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State agency paying up to $200,000 for legal advice on Buffalo Billion probe

ALBANY – The Cuomo administration’s economic development agency is paying up to $200,000 under a no-bid contract for criminal defense lawyers to assist with matters related to the federal probe of the Buffalo Billion economic development program.

The contract provides payments of up to $795 an hour for a law partner who previously worked in the same unit at the U.S. Attorney’s office that issued the subpoenas in the Buffalo Billion investigation.

Details of the legal contract are outlined in a memo from Empire State Development Corp. President Howard Zemsky to members of the agency’s board. It was obtained by POLITICO New York after the agency mistakenly posted the “privileged and confidential” document on its website instead of an agenda for a board meeting for a subsidiary of the economic development department. It has since been pulled down.

It was reported last year that the ESDC board turned to outside counsel WilmerHale to represent the agency in the Buffalo Billion investigation. What is new in the Zemsky memo is the per-hour amount of money the agency is paying the private lawyers, and a fuller explanation of why the firm was hired – in Zemsky’s own words to the board.

Zemsky’s memo said there was no reason, as of last July, to suspect that the agency or any of its employees were subject of U.S. Attorney Preet Bharara’s probe. But because the investigation is “criminal in nature” and because of the large amount of money involved in the Buffalo Billion program, it was recommended the agency use the help of an outside law firm.

“Specifically, we would like to secure the services of former Deputy U.S. Attorney for the Southern District of New York Boyd M. Johnson III, who was until recently the head of the unit that issued the subpoena at issue here,” Zemsky noted.

Bharara since last spring or early summer has been investigating the Buffalo Billion program and whether campaign donations or other political considerations were a part of the awarding of the massive contracts. One program under review is the contract won by LPCiminelli and McGuire Development Co., both Buffalo firms, for an overall Buffalo Billion construction and development contract.

Among the areas prosecutors have been looking at is the RiverBend project that is the future home of SolarCity. Subpoenas were issued last year to both Buffalo companies, as well as to the ESDC and SUNY Polytechnic, the state college that is part of running the Buffalo Billion program.

Zemsky said the agency was getting a 30 percent discount on Johnson’s billing and would pay the firm $795 per hour for his work, as well as $775 for the services of another lawyer at the firm, Stephen A. Jonas.

“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,” agency spokesman Jason Conwall said Wednesday afternoon.

Conwall did not respond to requests for information about how much the agency has spent on the legal work, or if there have been any renewals to increase the dollar terms beyond the original $200,000.

Zemsky said the agency looked to find lawyers with the right expertise to handle the matter, but said it was “quickly apparent” that “one firm and one partner in particular at that firm stood out as uniquely qualified and experienced in this area.’’

The contract was not to exceed $200,000, according to the memo, an amount that would take 251 hours if just Johnson’s rate was paid – and was to last one year beyond the July 8, 2015, approval date. The contract was signed with Wilmer, Cutler, Pickering, Hale and Door, the full name of WilmerHale.