Albany Corruption Inquiry Hurts Arizona Company That Hired Dean Skelos’s Son

The fallout from a federal investigation into political corruption in Albany has spread to an Arizona company that employed one of the men recently charged.

This month Dean G. Skelos, then the leader of the New York State Senate, and his son, Adam B. Skelos, were arrested on extortion, fraud and bribe solicitation charges. The company at the center of the scandal is AbTech Industries, a small environmental firm based in Scottsdale, Ariz., that markets a spongelike filter designed to remove pollutants from storm water. Senator Skelos, a Republican from Long Island, was accused of taking official actions to benefit AbTech, which, prosecutors contend, had hired Adam Skelos to gain influence in its attempt to win government work.

AbTech says it has been assured by federal investigators that it is not a target of the investigation. Still, the company’s stock has fallen more than 70 percent since The New York Times first reported in April that AbTech was entangled in it. In recent weeks it has seen work suspended on a big contract, one it won in Nassau County with the help of Adam Skelos. Separately, AbTech says the Corvias Group, a developer, construction and property management firm, canceled a partnership it had with it.

In addition, the Securities and Exchange Commission has begun to scrutinize AbTech, according to a person briefed on the matter but who insisted on anonymity because the investigation is continuing. The full scope of the investigation is not known, although the person said that the commission was examining the terms of the Nassau County contract, which required state legislation to be completed, and whether this information was properly disclosed to AbTech investors.

“The company is not aware of an S.E.C. investigation, but would expect to cooperate with any investigation,” Lisa Linden, a spokeswoman for AbTech, said in an email.

On Monday, Abtech Holdings, the parent company of AbTech Industries, held a conference call with investors and financial analysts to discuss its first-quarter financial results. Glenn R. Rink, AbTech’s founder and chief executive, started the call by addressing the impact the federal investigation had had on the company.

The investigation, he said, had “cast a shadow” over one of AbTech’s big initiatives, public-private partnerships. “This highly atypical and devastating set of events has made it impractical to invest in the strategy in the near term,” he told investors. As a result, Mr. Rink said, the company recently identified and eliminated $865,000 in annual costs, which include staff cuts.

Still, AbTech management said it would continue to seek opportunities elsewhere, and told investors it had targeted several other promising markets.

The company was not profitable in the first quarter of the year. To help bolster its operations, the company announced Monday, it has secured an additional $1.4 million in financing.

Company executives typically field questions from analysts and investors on earnings calls. In a highly unusual move, AbTech on Monday announced it was not taking questions, citing the federal investigation. Instead, AbTech executives themselves formulated a list of questions they said were based on inquiries they had received in recent weeks, and answered them.

“Can AbTech survive these recent setbacks?” was one of the questions Jonathan Thatcher, AbTech’s chief operating officer, posed and then proceeded to answer. “AbTech is fortunate to be supported by very dedicated investors, board of directors, advisory board and management. AbTech believes strongly in its technologies, priorities and future business opportunities.”