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Cuomo administration memo: Buffalo Billion probe ‘criminal’

The Buffalo skyline is seen in this Saturday,

The Buffalo skyline is seen in this Saturday, Oct. 17, 2015, photo. Credit: AP

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 lawyer who worked for U.S. Attorney 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 by Bharara’s office 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 in September that Bharara’s office had issued subpoenas involving the project.

Newsday and other outlets have reported that questions centered on the awarding of a state contract — to LPCiminelli Inc., a major Cuomo campaign donor — to build a $900 million solar panel factory in Buffalo.

The State University of New York Polytechnic Institute, which played a large role in administering the “Buffalo Billion,” also has been subpoenaed.

Zemsky’s memo marks the first time the Cuomo administration acknowledged the probe was “criminal in nature.”

Zemsky wrote the memo in July, but it first reported Wednesday by Politico New York.

Zemksy wrote to his board in a request to bypass the usual steps in hiring outside lawyers to represent Empire State Development Corp. and 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 agreed to reduce his billing rate by 30 percent and would charge ESDC $795 per hour, Zemsky said. Another outside lawyer would be hired at $775 per hour.

It wasn’t immediately clear if ESDC hired Johnson.

The agency’s spokesman, Jason Conwall, said: “As we’ve previously said, several months ago, the U.S. Attorney had requested that ESD assist in providing documents and ESD secured outside counsel to aid in that process.”

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