ALBANY &#8212 New York State will honor the lease contracts that Carl Paladino has with the

state government, Gov. David A. Paterson said Thursday.

A day earlier, state officials said a couple dozen of Paladino&#8217s leases were under

review following controversial e-mails Paladino forwarded. But Paterson said Thursday there is

no clause in the contracts that would allow the state to back out.

Paladino already had threatened court action if the state tried to back out of one recent

contract he was awarded.

Paterson called the forwarded e-mails &#8220absolutely outrageous.&#8221

&#8220It actually causes me to even take a look at some of our contracts, our leasing

agreements with Mr. Paladino, to see if we had any kind of moral turpitude clause, which we

don&#8217t, and he successfully won those bids and we&#8217ll honor them,&#8221 the governor

said.

The Paladino gubernatorial campaign said Paterson had no choice but to back down.

&#8220We congratulate the governor for discovering the limits of his powers. We do wish he

would spend as much energy to discover how much power he has to solve the state&#8217s

economic problems as much as he has expended to attempt to steer leases to his political

cronies, because that&#8217s what this is all about,&#8221 said Paladino campaign director

Michael Caputo.

&#8220[Paladino] has a First Amendment right to say what he wants and do what he

wants,&#8221 Paterson said of the GOP gubernatorial hopeful. &#8220But I think part of

governance involves a certain level of respect and integrity and caring for people of the

state. Some of those e-mails that I heard and read about, I felt were absolutely

outrageous.&#8221

Caputo responded: &#8220I think most of the reporters understand that when Gov. Paterson

talks about morality, it doesn&#8217t pass the sniff test.&#8221

Paladino holds about $85 million worth of current contracts for various state agency

leases, mostly in Buffalo.

The state asked Paladino on Wednesday to voluntarily back away from a recent lease contract

he won with the state. Paladino rejected the idea, and his campaign accused the Paterson

administration of trying to go after his state leases and give them to political allies. The

potential beneficiaries were not identified.