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State hires private firm to examine Buffalo Billion spending

ALBANY – A private legal firm is being paid up to $450,000 by the state to examine past and future spending of the Buffalo Billion and other upstate economic development programs, at the same time federal prosecutors have been expanding their own investigation of state officials, private individuals and companies across the state.

Two and a half months after hiring the outside investigator, the Cuomo administration on Friday afternoon released its contract with Bart Schwartz, a former federal prosecutor who runs Guidepost Solutions out of Manhattan.

Gov. Andrew M. Cuomo turned to Schwartz on April 29, the same day his office received a far-ranging subpoena from U.S. Attorney Preet Bharara to supply information about the Buffalo Billion and other programs.

Though Schwartz began his work immediately, the contract was not given final approval by Cuomo’s office until Friday when the governor’s counsel, Alphonso David, signed the document, a day after Schwartz put his signature to it. The contract still needs the approval of state Comptroller Thomas DiNapoli and Attorney General Eric Schneiderman, who has his own investigation underway looking into spin-off aspects of the program run by SUNY Polytechnic, the public college with campuses in Albany and Utica.

The Cuomo administration did not have an immediate comment about why the contract took as long as it did to execute, nor if Schwartz has uncovered any questionable spending since he began work in late April.

The contract calls for a maximum total payment of $450,000, though there is language in the 21-page document for additional expenses for “unanticipated needs.’’ The contract runs until Dec. 31. Schwartz’s firm can bill the state for a variety of work, including $652.50 per hour for tasks performed by his company’s directors and managing forensic investigators.

The document includes a clause that makes clear that there are no attorney-client privileges between Cuomo’s office and Schwartz. It also states that Schwartz, using his own discretion, can provide whatever information he obtains to law enforcement agencies, including Bharara’s office.

After an initial round of subpoenas was sent by federal prosecutors looking into the matter, Cuomo said there was no need for an additional state review of the Buffalo Billion program. That all changed on April 29 when his office became the latest to receive a subpoena seeking a range of information involving economic development programs, private corporations across the state, and communications by Cuomo’s top staff, as well as information about Joseph Percoco and Todd Howe, two longtime political associates of the governor.

The contract states that Schwartz is charged with reviewing any projects he wants associated with the Buffalo Billion program or several others that have been launched in other upstate cities.

The contract appears to expect that Schwartz will provide information to, or at least be in contact with, Bharara’s office, and that it will delay any work it is doing that might interfere with any pending legal investigation. It also provides that the state can fire state workers or private contracts who do not cooperate with Schwartz.

Significantly, it also states that Schwartz can publicly release a report on his work, though it is uncertain if that will happen.