New details on Vito Lopez harassment case

ALBANY -- The state comptroller's office released more details Wednesday about a sexual harassment settlement involving Assemb. Vito Lopez (D-Brooklyn), showing that its lawyers consulted with Assembly Speaker Sheldon Silver's staff about the dollar amount and tax implications of the deal but didn't review the final agreement.

Silver eventually approved a $135,000 settlement -- $103,000 of it in taxpayers' money. Silver (D-Manhattan) has since said he mishandled the matter by agreeing to the confidential settlement and not sending it to the Assembly Ethics Committee.

The sexual harassment claims are now subject of two probes, one by the state Joint Commission on Public Ethics and the other a criminal investigation by Staten Island District Attorney Dan Donovan, who was named special prosecutor. Comptroller Thomas DiNapoli and Attorney General Eric Schneiderman have been criticized for their offices' roles in consulting on the agreement.

DiNapoli has said that his office's role was technical and that he didn't know about it until it became public. The documents released Wednesday, obtained by Newsday through the state's Freedom of Information Law, indicate attorneys in the comptroller's office weren't centered on the overall settlement or the controversial confidentiality clause.

The emails and draft agreements show that an Assembly attorney first contacted DiNapoli's staff in March about the possibility of a settlement involving a state assemblyman. In May, the Assembly asked the comptroller's lawyers to review a draft agreement -- specifically a passage that dealt with treating the settlement as compensatory damages and not back pay, which would make it not taxable. DiNapoli's staff gave them a suggested paragraph to cover that issue. They also slightly edited language on submitting the agreement to the comptroller's office for "pre-audit" requirements.

The emails don't indicate that DiNapoli was aware of the settlement, only his general counsel, Nancy Groenwegen, and two lower-level attorneys. Groenwegen and one of the attorneys, John Dalton, have been subpoenaed by the ethics commission.

In a statement released with the emails, DiNapoli's office said: "Legal staff reviewed the nature of the payment to the victims and determined, based on information provided by the Assembly counsel and the Attorney General's office, that it was reasonable to allocate the payment as damages rather than salary . . . The comptroller's legal staff was not a party to the negotiations, nor did it evaluate the merits of the settlement."

Assembly attorney William Collins, who negotiated the settlement for Silver, said in an email he spoke to the comptroller's attorneys about the "payment process, how settlement language needed to be expressed, whether there needed to be tax withholding in relation to back- or front-pay, etc. Those were the only specific concepts and provisions that I discussed with those two lawyers in OSC Counsel's office."

Collins said the comptroller's office didn't review the final agreement.

At one point, Collins provided a draft settlement to Groenwegen, who passed it on to Dalton. The draft names Lopez.

Documents released earlier showed that Gloria Allred, the nationally recognized lawyer for the two women involved, initially asked for $1.2 million to end the case. Collins, in one email, says during the mediation process a "highly experienced mediator" advised the Assembly it would likely have to pay between $250,000 and $450,000 to settle the matter.

Also disclosed earlier, under the final agreement, the two former Lopez staffers each faced a $10,000 penalty for breaking confidentiality. Silver has said the victims insisted on confidentiality.The $135,000 payment -- about 40 percent of which went to the lawyers -- was to cover "emotional distress," the documents stated.

In an Aug. 31 memo, Collins said he informed Deputy Attorney General Arlene Smoler -- who had provided advice on how to structure a "pre-litigation" agreement -- that the final settlement could be in the "low six figures."

"Arlene Smoler hadn't considered that unreasonable under the circumstances I had described to her," Collins said.