Federal prosecutors had charged that Smith, with the help of $200,000, tried to bribe his way onto the GOP ballot by spreading money around to GOP power brokers. Smith was arrested in 2013, but continued to serve as a rank-and-file state senator, though his fellow Democrats did not allow him to conference with them. He was ousted by voters in Queens last fall in a Democratic primary election.
Also charged in the case was former Queens Republican boss Vincent Tabone. Smith, as a Democrat, needed to secure backing from GOP leaders in order to qualify for a place on the 2013 mayoral ballot on the GOP line. Tabone was convicted along with Smith Thursday. A former New York City councilman, Daniel J. Halloran III, had already pleaded guilty in the case.
5. Here’s another depressing story from the Albany Project. This one is about Cuomo mega-donor Leonard Litwin, a New York real estate tycoon. Litwin donated $1 million to Cuomo’s re-election campaign and $500,000 to the state Democratic committee, underscoring the toothless pointlessness of our campaign finance rules. Litwin also happened to be client of the small law firm Goldberg & Iryami, which is linked with the Sheldon Silver corruption prosecution and specializes in Article 7 real estate tax challenge suits. Litwin used the LLC loophole to get all that money (including $200,000 to Silver), to recipients.
Litwin recently booked a $260 million sweetheart loan through the NYS Housing Finance Agency to finance a luxury apartment project in Manhattan. The NYSHFA was run by a Cuomo appointee who was recently promoted, and is now Cuomo’s chief of staff.
Back when John McCain was a serious person, he’d talk of campaign finance reform to abolish what he called the “iron triangle” of special interests, money, and legislation. In New York, no one with any real authority has seriously taken up that cause, except for a federal prosecutor in Manhattan. In New York State politics, that triangle isn’t made of iron, it’s made from graphene, which is stronger and more expensive.
Furthermore, if anyone is to take up the cause of cleaning up state politics, they’ll have to lead by example and not cop out and be just as corrupt as everyone else.
The United States Attorney for the Southern District of New York Preet Bharara has the ability and willingness to do what no elected official in New York can or will. In fact, we should be thankful that Governor Cuomo disbanded his Moreland Commission on Public Corruption, enabling its investigatory files to be picked up by Bharara’s team of federal prosecutors and the FBI. The US Attorney, after all, is an appointed federal law enforcement official, unbeholden to any of the parties, factions, personalities, or pressure groups that maintain a corrupt chokehold on New York’s body politic.
Preet Bharara is New York’s honey badger, completely unconcerned with the toes on which his investigations might be treading.
Rumors swirled Saturday night in advance of a Bob McCarthy article in Sunday’s Buffalo News, as political junkies texted each other about the visit that the FBI and state law enforcement paid to one G. Stephen Pigeon.
Before I get into this party political inside baseball – why should you care?
Ultimately, the policies under which we live and work are decided by people whom we elect to public office – locally, regionally, statewide, and in Washington. The quality and efficacy of those policies can vary, so it’s theoretically important that voters make informed choices and select good candidates. Unfortunately, that’s not always how it works in real life, and too often personal ambition and greed get in the way. Scapegoats are many, but political machines aren’t necessarily to blame. Factionalism is the bigger problem.
If you’re a Republican, it can be frustrating how the ultra-right so-called “tea party” wing of the party can be at odds with the establishment party committees. One need only look at the 2014 race for the 60th Senate District – rightist Republicans were so angry at incumbent Republican Mark Grisanti’s support for same-sex marriage and the NY SAFE Act that they ousted him in favor of same-sex marriage and NY SAFE Act proponent, liberal Democrat Marc Panepinto.
As for the Democrats, they cyclically rip each other to shreds. However, the Democratic factional trench warfare is seldom about ideology or policy, but instead about patronage and power. It can be so paralyzing and distracting that Democrats end up losing winnable elections. Steve Pigeon was the chairman of the county Democratic committee until about 12 years ago, when he was replaced by Len Lenihan. Pigeon’s committee was known for sharp elbows and racking up electoral losses. Throughout Lenihan’s – and now Jeremy Zellner’s – chairmanship, people and clubs loyal to Steve Pigeon have popped up periodically to sabotage the Democratic establishment’s candidates and procedures. Rather than mounting a credible or serious challenge to the chairmanship in order to regain control of the committee, they would directly and indirectly help the other side. 2013 was one of those years when Pigeon and his cronies gave sabotage a try.
It’s not just that they run primary races – there’s nothing facially wrong about that. It’s that they only do anything until September. Come primary day, they generally stop any meaningful activity and refuse or fail to help any Democrat, whether it was their candidate or not.
In 2013, the Erie County Democratic Committee endorsed several candidates for the county legislature, and Deputy Sheriff / bike shop scion Bert Dunn for county sheriff. The Steve Pigeon faction backed different candidates for all of those races, including Dick Dobson for sheriff. On its face, that’s no big deal – primary races during primary season.
But for years, Pigeon’s electoral efforts have been suspected of playing fast and loose with election regulations that run the gamut from vague to toothless to unenforced. Typically, the Pigeon modus operandi is to use go-betweens and shell corporations or LLCs to funnel money to, from, and between his candidates and certain campaign consultants and companies to do lit, polling, signs, and media buys. They use rhetorical sledgehammers to demolish their opponents with whatever smear they can muster – ask Sam Hoyt. It’s a well-oiled machine that has, over the last decade, been organized quickly and quietly, but enjoys few electoral accomplishments. When Pigeon’s candidate “Baby” Joe Mesi ran for state senate, you’d have thought his primary opponent, fellow Democrat Michele Iannello, was the worst villain since Torquemada – but when it came time to go after Republican Mike Ranzenhofer in the general election, punches were pulled all over the place. As usual, they stopped fighting in September.
Campaign finance and disclosure violations are seldom investigated and almost never prosecuted. At least, not in Erie County. In 2013, Pigeon and erstwhile political commentator Kristy Mazurek set up the “WNY Progressive Caucus”. New York doesn’t formally recognize “political action committees” or “PACs”. so the Pigeon-Mazurek group was set up as an unauthorized committee. So constituted, the law permitted the WNYPC to raise and spend money for it to donate to specific campaigns. The WNYPC explicitly could not coordinate with campaigns, nor spend money on their behalf.
Furthermore, the WNYPC’s disclosures were not complete. For a time, it showed the PAC to be in the red – a big no-no. Disclosures came in late, were inaccurate, and misleading, in one instance showing a $9,000 donation from a different, long-dormant Pigeon-associated PAC, “Democratic Action”. What was odd about that Democratic Action donation was that this group did not disclose any outflow of money during the same 2013 cycle, and had most recently showed a fund balance of $2,400 and a concomitant “no activity” report with the Board of Elections. It didn’t have $9,000 to give.
Pigeon-backed Dick Dobson embarrassed Bert Dunn on primary night. Dunn went on to waste his money on an unsuccessful general election run using a personal, bespoke minor party line. But in September, Pigeon, Mazurek, and their WNYPC utterly abandoned Dobson, during his general election bid. There were contemporaneous whispers that the Dobson effort had merely been a repeat of an earlier “Democrats for [Republican incumbent Sheriff] Tim Howard” campaign.
Wynnie Fisher defeated Pigeon and Mazurek’s primary candidate, Wes Moore. Apparently, Fisher and her neighbors don’t get along, so Mazurek planted a story with her WGRZ 2Sides colleague Michael Caputo, accusing Fisher of being crazy. The problem was that the letter from the aggrieved neighbors was sent to Wes Moore at an address in Lancaster. But Moore’s campaign committee was based in an office in Clarence. The Lancaster address was a house on Doris Avenue where Mazurek was living, and which also served as the mailing address for WNYPC. There was, on its face, a smoking gun of coordination. How and why would Wynnie Fisher’s neighbors decide to send a letter to an address for Wes Moore that didn’t exist in nature?
In the Buffalo News, Bob McCarthy interviews his longtime source Steve Pigeon, and reveals,
He said he used his own money to donate to the fund, that the fund was never coordinated with candidates, and that he acted only as a donor and not as an administrator responsible for reporting. He added that he has not been contacted by any investigators.
I’m not financial genius by any stretch, but that seems unlikely, at best. The WNYPC raised almost $300,000 in 2013. $100,000 came from Pigeon alone. How wealthy or well-paid would Pigeon have to be in order to have the disposable cash to dump $100,000 on the likes of Wes Moore, Dick Dobson, and Rick Zydel? Now under state and federal investigation is where, exactly, that money comes from.
And why is it that the U.S. Attorney from Manhattan is looking into the campaign finance shenanigans of some small fish in Buffalo? Do we not have a District Attorney in Erie County, empowered to investigate and prosecute violations of state law? I know Bharara is on the case because he took possession of the Moreland files, but it’s unseemly that it takes an outsider to investigate and prosecute this here. The Attorney General’s office – under attack for supposedly not investigating election irregularities – is investigating these because formal, credible complaints were presented.
As rumors swirl about the FBI and State Police subpoenaing records and following the money, it seems that campaign finance and election laws are being enforced in a serious way. Will there be a prosecution? Will it focus on elected officials, or will these two-bit operatives get caught in the web?
Time will tell, but something big is going on behind the scenes, and it’s being directed by very serious people from outside the area. It’s being directed by people who don’t owe any of these malefactors anything.
Albany is a brick shithouse of institutionalized corruption. The people we sent to nominally represent us in Albany are incapable of reform, unwilling to be bold and aggressive, and nothing more than a preening flock of charity cases in Brooks Brothers suits and fat per diems.
It doesn’t matter what I write or what you say – Albany isn’t going to change because it has no reason to try.
213 nobodies get paid big bucks (by WNY standards, anyway) to do nothing. Everything is directed and produced by the governor, the Senate President, and the Assembly Speaker. Unless you’re represented by Sheldon Silver or Dean Skelos, your Assemblyperson and Senator go to Albany generally to moisten seats and rubber stamp stuff.
If they’re good girls and boys, they might be given some money to send home for road projects or other public works, and they get to stand there at the ribbon-cutting and look important.
It’s all a charade.
The upstate gun huggers will quickly tell you that Andrew KKKuomo is a Nazi Mussolini Duce. That’s foolish. Albany’s a dictatorship, it’s true, but it’s a dictatorship of the bureaucracy. The Albany nomenklatura is typically resistant to change and anything that might shake up the status quo; after all, change means someone’s likely to lose a job, and we can’t have that.
Actually, before we get to Greg Ball and George Maziarz, let’s flash back a few years to a former member of the WNY Albany delegation who was arguably the worst in recent history – Antoine Thompson. This guy, who tried to explain why we even need a State Senate to begin with:
■ Powerful politicians — including the governor himself — continue to exploit a loophole in state law that allows corporations to funnel huge donations to them in smaller gifts that disguise the true sources of the money.
■ Lax personal financial disclosure laws, critics say, give corrupt legislators a way to mask political payoffs under the guise of part-time jobs. A 2011 reform presented as requiring disclosure of some clients was so narrowly drawn as to be meaningless, and another enacted this year allowed enough wiggle room that lawmakers could well continue to avoid scrutiny.
■ The line between political donations and outright bribery remains murky. Some politicians used their campaign treasuries as piggy banks for personal expenses, the commission’s investigators found, and bank records showed that lawmakers had failed to report some donations and expenditures altogether. A new, beefed-up Board of Elections enforcement unit has yet to show its strength.
The LLC loophole is what lets Carl Paladino give what amounts to unlimited campaign donations in any given cycle. While corporations can only give $5,000 in any given cycle, LLCs are treated instead as people. So, for the cost of an LLC filing fee, a donor can now repeatedly max out at $60,800 per cycle to any candidate for statewide office under each separate LLC. It also helps keep the true source of the money somewhat opaque.
So when Mr. Cuomo’s campaign wanted to nail down what became a $1 million multiyear commitment — and suggested “breaking it down into biannual installments” — the company complied by dividing each payment into permissible amounts and contributing those through some of the many opaquely named limited-liability companies it controlled, like Tribeca North End LLC.
Brazen. But it gets even worse.
Documents the [Moreland] investigators obtained provided unusual insight into what watchdog groups had long asserted: Corporations were strategically dividing up huge contributions to maximize their giving — and their influence. The use of limited-liability companies concealed the magnitude of their gifts from public view.
In one instance in 2012, the Real Estate Board of New York solicited donations for Lewis A. Fidler, a Brooklyn Democrat who at the time was running for a State Senate seat (whose previous occupant had pleaded guilty to accepting bribes).
James Whelan, a senior vice president for the board, a major lobbying force, emailed a Durst executive, Jordan Barowitz: “If you could find one of your more obscure LLCs, that would be grand.”
The Moreland Commission saw closing the LLC loophole as an easy fix, but since its disbanding, the loophole – which isn’t so much a “loophole” as it is a specific part of the law as it stands today – remains in place.
Investigators scrutinizing his campaign spending from 2007 through 2013 found more than $28,000 at stores like Pier 1 and Michaels; $7,500 at Shutterfly, the photo-printing site; and $7,850 for reading material, including a stop at a Borders store at Kennedy Airport.
The Moreland Commission fired off subpoenas to see what books and photos Mr. Maziarz’s campaign had bought.
Investigators also learned that Mr. Maziarz’s campaign had failed to disclose $147,000 in contributions and $325,000 in spending.
His campaign had written more than 300 checks to cash, totaling $137,000; about one-fifth of the checks were never reported to the Board of Elections.
A lawyer for Mr. Maziarz, Joseph M. LaTona, declined to comment. Mr. Maziarz, whose spending is now the subject of a federal investigation, did not seek re-election this year.
And guys like Maziarz have the stones to claim that Democrats are spendthrift? In addition to his Mexican vacations, Greg Ball,
… also traveled repeatedly to Austin, Tex., where he paid $4,000 in bar and restaurant bills — along with a $160 charge at Brooks Brothers. Those trips were, in a way, less surprising: Mr. Ball, who did not seek re-election this year, is fond of Texas, and recently announced that he would move there after leaving office.
Among the unusual outlets for spending from his campaign accounts was Tough Mudder, the organizer of extreme obstacle-course races. (Mr. Ball posted Facebook photos showing him crawling through the mud in a Tough Mudder race in 2012, and said at the time that he was trying to raise money for charity.)
Tough Mudder?!
Anyhow, you’d figure that the State Board of Elections would be on top of – and investigating – complaints of campaign finance irregularities brought to its attention, right? You’d be wrong.
The Moreland Commission saved even harsher criticism for the sleepy Board of Elections. In a preliminary report released in December 2013, the commission wrote that the board had “largely abdicated its duty to enforce our election and campaign finance laws.”
In fact, the board sometimes seemed to be avoiding investigations altogether.
Its policy dictated that anonymous complaints never be investigated, regardless of the information they contained.
Lastly, the issue of legislators’ outside pay is coming under intense scrutiny, and if you want to know why the Moreland was shut down, look no further than Sheldon Silver and an abrupt change in the way he discloses his non-state income. Not just Silver’s firm, but the Moreland subpoenaed several law firms in hopes of verifying that these legislators were actually showing up to work, or whether their continued employment might be, e.g., an effort to skirt campaign disclosure laws.
Suspicious that some lawyer-legislators were holding no-show jobs, Moreland Commission investigators subpoenaed their law firms for building access-card data and sign-in sheets, invoices, expense reports and records detailing their clients.
Lawmakers became infuriated over the scrutiny, calling it a witch hunt into the legislative branch. Law firms went to court to block the subpoenas, as did the Senate and Assembly.
Mr. Silver’s law firm, Weitz & Luxenberg, argued that it was irrelevant “what time Sheldon Silver enters and exits” its office building each day.
The litigation was unresolved when the Moreland Commission shut down.
Yet Mr. Cuomo marveled at how much the subpoenas sent to outside law firms — including Mr. Skelos’s employer, Ruskin Moscou Faltischek — had discomfited lawmakers. “I’m surprised these guys weren’t fired,” Mr. Cuomo told members of good-government groups last spring. The United States attorney in Manhattan, Preet Bharara, whose office took control of the Moreland Commission’s files around that time, revived some of its investigations, including several involving lawmakers’ outside income.
Mr. Silver quickly became a focus of prosecutors’ interest.
Two people with knowledge of the matter said prosecutors have issued federal grand jury subpoenas to some of the same law firms that resisted the commission’s subpoenas, including Weitz & Luxenberg and Ruskin Moscou Faltischek. (A spokesman for the former firm declined to comment; the latter did not respond to messages.)
If you’re, say, a plaintiff’s law firm paying a legislator hundreds of thousands of dollars for what might be a no-show job, and that legislator also happens to be a huge and powerful obstacle to any attempts at tort reform, how is that not just outright bribery?
It’s time New Yorkers started demanding meaningful legislative and governmental reform, resulting in a true deliberative democracy. We do this by rejecting the notion that Albany pols are re-elected without any opposition. We do this by demanding results that go beyond a few dollars here and there for public works projects. We do this by limiting the perverse influence that money has on state politics, and by demanding true and full transparency of where the money comes from, and where the money goes.
Albany is a brick shithouse of institutionalized corruption. The people we sent to nominally represent us in Albany are incapable of reform, unwilling to be bold and aggressive, and nothing more than a preening flock of charity cases in Brooks Brothers suits and fat per diems.
The Moreland Commission saw closing the LLC loophole as an easy fix, but since its disbanding, the loophole – which isn’t so much a “loophole” as it is a specific part of the law as it stands today – remains in place.