NY development officials won't testify in probe

By MICHAEL VIRTANEN

ALBANY, N.Y.

Two local economic development officials invoked their rights against self-incrimination and refused to testify Thursday before a legislative committee investigating more than $1 million they received in bonuses.

The state has taken steps to illuminate the inner workings of the thousands of public authorities and quasi-public entities that have the power to provide tax breaks, raise fees and tolls, and borrow millions of dollars with little public oversight.

On Thursday, lawyers for Jeff Bray, the Fulton County Economic Development Corp.'s senior vice president, and Peter Sciocchetti, executive vice president of EDC affiliate Crossroads Incubator Corp., said the Fifth Amendment is meant to protect the innocent. In letters, they said Assemblyman Richard Brodsky, the committee chairman, has suggested wrongdoing and belittled witnesses.

Attorney Peter Moschetti wrote that Sciocchetti wanted to testify, but he advised him not to.

"It appears the hearings have little or nothing to do with fact-finding and more to do with the misstatement of facts and the making of accusations against witnesses," he wrote.

Michael Koenig, the other lawyer, wrote that he previously offered having Bray provide facts and information under other circumstances, not at a public hearing, but Brodsky refused.

"Based upon that and my previously expressed concerns, including, among other things, public comments and insinuations you have made, I have no choice but to advise my client to exercise his rights," he wrote.

Brodsky, who is seeking the Democratic nomination for attorney general, is scrutinizing the actions of quasi-public organizations statewide. Recent revisions in the law were meant to shine light on the records and what he has called the "secretive" activities of organizations that receive public funding and do public work with little scrutiny.

A new oversight office has begun collecting detailed financial and other information from more than 700 public authorities and has reported that many have failed to comply with those requirements.

At the hearing Thursday where Bray and Sciocchetti had been subpoenaed but did not appear, Brodsky said he subpoenaed documents about their compensation and employment contracts that were not provided and not addressed in the lawyers' letters. He added that you can't invoke Fifth Amendment privilege until you have actually been asked a question.

Brodsky repeated that in letters sent back to the lawyers, saying the committee will consider "remedies" regarding their clients' "defiance of the subpoenas." That could include going to court.

Both men have been suspended by their corporate boards. Members testified at a June hearing that they had only recently learned about the 2007 and 2008 bonuses and were looking into them.

Earlier corporation statements, before their suspensions, said the extra compensation came from selling $31 million in properties developed over 18 years by Crossroads, a private entity.