The subpoena to Upstate Telecommunications Corp. was issued in late August within the scope of a broad investigation into Monroe County local development corporations being conducted jointly by the attorney general and the state comptroller, and not in response to an audit released last month.
That audit, by state Comptroller Thomas DiNapoli, charged that the county's contract with Upstate Telecommunications smacked of favoritism and cost taxpayers millions of dollars more than necessary-- findings the county has predictably refuted and dismissed as politically motivated.
Upstate Telecommunications Chairman Hank Stuart acknowledged at a meeting of the board Thursday having received the subpoena. The board entered into a closed executive session to discuss the matter, citing it as pending litigation, and later approved hiring an outside counsel to handle the response.
"In regard to the subpoena, the board felt it important to hire outside counsel," Stuart said, adding that the meeting was the first time that board members had had an opportunity to review the subpoena and would respond appropriately. The board meets quarterly.
Navitech deal still under scrutiny
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| 198 Park Ave. near Goodman St. International HQ of Navitech, the company that got a 224 million dollar contract from Monroe County. |
The lone representative on the M3SLDC board appointed by Democratic county legislators, Samuel Farina Jr., abruptly resigned Thursday in an email to his colleagues. The email did not provide a reason and a phone message left for Farina was not returned.
The joint investigation stems from an agreement between the attorney general and comptroller struck in May to establish a task force on public integrity that significantly expanded the attorney general's authority to pursue and criminally prosecute corruption involving taxpayer money. The attorney general was already responsible for regulating nonprofit organizations, like local development corporations.
Some of the documents demanded of Upstate Telecommunications by the attorney general include those easily found in the public domain, such as incorporating papers and minutes of meetings.
But the subpoena also compels the corporation to produce documents pertaining to bank and brokerage accounts, deposit slips and canceled checks, contracts with the county and 14 different companies, and compensation and any other benefits it paid to contractors.
Upstate Telecommunications has no employees, but rather contracts with a variety of individuals and companies to carry out the day-to-day operations of the county's information technology network.
With the public release of his office's audit of the county's contract with Upstate Telecommunications, DiNapoli announced that he had referred his findings to Schneiderman and had specifically asked the attorney general to examine $1.9 million in management fees the corporation paid out between 2005 and 2009.
Among the concerns expressed by auditors were the timing of the creation of Upstate Telecommunications in 2004 and its contracts with individuals with close ties to county government. For example, Richard Mackey, the deputy county executive when Upstate Telecommunications was founded, became a paid consultant for the corporation upon leaving county government in 2005. Mackey has not responded to requests for interviews and declined comment at Thursday's board meeting.
Democratic county legislators held a news conference prior to the board meeting demanding answers to a series of questions and requests for documents they posed to the board two weeks ago.
"The documents we have requested relate directly to how this sweetheart deal was set up, who took part, and who benefitted," said Legislator Paul Haney, D-Rochester.
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