polytechnic Institute. Trials may be held in October and January, respectively. All defendants in those trials have pled not guilty and maintain their innocence.

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