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September 12 2011 16:19

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New York state probes $224 million Monroe County project


Andreatta, David; Terreri, Jill. Rochester Democrat and Chronicle [Rochester, N.Y] 19 May 2011.

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Abstract
A Monroe County local development corporation and its primary contractor managing a $224 million upgrade of the county's emergency communications system have been subpoenaed by state Attorney General Eric Schneiderman for documentation about their formation and business practices.

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A Monroe County local development corporation and its primary contractor managing a $224 million upgrade of the county's emergency communications system have been subpoenaed by state Attorney General Eric Schneiderman for documentation about their formation and business practices. Meanwhile, state Comptroller Thomas DiNapoli notified the county this week that its relationship with the local development corporation, Monroe Security and Safety Systems, also known as M3SLDC, would be audited. The impending audit and subpoenas issued to M3SLDC and its contractor, Navitech Services Corp., this week suggest a broad investigation into the makeup of the organization, whose existence has been mired in controversy since its inception two years ago. Another company, Harris Corp., whose winning bid for a subcontract to supply safety equipment to first-responders was $11 million higher than a competing firm, also was subpoenaed. The local development corporation was established by the Republican-controlled County Legislature in 2009 at the behest of County Executive Maggie Brooks, who said at the time that it would be less costly for the county to upgrade its communications infrastructure by contracting with an LDC than to do the job itself. It was unclear precisely what aspects of M3SLDC's operations the state is seeking to examine. But charges previously leveled by critics of the organization, almost all of whom have been Democratic county and state lawmakers, are that M3SLDC was created under false pretenses, lacks transparency and that its procurement practices are rife with conflicts of interest. Spokespeople for the state's Attorney General and Comptroller offices declined to comment on the state's investigation.

In separate telephone interviews, representatives of the county, the local development corporation and Navitech acknowledged receiving the subpoenas and notification of the audit this week. They characterized the information sought by the attorney general as "routine" and said they would cooperate. None expressed concern about the demands, but all were at a loss to explain why the organization was suddenly facing such intense scrutiny. "I really don't know why we're being subpoenaed, but I know we're going to cooperate fully with them," said Charles "Hank" Stuart, chairman of the M3SLDC board. "We try to run a very transparent and open LDC." Richard Bell, a partner at the law firm of Gates &Adams who manages the project for M3SLDC, said most of the documentation sought has been aired at public meetings, is subject to open-records laws and, in some cases, readily available on the local development corporation's website. "The information they're looking for is fairly routine," Bell said. "It is a very broad subpoena and we'll deal with it. But again, this is almost exclusively public information." The subpoenas gave the companies a deadline of May 31 to comply. Steve Gleason, the chief operating officer of Navitech, said he is confident the inquiry would turn up nothing of consequence. "We don't have any basis whatsoever to be concerned about adverse findings," Gleason said. Local development corporations are private, nonprofit entities that can issue debt and borrow money without the oversight of the government that created them, and they are not required to comply with public procurement laws for competitive bidding, though many do. They are also not subject to open-records laws, although the Brooks administration has said county local development corporations would comply with open-records requests. Most troubling to critics of M3SLDC's approach to the communications systems overhaul, however, is the labyrinth of companies that appear to be carrying out the business. For example, the county contracts with M3SLDC to manage and finance the project. M3SLDC contracts with Navitech, a startup company, to oversee the upgrades. Navitech contracts with another company called NaviChase, a subsidiary of LeChase Construction, to hire subcontractors to perform the work. The county is paying for the project through a 20-year contract with M3SLDC, yet none of the contracts issued by Navitech or, subsequently, NaviChase, are subject to public review. Ted O'Brien, the County Legislature's Democratic minority leader, welcomed the news of the investigation. "I hope that there isn't substantial wrongdoing uncovered here ... but if the legislature is not going to be able to provide oversight here, it will be comforting to have state agencies looking at what has transpired and making sure that what has been done has been done for a legitimate purpose," O'Brien said.

The county has defended the arrangement as being in the best interest of the taxpayers and in compliance with all applicable laws. County spokesman Noah Lebowitz questioned Wednesday why the state attorney general resorted to issuing subpoenas. "The information (being sought) appears to be routine in nature," Lebowitz said. "It's certainly puzzling that they chose to issue a subpoena instead of calling us and asking for the documents." Schneiderman is scheduled to address the Monroe County Bar Association in Rochester on Friday. DANDREAT@DemocratandChronicle.com JTERRERI@DemocratandChronicle.com ID_Code: A2201110105190331

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Subjects Title Authors Publication title Publication year Publication Date Year Section Publisher Place of Publication Country of publication Source type Language of Publication Document type Subfile ProQuest Document ID Document URL Subpoenas, County executives, Public records New York state probes $224 million Monroe County project Andreatta, David; Terreri, Jill Rochester Democrat and Chronicle 2011 May 19, 2011 2011 NEWS Gannett Co., Inc. Rochester, N.Y. United States Newspapers English News Subpoenas, County executives, Public records 867493508 http://ezproxy.drake.brockport.edu:2048/login?url=http://search.proqu est.com/docview/867493508?accountid=26985

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