Leading New York politician arrested on bribery charges

23 Jan 2015 | Author: | No comments yet »

Assembly Speaker Sheldon Silver could hold on to power despite arrest.

New York and its Democratic Gov. ALBANY — There’s a little known anecdote about Assembly Speaker Sheldon Silver that reveals a lot about why the state’s second-most powerful Democrat is facing five federal corruption charges that could put him in prison for the rest of his life.Sheldon Silver funneled $500,000 in state slush funds to a leading Manhattan oncologist in exchange for a steady stream of asbestos-related cancer cases, which he then fed to a personal-injury law firm that paid him more than $3 million in fees for the referrals, federal prosecutors charged Thursday.

Stunned Assembly Democrats must now decide which is the lesser of two evils: sticking with a politically damaged speaker or turning over upcoming budget talks to a rookie.Sheldon Silver, the speaker of the New York Assembly, exploited his position as one of the most powerful politicians in the state to obtain millions of dollars in bribes and kickbacks, federal authorities said on Thursday as they announced his arrest on a sweeping series of corruption charges. For the better part of a decade during the 2000s, Silver told an associate, he would routinely send a $100 check each year to the campaign committee of former Manhattan District Attorney Robert Morgenthau. “But I wanted to see if he would cash my check. Cuomo’s decision to pull the plug on his corruption-fighting Moreland Commission panel will have repercussions far beyond Thursday’s indictment of Sheldon Silver, insiders said.

Several years ago, Silver approached “two prominent developers of substantial properties in Manhattan” to hire the firm, which specializes in seeking property-tax reductions, Manhattan US Attorney Preet Bharara said. The Assembly since 1973 has had three speakers serve while under indictment, including Mel Miller, who managed to negotiate a budget deal with then-Gov. The 70-year-old Democrat was taken into custody Thursday by the FBI on federal charges that he took nearly $4 million in payoffs and kickbacks, crimes that carry up to 100 years in prison and could cost him his political seat. The move, some said, raised questions about Cuomo’s commitment to rooting out Albany’s pay-to-play culture and could harm his efforts to cast himself as an anti-corruption reformer. “It has a huge impact. [US Attorney] Preet [Bharara] confirmed that this is a result of the Moreland investigation, and that begs the question whether or not the governor knew about this information when he decided to disband the panel.

Neither the firm nor its members are identified in the complaint against Silver, but sources identified the firm as Goldberg & Iryami, whose founding partner, Jay Arthur Goldberg, is Silver’s former counsel and is referred to in court papers as Silver’s uncharged co-conspirator, or “CC-1.” The developers also aren’t named in the court papers, but a source identified one as 100-year-old Leonard Litwin, owner of luxury apartment-rental giant Glenwood Management. The showdown made headlines because of the clear insinuation that Silver, a Democrat, was using his official power to serve a private customer and enrich himself. Silver has been the most inscrutable power broker at the state Capitol for two decades, with just two or three of his most intimate associates, who often went back to his childhood on the Lower East Side, knowing really well what he was all about. Between 2005 and last year, Litwin, the state’s largest political donor, contributed more than $10 million to various candidates and political committees of both major parties, including about $200,000 to Silver and his political committee, according to court papers. Many Albany observers believe it’s unlikely Silver (D-Manhattan) would quit his leadership post without a clear signal from members that they want him gone.

That it took nearly 11 long years for prosecutors finally to make a case along those very lines reveals both the complexity of Silver’s alleged scams and Albany’s rotten pay-to-play culture. Cuomo lamented the added “negativity” associated with state government as good government groups renewed calls for him to do more and critics accused him of flagging on past anti-corruption initiatives. High-level officials used to believe that Silver was something of a politician’s politician, seeking from the game of politics as much as he could possibly get for his district and/or his fellow Democrats in the Assembly. But they said his decision to shut down the panel after it subpoenaed Silver’s and other Assembly members’ financial records looked like business as usual after the feds were able to take the same information to build a case against Silver.

Silver asked Taub to refer cancer patients through him to Weitz & Luxenberg, where court papers say Silver got a 33 percent cut of the firm’s earnings on any asbestos cases he brought in. Mickey Carroll of Quinnipiac University’s polling institute called the timing of the charges against Silver — a day after Cuomo delivered the State of the State Address with Silver at his side — was “very, very political.” “If I were the governor, I’d be keeping a very wary eye on this US attorney.

So, in 2005, Silver awarded Taub’s research center a $250,000 research grant from an $8.5 million pool of taxpayer money established by the state Health Care Reform Act — which was disbursed at the speaker’s sole discretion with no public disclosure, court papers state. Several people met Thursday with veteran Assemblyman Herman (Denny) Farrell (D-Manhattan) to see whether he would take over temporarily should Silver depart, a source said. Michael Grimm should’ve resigned prior to pleading guilty on corruption charges, the mayor said the cases were different. “We saw a pattern of questionable practices over a long period of time (with Grimm),” he said, adding, “With Shelly Silver, I’ve seen integrity and public service.” “The mayor’s statement is quite hypocritical,” he said, referring to de Blasio’s harsh criticism of then-Gov. Rumors have circulated that bags of cash were being delivered to the speaker’s office on behalf of various special-interest pleaders, although that’s never been proven.

The money was disguised as “referral fees,” Bharara said. “I’m confident that after a full hearing and due process I’ll be vindicated on the charges,” said Silver, who even paused on his way out of court to sign a sketch artist’s rendering of the scene. When a change in the law eliminated the HCRA fund and “other lump-sum appropriations,” Silver allegedly told Taub that the grant program had ended. Cuomo, dealing with a weakened Silver who can still control the chamber might be a better option than the chaos from a potential leadership fight and untested speaker. Silver didn’t knock down the suspicion that he was about making as much money as possible a few years ago when he began defending his bizarre practice of flying on the state’s dime from New York City to Albany via Washington, DC, or some other distant spot so he could pick up a few extra frequent flier miles for his personal use. “In the end, Shelly is about Shelly. Democratic political consultant George Arzt called the developments “an earthquake of seismic proportions” that would make short- and long-term governing difficult. “I don’t think anyone is happy in the political establishment given the repercussions to other members of the Legislature and other elected officials in high positions,” Arzt said. “Obviously, it’s bad for the speaker, but it’s also a bad reflection on government, and it adds to the negativity.

Security personnel outside Litwin’s home in Boca Raton refused to let a reporter inside the swanky, gated community, and no one answered any of three phone numbers listed for him. Along with the Senate majority leader and the governor, he plays a major role in creating state budgets, laws and policies in a system long criticized in Albany as “three men in a room.” He controls, for example, which lawmakers sit on which committees and decides whether a bill gets a vote. In a measure of his clout, he helped persuade Cuomo last spring to disband a state anti-corruption commission that was investigating Silver’s financial dealings and those of his colleagues.

Silver has gone toe-to-toe with five New York governors — from Mario Cuomo to his son Andrew Cuomo — since early 1994, when he was selected speaker. The arrest put the spotlight back on the spate of corruption scandals in Albany and immediately overshadowed the ambitious second-term agenda that Mr. He promised it would trace campaign donations, legislation and pork-barrel spending to connect the dots to corrupt quid pro quos. “It’s going to be a real follow-the-money investigation,” he said then. “We want to see who gives you money, the legislation you introduce and your member items.” He was onto something big, but pulled the plug prematurely when lawmakers, who had fought the panel’s subpoenas, agreed to toothless ethics rules.

The 35-page federal complaint has several loose ends, including any connections to Silver’s repeated squashing of tort-law reforms, and cooperating witnesses may have the goods on other crooked officials. Silver’s profitable legal career — he reported earning more than $650,000 in 2013 — has long been viewed with suspicion in the capital, perhaps for good reason: Mr. Silver received a slice of the legal fees paid to the firm, even though he did no work for the developers; prosecutors said he was paid about $700,000. Glenwood develops luxury apartment buildings in Manhattan, has been an enormous contributor to state politicians and has a significant interest in matters before the Legislature, such as measures dealing with real estate taxation.

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