Testwell Inc. asserts in state Supreme Court papers that the city suspended its licenses "unlawfully" in October after the company was indicted on enterprise corruption charges. Testwell says the charges have not been proven.

Testwell says an administrative law judge recommended lifting the suspensions but last week the city rejected that recommendation.

The city Law Department says it is reviewing Testwell's court papers. The city has been attempting to retest concrete and steel handled by Testwell on some buildings, although prosecutors say no weaknesses have been found.

But his arrest on federal corruption charges has clearly complicated his work as the state's chief executive and already cost the state some $20 million. The state is facing a potential $2.5 billion budget deficit and the governor doesn't have the same horsepower — or clout — to address the problem that he had just a month ago.

No one in the state capital trusts Blagojevich enough to give him authority to trim the budget on his own, as he requested in November. Any other idea he advances would probably be rejected out of hand. Yet no other official can take the lead.

"Everything just comes to a halt. You have complete paralysis," said House Republican Leader Tom Cross of Oswego.

Blagojevich, a second-term Democrat, was arrested Dec. 9 on charges accusing him of scheming to swap President-elect Barack Obama's vacant Senate seat for profit, shaking down a hospital executive for campaign donations and other wrongdoing.

The governor has defiantly insisted he's done nothing wrong and that he will not resign. His aides say he is going about business as usual.

The complaint, filed Tuesday in The Hague, follows a ruling by Italy's top criminal court ordering Berlin to pay euro1 million (US$1.4 million) in damages to nine relatives of victims of a June 1944 massacre in the Tuscan town of Civitella.

In the atrocity, German soldiers killed more than 200 civilians to avenge a deadly attack by partisans.

In its filing with the World Court, Germany argued that as a sovereign state it has immunity in Italian courts, and that any decision rendered in the Italian judiciary is unenforceable.

Germany, which says it has paid reparations for Nazi crimes under international treaties with Italy, rejected the ruling handed down by Italy's Court of Cassation two months ago.

German Foreign Ministry spokesman Jens Ploetner said seeking compensation for World War II crimes was "morally understandable but it is, in judicial terms, the wrong way to address this injustice, and so this ruling is not acceptable for us."

Compensation claims against Germany have been winding through the Italian judiciary since the late 1990s, when Luigi Ferrini sought restitution for his arrest and deportation to Germany in 1944 to work as a slave laborer in the Nazi armaments industry.

Germany fought the case, pleading immunity. Ferrini lost in two lower courts before the Court of Cassation overturned the previous decisions in 2004 and recognized Italian jurisdiction.