Six state agencies retained outside counsel worth $1.9 million for federal probe

Six state agencies retained outside counsel worth $1.9 million for federal probe

Six state agencies retained the law firm Fried, Frank, Harris, Shriver & Jacobson LLP on April 29, 2016—the same day Governor Andrew Cuomo’s office hired private investigator Bart Schwartz’s Guidepost Solutions—at a total potential cost of $1.9 million.

The six agencies are the Department of Environmental Conservation ($275,000), Division of the Budget ($545,000), Public Service Commission ($645,000), Department of Transportation ($36,000), Department of Labor ($220,000), and Division of Housing & Community Renewal ($179,000).

None of the agencies, or their employees, appear to be targets of the wide-ranging investigation by the U.S. Attorney’s Office for the Southern District of New York, which brought charges last fall against former SUNY Polytechnic Institute president Alain Kaloyeros, top Cuomo aide Joseph Percoco, and several private sector executives. All defendants have pleaded not guilty, and two related trials are scheduled for next year.

The multi-agency contract was approved by the state comptroller’s office on Nov. 6, according to the Open Book NY website. The description reads, “Multi Agency Legal Services Contract Related to Investigation by US District Attorney.” The agreement is slated to end on Dec. 31, 2017.

The Alt reported in July that total state spending for outside legal services related to the federal and state investigations could approach $7 million. That figure did not include this previously unreported contract with Fried Frank.

We did learn in late September that DHCR, the state affordable housing agency, had retained or was in the process of retaining outside counsel. This past summer, we had submitted a Freedom of Information Law request to the agency requesting “a copy of any agreements—since 1/1/2015 between the agency and any law firm or vendor of legal services—that are related, in part or in whole, to federal or state law enforcement investigations.” The agency denied this request, claiming that “disclosure would impair present or imminent contract awards.” Subsequent emails to the press office in September concerning this then-unknown contract went unanswered.

The Sep. 2016 federal criminal complaint describes, in part, how a proposed $900 million power plant in Orange County needed certain regulatory approvals from DEC, PSC, and DOT. It is alleged that Peter Galbraith Kelly, Jr., a company executive, retained lobbyist Todd Howe, now a cooperating witness for the government, and bribed Percoco in order to have the latter “use his official position and influence with respect to” actions that would potentially benefit the power plant.  

The Division of the Budget appears in the complaint in the context of an allegation that Percoco used his position to pressure the agency to release $14.2 million in funds owed to a Syracuse real-estate development company for two upstate projects. (Two executives from the company are alleged to have bribed the ex-Cuomo aide.)

The complaint mentions that the son of one of the Syracuse developers was employed by HCR in two phases, interrupted by a stint with Gov. Cuomo’s reelection campaign. (The son is not accused of any wrongdoing.)

All six agencies appear in a voluminous discovery index, which shows documents compiled by prosecutors, filed in court in May.

None of the agencies, nor Fried Frank, immediately provided comment for this article.

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