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Long IslandColumnistsDan Janison

Feds' Skelos charges outline a multi-sided scandal

New York Senate Majority Leader Dean Skelos, center,

New York Senate Majority Leader Dean Skelos, center, and his son Adam, right, arrive at FBI offices in Manhattan on Monday, May 4, 2015. Credit: AP

Criminal charges aside, this week's 42-page FBI complaint against Senate Majority Leader Dean Skelos and his son, Adam, taps into issues and controversies that have roiled New York for years.

For one, the complaint says Adam Skelos "did not register as a lobbyist as required" despite advocating for his employer with state and county officials. Prosecutors present this as one of several signs that the Skeloses sought to conceal illegal actions. Whether that proves true, enforcement of lobbying rules has been a perennial issue.

"It's of course hard to know if people are not following the law," said Blair Horner of the nonprofit New York Public Interest Research Group. He said state ethics investigators should follow up to determine if under-the-radar lobbying really occurred here, and act accordingly.

The federal complaint also charges that 32-year-old Adam Skelos -- aided by 67-year-old Dean Skelos (R-Rockville Centre) -- secured title insurance work through the Nassau County Industrial Development Agency, related to a hospital system's bond issuance.

Some rules have been changed, aimed at making the state's many IDAs, which are supposed to encourage economic development, more accountable. Gov. Andrew M. Cuomo and State Comptroller Thomas DiNapoli have called for further state oversight and standards.

Michael Farrar, director of the state's Authorities Budget Office, said that as a rule, any public authority should obtain services in a transparent manner and contracts should be awarded based on cost and vendors' qualifications.

In a 2011 email, as quoted by the FBI, Adam Skelos tells a colleague that he is "with my dad calling [the] head of the Nassau IDA. We're going to try to get half the deal."

Apart from the Skelos case, the title insurance business faces regulatory issues. Just last week, state Superintendent of Financial Services Benjamin Lawsky concluded that some companies inflate fees to cover lavish expenses, and he set forth new rules to prevent abuse.

The Skelos case also raises red flags about how Nassau County does its contracting.

Adam Skelos in 2013 worked for AbTech Holdings, an Arizona-based environmental company that makes storm water pollution filters. According to the federal complaint, his boss asked him to find out which other companies had inquired about a request for proposals that the father and son allegedly pushed Nassau officials to issue. The reason: "So we can guess at competition." Skelos wrote back, "I will [inquire] but no competition" -- an indication that he knew AbTech would win the contract, according to a key FBI witness.

AbTech pushed, meanwhile, for what is called a "design-build" project. Under this method, design and construction are bid out to a single entity, rather than in separate contracts, which would have required state approval.

"Design-build," as used elsewhere, has its pros and cons, experts say. A 2012 article in the publication Government Product News discusses how design-build can mean faster work with closer teamwork -- but also can limit competition and the public entity's control of the design process.

Other longtime Albany issues that become part of the case narrative include the real estate tax-break program known as 421a and the use of limited liability companies to sidestep dollar caps on campaign contributions.

If the prosecutors have it right, we may be looking at the tips of a few icebergs.


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