Nassau comptroller blocking payment to Sandy cleanup company

Nassau County Comptroller George Maragos is blocking a final $387,000 payment to the company whose $12 million storm cleanup contract has been the focus of federal and local criminal investigations.

Maragos said in an interview this week that his field audit staff has opened an investigation into a claim submitted by VIP Splash Waterways Recovery Group Inc. under the county contract amendment it was awarded in June.

The audit, Maragos said, was prompted not only by the Island Park-based firm being the focus of criminal probes tied to political contributions — but also by “whistleblower” complaints his office received about VIP Splash’s work.

“We were very, very concerned,” said Maragos, “given the press about the company and the concerns that have been expressed to us by some residents with regards to the work they’ve done, especially with regard to this amendment being for retroactive work.”

County Executive Edward Mangano’s administration has said VIP Splash’s $386,642 amendment was necessary to cover work they did, but were never paid for, under its $12.2 million pact that expired in January 2015. The firm was hired in 2013 to remove sunken vessels and other debris from South Shore waters following superstorm Sandy in Oct. 2012.

The full contract amount, including the amendment, was covered by Federal Emergency Management funds, say aides to Mangano, a Repubican.

County legislators approved the amendment in June, and it became eligible for payment following its certification in mid-July. Most claims for payment are approved within two weeks, comptroller’s officials say, but Maragos’ office mailed VIP Splash a letter on July 28, informing the company that it had commenced an audit.

Maragos, a Republican, estimated that only 1 or 2 percent of all claims received by the comptroller trigger such audits. He said his office would be looking to verify not only the work done under the amendment, but also everything associated with the $12 million already paid out.

“If false claims were submitted, then we’d refer the audit findings to the district attorney,” Maragos said.

The Mangano administration has previously said that FEMA monitored and signed off on all of VIP Splash’s work.

Responding to Maragos, County Attorney Carnell Foskey alluded to the criminal probes: “The county has been cooperating with the ongoing investigation and suggests the comptroller do the same.”

SEE PHOTOSSandy's destruction

Kent Katter, VIP Splash’s principal officer, could not be reached for comment.

Prosecutors with the U.S. Attorney’s Eastern District and the Nassau district attorney have issued subpoenas related to the VIP Splash contract following Newsday reports.

VIP Splash incorporated with New York State in June 2013, two days before Nassau first solicited bids for waterways debris removal. Several company principals have ties to a nonprofit, Operation SPLASH, that has lobbied the county on environmental issues.

County officials awarded VIP Splash an initial $4 million contract over multiple firms with more experience in largescale storm recovery efforts. In 2014, they increased the agreement by more than $8 million.

On the same day that Mangano’s chief deputy, Rob Walker, signed and executed the $8.2 million amendment, VIP Splash made a $2,925 contribution to Walker’s Hicksville Republican Committee, records show. Two weeks later, the wife of a VIP Splash principal gave another $1,050 to the committee.

SEE PHOTOSAerial views of Sandy damage

Walker has denied any wrongdoing.

The Eastern District declined to comment this week on its investigation. A Nassau district attorney spokesman said only that their’s was “ongoing.”

By Paul LaRocco

paul.larocco@newsday.com@paullarocco

Paul LaRocco is a reporter on the investigations desk. Since starting at Newsday in late 2010, he has also covered Nassau and Suffolk county politics and government and the Town of Oyster Bay.