ALBANY – A powerhouse law-lobbying firm that employed the son of the Senate majority leader is behind Governor Pataki’s budget proposal authorizing a state authority to finance a construction project in Israel.

In 2004 and 2005, the firm Wilson, Elser, Moskowitz, Edelman and Dicker lobbied Mr. Pataki and lawmakers to grant the Dormitory Authority of New York permission to issue tax-exempt bonds to a nonprofit group in New York – Hadassah, the Women’s Zionist Organization of America, as well as the affiliated Hadassah Medical Relief Association.

Mr. Pataki’s proposal has raised the eyebrows of fiscal observers, who are questioning why taxpayer-funded bonds should be issued to finance construction projects outside of New York, let alone the country.

Hadassah in those two years paid the firm a total of $95,000 for lobbying the Legislature and the governor on the subject of authority issues, according to records filed with the New York Temporary State Commission on Lobbying. An item buried in the governor’s budget authorizes DASNY to issue bonds for the reconstruction, renovation, development, improvement, expansion, and equipping of Hadassah-Hebrew University Medical Center in Ein Kerem, Israel, where Prime Minister Sharon, who suffered a stroke, is being treated

DASNY, the primary state agency responsible for financing and managing the construction of public buildings, has never financed a project outside New York, according to the New York Post, which reported on the budget item on Monday. The dormitory authority, which sold $4.63 billion in bonds in fiscal year 2005, finances and manages the construction of private and public college campuses, state agencies, hospitals, and various nonprofit groups specified by law.

A spokesman for the law firm, Steven Greenberg, said the budget item “does not require DASNY to issue bonds. It simply gives them ability.”

Proposals would be first reviewed by the staff and counsel of the Dormitory Authority, he said. Mr. Greenberg said the firm had argued that Hadassah should have the same ability to be issued bonds from the authority that hundreds of other nonprofit entities in New York have.

Mr. Greenberg said the lobbying effort was handled by partners at Wilson Elser and said the son of Senate majority leader Joseph Bruno, Kenneth Bruno, had no involvement with the client. The younger Mr. Bruno worked at the firm from mid-2003 to early 2005 for a reported 21 months. He quit the job and started his own lobbying firm but closed down his company late last year to practice law.

Wilson Elser, the highest earning lobbying firm in Albany, has represented Madison Square Garden, CGI Group, the Healthcare Association of New York State, and the New York State Hospitality and Tourism Association, according to the New York Law Journal.