Jeff Bray, the former Fulton County Economic Development Corp. executive sued by EDC for paying the agency attorney $200,000, asserts he acted properly in paying J. Paul Kolodziej for his services.
Bray and his lawyers, Michael L. Koenig and Victoria P. Lane, filed their response to the EDC lawsuit Friday in State Supreme Court in Johnstown.
EDC also named former agency attorney Kolodziej in the suit, but he has yet to file his answer.
The agency, represented by Saugerties attorney Michael W. Catalinotto, filed suit in January in an attempt to recover the payment.
The suit contends Bray “unlawfully entered into an agreement with Kolodziej, purportedly on behalf of the [agency], to compensate him for alleged services rendered beyond the scope” of his contract, which was to pay him no more than $18,000 annually.
Instead, the suit contends, Bray agreed to pay Kolodziej $200,000 in seven installments through 2008 and 2009, a sum representing 3 percent of “various unspecified commercial transactions.”
The payments were not authorized by the agency board, the suit said, and were not disclosed to the board.
The payments to Kolodziej were discovered during the agency’s internal investigation commenced after last spring’s discovery that Bray and Peter Sciocchetti, former vice president of the EDC real estate arm, Crossroads Incubator Corp., were regularly paying themselves six-figure bonuses.
In August, the agency board issued its finding and disclosed it is seeking repayment of $1.5 million in bonus money from both Bray and Sciocchetti.
In his response to the suit, Bray denies all the allegations and cites the corporation by-laws as the source of his authority to pay Kolodziej.
Koenig said the answer raises numerous affirmative defenses and emphasizes that Bray acted “with the authority that had been delegated to him over the course of 19 years.”
The board, Koenig said referring to a key passage in the answer, “expressly and/or implicitly delegated authority to Mr. Bray to conduct the business and affairs of the corporation including making the payments alleged.”
Bray’s court papers repeatedly credit him with acting in good faith and “in the best interest of the corporation,” and assert the agency board should have been aware of the transaction because it “had a duty of reasonable inspection of the corporation’s books and records.”
Bray’s response said he acted “on behalf of the corporation; the board had knowledge of his actions; the board failed to timely repudiate Mr. Bray’s actions; and Mr. Bray reasonably relied upon the board’s silence as approving of his actions.”
Most of the bonus money was paid out after the 2007 sale of $31 million in industrial park properties to a Boston real estate management company.
The revelation of the bonus payments led then-Assemblyman Richard L. Brodsky to open committee hearings on the issue of nonprofit agencies paying high compensation to executives. A parallel investigation was commenced by the state Authorities Budget Office, which has been seeking to have EDC and similar agencies around the state operate as public entities subject to financial disclosure laws.
Catalinotto did not respond to a telephone call seeking comment by late Monday afternoon.
One of Bray’s enduring supporters, former EDC President Arlene M. Sitterly, sent a letter last year to county supervisors reminding them what Bray did for the county in his 19 years, a tenure in which 30 industrial buildings were constructed for various companies that now pay more than $3 million annually in property taxes.
During Bray’s leadership the agency also helped create more than 1,000 jobs, supporters have pointed out.
Categories: Schenectady County