Skelos corruption charges threaten $12M Nassau County contract

Nassau's $12 million contract with an environmental company at the center of corruption charges against State Senate Majority Leader Dean Skelos and his son, Adam, has hit serious roadblocks, interviews and documents show.

The issues have arisen as the county scrambles to react to the influence scandal, and as the state legislation needed to complete the bulk of the contract's work has stalled.

To date, Nassau has paid Arizona-based AbTech Industries only $150,141, largely for initial design and study. The project, if constructed, would install antimicrobial sponge technology in storm-water drainpipes to filter pollutants before they reach waterways.

But the construction portion of the project, estimated to be 90 percent of the $12 million cost, is contingent on a change in state law to allow municipalities to use special "design-build" contracts, in which the design and construction phases are awarded to one company, rather than in separate bids as is typical in large public works projects.

Gov. Andrew M. Cuomo and the Senate Republican majority, led by Skelos, of Rockville Centre, supported expansion of the state practice to local governments, but the Assembly blocked it from passage in the state budget on April 1.

This week, in light of the criminal case against Skelos and his son -- who was paid by AbTech -- aides to County Executive Edward Mangano said they were reviewing the contract and would soon notify the company of its status.

"With a cloud hanging over the project, we're going to suspend the work," said an administration source who requested anonymity because AbTech hadn't been notified.

County Comptroller George Maragos already has issued a stop-payment order on the contract, as he reviews the payments already made.

"We are looking at the past claims [for payment], and we're not going to process any new claims," said Maragos spokesman Jostyn Hernandez.

An AbTech spokeswoman did not respond to requests for comment made late this week. The firm itself is not accused of any wrongdoing.

Adam and Dean Skelos face federal conspiracy, bribery and extortion charges. A complaint charges the senator tried to "monetize" his position by pressuring a large real estate developer with an interest in state legislation to pay big fees to Adam Skelos through companies including AbTech.

Both men deny the charges.

After "design-build" legislation didn't make this year's state budget, AbTech suspended its $10,000 monthly payments to Adam Skelos, but had already paid him a total of $198,000 since late 2012, federal prosecutors said. Those payments were initially to be $4,000, but were boosted after Dean Skelos "threatened to block" the $12 million Nassau deal, the complaint alleges.

The contract was awarded to AbTech in May 2013. Although the company did not submit the lowest bid, a public works committee called the contract the "best value."

Nassau officials say the contract language makes it clear that the bulk of the work on the storm-water project can't take place without "design-build" authorization. The contract states: "The county is seeking approval to award this contract as a design-build contract. When such approval is received the county will proceed with the construction."

Another county official said that if Nassau decides to proceed with the full project to install storm-water-treatment technology, it could issue a new bid for the construction.

The official said Nassau initially sought to use the "design-build" method -- which the state is using in replacing the Tappan Zee Bridge -- because it can reduce a project's cost by up to 30 percent with one firm handling work that usually is split between contracts. It also can motivate a contractor to produce a better design, the official said, as any errors would impact the construction phase, which they also lead.

"You shift risk, one, and you save money, two," the county official said. "You get the job done quicker, but you have to use it for the right project."

Asked whether there would be any more lobbying by county officials for the state design-build legislation as it pertains to the AbTech project, the official replied: "Zero. Nothing."

With Michael Gormley

By Paul LaRocco

paul.larocco@newsday.com@paullarocco

Paul LaRocco is a reporter on the investigations desk. Since starting at Newsday in late 2010, he has also covered Nassau and Suffolk county politics and government and the Town of Oyster Bay.