State agency asks Nassau to drop lawsuit

A state oversight agency on Friday called on Nassau to drop a lawsuit challenging its authority to take control of the county's finances, saying it already has spent $418,000 in legal fees -- which taxpayers have to cover -- to defend its actions.

The Nassau Interim Finance Authority asked County Executive Edward Mangano to dismiss the last outstanding issue in a lawsuit he filed attempting to block the agency from imposing a control period.

"As a result of the county's lawsuit, NIFA was required to pay to its attorney money that could have been used to help solve the county's fiscal crisis," NIFA chairman Ronald Stack said in a statement.

Mangano did not respond to repeated requests for comment.

After issuing a request for proposals to six law firms, the agency selected the Manhattan firm of Skadden Arps in November for advice on its legal powers. NIFA then paid the firm in its defense against the lawsuit Mangano filed after NIFA voted in January to impose financial controls.

Skadden Arps includes the state's former top judge, Judith Kaye, who is of counsel. According to invoices released Friday by NIFA, Kaye was initially paid $875.50 an hour, compared with her standard rate of $1,030 an hour, and later earned $840 an hour, compared with a standard rate of $1,050 an hour. Other lawyers and assistants on the case earned lesser amounts, the invoices show.

All NIFA costs are paid from Nassau sales tax revenue.

Mangano has hired his former law firm, Rivkin Radler, to press the suit against NIFA. The firm's lead counsel on the case, partner William Savino, is earning $250 an hour.

State Supreme Court Justice Arthur Diamond has refused to block NIFA's takeover, ruling the state agency was constitutional and had the authority to impose financial controls. Although he said the takeover did not appear to be "arbitrary and capricious" as Mangano also argued, Diamond allowed both sides to submit further arguments on the issue.

NIFA board member George Marlin said in a statement: "To protect Nassau's taxpayers from the County's frivolous and unsuccessful lawsuit challenging NIFA's constitutionality and control powers, the NIFA board retained the best legal team. Unlike the County, which hired a politically-connected ... firm inexperienced in this area of the law, NIFA issued a Request for Proposals . . . that insured only the most qualified advocates would be considered and selected."

In response, County Attorney John Ciampoli said: "George Marlin purports to be a fiscal conservative but he chose to bring an extravagantly expensive Manhattan law firm to Nassau County as he spent our tax dollars in the tradition of limousine liberals."