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Nassau corruption trial: Wrangling over town loan guarantees

This photo submitted in court as Exhibit Number

This photo submitted in court as Exhibit Number 207 on Wednesday, shows William Savino speaking at Edward Mangano's second inauguration as Nassau County executive. Credit: U.S. Attorney’s Office

This story was reported by Andrew Smith, Nicole Fuller and Bridget Murphy and was written by Smith.

The Town of Oyster Bay wanted to do something that would have violated the New York State constitution — guarantee a loan sought by favored concessionaire Harendra Singh — when it turned in April 2010 to the prestigious Uniondale law firm of Rivkin Radler to find a way to do what it wanted.

Rivkin Radler, the former employer of just-elected Nassau County Executive Edward Mangano, came up with a solution that got the town what it wanted and was legal, two of the firm’s senior partners testified last week at the corruption trial of Mangano, former Oyster Bay Supervisor John Venditto and Mangano’s wife, Linda.

William Savino and William Cornachio described both what they did and the roles of Mangano and Venditto in pushing that first loan of $1.5 million to completion.

Defense attorneys, meanwhile, used cross-examination to try to minimize their clients’ roles in the transaction and to emphasize that the loan solution the Rivkin Radler lawyers devised was legal.

Cornachio testified that he saw the firm’s role as facilitating a transaction that its client — the Town of Oyster Bay — and all other parties wanted.

“The borrower wanted to borrow and the lender wanted to lend,” he said, and the town wanted it to happen.

Savino and Cornachio exhibited contrasts in styles and clarity during their testimony.

Savino responded to questions with discursive answers filled with clauses, often turning toward jurors and U.S. District Judge Joan Azrack as he emphasized his inability to remember much.

Cornachio was direct and clear, even as he took care to show that what he and his firm did for the town was completely lawful.

Edward Mangano, 56, of Bethpage, and Venditto, 58, of North Massapequa, are charged with conspiracy to commit federal program bribery and honest services wire fraud. Mangano also is charged with extortion. Venditto also is charged with securities fraud. Linda Mangano, 54, of Bethpage is charged with conspiracy to obstruct justice, obstruction of justice and making false statements to the FBI.

All have pleaded not guilty.

Lawyers are rarely comfortable on the witness stand. They prefer to probe witnesses for answers, not answer themselves. That was evident when Savino — the firm’s former leader — was under oath last week.

Even when Assistant U.S. Attorney Catherine M. Mirabile asked him questions, Savino sprinkled his answers with hedges and clarifications about what he couldn’t recall.

“What work did you do?” Mirabile asked at one point.

Savino began, “I’m going to accept your use of the term ‘you’ to mean our law firm, Rivkin Radler.” He went on to detail discussions with Oyster Bay Town Attorney Leonard Genova, the attorneys for Madison National Bank and Singh.

Mirabile asked him to verify that some notes in the case file were his.

“From time to time, it might be my practice where I would discuss issues with a partner and take notes,” Savino responded. “I don’t want to say it’s universally done, but it was generally done. I would put those notes in the file on occasion.”

He did confirm the handwriting in the notes was his.

Several jurors and Azrack did little to hide their reactions to his manner of testifying. The judge at one point hid her face in her hands. About the same time, two jurors turned to each other with their mouths open while another shook her head.

But even if Savino’s answers often were opaque, his and Cornachio’s core message was clear: It was not legal for the Town of Oyster Bay to guarantee a loan sought by Singh for work at the town-owned concessions at Tobay Beach. At the same time, Savino and Cornachio recognized the town wanted Singh to get the loan, so they looked for a way to make it happen.

Savino, his memory boosted by a page of notes he had written, said Mangano, his friend and former employee, outlined the situation for him during a phone conversation. It was clear from the start that the firm would need to find a way around the constitutional prohibition against town-guaranteed loans for private businesses, Savino said.

Singh testified earlier that after the town’s regular outside counsel, Jonathan Sinnreich, advised against the town guaranteeing loan Singh desperately sought advice from Mangano, who he said urged him to get the town to hire Rivkin Radler.

After a meeting at Venditto’s political headquarters in North Massapequa to discuss the issue, Cornachio said he felt a sense of urgency to find a solution. That urgency was fueled in part by the presence of Venditto and Mangano at the April 28, 2010, meeting, Cornachio said.

Cornachio’s solution called for the town to pay Singh $1.5 million if he defaulted on the loan, but assigned his right to the payment to the bank. That wasn’t technically a loan guarantee, but it satisfied the bank.

Earlier in the week, Madison National Bank’s chief lending officer, Thomas Gilmartin, said he didn’t care what it was called or how it worked, as long as the bank was protected if Singh couldn’t pay back the loan.

“Whatever you call it, the bank viewed it as a guarantee,” Gilmartin testified.

Attorneys for Mangano and Venditto took aim at different parts of the Rivkin Radler lawyers’ testimony.

Kevin Keating, Mangano’s Garden City attorney, focused on whether Savino was accurately recalling that he talked to Mangano at all about this issue, at one point calling his memory “dim at best.”

“Mr. Savino, you’ve used the phrase you don’t have an independent recollection — you’ve used that phrase with some frequency today,” Keating said.

“I’ve used that phrase,” Savino agreed.

Savino had said some “indicators” on the notes suggested he was talking with Mangano, but he didn’t remember the conversation itself. But Keating pointed out that the notes were headed with Genova’s name and outlined issues related to the loan guarantee.

Savino said again he had no recollection of talking to Mangano about the loan, and he emphatically denied that Mangano would have pressured him to take a particular position on the issue.

“He couldn’t” do that, Savino said. “You couldn’t. You couldn’t,” he said turning to address the judge. Now facing the jury, he continued, “They couldn’t. No one could.”

Venditto’s attorney, Marc Agnifilo of Manhattan, emphasized that the deal carried no risk to the Town of Oyster Bay.

The loan covered capital improvements that Singh already had made at Tobay Beach, Cornachio replied to Agnifilo.

“That’s an important element of the agreement,” Cornachio said, because the town had received a benefit already. “If not, in the words of someone who’s in the White House, it would be a bad deal.”

Cornachio said his solution mainly gave the town the authority to end the license agreement if Singh failed to pay back Madison, and would trigger a payment of no more than $1.5 million — equal to the loan amount and less than what Singh already had put into improvements at the beach.

“Under no circumstance, then, the town could never be out a dime, correct?” Agnifilo asked.

“Correct,” Cornachio said.

The town eventually severed ties with Singh after he defaulted on loans from Madison and others. Several of Singh’s creditors have sued the town, seeking to collect on his debts. And the town’s once top-notch bond rating sank to a step above junk status.

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