Jan 23rd - 8:15 am
From the Morning Memo:
The law firm where Assembly Speaker Sheldon Silver has been “of counsel” on Thursday afternoon insisted in a statement that it was unaware of the Manhattan Democrat’s practice of “referrals” that have caught the attention of the federal prosecutors.
“As the U.S. Attorney’s Complaint makes absolutely clear, Weitz & Luxenberg was not involved in any of the wrongdoing the Government alleges, and the Firm, which has fully cooperated with the Government in this matter, was not aware of any improprieties whatsoever,” the firm said in a statement.
The statement also distances itself from both Silver and insists they are cooperating with the federal government as his case moves forward.
“There is nothing in this case or the related Moreland matter that calls in to question in any way Weitz & Luxenberg’s total commitment to representing its clients according to the highest standards of law and ethics. As referred to in the Complaint, the Firm did not know that any referrals brought to the Firm by Mr. Silver related in any way to the alleged actions on his part to benefit the referring doctor.”
Silver is accused of pocketing millions of dollars in bribes and kickbacks that federal investigators in a 35-page complaint yesterday said were masked as “referral fees” that he never disclosed.
It’s long been questioned what outside income Silver receives for his legal work at Weitz and Luxenberg. Silver has insisted he represents “plain, ordinary people” in his private practice, but federal prosecutors allege he does little actual work for his outside income.
Jan 22nd - 10:29 pm
When Assemblyman Mickey Kearns announced he would not caucus with his party until Assembly Speaker Sheldon Silver stepped down, few people outside Western New York even noticed. Thursday following Silver’s arrest on fraud and corruption charges, the South Buffalo Democrat seemed to offer a bit of an ‘I told you so’ to the Assembly Democratic Conference.
“What I’m surprised about is how long he’s lasted. We had proof that there were young girls that were under oppression that were being abused by some of my colleagues and that wasn’t good enough to remove him from office,” Kearns said.
Kearns has been a vocal critic of Silver since the Vito Lopez scandal but only Charles Barron, a freshman Democrat from Brooklyn, joined him in not supporting Silver as Speaker earlier this month. That’s something a well known WNY Republican leader was quick to point out Thursday night.
“I want to know where our local delegation, you know, Sean Ryan and Robin Schimminger and Crystal Peoples (-Stokes), where they stand on Shelly Silver’s leadership,” said Erie County GOP Chairman Nick Langworthy.
Ryan did release a statement saying he was “disturbed” by the allegations but few Western New York Democrats outside of the Assembly Majority Leader had anything to say.
“Perhaps they should look to Mickey Kearns as the new Speaker of the Assembly. He’s a Democrat. He’s a reformer. He’s somebody that really brings a bipartisan approach to government and he could get things done,” said Langworthy.
This isn’t the first time Langworthy has been supportive of Kearns. He allowed Kearns to run on the Republican line during his first run for the Assembly in a 2012 special election.
Kearns himself knows it’s unlikely the Democratic Caucus would welcome him back with open arms let alone vote for him as Speaker. When asked who he’d like to see replace Silver, Kearns was intentionally vague.
“Anyone who’s not under indictment or investigation would be better than Speaker Silver right now,” Kearns added.
Jan 22nd - 5:17 pm
Democrats on Capitol Hill Thursday weren’t calling on Assembly Speaker Sheldon Silver to resign, but they were not rushing to his defense either.
“My standard has always been that if an elected official is found guilty of committing a serious crime they have lost the privilege to serve,” Sen. Kirsten Gillibrand said in a statement. “I am very concerned by these allegations and will let the legal process play out before commenting further.”
Lawmakers called the news of Silver’s arrest “sad” and said it is up to Silver and his colleagues to decide what to do next.
“That is not up to me, that’s his own decision to make.” Rep. Nydia Velazquez told me when asked if Silver should resign. “He has to make that decision based on what he’s facing, and it’s a decision that he will make with his family.”
“I think one is afforded the right of the constitution as innocent until proven guilty,” Rep. Gregory Meeks said. “I think that the body of the assembly will decide what’s best for it. I can’t say what’s best for it. I’m sure that they have met or will be meeting and they’ll decide what’s best.”
The investigation into Silver picked up after Governor Andrew Cuomo abrubtly disbanded his anti-corruption panel, known as the Moreland Commission, last spring
Rep. Kathleen Rice, who was elected in November to Congress, served as co-chair of the panel until January, while she was also serving as Nassau County District Attorney.
“What’s clear here is that the Moreland Commission that Kathleen Rice helped lead engaged in really substantial, important work to help restore the public’s confidence in the integrity of its government,” said Rice’s spokesperson Coleman Lamb. “It’s also clear that the U.S. Attorney’s office is aggressively continuing that work.”
While the arrest was a bombshell, to be sure, on some level, it did not come as a huge surprise to Democrats, given that Silver’s business dealings have long been the source of speculation.
“It’s been a great concern about the outside income and how it was gained,” Rep. Charles Rangel said. “And so I got more calls this morning from members of the assembly asking the same question, where do we go from here. But I really don’t have enough facts to make any political decision until I hear more about what this is about.”
Rangel’s longtime ally Assemblyman Keith Wright has been mentioned as a possible successor to Silver should the longtime Assembly Speaker resign. But the dean of the state’s Congressional delegation wasn’t yet prepared to speculate on whether Silver’s legal troubles might be a boost for his friend.
“I suspect when any leader for one reason or another leaves office, it’s good for whoever has the chance to replace him,” Rangel said. “But this is a bad time to be talking about replacing him when I don’t even know what he’s been charged with.”
Updated: Rep. Steve Israel, late Thursday afternoon, released one of the most critical statements of Washington Democrats:
“New Yorkers deserve to be able to trust those who represent them. This is a sad day for Albany, and an unwelcome disruption from the important work that the State government does to grow the economy and create jobs for New Yorkers.”
Jan 22nd - 3:21 pm
Assembly Speaker Sheldon Silver briefly addressed the press after posting $200,000 bond in federal court in New York City.
“I am happy the issue is being aired in a legal process,” Silver told reporters. “I am confident that when all the answers are aired I will be vindicated.”
Silver is expected to be in Albany on Monday, a regularly scheduled legislative session day.
Jan 22nd - 3:03 pm
Assembly Speaker Sheldon Silver was released on $200,000 Thursday afternoon following a brief appearance in federal court.
Silver, accused of using his position as the powerful speaker of the state Assembly to enrich himself with $6 million in kickbacks and bribes, did not enter a plea.
A pre-trial hearing is scheduled for Feb. 23.
He is limited to travel around the U.S. and was required to surrender his passport.
Speaker Silver free on 200k bond. Pre-trial hearing set for Feb 23. No plea entered. His passport was surrendered.
As outlined by U.S. Attorney Preet Bharara earlier this afternoon, Silver is accused of receiving referral fees from both real-estate interests and a doctor.
The flow charts Bharara used to explain the case are below:
Jan 22nd - 1:53 pm
The case being brought by federal prosecutors against Assembly Speaker Sheldon Silver goes to the “core” of Albany’s ethics, disclosure and lobbying problems, U.S. Attorney Preet Bharara said Thursday at a news conference.
Bharara this afternoon outlined a five-count complaint against Silver, who is being charged with a mix of fraud and corruption tied to his use of his public office to enrich himself.
Silver is accused of receiving more than $6 million over the last decade through referrals and favor-giving when it came to a variety of areas ranging from a powerful real-estate developer, a doctor and health-care interests.
As detailed in the complaint, Silver received the money as “referrals” which were really masked bribes and kickbacks.
Pointedly, Bharara said Silver never disclosed any of these payments due to “lax outside income laws.”
“The show me the money culture of Albany has been perpetuated at the very top of the political food chain,” Bharara said.
The federal government, meanwhile, has frozen $3.8 million of Silver’s funds in various bank accounts.
Bharara saved some of his most pointed comments for the closure of the Moreland Commission To Investigate Public Corruption, a panel created by Gov. Andrew Cuomo in 2013 and subsequently shut down the following April after a deal on ethics reform was reached.
“A deal was cut to close Moreland Commission to the great relief of Sheldon Silver,” Bharara said.
After the commission closed, Bharara obtained records and files generated by the commission, though the investigation into Silver’s outside income began in June 2013, a month before the Moreland Commission was formed.
It had long been speculated what kind of money Silver was making at his law firm, where he is “of counsel.” Earlier this year, it was revealed Silver had been receiving previously undisclosed income from a law firm that had real-estate business before the state.
New disclosure laws have taken effect in recent years, with lawmakers having to disclose more specifics on their outside income, how they earn it and where.
Still, good-government organizations have noted the laws don’t necessarily go far enough in limiting the influence of private firms that seek “rain maker” lawmakers to sit on their boards or be of counsel.
Lawmakers, too, have in general resisted efforts to have their legal clients disclosed.
“Solving public corruption problems in Albany and the city is no one person’s problem,” Bharara said. “Legislators have to step up, the press has to step up.”
As for what’s next for a federal prosecutor who has made no bones about going after powerful political figures, Bharara ominously said, “Stay tuned.”
Jan 22nd - 12:37 pm
Assembly Minority Leader Brian Kolb today questioned whether there was “some connection” between the governor’s decision to shutter his corruption-busting Moreland Commission and the fact that the body might have uncovered wrongdoing by Assembly Speaker Sheldon Silver, who was indicted earlier today on corruption charges.
Kolb said Gov. Andrew Cuomo “should make a statment” about the Silver mess and whether the Manhattan Democrat should continue on as speaker. Kolb and a number of his fellow Republicans are calling for Silver to relinquish his leadership post, arguing that it would be too much of a distraction from important legislative business for someone so damaged to continue to lead the chamber.
“He has said in the past it’s up to the members, the Assembly Democrats, the internal process, but Governor Cuomo is the leader of the party,” Kolb said. “And it goes back to why was the Moreland Commission cancelled? Is there some connection? Was this percolating back then? Those are a lot of questions I think the governor has to answer.”
According to the criminal complaint against Silver, a grand jury started probing his outside business interests in June 2013. Cuomo convened the Moreland Commission in July 2013, and it released its preliminary report in December of that year. Cuomo disbanded the commission in March after striking an ethics reform deal with legislative leaders.
Us Attorney Preet Bharara’s office picked up where the Moreland Commission left off, and Bharara was quite critical of the governor for shutting the panel down before its work was complete. He also reportedly has been looking into whether Cuomo meddled with the commission, as was widely reported, and tried to micromanage it and steer its attention toward the Legislature and away from anything to do with his own fundraising or influence.
Cuomo, meanwhile, argued he couldn’t possibly have broken any rules by interfering with the commission because he created it in the first place.
Kolb isn’t the only one to be invoking Moreland following this morning’s bombshell about Silver’s arrest. Common Cause Executive Director Susan Lerner, issued the following statement:
“The arrest of Assembly Speaker Sheldon Silver by federal authorities for undisclosed income further reveals the crucial role the Moreland Commission played in bringing corruption in New York State government to light. This sad development underscores, yet again, the sorry state of ethics enforcement in New York.”
“These circumstances make it particularly egregious that the statutorily mandated Review Commission which was supposed to have been appointed by the Governor and legislative leaders to review and evaluate the performance of the Joint Commission on Public Ethics and the Legislative Ethics Commission was never named”
“Common Cause/NY supports requiring New York’s Legislature to work full-time for New Yorkers along with strict limits on outside income. In the meantime, New York State needs stricter disclosure laws requiring elected officials to fully open their books to public scrutiny and a wholesale overhaul of ethics laws and enforcement. New Yorkers deserve a Legislature that does not function under a persistent and permanent ethical cloud. Common Cause/New York urges the U.S. Attorney and Speaker Silver to do everything possible to facilitate an early trial to resolve these troubling charges.
Jan 22nd - 11:00 am
As expected, Republicans are – rather gleefully, it must be said – piling on Assembly Speaker Sheldon Silver in the wake of his arrest on corruption charges this morning, saying he must relinquish his leadership post for the good of the chamber, his constituents and the entire state of New York.
Assembly Minority Leader Brian Kolb, who remained fairly quiet when other Republicans were calling for Silver’s head during the sexual harassment scandal involving former Assemblyman Vito Lopez, now says it’s “imperative” that the speaker step down “immediately,” adding:
“His resignation as Speaker is in the best interest of the Assembly, of the State, and the best way for us to conduct the business that we are elected to do. We cannot afford this distraction with the important business before the Assembly and the people of New York State.”
It’s not clear to me why Kolb has experienced this change of heart. His previous position was that it wasn’t his place to meddle in the business of the Democratic conference, since Silver didn’t tell him how to run his conference (and he has had his share of detractors).
“The ultimate goal is saying ‘whose scandal is this?’ it’s not ours,” Kolb said back in 2013. “So let’s look and hold the people accountable for whose scandal it is.
Than again, the sexual harassment mess – and secret payouts to keep Lopez’s accusers and former aides quiet – was an internal problem with the Democratic conference, where this is a much bigger issue – corruption, which has claimed victims on both sides of the aisle and in both houses of the Legislature.
And, of course, Silver has been arrested and formally charged by the feds, which elevates this situation to a whole new level.
UPDATE: Speaking to reporters earlier today, Kolb said he is “not a person in this business that does personal attacks – never have, never will.”
“Having said that, when it comes to public policy, I think at this point in time when there’s actually an arrest, there’s a clear serious matter to take up,” the assemblyman continued. “And, you know, also the justice system is working on the other things the speaker was dealing with the Vito Lopez case. But I think this certainly raised to the level that he would be servely harmed, I think, by continuing on. I think he should resign as speaker. He does not have to resign as a member unless he’s convicted of a felony.”
One of Kolb’s critics, Assemblywoman Claudia Tenney, also called for Silver to resign (not the first time she has done so). She called the speaker “a disgrace to the people of New York and a blemish on all those who serve the public in this state. It is time to put the Silver era behind us once and for all.” Tenney also said the governor should get involved here and pressure Silver, a fellow Democrat, to depart.
“The politics of New York have for too long been three men in a room. The culture of corruption is pervasive as pay-offs, backroom deals, and cronyism are business as usual in Albany. This is unacceptable. Silver’s arrest is simply the latest indicator we need substantial reform in Albany,” the assemblywoman said.
“We should immediately move to clean up Albany. Career politician syndrome enabled this ignominious day in the history of New York. We need to institute real term limits, cut legislative pay and benefits, slash the length of the session, and restore the faith of the people in their public officials.”
Another female member of the Assembly GOP conference, Staten Island’s Nicole Malliotakis, who briefly eyed a potential run for the seat of disgraced former Rep. Michael Grimm, but stepped aside for the party favorite, DA Dan Donovan, also is calling for Silver to resign – and it’s not the first time for her, either.
“It is beyond time for Sheldon Silver to step down as Speaker of the Assembly,” the assemblywoman said. “The demands of running the chamber and serving the taxpayers cannot be compromised by charges of corruption and a judicial proceeding of this magnitude. There is no doubt that New Yorkers desperately need and deserve new leadership of ‘the People’s House’.”
State GOP spokesman David Laska issued a statement calling for Silver’s immediate resignation, calling this another “sad day for New York,” and insisting that it should not serve as a distraction from “the important business of growing our economy and creating jobs.”
Onondaga County GOP Chairman Tom Dadey also got in on the fun, calling the situation with Silver “deeply troubling” and saying the Democratic Assembly members from Central New York should join him in demanding that the speaker step down.
“On their own, these allegations will only grow the distrust New Yorkers now feel towards Albany,” Dadey said. “We need more transparency and disclosure, stronger ethics laws, term limits and we need to eliminate the bad apples. I am hopeful that our local Assembly delegation, including Assembly members (Bill) Magnarelli, (Sam) Roberts and (Al) Stirpe will show true leadership and call for the Speaker’s ouster.”
So far, the Democrats haven’t said very much. Still no statement from the governor, for example. Members of Silver’s conference are discussing this matter behind closed doors and will be issuing a joint statement soon, I’m told.
A source who has spoken to some of the members mentioned as potential Silver successors, should it come to that, said everyone is keeping their powder dry for now. Timing is everything here. A wannabe speaker who pulls the trigger on his or her effort to oust the wounded leader too soon, only to see him survive this scandal as he has survived other (albeit smaller) scandals before, would no doubt be wandering the wilderness for many years.
That said, a wannabe Silver successor who doesn’t start lining up his or her supporters and make a move in a timely fashion could risk missing the opportunity to become one of the most powerful people in the state.
Jan 22nd - 10:13 am
Assembly Speaker Sheldon Silver was charged on Thursday with five counts of fraud and corruption, with federal investigators accusing the longtime lawmaker of using his official position to reap millions of dollars in outside income and kickbacks.
Charges against Silver focus on the myriad ties he has to both two lucrative industries that have business before the state: Real estate and health care, as well as intersect with his work as a personal injury attorney, where he has been “of counsel.”
At the same time, a real-estate developer is pointed to who has contributed $200,000 to Silver and a political action committee under his control.
Silver, the speaker since 1994, turned himself into federal law enforcement this morning.
In a statement, Silver’s attorneys, Joel Cohen and Steven Molo, said the speaker would be vindicated.
“We’re disappointed that the prosecutors have chosen to proceed with these meritless criminal charges,” the attorneys said. “That said, Mr. Silver looks forward to responding to them — in court — and ultimately his full exoneration.”
The 35-page complaint alleges Silver received bribes and kickbacks through a law firm, which was masked as legitimate income.
The complaint states Silver received millions of dollars in non-public income “as a direct result of his corrupt use of his official position to obtain attorney referral fees for himself.”
Silver, since late 2002, has received more than $5 million from the two firms, with approximately $700,000 accounting for bribes and kickbacks.
Investigators allege Silver obtained referrals in asbestos cases from a doctor, and used his position as leader of the Assembly to funnel a half-million dollars in state funds to the doctor’s research as well as his family.
“There is probably cause to believe that Silver obtained approximately $4 million in payments characterized as referral fees solely through the corrupt use of his official position,” the indictment states.
Jan 22nd - 8:26 am
As we await more details in the case of Assembly Speaker Sheldon Silver – according to reports, he is now in FBI custody – it might be instructive to take a look back at the history of those who have found themselves in similar situations.
The last speaker who was indicted – and subsequently found guilty – of wrongdoing was former Assemblyman Mel Miller, a Brooklyn Democrat.
Miller’s conviction in December 1991 on federal fraud charges forced his immediate loss of both his Assembly seat and his leadership post. Miller, who was once one of the state’s most powerful lawmakers, was eventually cleared by a federal appeals court in 1993, but by then, his career in elected office was long over, though he stayed involved in politics by becoming a lobbyist.
Miller and top aide, Jay Adolf, were orginally charged in 1990 with committing fraud in conntection with the buying and selling of cooperative apartments between 1984 and 1986 when they were partners in the law firm of Adolf & Miller.
While representing clients who were buying apartments, according to the feds, Miller and Adolf secretly bought some of the apartments for themselves and then sold the units at a profit of $300,000 while also collecting $238,000 in legal fees.
Both men insisted they had done noting wrong, and Miller’s attorney said his client was among “a hunted class of well-known politicians.” (Sound familiar?) At the time, Senate Minority Leader Manfred Ohrenstein, a Manhattan Democrat, was awaiting trial on state charges that he misused public money by placing “no show” workers on his payroll.
(UPDATE):A veteran of NY politics notes I neglected to point out that the most significant charges against Ohrenstein, accusing him of assigning legislative workers to full-time duty on Senate campaigns in 1986, were thrown out in 1990 by the Court of Appeals. And the remaining charges, which involved the award of no-show jobs to political allies, were dropped by then Manhattan DA Robert Morgenthau. The former senator was subsequently partially reimbursed by the state (a la former Senate Majority Leader Joe Bruno) for his legal bills to the tune of $1.3 million.
Miller, who was first elected in 1970 by voters in the Flatbush section of Brooklyn, was the third of the last four Assembly speakers to be indicted but the first to be convicted. He was also the 10th state lawmaker to be indicted since 1987. (The list is considerably longer now, I believe up to 33 and counting, with the trial of former Sen. Malcolm Smith, a Queens Democrat, underway and former Senate Majority Leader John Sampson, a Brooklyn Democrat, awaiting his day in court).
In January 1993, an appeals court threw out the convictions of both Miller and Adolf, ruling that a financial group the two represented had no contractual rights to the profits in question, so the investors could not have been defrauded.
In between his indictment and his conviction, Miller held on to the speaker’s office. And Silver could indeed try to do the same, but there will no doubt be calls for him to relinquish that post if and when he is arrested and charged.
Those calls will no doubt start with the Republicans, who have used Silver as a foil in recent years – especially since his role in the secret settlement of sexual harassment charges lodged against former Brooklyn Democratic Assemblyman Vito Lopez. (That case is still playing out in court, and Silver has been named in a lawsuit brought by two former Looez aides who claim they were harassed by their ex-boss).
But Silver is elected by his fellow Democratic Assembly members, and only they can decide if they want to keep him as their leader. As I mentioned earlier today, there is no clear successor to Silver, though several members have been mentioned in the past. (I forgot to add Assemblyman Jeff Aubry, a Queens Democrat, to that list, though his health – he suffered a heart attack in 2002 – could be a concern to some of his colleagues; being the speaker is a high stress job).
Silver was easily re-elected to another two-year term as speaker earlier this month, even as reports of the US attorney’s investigation into his outside income hung over his head. He had just a few detractors – freshman Assemblyman Charles Barron, a freshman from Brooklyn who is basically a professional detractor, and Assemblyman Mickey Kearns, a WNY Democrat who been at odds with Silver pretty much since before he arrived in Albany.
Another big question is what Gov. Andrew Cuomo will do here. He has studiously avoided getting involved in Assembly Democratic politics, though there has always beens speculation that he would prefer to see someone other than Silver in the speaker’s office. The governor doesn’t have a vote in the speaker election, but he does have a BIG bully pulpit.
Miller’s conviction caused a headache for Cuomo’s father, former Gov. Mario Cuomo. It’s unlikely the current governor Cuomo would sit by and let chaos rule in the Assembly chamber, potentially derailing – at least temporarily – his reform agenda in Albany. After all, as my friend and colleague at Capital NY Jimmy Vielkind likes to say, chaos is decidedly not Cuomonian.