A Hempstead Town contractor facing scrutiny from federal law enforcement has paid more than $1 million over 10 years to Joseph Cairo, chairman of the Nassau County Republican Committee, and Cairo's son for legal and project management work at the beachside recreation complex the contractor runs, according to records and interviews.
Butch Yamali, whose company, Dover Gourmet Corp., operates the town-owned Malibu Beach Park, said in an interview that he paid $1,160,000 to Cairo and his son, Joseph Michael Cairo, for work related to the popular Lido Beach facility. Hempstead provided Newsday with invoices for the work dating from 2009 to 2018 following a Freedom of Information request.
The records show Yamali's work at Malibu has been a steady source of income for the senior Cairo, who political experts say wields vast influence over jobs and the Republican agenda in the Hempstead and Nassau governments.
Newsday reported in July that Dover had not paid Hempstead rent on Malibu for seven months, accumulating a balance of $378,000 in unpaid fees as of April, when town Parks Commissioner Daniel Lino and then-Comptroller Kevin Conroy extended the contract without Supervisor Laura Gillen's knowledge or town board approval. Gillen, a Democrat, criticized the extension as a “sweetheart deal” and called for Lino to resign. The U.S. Attorney's Office for the Eastern District of New York subpoenaed the town for records on Dover. Conroy retired Aug. 26, citing health issues.
Cairo said in an interview that he worked for Yamali in his capacity as a private attorney. Cairo, a former Hempstead councilman, said he was not involved in the contract extension, is not on retainer this year and has had only minimal communication with town officials regarding Dover's work at the facility.
“There may have been some correspondence [with town officials], but certainly the correspondence dwindled, so to speak, over the years, and there has been none recently,” Cairo said.
Joseph Michael Cairo, through a spokesman, declined to comment.
Former Republican town officials, speaking on the condition of anonymity, said Cairo's involvement in the contract raises questions about whether Republican town officials overseeing the Malibu deal felt pressure to offer Yamali favorable treatment.
"It would make people bend over backwards in order to accommodate whatever that vendor wanted," one former Republican town official said. "You would be very reticent to get on the wrong side of someone so powerful."
Another said: "If Joe Cairo was a town vendor's attorney, then who in their right mind would question his legal opinions or demands for a client? . . . It's a culture of fear."
Cairo was appointed the county committee chairman in May 2018. He served as vice chairman for more than a decade prior. He said he did not believe his political role put pressure on Republican town officials to treat his client favorably.
“I have not spoken to either the park commissioner nor do I talk to any town elected officials with respect to his contract, his extension or his agreement,” Cairo said. “I made that decision very specifically that I would not interfere, and I went out of my way to avoid even the appearance that . . . I would have any influence on them. I was very cautious in that regard.”
Lino did not respond to a request for comment. A spokeswoman said Conroy was unavailable for comment.
The records include seven invoices from Joseph Cairo to Dover Malibu for “Retainer[s] for legal and advisory services” from 2012 to 2018, totaling $510,000.
They also include five invoices from JMC Management to Dover Malibu for “Capital Improvement Planning, Consulting and Project Management” from 2009 to 2013, totaling $650,000, payable to ”J Michael Cairo.” Joseph Cairo said JMC is run by his son, Joseph Michael Cairo.
Yamali, who has held numerous concessions and vending contracts with local governments on Long Island, said Cairo was a longtime friend and played an advisory role on Malibu issues.
“I would ask for guidance,” Yamali said. “There’s a lot here, a lot to decide. Who can you bounce it off of?”
Hempstead Town records obtained by Newsday through a previous Freedom of Information request show town officials sent letters to Cairo in 2015 regarding sanitation fees at Malibu.
Yamali said the younger Cairo oversaw construction and renovation projects at the facility, which features a restaurant, pool, tennis courts and hundreds of cabanas.
Joseph Michael Cairo would "make sure that the fence was put in the right spot, or that the thing was painted the right color, or the consistency of the stucco was right,” Yamali said.
Yamali has described Gillen's statements as politically motivated. He asked the state Supreme Court in Nassau County earlier this month to confirm the contract was "lawfully and validly extended.” The litigation is ongoing.
Hempstead possessed the invoices it provided to Newsday because Dover submitted its capital improvement expenses at Malibu to the town for review, according to a town official familiar with the documents.
The capital improvement costs have become a focal point of the dispute over Malibu. Yamali said he has spent more than $12 million to improve the property since he began operating Malibu in 2009. He said he has replaced roofs, installed new amenities and spruced up the hundreds of cabanas that Hempstead families rent for thousands of dollars each summer.
The contract states the Freeport-based Dover would carry out $10 million in capital improvements. Yamali has said he has not paid rent on the Malibu concession in the past year because the town owes him for the more than $2 million for improvements he has completed beyond that mark. He said town officials instructed him not to pay until the two sides came to terms.
Newsday also received spreadsheets prepared by the Hempstead comptroller’s office indicating the town counted Joseph Michael Cairo’s project management fees as capital improvement costs and Joseph Cairo’s legal retainers as operational costs.
Project management fees incurred before or during construction are typically classified as capital improvement expenses, while legal retainers are considered operational, according to Mitchell Pally, chief executive of the Long Island Builders Institute.