Gov. Andrew Cuomo has hired a former criminal prosecutor to review his upstate economic development initiatives after learning federal investigators are examining potential conflicts of interest and improper bidding.Cuomo's counsel says Friday that U.S. Attorney Preet Bharara's investigation has ``raised questions'' about improper lobbying and conflicts of interest by individuals involved in the Buffalo Billion initiative and efforts to attract nanotechnology investment.
The administration says Bart Schwartz, formerly head of the U.S. attorney's criminal division in Manhattan, was hired to conduct an internal investigation. Schwartz says the state ``may have been defrauded'' by the actions of lobbyists and former state employees.
The Buffalo Billion centerpiece is a $750 million factory the state is building for SolarCity.
The New York Daily News reported details of the probe Friday shortly before the Cuomo administration statement.
Statement from Governor’s Counsel Alphonso David:
“The U.S. Attorney for the Southern District has an ongoing investigation focused in Upstate New York (commonly referred to as the Buffalo Billion and Nano investigation). This investigation has recently raised questions of improper lobbying and undisclosed conflicts of interest by some individuals which may have deceived state employees involved in the respective programs and may have defrauded the state. We take violations of the public trust seriously and we believe these issues must be resolved by further investigation by the U.S. Attorney. In the meantime, and as the program operates on a daily basis, the Governor has ordered an immediate full review of the program. Any grants made by this program will be thoroughly scrutinized – past, current or future. This effort will be led by Bart M. Schwartz, a highly regarded independent investigator who previously served as Chief of the Criminal Division of the U.S. Attorney’s office for the Southern District of New York. We have notified the U.S. Attorney’s office of our efforts.
“Ensuring the integrity of the contracting process for this program is paramount, so that the Buffalo Billion and Nano program can continue creating new jobs and revitalizing Upstate’s economy.”
Statement from Bart M. Schwartz:
“The state of New York awards significant funding and regulatory approvals to private sector companies.
“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. The U.S. Attorney has an ongoing investigation that has revealed important information in this regard.
“As the state needs to continue operating these important programs, they have asked me to commence an immediate review of all grants and approvals – past, current and future – in certain programs and operations including the Buffalo Billion/Nano Economic Development Program.
“I will conduct my review commencing immediately and report any information I find to the U.S. Attorney and the administration. The administration has made it clear to me that they have zero tolerance for any violation of the public trust from any actor or entity and I should follow the facts.”