Thursday, March 10, 2011

Brooklyn Democrats Indicted on Corruption Charges

Two influential Brooklyn Democrats in the State Legislature are being indicted today along with an influential lobbyist and two hospital officials on corruption charges stemming from improper assistance to businessmen in exchange for raising campaign contributions. Sen. Carl Kruger and Assemblyman William F. Boyland Jr. were expected to turn themselves in to authorities later today:
State Senator Carl Kruger, a powerful and at times controversial Brooklyn Democrat; a state assemblyman; and an influential lobbyist are expected to turn themselves in on Thursday to federal authorities in Manhattan on corruption charges, according to several people briefed on the matter.

Mr. Kruger had been under investigation by federal prosecutors in Brooklyn who were looking into accusations that he had helped businessmen surmount bureaucratic hurdles in exchange for assistance raising campaign money, but the charges stemmed from an investigation by Manhattan federal prosecutors and the Federal Bureau of Investigation.

Others, including William F. Boyland Jr., a four-term Democratic state assemblyman from Brooklyn, and Richard Lipsky, a lobbyist, and two hospital executives, were also expected to face charges in the case, according to the people, who spoke on the condition of anonymity because the charges had not been made public.

Some of the charges were expected to center on actions that the men took supporting the activities of hospitals in Brooklyn and Queens, the people said.

Mr. Kruger led the powerful Senate Finance Committee until Democrats lost control of the chamber last year, a position from which he amassed the Senate’s largest campaign war chest.

In the Brooklyn investigation, one of Mr. Kruger’s campaign donors, Michael Levitis, who is suspected of serving as an intermediary between the senator and those seeking favors, pleaded guilty this month to lying to federal investigators in the case.

Details of the Manhattan case against Mr. Kruger and Mr. Lipsky were not available on Wednesday night. The United States attorney in Manhattan, Preet Bharara, and officials with the F.B.I. were expected to hold a news conference on Thursday to announce the charges.

Mr. Kruger’s lawyer, Benjamin Brafman, declined to comment on Wednesday, as did Gerald B. Lefcourt, who represents Mr. Lipsky. It could not be determined Wednesday night who represents Mr. Boyland.
Kruger's name came up in connection with the investigation into Queens Democrat Tony Seminerio, who was later convicted on corruption charges (and died in prison in January). Boyland was fingered because his name came up in talks with David Rosen, who was the chief executive of MediSys Health Network and several of its subsidiaries, including Jamaica Hospital Medical Center. Rosen allegedly paid Boyland between $10,000 and $50,000 for work as a consultant and MediSys had also paid Mr. Seminerio more than $300,000 for work as a consultant for his efforts supporting its bid to purchase other hospitals. Rosen claims that Boyland suggested to Rosen that he could be hired as a consultant.

This is hardly the first time that Brooklyn's political representatives have found themselves in hot water. Assemblyman Clarence Norman was previously found guilty of campaign violations. State Senator Kevin Parker was found guilty of misdemeanor assault for hitting a photographer.

Assemblyman Vito Lopez is the subject of a federal and state and local investigation on corruption.

Going back 20 years, Assemblyman Speaker Mel Miller of Brooklyn was convicted on corruption charges, but the verdict was subsequently overturned on appeal. For more on New York's political corruption through the years, see here.

Some of the issues with corruption at the state level deals with the fact that the state legislature is technically a part-time position (a well paying one at that). Legislators are allowed to maintain outside jobs, and some are extremely lucrative. Speaker Shelly Silver is counsel with Weitz and Luxenberg, but has never revealed his salary (or potential conflicts of interest). Thus, New York politicians are able to boost their salaries considerably.

Making the job full time and eliminating any outside consulting gigs or other potential sources of income would reduce the chances for corruption seeping in. Don't expect the legislature to move on that anytime soon.

Another issue may stem from the need for politicians to raise considerable campaign funds to run for office - but there's no easy or quick fix to that.

The copy of the complaint is now available.

The Times reports that Kruger is facing two counts of depriving NY citizens of their their legislators' honest services (corruption) and one count of money laundering, while Boyland is facing one count of corruption.
Mr. Kruger, a Democrat from Brooklyn, is accused of “receiving a stream of bribes totaling at least $1 million in exchange for taking official actions.” Among the charges in the complaint is that he shared fees paid to the lobbyist, Richard Lipsky, and then took “the very official acts in favor of which Lipsky had been paid to lobby.”

Indeed, the detailed 53-page complaint portrays Senator Kruger as a lawmaker who offered a full range of corrupt services in exchange for bribe payments, performing official acts that included sponsoring and supporting legislation, lobbying other elected officials and directing state monies for the benefit of Mr. Lipsky and the lobbyist’s clients.

Assemblyman Boyland, also a Brooklyn Democrat, accepted $177,000 in bribes from a hospital executive, according to the charges.

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