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Environmental groups are suing the Cuomo administration in a bid to make sure that federal rejection of nearly a half-billion dollars in controversial Tappan Zee Bridge financing sticks.
Naming 16 administration officials, Assembly Speaker Sheldon Silver and a state senator, the lawsuit asserts Gov. Andrew Cuomo this summer orchestrated a state loan of federal clean water funds for the new $3.9 billion bridge, but does not name the governor himself.
The lawsuit, which was filed late Monday in Albany County state Supreme Court, asks that a judge, in addition to backing last month's ruling by the U.S. Environmental Protection Agency that denied 95 percent of the loan, also strike the remaining portion that EPA said was appropriate.
The lawsuit claims the entire loan is illegal because the state Environmental Facilities Corp. and state Thruway Authority — both controlled by the Cuomo administration — ignored public notice and filing requirements when they approved the use of $511 million in loans from the federally supported Clean Water State Revolving Loan Fund.
The state has hired a high-profile Washington law firm to appeal the EPA decision through the regional agency office in New York City, which disallowed $482 million of the planned loan.
"We need to make sure the EPA ruling stays in effect," said Paul Gallay, president of the environmental group Riverkeeper. "The best way to do that is to go to court to make sure a judge has jurisdiction on this."
The federal funds normally are used by states to help localities build and upgrade water and sewer systems. Between 1990 and 2013, the state spent about $13.6 billion from the fund on such projects. This was first time in the U.S. that a state sought to use the funds for a bridge project.
Riverkeeper was joined in the lawsuit by Environmental Advocates of New York and Waterkeeper Alliance. Named in the suit were state Environmental Conservation Commissioner Joe Martens, state Environmental Facilities Corp. President Matthew Driscoll, five other EFC directors, and the seven members of the state Thruway Authority.
EFC board members also named included acting Health Commissioner Howard A. Zucker and Secretary of State Cesar A. Perales, and Cuomo-appointed directors Francis R. Corcoran, president and CEO of National Stock Exchange; Charles Kruzansky, director of government relations at Cornell University; and Vita DeMarchi, a managing partner of Syracuse-based Synapse Partners, an insurance brokerage and risk management firm.
The lawsuit also named Silver, state Sen. John DeFrancisco and Cuomo's budget director, Robert Megna, who approved half of the financing in July as a member of the state Public Authorities Control Board.
"I believed that there were environmental problems that the state had to deal with ... to justify the $250 million. We are on solid ground," DeFrancisco said. Silver's office did not provide comment.
Asked why the lawsuit, which alleged that Cuomo directed his agencies to adopt the funding plan, did not include the governor, Gallay said, "We will follow the facts where they lead. We will seek (legal) discovery where we need to get discovery .. we will go in any direction allowed by law."
"Allowing this misuse of funds could set a dangerous national precedent spurring other states to raid federal monies designed to give us clean water. In the vernacular of this holiday season, the state's economic trick isn't a treat for our waterways and communities," alliance Director Marc Yaggi said.
"EFC intends to vigorously defend its right to finance Clean Water Act projects that benefit the Hudson River Estuary, as well as the toll payers of New York state," according to a statement issued by EFC spokesman Jon Sorensen.
The EFC voted to support the loan June 26, 10 days after Cuomo issued a news release that touted the outcome in advance. The lawsuit asserted that EFC directors "carried out their marching orders as they were plainly expressed" in Cuomo's news release.
When the governor announced the financing arrangement, the EFC, the Public Authorities Control Board and the Thruway Authority had yet to vote on the issue. The Thruway Authority voted to approve the loan package in August.
After the EPA ruled that nearly all the loan was improper, the EFC hired the law firm of Squire Patton Boggs to file an internal appeal with the agency.
The firm is one of the 25 largest law firms in the world, according to Forbes. It is also the largest lobbying firm in the U.S., having contributed more than $13 million to political candidates from 1989 to 2014 and having earned more than $540 million in lobbying fees from 1998 to 2014, according to the campaign finance website opensecrets.org.
On Oct. 15, EPA granted a request from the firm to extend the date to file an appeal to Nov. 14, from the original deadline of Oct. 16.
Asked what the state was paying the firm, Sorensen said, "The firm was selected through a competitive process and total costs will not be known until the appeals process is complete ... defending against EPA's overreach is a worthy investment in both the short- and long-term."
Environmental Advocates Director Peter Iwanowicz questioned why the state would chose to hire an outside law firm rather than use in-house lawyers or state Attorney General Eric Schneiderman. He noted that Allen A. Kacenjar, the lawyer for Squire Patton Boggs handling the case, has a history of bringing federal cases in the U.S. District Court in Washington.
Several of his cases involved representing industries that were challenging federal pollution control rules, Iwanowicz said.
bnearing@timesunion.com • 518-454-5094 • @Bnearing10
