Joye Brown Newsday columnist Joye Brown

Joye Brown has been a columnist for Newsday since 2006. She joined the newspaper in 1983 and has

Why did Oyster Bay Supervisor John Venditto and town board members -- in two resolutions passed unanimously in 2010 -- help Harendra Singh, a politically connected vendor, secure private financing?

Town officials aren't talking, especially in light of this week's federal indictment of Singh on multiple charges, including bribing a former Oyster Bay deputy town attorney to help arrange loans in 2011 and 2012 guaranteed directly by town taxpayers.

An attorney for the town has called the later loans "invalid and unenforceable" because they did not go through town procedures and violate the state constitution, which bars municipalities from guaranteeing private loans.

See alsoDocs show town helped secure loans

But back in 2010, town elected officials wanted to find a legal way to help Singh get more financing to continue improvements at the town golf course and Tobay Beach. A resolution, passed on March 23, opens a window into their thinking.

"Due to the global credit crisis . . . it has become very difficult to secure financing for certain projects," according to the resolution.

OK. But if a global credit crisis was hurting one town vendor, surely it was hurting others. Why pull the municipality into Singh's private financing negotiations?

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Using his own funds, Singh already had made $5.7 million in capital improvements to town facilities, the resolution noted. He proposed work costing $6 million more, but needed financing. According to the resolution, Singh's bank was "requiring the town to enter into an agreement relating to the loan."

The resolution went on to authorize Venditto to "enter into an agreement with . . . [Singh's] bank."

In April, however, Jonathan Sinnreich, the town's outside counsel, warned that Oyster Bay could not guarantee "an open-ended general purpose line of credit" for Singh, according to emails obtained by Newsday.

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So town officials proposed another resolution, on June 8, "to facilitate . . . [Singh's] ability to obtain financing to make capital improvements."

The resolution authorized town officials to amend Singh's contract to operate town concessions. Those changes allowed Singh to collateralize a portion of the value of improvements he'd made to seek new financing.

Singh, the town and Singh's creditor also signed off on other agreements that set penalties for early terminations of Singh's contracts. If Singh defaulted on his loan, the agreements allowed the town to pay a set termination fee directly to his lender.

The town's default termination fee for Tobay Beach was $1.5 million -- the same as a line of credit Singh had that expired in April. The fee for the golf course contract is $2 million -- which matches the value of a second loan Singh landed in 2010.

Critics called the arrangement a "backdoor guarantee" since the town, even indirectly, would be obligated to pay Singh's creditor. A lawyer for the town said officials, in making the arrangement, only were doing their due diligence to comply with the New York Constitution.

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Either way, Singh ended up with financing in 2010.

Jonathan Pickhardt, the lawyer hired by Oyster Bay, said agreements Singh had with the town dating as far back as 2000 allowed Singh the option to collateralize a portion of the value of the improvements.

And, he said, there are key differences between the 2010 loans -- in which the town acknowledges its role -- and the 2011 and 2012 loans cited in the federal indictment, which the town contends were handled secretly by a deputy town attorney gone rogue.

"Those were done without proper authorization; they were guarantees and they were loans in excess of the value of the improvements," Pickhardt said Friday.

Oyster Bay's elected town officials have yet to speak directly to residents about how the town ended up with a role in helping Singh four times get borrowing totaling more than $16 million. Or how the town ended up, four times, directly and indirectly, with the obligation to pay Singh's creditors should he default.

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Singh has pleaded not guilty in the case. And this week's indictment may provide a clue as to why the town's elected officials likely are following legal advice in not talking. The document noted that the former deputy town attorney -- identified by sources as Frederick Mei, who is said to be cooperating with federal authorities -- arranged meetings with other town officials about the 2011 and 2012 loans.

In other words, the federal investigation is continuing.