Ethics

Mahoney: There Were ‘Personality’ Clashes On Moreland

The Moreland Commission to Investigate Public Corruption suffered from “personality problems” among its members with some being unaccustomed to and uncomfortable issuing subpoenas, Onondaga County Executive Joanie Mahoney said in an interview.

“Generally speaking, I don’t feel like we have an accurate representation what happened inside Moreland yet,” she said. “With patience, I think people are going to see more of the story. Whether there were problems, I would put them in the category of personality problems. I think there were people who had a difficult time getting along and some of that has spilled out.”

Mahoney, a prominent Republican backer of Gov. Andrew Cuomo and a member of the short-lived anti-corruption panel, stressed the commission would ultimately be judged a success and, to her knowledge, wasn’t directed by the governor’s office.

The New York Times this week provided a detailed account of the commission being plagued by both infighting between its executive director and an attorney for the commission, as well as efforts from Cuomo’s office to direct or block subpoenas from the panel.

Mahoney insisted she never personally witnessed any interference from Cuomo’s office.

“I will tell you that no one ever in my presence ever said we can or can’t do anything,” she said. “I really do believe were an independent commission and ultimately the decisions were made by the three co-chairs and the commission members.”

Nevertheless, Mahoney reiterated that a commission appointed by the governor and state attorney general could not have credibly investigated them.

“I don’t think the general public would ever buy the results of an investigation like that,” she said.

Mahoney said some commission members weren’t used to issuing subpoenas, and severity of the act concerned them.

“There were such competing interests and the net was being cast so wide. In the world of district attorneys… things like subpoenas aren’t that scary,” she said. “That’s the world they live in. For people outside that world, there was an effort to say, ‘Well recognize the effect that has on a private individual.’”

Members of the commission came to it with the best of intentions, Mahoney said, even if it was a difficult job.

“I really think people wanted the opportunity to clean up Albany,” she said. “I think everyone’s intentions were good.”

JCOPE Settles Ethics Case With AG Lawyer Who Accepted Air Travel (Updated)

A senior trial attorney in the state attorney general’s office violated travel regulations when he accepted air travel on a jet that was chartered by opposing counsel, the Joint Commission on Public Ethics announced on Wednesday.

The attorney, David Ellenhorn, reached a settlement agreement with JCOPE this week over the matter, which first raised to ethics regulators in 2013.

The case stems from the 2009 civil fraud case the state was bringing against former AIG executives Hank Greenberg and Howard Smith.

Ellenhorn traveled to Nebraska to question Berkshire Hathaway CEO Warren Buffet, but in doing so accepted a return trip to New York City on a jet chartered by David Boies, an attorney for Greenberg who attended the deposition.

JCOPE says the trip was accepted even though airfare was refundable by the state, failed to obtain both permission and a refund for the unused ticket.

“Mr. Ellenhorn failed to follow the basic travel rules that are in place for all state employees to help avoid any real or perceived conflicts of interest,” said Commission Executive Director Letizia Tagliafierro.

Updated: The AG’s office responds.

“After a flood of over-the-top rhetoric and outlandish accusations intended to distract from the serious fraud charges that three successive attorneys general have pursued against Mr. Greenberg, we are grateful that JCOPE agreed to resolve this matter without leveling any penalty or sanction.”

Ellenhorn Settlement by Nick Reisman

Rapfogel Receives Up To 10 Years In Prison

William Rapfogel, the once powerful head of the Metropolitan Council on Jewish Poverty, was sentenced on Wednesday to 3-1/3 to 10 years in prison for his role in a 20-year scheme to siphon millions of dollars from the charity he controlled.

The sentencing was announced by state Attorney General Eric Schneiderman and Comptroller Tom DiNapoli.

“This sentence sends the message that there has to be one set of rules for everyone, no matter how rich or powerful, and that those who rip off the neediest New Yorkers will be prosecuted,” said Schneiderman in a statement. “New York has the greatest nonprofit sector in the country, and this case reminds us that we must vigilantly protect it. I am committed to using every tool at my disposal to prevent people from abusing the public trust and cheating charities out of the funds they need to perform vital services.”

Rapfogel, a longtime political power broker with ties to Assembly Speaker Sheldon Silver, pleaded guilty to his role a in complex kickback scheme in which he stole $3 million.

Rapfogel is the husband of Judy Rapfogel, an aide to Silver.

“The fraud that occurred over two decades by the people at the top of the Metropolitan Council on Jewish Poverty was shocking and very damaging to an organization that has literally helped countless people,” DiNapoli said. “Those involved in this scam have been held accountable for their wrongdoing and this should serve as an example of what happens when individuals lose their way and become more focused on filling their own pockets than doing good works. Attorney General Schneiderman and his team deserve credit for aggressively and thoroughly pursuing this case. Through our Joint Task Force on Public Integrity, the Comptroller’s office and the Attorney General’s office will continue to fight corruption and find those individuals misusing the public’s money.”

Gallivan Reacts To Maziarz Retirement; Downplays Questions Over Campaign Funds

Although he was surprised by it, State Senator Pat Gallivan said the public shouldn’t read into the timing of the retirement of fellow Western New York Republican George Maziarz.

“Senator Maziarz has expressed publically his reasons for retiring that he had been thinking of it for a while, that it was in the best interest of his family and his future and I think unless we see otherwise we have to take that at face value,” Gallivan said.

A report by an anti-corruption panel released in May that showed Maziarz had $140,000 in unspecified campaign expenditures, followed by the revelation his former chief of staff was issued a Federal subpoena has sparked a new conversation over how this money can and should be spent.

“It wasn’t talking about taxpayer dollars. It was talking about voluntary campaign contributions and of course the expenditures of campaign contributions are guided by the Executive Law,” said Gallivan.

Gallivan’s name also appeared on the now defunct Moreland Commission Report.  It showed he had $80,000 in unspecified campaign expenditures dating back more than five years.

“When that happened I directed my campaign staff to look at our filings. We’ve always tried to endeavor to comply with the law but I asked them to look at our filings to ensure that we are in full compliance with the law,” Gallivan said.

Democratic Erie County Board of Elections Commissioner Dennis Ward said there’s a lot of gray area when it comes to campaign finance law in New York State.  He said expenditures from private campaign donations, under $100 don’t have to be itemized.

“That doesn’t mean that you don’t have to keep the records so that if you are audited, at a point down the road, that you have to still have the records for such expenditures,” Ward said.

Ward said the Moreland Commission; even if it was still active, had no power to prosecute.  There are also questions as to whether or not a commission appointed by the executive branch even had the authority to investigate the legislative branch of state government.

“Is it sufficiently clear? No. Our law should be strengthened and it should be tightened up to define a lot more of these expenses that would appear to people to be personal expenditures,” Ward added.

Gallivan hopes the public will keep a few things in mind before passing judgment solely on the findings of the Moreland Commission.

“My understanding is that they looked at the campaign filings of every member of the the legislature so in some way shape or form everybody was looked at, some questions were raised and that’s ok that some questions were raised because that gives you a chance to make sure you’re doing things the right way and again I’m confident that our filing, after review, are fully up to snuff and are in full compliance with the law,” Gallivan added.

Bharara: Elected Officials Serve The Public, Not Their Families

The son of Sen. Tom Libous pleaded not guilty to six federal counts of filing false tax returns and obstruction and was arraigned on $50,000 bail.

Matthew Libous is accused of using the under reported income from a minority stake in Wireless Construction Solutions for a variety of personal uses, including iTunes downloads, casino trips, tanning, spa treatments, a gym membership and even an Internet data site, according to the indictment unsealed Monday.

Between 2008 and 2011, Matthe Libous is accused of failing to report more than $200,000 in income to the IRS.

Sen. Tom Libous faces one count of making a false statement to the FBI stemming from an investigation in whether he arranged for his son to receive a job at a prominent Westchester COunty law firm paid for by a lobbying organization.

“As alleged, Thomas Libous took advantage of his position as Senator and Chairman of the Transportation Committee by corruptly causing lobbyists, who wanted Libous’s influence to benefit their clients, to funnel money through a law firm to his son where Libous has gotten his son a position,” U.S. Attorney Preet Bharara said in a statement. “He then tried to cover up his corrupt conduct by lying to FBI Agents about his knowledge of his son’s arrangement with the firm, as the Indictment describes. Public servants should serve the public first, not themselves and their families. This Office will continue to pursue elected officials who attempt to take corrupt advantage of their positions.”

A Dubious Record Is Set

With the resignation last week of Assemblywoman Gabriela Rosa after it was revealed she was in a “sham” marriage, she became the sixth state lawmaker to leave office during the 2013-14 legislative term in office — a record high since the 1999-2000 class.

That’s according to a report compiled by Citizens Union, which found 26 lawmakers since the turn of the last century have left office under an ethical or legal cloud of misconduct, due to a range of wrongdoing including sexual harassment, bribery and misdirected member items.

Many of those lawmakers — such as Assemblyman William Boyland — were automatically forced out of office when they were convicted of felony charges.

Of course, the next class of state lawmakers haven’t been elected just yet, meaning those who face legal and ethical troubles could make that figure grow. Sens. Malcolm Smith and John Sampson are facing separate corruption charges (as well as primary challenges).

Assemblyman Micah Kellner, who was stripped of his Albany and district offices along with his staff budget after new allegations of harassment arose, is fighting the sanctions from Assembly Speaker Sheldon Silver. He plans to serve out the rest of his legislative term.

The record is set, too, after lawmakers in 2011 and then this past March approved various anti-corruption measures that created new ethics regulators, strengthened anti-bribery laws and an independent enforcement counsel at the state Board of Elections.

The most recent effort to bring corruption to light — the Moreland Commission on Public Corruption — was disbanded by Gov. Andrew Cuomo following the latest ethics agreement, which his critics have pounced on.

CU TurnoverResearch Ethical Criminal Issues June 27 2014 by Nick Reisman

Lawmakers Told To Save Their Moreland Records

U.S. Attorney Preet Bharara’s office is instructing the state Legislature to save documents relating to the now-defunct Moreland Commission on Public Corruption’s probe.

A member to Senate lawmakers from the chamber’s secretary, Frank Patience, suggests federal prosecutors are casting a wide net with its formal preservation request.

Patience in the memo writes the “All documents and records relating to the investigation” should be saved as well as records relating to its “funding, formation, operation, management and dissolution.”

“For purposes of this preservation request, the terms ‘documents and records’ should be construed broadly,” Patience writes in the memo.

The letter comes as the Moreland Commission has retained a lawyer to aid in its dealings with Bharara’s office, which assumed control of records generated by the anti-corruption panel.

Gov. Andrew Cuomo closed down the commission following an agreement on ethics reform in the state budget.

When it was in operation, the commission had been studying campaign finance records and how donations influenced policy. The commission was also trying to determine more information on lawmakers’ outside income and business interests.

A lawsuit to quash subpoenas from the commission was declared moot following the disbanding of the panel.

Senate Letter by Nick Reisman

Wills Used Charity To Conceal Matching Funds Theft (Updated)

New York City Councilman Ruben Willis, a former top aide to the now jailed former state Sen. Shirley Huntley, was arrested by the state attorney general’s office on a dozen different charges of misusing public funds and providing fraudulent records.

Updated: A letter from the state attorney general’s office reveals more information on why Wills, and his alleged accomplice, Jelani Mills, were arrested today.

The charges stem from an alleged scheme to use a charity organization to conceal the theft of public matching funds from the New York City Campaign Finance Board.

According to the letter from state prosecutors outlining bail recommendations for Wills and Mills, the councilman is accused of setting up a shell company to help funnel the money from the city campaign finance board.

The shell company, known as Micro Targeting, initially received funds to print campaign literature, though that never materialized, according to the AG’s office.

Mills, who is realted to Wills, was the sole owner of Micro Targeting.

After a $11,500 check cleared, Micro Targeting deposited the money into the charity’s bank account.

The AG’s office is recommending $50,000 bail.

The arrest follows an investigation by Attorney General Eric Schneiderman’s office that was looking into public funds directed to a charity Wills had once run that had subsequently gone missing.

According to the indictment, Wills is accused of filing false records through Micro Targeting with the New York City Campaign Finance Board through an undated invoice of $11,500.

Wills was one of several elected officials who was secretly recorded by Huntley, who was acting on behalf of law enforcement as she faced corruption charges of her own.

Indictment Wills & Mills by Nick Reisman

People v Ruben W Wills Et Al by Nick Reisman

Read The Cuomo Administration’s Contract With Cyber Search

The Cuomo administration last year entered into a contract with a New York City-based company tasked with helping the Moreland Commission on Public Corruption organize and process the reams of data being collected by the panel.

The contract between the Cuomo administration and Cyber Search Corp. was obtained by Capital Tonight from the state comptroller’s office through a Freedom of Information Law request.

Cyber Search Corp. received the $150,000 contract to help with the technical aspects of the Moreland investigation, including uploading documents to Concordance, software that is used by legal teams to help manage and coordinate large batches of files.

Last week, we reported on the K2 Intelligence contract with the Cuomo administration that showed the company was hired in part to help the Moreland Commission put together “dossiers on persons of interest” as well as organizations.

K2 Intelligence was hired to help comb through data that is available from a variety of sources, including campaign finance reports, lobbying disclosure data on the Joint Commission on Public Ethics website and the Project Sunlight database

The contracts from both K2 Intelligence and Cyber Search provide a window into the Moreland Commission’s work in investigating both the Legislature and, writ large, the intersection of money and politics in state government, however brief its life was.

The Moreland Commission on Public Corruption closed down last month following an agreement on ethics reform in the state budget, including the creation of a new independent oversight counsel at the state Board of Elections.

U.S. Attorney Preet Bharara’s office last month took possession of copies of documents generated by the commission.

2014-185 (2) by Nick Reisman

Read The Cuomo Administration’s Contract With K2 Intelligence

Gov. Andrew Cuomo’s office last year entered into a contract with K2 Intelligence in order to provide detailed data analytic services for the Moreland Commission on Public Corruption which includes a requirement for the creation of “dossiers on persons of interest.”

The $175,000 contract, which ran through December, lays out the requirements for the company to help the anti-corruption panel find “pertinent links and patterns” in a huge swath of data.

The contract shows K2 was charged with helping to “develop and execute a strategy for acquiring data” from the Joint Commission on Public Ethics including financial disclosure and lobbying records, Senate and Assembly legislation, campaign finance records and data made available on the Project Sunlight website.

The company’s contract stipulates the information would be used to help “create dossiers on persons of interest” along with organizations and companies as well. K2 was also required to create visual data maps and help analyze events over time.

The agreement was obtained by Capital Tonight from the state comptroller’s office through a Freedom of Information Law request.

Capital New York first reported on the initial request from the Cuomo administration to seek out K2′s services.

At the time, the administration noted K2′s data analysis software had been used by a variety of law enforcement agencies, including the Department of Justice, NYPD, FBI, and the NSA.

The commission closed down last month after state lawmakers and Gov. Andrew Cuomo reached an agreement on an ethics package in the state budget, which included the creation of an independent oversight counsel at the state Board of Elections.

U.S. Attorney Preet Bharara’s this month took possession of documents generated by the commission during its existence. On Thursday it was reported Bharara’s office had subpoenaed records from JCOPE.

A former commission member says the Moreland panel found as much as a dozen state lawmakers involved in criminality.

FOIL 2014-184 by Nick Reisman