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The Appellate Division, 3rd Department last week rebuffed an attempt by Besicorp founder Michael F. Zinn to renew his bid for indemnification of legal expenses stemming from his violation of federal campaign spending laws. In Bansbach v. Zinn, 96955, a unanimous opinion written by Justice D. Bruce Crew III, the court refused to consider comments to a clemency board by the federal judge who had sentenced Zinn. Zinn, who served as finance chairman of Rep. Maurice Hinchey’s 1992 campaign, was convicted of funneling $43,000 in illegal contributions through Besicorp accounts and into the Saugerties, N.Y., Democrat’s campaign fund. Besicorp Group Inc. was an alternative-energy power production company in Kingston, N.Y., that is now known as WOM Inc. Early in the investigation, Besicorp’s board voted to indemnify Zinn for any legal expenses he incurred as a result of that probe. The company advanced him about $275,000, prompting a shareholder derivative action by John M. Bansbach. Bansbach alleged that the Besicorp directors had breached their fiduciary duty and squandered corporate assets. The Supreme Court held in April 2001 that Zinn was not entitled to indemnification under Business Corporation Law �722. The 3rd Department reversed the following year (see 294 AD2d 762), and the Court of Appeals reversed the Appellate Division in 2003 (see 1 NY3d 1). Zinn then moved to renew his opposition to Bansbach’s initial summary judgment motion, relying on a letter that Southern District Judge Charles L. Brieant sent to a Florida clemency board. In his letter, Judge Brieant opined that Zinn’s criminal conduct resulted primarily from ignorance. That prompted Zinn to seek renewal on the grounds that the judge’s letter suggested that he acted in good faith — or, at least, not with malice — and therefore should be entitled to indemnification. But Supreme Court Justice John G. Connor of Columbia County disagreed in an opinion upheld last week by the Third Department. “[T]he mere fact that the sentencing judge, with the benefit of hindsight, expressed in a letter to the Florida clemency board his opinion that Zinn’s conduct was the product of aberrant behavior and political naivety does not undermine Zinn’s admissions made in connection with the plea bargain he received,” wrote Justice Crew. Crew said nothing in the letter “in any way alters the fact that Zinn admitted, on the record in open court, that he knowingly and intentionally violated federal campaign finance laws.” The opinion was joined by Justices Edward O. Spain, Carl J. Mugglin and Robert S. Rose. David C. Burger of Robinson, Brog, Leinwand, Greene, Genovese & Gluck in Manhattan argued for Zinn. Harold B. Obstfeld of Manhattan appeared for Bansbach.

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