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State public authorities also hired law firm for Bharara probe

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State public authorities also hired law firm for Bharara probe

Multiple state public authorities hired law firm Fried, Frank, Harris, Shriver & Jacobson LLP to represent them amid a Manhattan U.S. Attorney’s investigation that led to corruption charges against a former top Cuomo aide and seven other individuals, according to an engagement letter for a separate contract obtained Tuesday by The Alt through a Freedom of Information Law request.

“As you are aware, we are also representing various other New York State public authorities…in connection with this matter,” the letter, addressed to the six state agencies that entered into a $1.9 million contract with Fried Frank in April 2016, states. “Additional New York State clients may also be added to this group of Other Clients.”

News outlets, including The Alt, have reported on state agencies’ outside legal costs related to the wide-ranging investigation, but Fried Frank’s representation of “various” public authorities does not appear to have been previously reported. The firm did not return a request for comment.

Public and quasi-public state agencies have entered into more than $11 million worth of legal services agreements with seven different firms related to the federal (and a related, less prominent state-led) investigation, according to information compiled by The Alt.

One Fried Frank client is the New York Power Authority, according to July 2017 meeting minutes. The single-source contract began in May 2016, after NYPA was served with a grand jury subpoena related to Competitive Power Ventures, the energy company that employed Peter Galbraith Kelly, Jr., who prosecutors say bribed ex-Cuomo aide Joseph Percoco in exchange for official actions.

Initially a one-year deal worth $250,000, NYPA’s contract with Fried Frank was later extended by two years, bringing its total maximum value to $750,000. (A NYPA spokesperson did not provide comment for this article.)

The New York State Energy Research and Development Authority, or NYSERDA, may also have retained Fried Frank for a similar purpose. The authority entered into a $100,000 contract with the law firm on May 11, 2016, according to an annual procurement report, though the description only reads, “Legal Services.”

According to a federal criminal complaint unsealed in Sept. 2016, Competitive Power Ventures had sought to obtain a power-purchase agreement from NYPA, which would have helped finance the company’s power plant in Orange County. In return for concealed payments to his wife, prosecutors say, Percoco used his position “to exert pressure” on CPV’s behalf, though it did not ultimately receive the contract.

Percoco, along with other defendants, has pleaded not guilty. No officials at NYPA, NYSERDA, or any other state public authority have been accused of wrongdoing in connection with the probe.

NYPA and NYSERDA documents appear in a discovery index filed in court in May of last year. The state Dormitory Authority and Empire State Development—also public authorities—appear in the index, too. ESD retained separate outside counsel, WilmerHale, in 2015. DASNY did not provide comment for this article.

The federal trial of Percoco, Kelly, and two Syracuse real-estate development executives begins Jan. 22. A second trial, centering on alleged bid-rigging of state economic development contracts by the Syracuse executives, former SUNY Polytechnic Institute president Alain Kaloyeros, and real-estate executives from Buffalo, is scheduled for June.

The need for state agencies to seek outside legal assistance in this matter may indirectly stem, at least in part, from a state attorney general’s investigation that resulted in felony bid-rigging charges against Albany real-estate developer Joseph Nicolla and Kaloyeros. Both defendants pleaded not guilty in Sept. 2016, and there has been no public movement in the case since that time. (A spokesperson for the AG’s office didn’t return a request for comment.)

The AG’s investigation of SUNY Poly presents “a conflict of interest that cannot be resolved, thus further necessitating the Agencies’ need for expert outside counsel,” a Department of Environmental Conservation staffer told the comptroller’s office in June 2017.

The AG’s office even recused itself from reviewing the executive chamber’s legal services contract with Morvillo Abramowitz, citing the SUNY Poly probe, correspondence obtained by The Alt from the comptroller’s office shows. Certain state contracts are typically reviewed by both the attorney general’s and comptroller’s offices.

Below is a chart we’ve compiled showing all outside legal services contracts connected to the state and federal investigations that resulted in charges against Percoco, Kaloyeros, and others. If you know additional details about these contracts, please get in touch (luke@thealt.com).

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