A demo sample of the sponges that are used by...

A demo sample of the sponges that are used by the Village of Babylon, produced by AbTech, May 5, 2015. Credit: Johnny Milano

The Arizona-based company that hired Senate Majority Leader Dean Skelos' son and won a $12 million contract for storm-water cleanup in Nassau operates in 36 states and in Europe and has contracts with at least two Long Island villages.

AbTech Holdings Inc., a Scottsdale, Arizona, water treatment company founded in 1996 by Glenn R. Rink, has an advisory board that includes Robert F. Kennedy Jr., founder of the environmental group Waterkeeper Alliance, former Pennsylvania Gov. Edward G. Rendell and former Maryland Gov. Parris N. Glendening.

Convicted Ponzi schemer Bernard Madoff's company was an early investor in AbTech, and his brother Peter Madoff and late son Andrew Madoff once served on the company's board of directors.

AbTech has sold its "Smart Sponge" technology that is placed in storm-water drains to filter pollutants before they reach waterways to municipalities including Nassau County, Babylon Village and Sag Harbor, records show.

It also is seeking to take part in a $100 million storm-water infrastructure project in Prince George's County, Maryland, expected to begin in 2015, according to the company's financial documents. Glendening, a Democrat, once served as Prince George's County executive.

Rink did not respond to requests for comment Tuesday, and a spokeswoman for the company declined to comment.

AbTech is a public company that trades over the counter. Its shares closed at 8.5 cents Tuesday, down 39 percent in the day's trading, bringing the company's stock market value to $5.8 million. The stock has declined sharply since June 16, 2010, when it closed at $2.22.

The company reported a net loss of $5.8 million in 2014, after a $5.3 million loss in 2013, according to its fiscal year 2014 financial results.

Company revenues in 2014 were $607,000, compared with 2013 revenues of $461,000, according to the company's statement.

Bernard Madoff's company, Investment Securities LLC, loaned AbTech $495,000 in 2006 and in 2008 made loans of $100,000 and $200,000.

During that period, Peter Madoff and Andrew Madoff served on the company's board. Peter Madoff pleaded guilty in 2012 to helping conceal the Madoff fraud and was sentenced to 10 years in prison. Andrew Madoff died of cancer last year.

At the end of 2010, Bernard L. Madoff Investment Securities owned 4.5 million shares, or 9.1 percent, of AbTech, according to Securities and Exchange Commission documents. The trustee charged with recovering assets for the victims of Madoff's fraud has clawed back $795,000 from AbTech.

Babylon Village installed Smart Sponge technology under a $300,000 grant it received from Suffolk County in 2006, according to Mayor Ralph Scordino.

The village has installed the sponges at 30 to 40 locations around the village and plans to put them at a total of 93 locations by the end of the year, said Skip Gardner, public works supervisor.

In 2013, Sag Harbor installed the sponges near Havens Beach, which has repeatedly been closed after storms because of high bacteria counts, said Dee Yardley, the village superintendent of public works.

While Babylon and Sag Harbor officials said the AbTech sponges are working well, there is little independent data on their effectiveness.

Suffolk County Department of Health spokeswoman Grace Kelly-McGovern said the county doesn't conduct water tests near the sponge sites in Babylon Village. The Sag Harbor project is too new for the department to draw any conclusions from the limited testing it has done, Kelly-McGovern said.

Babylon Village and Sag Harbor said they were unaware of Adam Skelos' involvement in the company and they learned of the firm through engineering firms that work with the village.

Suffolk spokesman Justin Meyers said county Public Works Commissioner Gil Anderson met with AbTech officials in 2013. "We told him how they could bid on a public contract, through public bidding," Meyers said.

Meyers said he did not know the names of the AbTech officials who took part in the discussions, and no bid was ever received.

AbTech in 2010 merged with an Ontario, Canada-based mining company, Laural Resources Inc., and emerged as the surviving company. Laural had been publicly traded, so AbTech effectively went public through that merger.

AbTech has repeatedly raised money in the financial markets in recent years. In March and April, the company sold two promissory notes with a total value of $1.2 million, paying interest rates of 7.5 percent.

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