Feds looking at upstate economic development plan News

| 03 May 2016 | 11:34

Gov. Andrew Cuomo announced that his administration retained a former criminal prosecutor to review his upstate economic development initiatives after learning federal investigators are examining potential conflicts of interest and improper bidding related to the programs.

U.S. Attorney Preet Bharara’s investigation has “raised questions” about improper lobbying and undisclosed conflicts of interest by individuals involved in the Buffalo Billion initiative and efforts to attract nanotechnology investment, according to a statement from Cuomo counsel Alphonso David.

In response, the administration hired Bart Schwartz, formerly head of the U.S. attorney’s criminal division in Manhattan, to conduct an internal investigation.

“The state has reason to believe that in certain programs and regulatory approvals they may have been defrauded by improper bidding and failures to disclose potential conflicts of interest by lobbyists and former state employees,” Schwartz said in a statement. “The U.S. Attorney has an ongoing investigation that has revealed important information in this regard.”

Schwartz said Friday he will start his review immediately and report anything he finds to the administration and to federal prosecutors.

David said it is “paramount” that the state ensures the integrity of the economic development programs so that they may continue. He said the state may have been defrauded.

“Any grants made by this program will be thoroughly scrutinized -- past, current or future,” he said.

The Buffalo Billion centerpiece is a $750 million factory the state is building for SolarCity. Another program, known as Nano, seeks to attract high-tech nanotechnology jobs to upstate New York.

A Cuomo administration official confirmed Friday the administration has received a federal subpoena for documents related to the Buffalo Billion issues. The official, who wasn’t authorized to speak publicly about the matter and spoke to The Associated Press on condition of anonymity, said no individuals in the office were subpoenaed.

The official said the administration will share Schwartz’s findings with federal prosecutors.

The New York Daily News reported details of the probe Friday shortly before the Cuomo administration statement.

A spokesman for Bharara declined to comment on the investigation.