Rejecting a recommendation by its town attorney’s office, the Oyster Bay Town Board on June 26 nixed a resolution to pay legal fees for former Supervisor John Venditto.
Councilmembers Lou Imbroto, Michelle Johnson and Thomas Hand joined Supervisor Joseph Saladino in voting no. Joseph Muscarella was the lone “aye” vote. Councilwoman Rebecca Alesia abstained from voting and Councilman Anthony Macagnone recused himself.
The resolution would have authorized the town comptroller to make a payment to a law firm in connection with a civil complaint filed against the town and Venditto by the Securities and Exchange Commission (SEC) last November. It charged the defendants with what the complaint called their “fraudulent omissions and misrepresentations in failing to disclose to the investing public material information relating to the town’s indirect guarantees of millions of dollars of private bank loans for the benefit of one of the town’s concessionaires. Defendants failed to disclose the indirect guarantees in connection with any of the 26 securities offerings the town issued between August 2010 and December 2015, and the town’s eventual disclosures in connection with four securities offerings issued between December 2015 and December 2016 were materially misleading.”
The town, an outside attorney had counseled, would have violated the state constitution by guaranteeing loans eventually worth more than $20 million to concessionaire Harendra Singh. The complaint alleged that Venditto and his associates, including former Town Attorney Leonard Genova, managed to mislead the town board and financial officers about the loan guarantees. Genova, granted immunity, was a witness for the federal government in its trial against Venditto.
The town will initiate legal action against Genova to recover losses it sustained by what it called his “improper conduct.”
Venditto, last November, had requested that the town provide for his defense in the SEC lawsuit.
In May, Venditto was acquitted of federal corruption charges related to the loan guarantees in a separate criminal trial. The government alleged that Venditto accepted bribes from Singh in exchange for loan guarantees. The longtime politician was represented by Marc Agnifilo of the Manhattan-based Brafman & Associates.
In a June 20 letter emailed to Deputy Town Attorney Matt Rozea, Agnifilo listed the proposed rates in the SEC vs. John Venditto trial: $850 an hour for himself and $650/hour for his associates. The firm began representing Venditto in the upcoming case on May 24 and the resolution in question contained a recommendation by the town attorney’s office that the firm be retained and an initial payment of $50,000 be disbursed from the comptroller’s office.
In commenting on the resolution before the board vote, Arthur Adelman of Sea Cliff called the hourly fees “outrageous” and though he agreed that the former supervisor should be indemnified, urged the board to seek an agreement with Venditto to find a less expensive lawyer.
“The board might consider not approving this resolution and moving forward with [Venditto’s] litigation and seeing if they’ll do a 50/50 split,” Adelman concluded.
Kevin McKenna of Syosset also asked the board not to vote, and await the proceedings of Venditto’s trials—both with the SEC and yet another in Nassau County Supreme Court; last June, he was one of several former town officials charged by Nassau County District Attorney Madeline Singas. A trial date has not been set, and Venditto faces felony charges of “corrupt use of position or authority.”
“You have the ability to delay this whole [vote], to put it off,” McKenna urged, noting that a vote against authorizing the payment “would automatically trigger a lawsuit, which the experts say the town and the public is going to lose.”
In a memo backing the resolution, the attorney’s office argued that “Town Code 22-2 provides, in mandatory language, that the town ‘shall provide for the defense of an employee in any civil action or proceeding’…and given the complexity of the matter, the Office of Town Attorney cannot provide Mr. Venditto’s defense through ‘in-house’ counsel.”
The memo concluded that Venditto was “entitled to representation by counsel of his choosing and that such counsel’s reasonable attorneys’ fees and litigation expenses shall be paid by the town…”
Brafman & Associates did not return an e-mail seeking comment.
