ALBANY - Federal prosecutors’ probe of the “Buffalo Billion,” one of Gov. Andrew M. Cuomo’s signature development projects, is “criminal in nature,” according to an internal administration memo that recommended hiring a former underling of U.S. Preet Bharara to handle the case for the state.
The memo also acknowledged that Cuomo’s Empire State Development Corp., the state’s chief economic-development arm, was served with a subpoena that “requests documents relating to projects and activities that were funded from a particular funding source.”
Although the memo, written by ESDC President and CEO Howard A. Zemsky, doesn’t specifically cite the “Buffalo Billion,” sources acknowledged last fall that Bharara’s office had issued subpoenas involving the project. Newsday and other outlets have reported that questions centered on a bidding process that awarded a state contract -- to a major Cuomo campaign donor -- to build a $900 million solar panel factory in Buffalo.
Zemsky wrote the memo in July but it wasn’t made public then. The memo was first reported by Politico New York.
Zemksy wrote to his board as part of a request to bypass the usual steps in hiring outside lawyers to represent ESDC and inside contract with a particular firm.
“Although ESD in-house counsel typically handle document production pursuant to request by subpoena, the amount of money involved in these transactions is quite large,” Zemsky wrote. “In addition, although we have no reason to believe that either the corporation itself or any of its employees is a subject of this investigation, the investigation is criminal in nature.”
Zemsky goes on to say he wants to hire Boyd Johnson III, “who was until recently the head of the unit that issued the subpoena at issue here.” The memo said that the outside lawyer’s “scope of work” would be “advice and counsel in connection with a subpoena served upon the corporation by the United States Attorney for the Southern District of New York.”
Johnson to reduce his billing rate by 30 percent and would charge ESDC just $795 per hour, Zemsky said. Another lawyer would be added for $775 per hour.