22 Aug 2014
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Cardinale, Walter Fight for Kudos Over Discovered $250k

The oversight could bring in $250,000 in money owed by developer Rechler Equity Partners.

Cardinale, Walter Fight for Kudos Over Discovered $250k Cardinale, Walter Fight for Kudos Over Discovered $250k Cardinale, Walter Fight for Kudos Over Discovered $250k

Town Supervisor Sean Walter and his immediate predecessor, Phil Cardinale, who is running to get the job back in November’s election, are engaged in a battle of words over who should get credit for the town’s discovery of $250,000 from a developer.

At issue is the cash that both men say Rechler Equity Partners still owes the town in non-refundable security after the company pulled out of a deal last summer to purchase 300 acres at Enterprise Park at Calverton. The recovered money will be used for maintenance and upkeep of the EPCAL property, Walter said.

On Friday, Walter’s statement carried the headline, “Supervisor Uncovers Potential Windfall for Taxpayers.”

Though it quoted Walter saying that failure to collect the money was an oversight for which he takes full responsibility, it also quotes him stating that the mistake was discovered through “our ongoing efforts to cut the cost of town government and to find any revenue sources we can in these difficult times.”

Cardinale, however, cried foul, claiming in an email to the press Friday that Walter was tipped off by a Freedom of Information Act request – signed by Cardinale’s daughter, Tina Johnson, on June 17 – asking the town for a copy of a $250,000 check from Rechler, if there was one.

Cardinale told Patch Saturday that he tipped off Walter in April, to when he was at Town Hall dropping off some papers for a law client.

The former supervisor said he had mentioned having read about the town’s receiving $125,000 from Rechler and suggested to Walter that the company may owe more than that.

“Are you sure $125,000 is all you’re entitled to?” Cardinale said he had asked Walter.

Walter acknowledged that Cardinale had mentioned the matter. In fact, he said, he made some calls soon after Cardinale left his office.

“I spoke to our attorneys,” Walter said, “and they said, ‘No, $125,000 was all that was due,’” which Walter said he later learned not to be true.

Walter said the FOIL request from Cardinale’s daughter had prompted him to go back to the town’s outside attorney, Frank Isler, who had handled Riverhead’s dealings with Rechler.

“I had looked into the matter in the beginning, and then when the FOIL came in, I said, ‘Well, there’s got to be something else going on,’” Walter said.

“That’s when we uncovered the fact there is this $250,000 that is additionally owed to us.”

Cardinale’s daughter didn’t receive a reply to her FOIL request until July 12, when Laura Calamita, a paralegal in the town attorney’s office, sent her a copy of the $250,000 letter of credit agreement that Rechler had pledged as security on May 18, 2009.

Then on the morning of Aug. 12, less than six hours before Walter’s press release was distributed, Johnson received a fax of a document signed by Town Attorney Robert Kozakiewicz, informing her that the town needs another 15 days to process her request.

Asked about the delayed FOIL response, Walter said, “I don’t dictate what is going on in the town attorney’s office.”

Walter said that should a lawsuit against Rechler be needed to retrieve the $250,000, the legal costs involved would have to be borne by Frank Isler’s law firm – Smith, Finkelstein, Lundberg, Isler and Yakaboski – because, he said, it was the outside attorneys who were responsible for the oversight. Walter added he was optimistic Rechler would pay the money owed without legal interference.

Cardinale on Saturday said there was nothing underhanded about having his daughter submit the FOIL request instead of submitting it himself.

“I wanted an honest and prompt response,” he said, “and if it came from me I’m sure they would have delayed a response, which, it turns out, they did anyway.”

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