Oyster Bay Supervisor John Venditto says the town is considering a plan to nullify the $20 million in loan guarantees it made to support the business dealings of Harendra Singh, who runs restaurants on town property. The plan being negotiated adds significantly to already troubling questions about the town’s business methods.
Singh has been charged with bribing a deputy town attorney, Frederick Mei, to put the town’s full faith and credit behind loans for his company. Mei has not been charged, but has resigned. Venditto, who approved the guarantees, now argues they aren’t valid, but town attorney Leonard Genova signed them and Singh’s attorney contends everyone involved knew. And if they aren’t valid, why go to so much trouble to make them go away?
The town seems to be caught between the bond-rating agencies and the Securities and Exchange Commission. If the guarantees are valid, the SEC could impose legal sanctions because they were omitted on town financial statements. Moody’s Investors Service stopped rating Oyster Bay debt because it did not receive audited financial statement for 2014. Standard & Poor’s threatens to do the same. The failure to produce the statement could be the result of a computer change 25 months ago, as the town says. Or, the problem with the rating agencies is caused by the town’s refusal to create audited records until the powers that be make the guarantees — which the town would have had to show as liabilities — go away.
Now, about this deal. Why would the lenders agree to drop the $20 million in guarantees? What would they get in return and who is giving it to them? Why would Singh let go of his businesses, as Venditto says the deal requires, and why would the lease lengths be cut from 50 and 55 years to 25? Have all the investors in the new hospitality company taking over Singh’s leases been identified? How much does Singh owe the town in rent? And what of a separate $2 million loan guarantee for Singh from the town that Venditto has not claimed is invalid?
Oyster Bay residents deserve answers. — The editorial board