A bond contract for a Buffalo project that went to the Harris Beach law firm has raised conflict-of-interest concerns and involved a local lawyer in a debate about how much influence he has, even when he doesn't exercise it.
In a front-page story Thursday, The Buffalo News reported suggestions by the Public Accountability Initiative of Buffalo that Harris Beach should not have been chosen as bond counsel for the Canal Side project because Harris Beach partner Mike Townsend of Perinton chairs the New York Power Authority.
The Power Authority is financing more than $100 million in bonds for the project over 20 years.
So the potential conflict, according to Kevin Connor, co-director of the Public Accountability Initiative, is that Harris Beach stands to make $50,000 to $100,000 from its role as bond counsel while working with an agency chaired by one of its partners.
Canal Side is a mixed-use development originally devised to attract Bass Pro Shops, a sporting goods retailer. Although Bass Pro has since pulled out, the project is moving ahead and could consist of 1 million square feet on the Lake Erie waterfront.
Another state agency, Empire State Development Corp., is overseeing Canal Side, and chose Harris Beach.
An Empire State Development official was quoted by The Buffalo News as saying the selection of Harris Beach and Townsend's position with the Power Authority were "merely coincidental."
Although Townsend wasn't involved in the selection of Harris Beach, Connor said Townsend should have disclosed to Empire State Development that he was a Harris Beach employee.
According to Harris Beach officials, Townsend was out of the office traveling on Thursday and could not be contacted. The officials said nothing was unusual in how the firm was selected.
"We have represented the Empire State Development Corp. for well over a decade and are privileged to do so," said Harris Beach's William Albert.
A scan of past stories in The Bond Buyer, an industry news magazine, shows Nixon Peabody, another large Rochester law firm, is also used regularly by Empire State Development as bond counsel.
Harris Beach's website notes Townsend's membership on the Power Authority board began in 2004. He became chairman in 2008. He also is on the board of the state Energy Research and Development Authority and serves as counsel to the County of Monroe Industrial Development Agency.
JFSTINSO@DemocratandChronicle.com
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