Preet Bharara

Bharara and Schneiderman Do Lunch

At the height of Moreland madness, two of the most high profile players in this seemingly never-ending saga – US Attorney Preet Bharara and state Attorney General Eric Schneiderman – met for a very public lunch in lower Manhattan yesterday, multiple sources confirm.

The Democratic duo was spotted lunching at City Hall Restaurant – an eatery favored by members of the New York City political set due to its proximity to (you guessed it) City Hall. Schneiderman and Bharara have known each other in a professional capacity for the past several years, but aren’t personal friends, according to a source familiar with their relationship.

It’s worth noting that Bharara, who is investigating the demise of Gov. Andrew Cuomo’s now-defunct corruption-busting Moreland Commission, would probably not be seen in such a public place with Schneiderman if the attorney general was a target of that probe.

Given the role that Schneiderman played, however, through his agreement to deputize its 25 members to broaden their purview beyond the executive branch and loaning of top aides to staff the commissinon, it’s possible that he is providing information to the US attorney as the investigation progresses.

Schneiderman has been under fire – especially from his Republican opponent, former Pataki administration official John Cahill – for refusing to comment on the Moreland Commission and explain why he did not speak up when the Cuomo administration was, as has been exhaustively documented by the New York Times (and refuted by Cuomo himself) interfering with its work.

It’s no secret that the relationship between Cuomo and Schneiderman has been rocky, dating at least as far back as the 2010 Democratic primary to replace Cuomo in the AG’s office.

At the time, Cuomo was widely believed to prefer Nassau County District Attorney Kathleen Rice to Schneiderman in that race, due in part to her ticket-balancing capability (the Democratic slate that year was all white, almost all male – with the exception of US Sen. Kirsten Gillibrand – and all from downstate), but also because he felt Schneiderman was too liberal and, as a former senator, too tied to the scandal-scarred Legislature.

Now Rice is running for the seat of retiring Long Island Rep. Carolyn McCarthy, and is trying to keep a low profile given her role as one of the Moreland Commission’s three co-chairs. (Unlike Onondaga County DA Bill Fitzpatrick, whose public comments have provided considerable cover for Cuomo in the wake of the Times story, neither Rice nor the third co-chair, Milton L. Williams, Jr., have offered support of the governor’s position).

Rice may soon be forced to end her silence. Tomorrow, her Republican opponent in the NY-4 race, former Nassau County Legislator Bruce Blakeman, is holding a press conference tomorrow afternoon outside the Nassau County Supreme Court in Mineola to “to discuss his opponent’s role in the Moreland Commission and answer questions from the media.”

Ex-Councilman Halloran Guilty On All Five Counts

A jury today found ex-Queens Councilman Dan Halloran guilty on all five counts of the corruption charges he faced stemming in part from his role in a bribery scheme to sell the GOP line in the 2013 NYC mayoral primary.

US Attorney Preet Bharara issued the following statement:

“With today’s verdict of guilty reached by an impartial and independent jury, the clean-up of corruption in New York continues in courtrooms. As the jury unanimously found, Daniel Halloran played a key role in two distinct political corruption schemes: first, for $20,000, Halloran was willing and able to serve as a go-between to deliver bribes to political party officials, and second he also took nearly $25,000 in cash and illegal campaign contributions to steer $80,000 in City Council money to other bribe payers.”

“Dan Halloran was the lone defendant in the trial that just ended in his conviction, but he is unfortunately not alone in a crowded field of New York officials who are willing to sell out their offices for self-enrichment.”

“This Office will continue the vigorous prosecution of political corruption to secure for the people of New York – regardless of party affiliation – what they deserve: the honest labors of their elected representatives. And we will continue to partner with the FBI, whose outstanding investigative work in this case was instrumental to achieving a just result.”

Halloran, a Republican, was charged with taking more than $20,000 in payoffs from two undercover FBI operatives posing as corrupt developers in exchange for agreeing to funnel public cash to them and to help bribe Republican NYC county leaders to allow Democratic Sen. Malcolm Smith, also of Queens, to run Row B in the party’s mayoral primary.

(That race was eventually won by former MTA Chairman Joe Lhota, who lost the general election in a landslide to the winner of the Democratic primary, current NYC Mayor Bill de Blasio).

Testifying in his own defense, Halloran admitted taking the cash, but said he considered the money payment for consulting services and never procured any public funds for the real estate developers/FBI agents.

Originally, Halloran and Smith were once co-defendants, along with former Queens GOP official Vince Tabone. But attorneys for Smith and Tabone opted to accept a mistrial due to a procedural error having to do with Yiddish phone recordings, while Halloran’s attorney decided to proceed as scheduled.

Smith and Tabone will be re-tried in January, and today’s verdict perhaps is not the best omen for them. In the meantime, Smith is seeking re-election, though he has been cast out from both the Democratic Senate conference (which he once led) and the IDC.

Paladino Calls Maziarz ‘Poster Child For Term Limits’

Several Western New York Republicans have come to the defense of retiring New York State Senator George Maziarz in recent days; former GOP Gubernatorial Candidate Carl Paladino is not one of them.

“I think George is probably a poster child for term limits,” Paladino said. 

Maziarz has served in the Niagara County based 62nd state senate seat for two decades.  It’s a tenure Paladino believes was too long.

“After a while they start to feel like a king, you know King George,” said Paladino. 

It’s a characterization the Buffalo businessman has repeated over the years, and one that now appears to be gaining traction.  At about the same time Maziarz announced his retirement, reports surfaced the U.S. Attorney’s Office was looking into his campaign spending.

What started as a Moreland Commission report that showed $140,000 in unspecified campaign expenditures continues to expand.  The Albany Times Union reported Friday Federal investigators are now examining unitemized checks that were made out to cash, but never reported to the state board of elections.

The latest questions center on funds from the Maziarz campaign account that were reportedly given to a youth softball team and thousands of dollars in purchases from a WNY business.  Maziarz Campaign Treasurer, Laureen Jacobs, has been asked to turn over documents but her attorney wouldn’t provide any further details.

And although charges have not been filed, Paladino isn’t giving Maziarz the benefit of the doubt. 

“In my book, he was the guy that held Niagara County down,” Paladino said. 

Paladino believes the investigation into Maziarz campaign spending is nothing compared to what he didn’t do.  That criticism has to do with what Paladino describes as more than $1 Billion from the New York State Power Authority’s budget. 

That money, according to Paladino, was generated through the sale of unused allocated power.  Money that Paladino insists should have been spent on development in Western New York.

“George turned the other way as Cuomo was sweeping the account for the last four years.  He never ensured that that money would stay here for Western New York’s benefit.  That’s the kind of stuff that bothered me about George.”

It may take some time before Maziarz’s legacy is clear.  While the jury is still out in the court of public opinion, Paladino made up his mind long ago.  

“George is going to walk away with a million, one hundred thousand dollars in his campaign account and Western New York is no further ahead today than it was when George originally took office,” Paladino added.

 

Report: Bharara Subpoena Seeks Ethics Complaints

U.S. Attorney Preet Bharara’s office has served the state’s top ethics regulatory panel with a subpoena seeking ethics complaints the commission has received over the last three years, according to reports this afternoon in The Daily News and New York Post.

The Joint Commission on Public Ethics, created in 2011 as part of an ethics overhaul agreement between Gov. Andrew Cuomo and state lawmakers, is charged with regulating both lobbying as well as conducting probes into public officials’ official actions.

A spokesman for the commission would not confirm or deny that the U.S. attorney’s office was seeking the information.

“The Joint Commission on Public Ethics routinely works with other law enforcement agencies on various cases but it will not confirm or comment on any specific investigative matter,” said the spokesman, John Milgrim.

The news comes after Bharara was critical of the decision to shut down the Moreland Commission on Public Corruption, a panel Gov. Andrew Cuomo created in 2013 that was charged with investigating lawmakers’ outside business interests and the relationship of money and politics.

The commission is being shuttered, however, after Cuomo and state lawmakers agreed to new anti-corruption laws as well as independent enforcement at the state Board of Elections.

Bharara this month said his office would take possession of the records generated by the Moreland Commission.

JCOPE, unlike the Moreland Commission, has members represented by the governor’s office as well as the different legislative conferences in the Senate and Assembly.

Republicans seized on the news of the subpoena at JCOPE — though there is no indication the commission itself is under a formal investigation.

“Public ethics is of paramount importance to all New Yorkers,” said State GOP Chairman Ed Cox. “Any investigation of ethics committees is a legal, not a partisan issue. We trust the US Attorney and his team will uncover the truth.”

Moreland Commission Says Referrals To Law Enforcement Have Been Made

The co-chairman of the Moreland Commission on Public Corruption in a letter to U.S. Attorney Preet Bharara write that “several referrals” have been made to federal and state law enforcement based off its work.

In the letter, commission co-chairman Milton Williams and William Fitzpatrick note that Bharara is correct in his assessment earlier this month that some investigations the panel conducted “overlap considerably” with his office.

“As the co-chairpersons of the Commission, we have decided that referrals to law enforcement shall be made only upon unanimous vote of the co-chairs,” Fitzpatrick and Williams wrote. “In light of the facts discussed above, and consistent with the Executive Order, we have agreed to provide your office with copies of all documents in the Commission’s control relating to the Commission’s ongoing investigative work.”

This lines up with Fitzpatrick, the Onondaga County district attorney, declaring in a radio interview last year that the commission had turned up potential corruption that it would refer to law enforcement.

Bharara has questioned in two letters whether the commission was ending its work prematurely following a state budget agreement that included the passage of the Public Trust Act, a package of anti-bribery and anti-fraud measures as well as independent oversight at the state Board of Elections when it comes to campaign finance violations.

Cuomo insisted on Thursday the commission did what it was designed to do: Investigate the Legislature and find a way to have lawmakers agree to new reform measures.

But questions remain on the scope of Cuomo’s office’s involvement in the commission’s direction of subpoenas themselves; Bharara in a radio interview did not rule out an investigation of the governor’s office.

SDNY 4_10_14 by Nick Reisman

Bharara Had Hoped For Tangible Results

From the morning memo:

Back in September, U.S. Attorney Preet Bharara sat down with the Moreland Commission on Public Corruption to urge them to take an aggressive stance on government malfeasance.

In his four-page testimony, Bharara set down some basic hopes for the commission, including that they use their subpoena power effectively.

And he called on them to essentially rattle some cages and get some tangible results.

“…[P]ublic hearings are important and policy proposals are important too. But so are hard-nosed investigations and prosecutions, which I hope will be a primary, rather than tertiary, focus of the Commission,” Bharara said in his prepared remarks. “Nothing shines a light brighter or focuses the public’s anger and attention better than the actual arrest and conviction of a corrupt politician.”

The prosecutor who has made a name for himself taking on large financial institutions as well as public corruption in Albany doesn’t think that wish was fulfilled.

As The Times reported this morning, Bharara wrote to commission members expressing his disappointment the anti-corruption panel is concluding its work following a budget agreement that brought some changes to the state’s fraud and bribery laws.

The agreement struck by Gov. Andrew Cuomo and legislative leaders was apparently not enough for Bharara.

According to a letter obtained by the Times, Bharara’s even wondered whether the commission had been set aside only because of a compromise in the budget.

“The sequence of these events gives the appearance, although I am sure this is not the intent, that investigations potentially significant to the public interest have been bargained away as part of the negotiated arrangement between legislative and executive leaders,” he wrote.

Cuomo maintains the commission was due to conclude its work once state lawmakers had reached an agreement on ethics reform.

The Moreland Commission, indeed, was really running on three parallel tracks.

First, there was the commission itself, which reportedly was the subject of influence from Cuomo’s office and his top aides when it came to directing subpoenas (eventually the state Democratic Committee was issued a subpoena after Republican campaign committees were targeted).

Going on behind the scenes was the ethics negotiations themselves, which eventually included the adoption of the Public Trust Act. The agreement did not include the public financing of political campaigns or any new regulations on raising money for campaigns.

And on the third track was a challenge brought by state lawmakers in the Assembly and Senate who declared the entire commission had no jurisdictional authority to investigate the Legislature.

Lawmakers in the case argued the commission was violating the Constitution’s separation of powers because the executive branch was attempting to probe the legislative branch when it came to more information on their outside, private-sector income.

Moreland pushed back, however, noting the attorney general’s granting of jurisdictional authority gave them the needed powers.

Regardless of the legal arguments, the case dragged through the state court system, with adjournments pushed back from March through the middle of April.

This seemed to suggest a clear time table for budget talks: As Moreland’s legal authority was being hashed out in court, the adjournments bought negotiators in Albany some time to agree on an ethics package.

Once Cuomo and lawmakers agreed to the ethics changes, he said the commission would wind down its work.

Court filings this month show lawyers for the firms representing state lawmakers, as well as the commission itself, agreed their arguments had become moot.

Bharara Targets Convicted Pols’ Pensions

U.S. Attorney Preet Bharara is seeking forfeiture of public pension dollars to at least two politicians convicted of corruption, according to court papers filed Monday by his office.

At the same time, Bharara wants to determine whether former state Sen. Hiram Monserrate and former Yonkers City Councilwoman Sandy Annabi cancelled their membership in the state pension system and

Bharara, the federal prosecutor for the southern district, wants to force ex-New York City Councilmen Larry Seabrook and Miguel Martinez to forfeit their pension beneifts.

In the cases of Annabi and Monserrate, he also filed discovery papers to determine whether they received any payments after leaving the system.

“With today’s actions, we aim to prevent corrupt elected officials from continuing to benefit from pensions paid for by the very people they betrayed in office,” Bharara said in a statement. “As I announced this fall, we are committed to using every legal tool to take the profit out of crime, and that includes preventing public money from being used to fund the comfortable retirement of corrupt officials. This is what justice and common sense require.”

Bharara, who has gained notoriety for several high-profile corruption arrests in the last year, had previously indicated he would try to halt pension payments to public officials found guilty of corruption.

The state’s Constitution prevents lawmakers from losing their pension benefits. An ethics measure approved in 2011 would strip those convicted of a felony, but it applies to officials elected after the law took effect.

Monserrate was exeplled from the state Senate in 2010 after being convicted of assaulting his girlfriend. In October 2010, he was indicted on federal corruption charges for funneling member item funds through a Queens social service agency.

Seabrook was convicted in 2012 of nine felony counts including money laundering, extortion, and fraud.

The letter to Judge Colleen McMahon requesting discovery of Monserrate’s pension status is below as is the order seeking to halt pension payments to Seabrook.

Letter to Judge McMahon Re Monserrate Discovery Requests 12 17 2013 by Nick Reisman

131- Seabrook Substitute Asset Application by Nick Reisman

The Ben And Preet Show

From the Capital Tonight morning memo, the second item:

U.S. Attorney Preet Bharara and Department of Financial Services Superintendent Ben Lawsky are scheduled to appear together on Jan. 27, sharing keynoting duties at a speech at a regulatory conference in New York City.

The topic for the discussion will be risk management in the financial services field (no word if George Costanza will also appear).

Bharara, when he’s not arresting Albany pols, also has jurisdiction over Wall Street and has netted more than a few white collar criminals for the Southern District.

Lawsky, whose department oversees banking and insurance, has been carving out a sphere for his office to include oversight of the pension fund.

He is also considered a protege of Gov. Andrew Cuomo.