New York To Study Extending 7 Line To Secaucus

After Gov. Chris Christie killed the ARC tunnel project and riled the likes of Sen. Chuck Schumer of New York, one of the alternative proposals was that the MTA should extend the 7 line to Secaucus.

Well, the MTA and New York City are going to conduct a study whether it makes sense to do so.

The city hired engineering firm Parsons Brinckerhoff this week to analyze how many riders the line could serve, how they would connect to the NJTransit train hub in Secaucus and - most importantly - how much it would cost.

Their study is due in three months, which Deputy Mayor Robert Steel said will help show government and transportation agencies in the region whether to go forward.

"All of [them] are focused on trying to understand, is this a good alternative?" Steel said. "It's a matter of months, not years."

Other officials in New York and New Jersey are looking at the idea, but haven't put up any cash to make it happen.

It could give New Jersey residents their first direct train line to Grand Central Terminal, as well as to see the Mets or the U.S. Open in Queens.

"City Hall really does want to explore it," said one person involved in the multiagency talks.

"They have an incredibly reluctant MTA partner, and an incredibly wary New Jersey state government," the source cautioned. "[MTA Chairman] Jay Walder doesn't have enough money to finish what they're already doing."

The city is paying $2.1 billion to extend the 7 train to 34th St. and 11th Ave., where it will serve a massive office and housing development planned for the West Side rail yards.

Schumer, along with New Jersey's Sen. Lautenberg have been hypercritical of Christie's shutdown of the ARC tunnel over expected cost overruns that would likely leave New Jersey on the hook for an excess of $1 billion (some estimates put it as high as $5 billion).

Schumer and Lautenberg were unable to find additional funding to cover potential overruns, and the federal DOT could only provide additional loans to cover potential overruns. All they could do was snipe at Christie looking at the state's financial health and seeing that the state could not afford to cover cost overruns that were beyond its control. No one else was willing to step in to cover the overruns, which should be a warning sign that Christie was right to reconsider the project since if the costs could be contained, it should have been easy to convince other entities (the federal government, or New York) to cover potential cost overruns directly.

It's inexcusable on their part to not find the funding or ways to enable New York to pony up the overruns. New York state finances are in shambles as I've repeatedly warned and argued, but a new rail connection was critical to reducing congestion and improving service along the Northeast Corridor. Further, the new tunnels could support additional traffic that could be generated by a link to Stewart Airport in Newburgh. The Port Authority bought the airport in an attempt to reduce congestion at the other area airports but hasn't found a way to integrate it into the long term airport strategy. It needs a high speed rail link to make that a credible option, but no one has the money to make it happen.

That's where the federal stimulus funds should have come into play - using the federal government's funding to build major infrastructure that would help bring relief to the millions of commuters and travelers who rely on an aged and decrepit system.

The 7 line extension would be less costly than the ARC tunnel project, and would bring a more direct routing for commuters looking to get to the East Side of Manhattan and the rest of the City and it's an option worth seriously considering, even if a portion of the ill-conceived Xanadu looks like it will collapse under the strain of the latest snowstorm.

Moreover, the 7 line extension would likely be able to use much of the real estate procured for the ARC tunnel and the engineering expenditures and other work on the tunnel before it was cancelled. That will further reduce the New Jersey tab that it would owe to the federal government for canceling the project.

Democrats Distancing Themselves From Rangel Hoping to Limit Political Fallout

As I've been noting for some time now, Rep. Charles Rangel is in a pretty secure seat -- he's a 20-term Congressman from Harlem who has won reelection time and time again without even the slightest bit of concern for his reelection chances.

It's quite likely he'd win reelection again in 2010, though he's finally getting an opponent who has the kind of name recognition to send Rangel packing - Adam Clayton Powell IV (the son of the man that Rangel beat to win his House seat 40 years ago). Rangel won in 2008 with the tax evasion and rent stabilization mess breaking before the election and that didn't stop his constituents from reelecting him handily.

His fellow Democrats aren't so blessed with constituents willing to overlook his corruption, ethics flaps, tax evasion and avoidance, and other legal issues (like gaining benefits from rent stabilization despite not being in compliance with state law). They are thinking they're going to be hammered in November in part because Rangel is still in office because Democrats aren't going to take the steps needed to purge Congress of corrupt officials.

Rangel is still putting up a defiant front, but even fellow New York Democrats are starting to distance themselves from the radioactive Rangel. That includes Senator Chuck Schumer, who just a month ago gave $10,000 to Rangel's reelection campaign effort. Schumer's probably wishing that he could get the money back now that the ethics flap has come to a head - even though anyone and everyone knew that Rangel was going to be toxic for their political futures with all the issues facing him.

Other Democrats have given back $500,000 in money donated by Rangel to avoid the stench of corruption and the appearance of impropriety.

"Democrats will start heading for the hills — distancing themselves from Charlie once those charges are out — so if he wants to keep a modicum of support, he better reach a deal with the House over the next few days," a senior state Democrat told the New York Post.

A House panel has scheduled a reading of ethics charges against Rep. Rangel on Thursday.

Rangel is accused of accepting four rent-stabilized apartments in New York City and creating an alleged tax loophole for an oil executive who contributed to a City College program under the his name. Rangel also failed to pay taxes on a villa he owns in the Dominican Republic.

"He did some things that look like they ought to get him thrown out of Congress, and if it turns out that he did them, he's going to get thrown out of Congress," former DNC Chairman Howard Dean said on "Fox News Sunday."

The longtime Harlem Congressman said over the weekend that he could beat a public trial, opposing the advice that Democratic leaders have given him to cut a deal and avoid the possibility of Republicans using his case to take back the majority in the House in November.

9/11 Trial Security In NYC Might Top $200 Million A Year

Only days ago, the NYPD and Commissioner Ray Kelly said that the costs for a 9/11 trial at the federal courthouse in Lower Manhattan would run $75 million. Today, the Daily News reports that the costs are nearly triple that estimate - $200 million.

The NYPD's newly revised projection is almost triple the estimate of $75 million in November, after Attorney General Eric Holder announced he would move the prisoners from Guantanamo to Manhattan for trial.

The legal process is expected to play out over more than a year.

At a news conference Monday, Sen. Chuck Schumer (D-N.Y.) demanded the federal government pay every penny of the security costs.

"Some New Yorkers think the trials are a good idea. Some New Yorkers think the trials are a bad idea," Schumer said. "One idea all New Yorkers agree on is that New York taxpayers should not have to pay a dime for these trials."

Federal marshals will handle security at the courthouse. The NYPD and other law enforcement agencies will be assigned to protect the surrounding area.

Schumer warned the security cost of the trials would be in the "hundreds of millions," but he declined to give an exact figure.

Those are costs that the City is incapable of paying due to its fiscal situation, and Sen. Schumer has called on the federal government to reimburse the City for the additional security. That's the bare minimum, and it again raises questions over why this was necessary when the Obama Administration notes that they're more than willing to use tribunals for cases where the likelihood of conviction isn't assured given the evidence (the quantity and manner in which it was collected). The Administration has also hinted that should Khalid Sheikh Mohammad or his fellow terrorists be found not guilty, the Administration would still find a way to detain them indefinitely.

NY Politicians Oppose Obamacare; Joining The Rest of Us

The health care proposal working its way through the Senate received new opposition over the past 24 hours from Governor David Paterson and NYC Mayor Mike Blooomberg. Both are concerned that New York would be adversely affected by the implementation of the health care plans, and that neither the City nor state would see the benefits of the plan's implementation since the City and State are already exceeding the level of coverage.

Gov. Paterson, Mayor Bloomberg and other officials warned the Senate plan would:

- Force the city to close 100 health clinics.

- Blow a $1 billion hole in the state's budget.

- Threaten struggling hospitals, nursing homes and other facilities.

"It is really a disgrace and we've got to make sure that we fight before the bill is finally passed," Bloomberg fumed.

New York ended up on the short end as Senate brokers showered cash on states whose senators were among the last holdouts before Democratic leaders locked up the 60 needed votes.

New York's best hope now is emergency surgery to undo the shafting before the bill becomes final.

A health care overhaul passed by the House last month is more generous to the city and state, and negotiations over the differences start in January.

Under the Senate plan, the biggest rewards go the states that, unlike New York, have been Scrooges to the poor in need of medical care.

"We are in a sense being punished for our own charity," Paterson said Monday.

Paterson was also bitter that states like Massachusetts and Vermont, which were also generous, got last-minute deals that erase their extra costs.

Well, maybe Paterson and Bloomberg should grill the state's representatives in Congress over this failing. After all, with Senior Democrats Sen. Chuck Schumer and Rep. Charlie Rangel in positions of importance, you'd think that they'd be able to bring home the bacon for the state, but it appears that they've failed miserably to do even that. By playing "loyal" soldiers and supporting this mess, they've screwed New York at its most desperate hour. Did they not see that the costs would hit New York disproportionately precisely because the state had been overly generous with its Medicare/Medicaid programs for decades?

Of course, the whole situation boils down to cost, and this health care proposal is a costly shifting of burdens that does nothing to reduce the actual cost of health care.

All the horse trading over benefits and costs means that the Democrat leadership can barely keep up with the criticisms and complaints over the plan from its own caucus, let alone the withering criticism from everyone else who sees this plan as a mess.

Schumer was in on this mess from the get-go, and he thinks that this will end up being a net positive for the state. It's hard to compute that when the state's finances are essentially broke due to structural deficits as far as the eye can see, and yet the state is being asked to assume even more costs. The House version may be more helpful to New York, but the chances of those provisions getting adopted are slim if this bill is to pass the Senate.

Now They Notice?

The New York Times has spent years supporting Democratic control in Albany, maintaining a status quo for Democrats who have held the Assembly chamber for decades and gained control over the Senate this past year. Now, they suddenly realize that Albany is a cesspool in need of a vast cleansing?

New Yorkers have been complaining for many years about their abysmal state government, but it has simply grown worse. The state has become a national embarrassment, a swamp of intrigue and corruption, a $131 billion monster controlled by a crowd of smug officials whose main concern is keeping their soft jobs. By now, most New Yorkers have given up hope that these officials are capable of cleaning up their own mess.

The clock is ticking. In one year, unless the Albany crowd pulls off some miracle, which we doubt will happen, it will be up to the voters to get them out, all of them.

To recap some recent outrages:

Former Gov. Eliot Spitzer, who promised to reform Albany on Day One, was forced to resign on Day 441 after his bizarre antics with a prostitute. His replacement, David Paterson, has been weak and ineffective. The state comptroller was forced to resign after confessing to a felony involving his misuse of state resources. Three of his close associates have been arrested on charges of bribery and grand larceny.

A dozen legislators in the last few years have been convicted of serious crimes including bribery, mail fraud, extortion and racketeering. Joseph Bruno, the Senate majority leader who resigned last year, is fighting federal charges that he collected more than $3 million in fees from companies trying to do business with the state.

After failing to do the people’s business for years, the Senate was shut down for a month this summer by two Democratic senators. Pedro Espada Jr., one of them, is under investigation for not filing campaign finance forms and over allegations that he funneled state money into his own business. The other, Hiram Monserrate, was convicted last week of assaulting his girlfriend.

How do we let such people anywhere near a legislature? The answer is in voters’ hands. It is time to change the culture.

Maybe there's a real good reason that the Times had to can another 100 people in their newsroom today. Maybe it has something to do with myopia and a failure to report the massive failure of the state government for years on end that now culminate in a $50 billion deficit due to the state spending billions more than it could ever hope to take in due to unfunded mandates, a bad state economy (and even worse upstate economy that has been reeling for years due to a collapse of the state's manufacturing base and key companies like IBM, Xerox and Kodak).


For starters, voters must realize that the politicians that they've repeatedly reelected to office are incompetent and incapable of making any decision tougher than rubber stamping a decision by the Senate Majority Leader, the Speaker of the Assembly and the Governor to produce an annual state budget that empties taxpayer pockets and leaves the state budget in tatters.

They also have a way of electing politicians who assault their girlfriends and engage in all manner of illicit activities. To their credit, Sen. Charles Schumer and Sen. Kristen Gillinbrand (both Democrats) called on Monserrate to step down (but don't expect that to happen, or expect voters in his district to even notice).

And the problems aren't just in Albany. The same exact problems occur in Washington; Speaker Pelosi promised to drain the swamp of corruption, and yet she ignores multimillion dollar multiple ethical, legal and tax problems with none other than senior New York Congressman Democrat Charles Rangel. The Times called on him to step down from the post, but that's met with deaf ears.

The problems are also severe in New Jersey, where dozens of politicians have been indicted and convicted on corruption charges. Yet, we've got Republicans pushing candidates who apparently have unsavory connections to the porn industry, while Democrats have to run away from their "achievements" like Jon Corzine, because the economy is in tatters, state taxes have risen, and the only growth has been in the size of the state workforce.

It's time that the taxpayers cut through the crap spewed by the politicians. That means journalists doing more actual reporting of the news and less editorializing in hard news stories.

Democrats Turn Swamp of DC Corruption Into Swimming Pool

The politics of corruption continues and the Democrats are up to their necks in these kinds of arrangements. In fact, as Hot Air notes, Hassan Nemazee makes Norman Hsu look like a small time crook.

Hassan Nemazee, chairman of Nemazee Capital Corp. and a fundraiser for President Barack Obama and Hillary Clinton, was arrested on charges he used phony documents to trick Citigroup Inc. into lending him as much as $74 million.

Nemazee got the loan by telling Citibank he held accounts with hundreds of millions of dollars that could serve as collateral, U.S. Attorney Preet Bharara said today in a statement. The financier used fake addresses and phone numbers controlled by him to mislead the bank, prosecutors said.

The accounts “either never existed or had been closed years before Nemazee submitted the documents referencing those accounts,” Bharara said in the statement.

Nemazee, 59, repaid the loan to Citibank yesterday, a day after he was interviewed by Federal Bureau of Investigation agents, prosecutors said. The interview took place at Newark Liberty International Airport as Nemazee was checking in for a flight to Rome.

In an interesting turn of fate, Nemazee is being represented by Marc Mukasey, who is the son of Michael Mukasey, an Attorney General under President Bush.

So, who is Nemazee? He had some key ties to major Democratic party figures, including three candidates for President: John Kerry, Hillary Clinton, and Barack Obama. He also was involved in the DSCC, which is run by Sen. Chuck Schumer (via Ace of Spades).

For Democrats who claimed that they would drain the swamp of corruption in Washington, we're finding that they haven't so much drained the swamp, but flooded it turning it into a swimming pool for their excess.

In fact, in a related item, Rep. Charles Rangel was caught underreporting assets once again to the tune of $500,000.

The Rebuilding of Ground Zero, Part 71

Over the past few days, Governor Paterson has announced that he's going to force Larry Silverstein to accept whatever half-baked deal that the Port Authority comes up with rather than make sure that Silverstein gets the financing he needs to build at Ground Zero. He's basically threatening that Silverstein will be pushed aside to allow the Port Authority to go ahead with its own agenda. That includes the Port Authority drawing up plans to finish the 9/11 memorial and the PATH transit hub, and nothing else.

If you want a reason why Ground Zero remains largely a hole in a ground, there's your answer.

The 9/11 WTC Memorial and Museum is being built - largely because public pressure to have a gaping maw present come time for the 10th anniversary would be political poison to everyone even remotely associated with Ground Zero. However, all the other projects are behind schedule and subject to delays, modifications, or cancellations.

In fact, the Freedom Tower (aka 1WTC), which now peeks out over the northwestern portion of Ground Zero is hopelessly stalled, and a new report indicates that it will not be completed before 2018, at least 4 years after the Port Authority claimed just a few months ago. Anyone looking at the Tower can see that it's stalled out, as the northern core remains barely visible from ground level.

Moreover, that report indicates that the 9/11 memorial and museum wont be completed until 2013, two years after the 10th anniversary, and well after the dates provided by the Port Authority:

A 2018 opening for the iconic, 1,776-foot building would come more than four years after the opening date the Port Authority trumpeted just 10 months ago, the government report found.

The July 14 "confidential draft...risk analysis" by the Lower Manhattan Construction Command Center (LMCCC) found that every blockbuster project at Ground Zero has fallen years behind time lines the PA unveiled in October.

The report says the grandiose transportation hub may not be ready until 2018, while the Sept. 11 Memorial, the site's emotional centerpiece, could be two years behind its 2011 deadline.

The report contradicts the "aggressive yet realistic schedules" PA boss Chris Ward gave Gov. Paterson.

Every one of those delays adds to the costs of rebuilding, and which makes an already expensive rebuilding project, even more expensive.

First and foremost, the Port Authority continues dragging its feet on the preparation of the site for Silverstein's office towers that were part of a previously negotiated settlement over how to rebuild at the site. The Port Authority continues to have to pay daily fines for failing to have the site ready.

The credit market collapse last fall has meant that financing remains a key stumbling block, and Silverstein's attempts to get the Port Authority to provide the financing has fallen on deaf ears. So too apparently has it fallen on the deaf ears of the New York Congressional delegation, from Senator Charles Schumer and Kristen Gillinbrand, to the members of the House.

At a time when the Obama Administration wants to get shovel ready projects going that would provide jobs and economic incentives, the rebuilding at Ground Zero is clearly the highest profile project, and one that would get support from a wide cross section of New Yorkers and all Americans in general.

Instead, we get treated to an ongoing battle, where Silverstein gets painted by the politicians as the bad guy, when the Port Authority and the other state agencies involved in rebuilding in and around Ground Zero can't get their own acts together to rebuild in a timely fashion.

If you want proof that this situation, look no further than Fiterman Hall and the former Deutsche Bank buildings. Both were heavily damaged during the 9/11 attacks, and both should have been demolished long ago. Yet, they're only now beginning to get around to it.

Silverstein long ago rebuilt 7WTC, showing that there is still someone who can get the job of rebuilding done.

Silverstein needs the financing to move ahead, and he needs the Port Authority to quit dragging its heels on site preparation. Everything is getting delayed because the former Deutsche Bank building hasn't been deconstructed, and is crucial to the infrastructure at the site since it is the site for the vehicle security center for vehicles entering the site.

Silverstein has threatened to take the matter to arbitration, and I suspect that he'd win on his claims, since there is more than adequate proof that the Port Authority is purposefully dragging its feet in the site reconstruction and efforts to prepare the site for Silverstein's office towers.

Curiously, for the first time in a while, Assembly Speaker Shelly Silver has noted that Gov. Paterson's nonsensical statements are a guarantee that there will be years more delays.

The Rebuilding of Ground Zero, Part 70

Has there been a thaw in the cold war between Silverstein Properties and the Port Authority? Silverstein had demanded arbitration to get the Port Authority to meet its obligations to prepare the site and insure that the preconditions to building the office towers on the site were in place.

Now comes word that the Port Authority will be in a position to offer Silverstein the financing he needs to fully build the office towers if he's able to raise $625 million. It's not going to solve the mess completely, but it does indicate that some progress has been made to get development rolling.

For the first time, the authority, which owns the site, agreed to guarantee financing for both of Mr. Silverstein’s office towers, which are to be built along Church Street, at an estimated cost of $4.2 billion, according to a letter on Monday from the Port Authority to the Bloomberg administration and the office of Assembly Speaker Sheldon Silver.

But up to $1.2 billion in financing for the second tower would come only after Mr. Silverstein raised $625 million from investors or lenders, according to the proposal.

The letter, from Christopher O. Ward, the authority’s executive director, was sent to City Hall on the same day that Mr. Silverstein sought to start an arbitration process, angrily claiming that the Port Authority had violated the development agreement at ground zero.

A spokesman for Mr. Silverstein declined to comment on Thursday. He does not view the proposal as a credible offer, according to an official who spoke with him

“I don’t believe it moves the ball forward,” said Mr. Silver, whose district includes Lower Manhattan. “I don’t believe it gets us closer to a deal.”

Mr. Silver, a consistent supporter of Mr. Silverstein, and Mayor Bloomberg organized a summit meeting in May in a so-far unsuccessful effort to broker a resolution.

Andrew Brent, a spokesman for Deputy Mayor Robert C. Lieber, who leads the city’s negotiating team, declined to comment on the proposal, citing an agreement among the parties not to negotiate in public. But two officials who had been briefed on the new proposal said that it was a step in the right direction, although they noted what they called some serious flaws.

One flaw, one of the officials said, is that the financial structure would make it nearly impossible for Mr. Silverstein to raise $625 million in the credit markets, where there is little money available for real estate projects.

It's the credit crunch that has been a recent stumbling block, and it's in this arena that the state's US Senators, Gillinbrand and Schumer, should be pushing President Obama to provide Silverstein with the access to credit needed to rebuild at Ground Zero.

Considering the thousands of jobs at stake and that this is truly a shovel-ready project, it would appear to be a no-brainer, but this is the Obama Administration we're talking about. They'd be in a position to rescue the development at Ground Zero, but are incapable or unwilling to do so.

Continued delays can and would put the completion of the 9/11 Memorial in doubt in time for the 10th anniversary commemoration.

This Isn't First Time Hank Morris Had Brush With Law

Hank Morris, who is not only closely tied to Alan Hevesi but helped steer Chuck Schumer to his win over Al D'Amato for D'Amato's Senate seat, has had problems with following the law in the past.

Comptroller Alan G. Hevesi struck a compromise yesterday with the Campaign Finance Board, which then released $2.6 million in city matching funds for his mayoral campaign and, perhaps just as important, lifted what had been a cloud over his candidacy.

As part of the deal, Mr. Hevesi offered to pay his chief political consultant, Hank Morris, an extra $240,000 for work leading up to the Democratic primary on Sept. 11. Mr. Hevesi's opponents had charged that he was circumventing the campaign finance spending cap by allowing Mr. Morris, a longtime friend, to work for free or provide his firm's help at a steep discount.

The campaign finance law limits spending to $5.5 million in the primary, so anyone paying less than fair market value for a service would be able to spend that much more on items like television advertisements or campaign mailings.

Last week, the Campaign Finance Board refused to release Mr. Hevesi's share of city matching funds, which are paid to candidates in exchange for honoring spending limits and accepting restrictions on the size of political donations.

The September 11 in question? That would be September 11, 2001. Even back then, Hevesi and his political cronies were busy skirting the rules. Now, we know that they were up to no good for years. The Campaign Finance Board gave them a slap on the wrist - essentially saying that boys will be boys and that politicians will always try to test the boundaries of the law.

Morris profited mightily from his Hevesi connections, through links to other major politicians and most of all from his pension plan connections:

Since Mr. Hevesi took office in 2003, Mr. Morris created or was employed by half a dozen companies whose main purpose was to help hedge funds, private equity firms and others handle some of the investments of New York State’s $154 billion pension fund.

As comptroller, Mr. Hevesi had sole authority over the fund, and Mr. Morris appears to have been paid handsomely for making introductions: state investigators believe that at least $25 million in fees were paid to Mr. Morris’s business interests during Mr. Hevesi’s four-year tenure.

Mr. Morris’s earnings from pension fund work, along with those of other friends and political allies of Mr. Hevesi, a Democrat, are now the focus of criminal investigations by Attorney General Andrew M. Cuomo, also a Democrat, and P. David Soares, the Albany County district attorney.

It's that pension fund work that led to the indictments yesterday.

Former Hevesi Aides Indicted On Pension Scam

Hank Morris, a political consultant to disgraced former New York State Comptroller Alan Hevesi, and David Loglisci, former deputy controller for Pension Investment and Cash Management under Hevesi, were indicted in a pension fund fee scam. Morris also worked for Sen. Chuck Schumer.

The specific charges weren't clear last night. Hevesi will not be charged, the source said.

The News reported in September that Cuomo had convened a grand jury.

Morris pocketed at least $25 million in middleman fees from financial firms that won business with the pension fund during Hevesi's tenure.

Successful companies paid a little-known Connecticut financial firm, Searle & Co. "placement fees," 95% of which are said to have gone to Morris.

The largest chunk was from the Carlyle Group, one of the world's biggest private equity firms in the world.

Carlyle, which invests $1.3 billion for the state pension, paid $12.3 million to Searle from 2003 through 2006.

Morris, Loglisci and their lawyers could not be reached. Searle's lawyer said he was unaware of any charges. Cuomo had no comment.

Morris, a longtime Democratic consultant who also worked for Sen. Chuck Schumer, quietly registered as a financial broker just months after Hevesi took office in 2003.

Few people are said to have known of his involvement with Searle & Co., which is located above a Greenwich, Conn., Christian Science reading room.

Meanwhile, Morris created five firms - four of which shared his East Hampton home address. His name was not listed on the incorporation papers.

At least three of the companies received fees from firms doing business with the fund, documents show. Morris no longer works at Searle.

Hevesi, who quit in 2006 before pleading guilty to an unrelated felony, has denied knowing Morris made money off the pension fund.

While the Daily News doesn't have the specific charges, NY1 does. It's 123 counts of enterprise corruption and other felonies.

Hank Morris and David Loglisci were arrested and arraigned this morning in a Manhattan court on 123 counts of enterprise corruption and other felonies.

Prosecutors allege the two engaged in a three-year criminal enterprise to pocket more than $35 million in middleman fees.

They are the first to be charged in a case that took nearly two years to uncover.

State Attorney General Andrew Cuomo's office investigated whether financial firms were using politically-connected consultants in an effort to get business with the state pension fund.

Morris is a top political consultant to former Comptroller Alan Hevesi and Senator Charles Schumer.

Business Booming at Bergen Town Center

Bergen County has these odd blue laws which mean that you cannot sell many common items on Sunday. It means most stores other than restaurants, supermarkets, and book sellers are closed. In other words, Saturdays are a huge day for business in Bergen County.

With that in mind, we wandered over to Bergen Town Center in Paramus yesterday to check out whether the new Target had opened. It had.

In fact, it was absolutely packed. The whole mall was packed as people were busy making purchases at Target, Off 5th Avenue (Saks), Century 21, Marshalls, the new Nike outlet, GAP outlet, and Filene's Basement.

You wouldn't be able to tell there was a recession by the way the parking lots were stacked and by all the bags people were lugging back to their cars.

It says something about the nature of these particular businesses though that they were as busy as they were. The anchor department stores in Bergen Town Center are selling designer items at steep discounts. That's what they're known for, particularly Century 21. As such, they provide more bang for the buck - which is also what Target is known for. Therefore, they're much better positioned to ride out the recession than other department store chains.

While the Target in Paramus was busy, the existing store in Hackensack wasn't nearly as busy as it had been on a typical Saturday. I expected as much, given the fact that the new Target is just a few miles down the road on Route 4 in a much more prominent location. I think after the excitement wears off, both businesses will settle down into a comfortable traffic pattern.

Business at Bergen Town Center will continue to see big crowds as other stores continue rolling out, including the Whole Foods starting March 19 and Nordstrom's discount.

UPDATE:
Sen. Charles Schumer went on Meet the Press today and claimed that only the government can get the US out of the recession. The new jobs created by the private sector in Paramus would suggest otherwise. It takes a government that knows when to get out of the way of the private sector to allow job growth - in the private sector, rather than sucking revenues out of the pockets of consumers that could instead be spent in businesses and add to the tax revenues.

New York Gov. Paterson Picks Kristen Gillibrand For Clinton Senate Seat

The long wait is over. Governor David Paterson, who had courted with the idea of passing the seat on to Caroline Kennedy, has settled upon upstate Democrat Kristen Gillibrand.

Gov. Paterson, defying the liberal wing of his Democratic Party, has chosen little-known, NRA-backed, upstate Congresswoman Kirsten Gillibrand to succeed Hillary Rodham Clinton as New York's junior senator, it was learned last night.

The surprising - and, for many Democrats shocking - decision to pick the conservative Gillibrand, 42, from Hudson in Columbia County, was disclosed by the governor in calls to party officials and some members of the state's congressional delegation, many of whom said they were unhappy with the selection, sources said.

There are more Democrats in New York than Republicans, and not all Democrats in the state are as liberal as the downstate contingent who are already represented by the likes of Charles Schumer. Gillibrand was actually supported by Schumer in this move precisely because of the need to increase the voice of upstate Democrats. This is a sign that Paterson is attempting to provide a greater voice to upstate New Yorkers. Like him or hate him, Schumer is a very savvy politician who has steered the Democrats to a comfortable advantage in the Senate.

However, that isn't sitting well with some of the leading contenders for the position, including Carolyn Maloney, who is a staunch gun control advocate. Expect top Democrats to come out and challenge Gov. Paterson when he comes up for reelection, as well as Gillibrand when her term is up in 2010.

Pleading Her Case?

Caroline Kennedy sure is doing a whole lot of pleading in her listening tour across much of New York State to claim that she should be appointed by Democrat Governor David Paterson to replace Sen. Hillary Clinton should she be confirmed to be President-Elect Barack Obama's Secretary of State.

What exactly has she done that makes her suitable for the position? Her claims to fame?

That would be her last name, which apparently is more than enough for many.

She's claiming that she's raised a family, which is a sign of her ability.

Really? How come Democrats repeatedly denigrated and castigated Alaska Governor Sarah Palin for not only being a small town mayor and the governor of the state of Alaska, but for raising a family of five?

Can you say hypocritical double standards? I know you can.

Kennedy has not done anything that should warrant being chosen Senator from New York, not when there are other suitable politicians who have put in their dues and done service for the citizens of the state. Why should they be passed over for Kennedy, unless it's that last name that will trump all? Kennedy has lined up a bunch of high profile people to help back her efforts, including other members of the Kennedy clan.

Meanwhile, the Daily News is starting to ask some serious questions about key issues of the day, including where she stands on the auto bailout and the financial crisis.

She's nice, smart and has a golden political pedigree, but where does Caroline Kennedy stand on the auto bailout, immigration, Wall Street regulation and other sticky issues?

The answer, many New Yorkers are quickly realizing, is "No one knows." And there's no guarantee they will before Gov. Paterson bequeaths Hillary Clinton's Senate seat upon her, as he seems inclined to do.

"You will find out where she stands when she runs in 2010," said former Mayor Ed Koch, a supporter. "She's a liberal with sanity, which is what I look for in any candidate."

All that's really known is that Kennedy is a fierce advocate for public education, having raised millions for city public schools.

She is also solidly pro-choice, according to Kelli Conlin of NARAL Pro-Choice New York, an organization Kennedy has supported for years.

Beyond that, her views are cloaked in the same privacy as her personal life.

Why should New Yorkers have to wait until 2010 to know where their Senator stands on key issues? Why should any of this be a secret? Shouldn't New Yorkers have the right to know who they have in the Senate representing their interests? Koch's words are extremely condescending and highly suggestive that the political masters know better than the public about what's good for them.

In fact, it would be nice if the Daily News or the New York Times actually had their reporters ask these questions of Kennedy, rather than simply chasing her around the state and offering up free face time without actually informing people of what this woman stands for. Right now, no one knows, and yet she's well on her way to convincing Gov. Paterson that she should be replacing Hillary.

Meanwhile, many New Yorkers seem to prefer Andrew Cuomo to Kennedy. I don't think anyone quite realizes what that would mean for the media covering New York politics. It would be a rugby scrum watching Cuomo and Sen. Chuck Schumer fighting for face time before the cameras. Then again, that might be just the thing to get the local media out of the doldrums and improve the bottom line for sagging media companies.

Schumer Seeks Student Loan "Protection"

Once again we find that our Senators are absolutely clueless as to the nature of the economy and how easy credit has pushed up costs, especially in higher education.

Education costs have risen well above the rate of inflation for more than a decade, and that has been fueled by the easy available of student loans that are subsidized by the federal government. Higher tuition forces more students to turn to the student loan programs (Stafford program at the federal level), plus Pell Grants and other state programs that seek to make education more affordable to more students.

Now, Sen. Chuck Schumer (D-NY) wants to make sure that credit remains available to students who want to pursue higher education.

New York Senator Charles Schumer announced yesterday that he is taking steps to protect college students and their families from the credit crunch.

The senior senator said he has asked Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke to pay special attention to the student loan market as they carry out the government bailout plan.

He also wrote to every college president in New York asking those who do not participate in the federal direct loan program to consider enrolling.

Keeping higher education affordable is a laudable goal, but as we've seen with "affordable" housing, the results are anything but affordable - just witness the $700 billion bailout, and the stock market jitters that saw the market shed nearly $1.5 trillion in value yesterday.

People are borrowing vast sums of money to go to college and are incapable of repaying those loans. I'm carrying a mortgage and student loans, and thankfully I have a job that enables me to pay for both. I was able to do so because I could attend a state school and worked throughout. That can't be said of many who go to private colleges and universities where costs are out of control, and would be akin to taking out a mortgage with no ability to repay right away.

You have undergraduate programs in places like NYU or Boston U costing $45,000 a year or more, meaning that unless you're independently wealthy or at the top of your class, you're going to be taking out serious loans just to get through college. How exactly is that affordable.

If credit tightens on education loans, that means that the colleges and universities that have made a ton of money on students paying inflated tuition costs, will have to make due with less. To put it another way, student loans are not subsidizing the student, but are subsidizing the colleges and universities around the nation. It's time to rein in that, which is the opposite of what Schumer wants.

UPDATE:
Don Surber emails to point out what should have been quite obvious - college isn't affordable because of student loans. If students had to pay cash, tuition would drop. Unlimited cash (in the form of student loans) equals unlimited price.

Misleading Headline of the Day

Here's the headline and the link:

Analysts say more U.S. banks will fail

Can we get a timeline or any frame of reference?

Actually, if you did that, the story would fall on its face. The report actually acknowledges as much in the third paragraph, noting that the banking industry is in far better shape than in the late 1980s and early 1990s.

They worry that as many as 150 banks may fail in the next 12-18 months.

Out of 7,500.

So far, this year only six banks have failed:

Still, only six lenders have failed so far this year, including IndyMac. In 1994, the Federal Deposit Insurance Corporation listed 575 banks that it considered to be troubled. As of this spring, the agency was worried about just 90 banks. That number may go up in August, when the government releases an updated list.

Things may be bad for some banks because they followed Congressional directives to provide loans to more people without the bothersome requirement to make sure that they had the capacity to repay because that might limit minority ownership of homes, but the vast majority of banks are on sound fiscal footing.

However, it's the rumor of bank problems that are feeding the current problems - most notably the IndyMac bank rush due to Sen. Chuck Schumer's letter urging the FDIC to take steps to prevent a bank rush. Far from quelling worried depositors, that letter spurred the bank rush that forced the FDIC's hand and required it to step in.

While IndyMac wasn't on the FDIC radar, it was Schumer's actions that led to the FDIC having to step in as a last resort.

Some major banks may still fall before all is said and done, but the end result will be a banking industry that is in far better shape to handle these crises going forward and whose lending practices will be shaped by the lessons learned the hard way.

New York Area Airports Lack Critical Safety Radar

The region's three major airports lack technology designed to prevent airplanes from colliding with each other, and it could be years before all of them have it, a lawmaker said yesterday.

La Guardia, John F. Kennedy International and Newark Liberty International airports don't have the surface detection equipment technology that alerts air traffic controllers to potential collisions within five miles of an airport, including on runways, Senator Schumer said.

The airports remain at the bottom of the list to receive the new technology, and La Guardia will be among the last airports to receive it in December 2010, Mr. Schumer said.

Kennedy was slated to receive the new system in August of 2008 and Newark in July 2009, he said. Mr. Schumer's comments come three days after a plane taxied onto a runway where a plane was about to land at Newark Liberty. The Federal Aviation Administration is investigating that incident, called an incursion.

Also last week, a congressional report said there was "a high risk of a catastrophic runway collision occurring" in the country because of poor leadership, unreliable technology and overworked air traffic controllers.

Mr. Schumer called on FAA officials to expedite the installation of the collision technology, which he said was particularly helpful in bad weather and at night, at New York area airports.

"As one of the busiest areas in the country, we should be at the top of the list when new technology is developed to make us safer," Mr. Schumer said. "On the heels of this week's scathing report, Thursday's near miss at Newark shows the FAA must not continue to drag its feet."

An FAA spokesman said the schedule to install the technology was based on several factors including how busy an airport is and the complexity of an airport's runway and taxiway infrastructure and procedures. Some airports received the technology ahead of New York's airports while others will get it later, an FAA spokesman, Jim Peters, said.

New York's three airports already have ground surveillance radar, although it doesn't offer as much detail about an aircraft's whereabouts as the new technology, Mr. Peters said.

Lawhawk has been writing about the problems at New York's three major airports. Before August 2008, when Kennedy Airport is slated to receive the new system, how many flights will pass through there? How many people will be put in danger? Why can't the system be installed in all three airports simultaneously?

And to turn this into a political debate -- Where is Hillary on this issue? New York's junior Senator seems to be quiet on every issue that truly effects New Yorkers. Now, I am not the biggest fan of Senator Schumer, but he is always outspoken about issues that matter to New Yorkers. He has been out front on gun control, ATM bank fees, port security, and aviation issues. Since Hillary's election I have not heard her speak out on any of these issues. The Country really needs to realize that she is ineffective, and would make a horrible President.

Sen. Schumer's Shamelessness

Sen. Chuck Schumer (D-NY) has no shame in making the baseless assertion that the improvement in the situation in Anbar province had nothing to do with the US military. For the record, he stated the following:

And let me be clear, the violence in Anbar has gone down despite the surge, not because of the surge. The inability of American soldiers to protect these tribes from al Qaeda said to these tribes we have to fight al Qaeda ourselves. It wasn't that the surge brought peace here. It was that the warlords took peace here, created a temporary peace here. And that is because there was no one else there protecting.

Not only does that go against the facts on the ground, but the facts as known by the Iraqis living there. Schumer has gone on about Iraq with blinders on, and the improvements there are not only real and tangible, but a direct result of changed tactics by the US military under Gen. Petraeus. Notes the Times of London:

Captain Patriquin may have offered more than mere words. His main interlocutor, Sheikh Abdul Sittar Bezea al-Rishawi, told The Times that he gave them guns and ammunition too. The sheikhs did rise up. They formed a movement called the Anbar Awakening, led by Sheikh Sittar. They persuaded thousands of their tribesmen to join the Iraqi police, which was practically defunct thanks to al-Qaeda death threats, and to work with the reviled US troops. The US military built a string of combat outposts (COPs) throughout a city that had previously been a no-go area, and through a combination of Iraqi local knowledge and American firepower they gradually regained control of Ramadi, district by district, until the last al-Qaeda fighters were expelled in three pitched battles in March. What happened in Ramadi was later replicated throughout much of Anbar province.

Ramadi’s transformation is breathtaking. Shortly before I arrived last November masked al-Qaeda fighters had brazenly marched through the city centre, pronouncing it the capital of a new Islamic caliphate. The US military was still having to fight its way into the city through a gauntlet of snipers, rocket-propelled grenades, suicide car bombs and improvised explosive devices (IEDs). Fifty US soldiers had been killed in the previous five months alone. I spent 24 hours huddled inside Eagles Nest, a tiny COP overlooking the derelict football stadium, listening to gunfire, explosions and the thump of mortars. The city was a ruin, with no water, electricity or functioning government. Those of its 400,000 terrified inhabitants who had not fled cowered indoors as fighting raged around them.

Today Ramadi is scarcely recognisable. Scores of shattered buildings testify to the fury of past battles, but those who fled the violence are now returning. Pedestrians, cars and motorbike rickshaws throng the streets. More than 700 shops and businesses have reopened. Restaurants stay open late into the evening. People sit outside smoking hookahs, listening to music, wearing shorts – practices that al-Qaeda banned. Women walk around with uncovered faces. Children wave at US Humvees. Eagles’ Nest, a heavily fortified warren of commandeered houses, is abandoned and the stadium hosts football matches.

The Iraqis named a police station after Army Captain Travis Patriquin.

Speaking of Gen. Petraeus, the media is now full of reports undermining claims by the military that violence is down in Iraq, Democrats attempting to downplay Petraeus' report next week, and generally attempting to poke holes in the fact that the Surge has improved the situation in Iraq.

Does the prospect of a positive report from Petraeus scare so many people in DC that they've got to proactively attack the policy and report even before it is presented to Congress?

UPDATE:
It should be noted that Captain Patriquin was killed in action in Ramadi. The Iraqis chose to honor his sacrifice by naming the police station after him.

Meanwhile, Cassandra lets it rip and doesn't hold back on Schumer's perfidy. Hot Air has the video.

Others blogging: Don Surber, Right Voices, and Jammie.

The FAA Computer Glitch

Senator Chuck Schumer slammed the FAA over a computer glitch that caused thousands of delays and cancellations across the US yesterday and questioned the FAA's competency to oversee the nation's air traffic system. The delays were worst at New York area airports, which prompted Schumer to call for the whole incident to be investigated. His comments suggested that the FAA was incompetent to deal with the air traffic system.

I wonder, if the FAA is incompetent to handle the air traffic control system, what else is the federal government unable to handle on a regular basis because of incompetency? And besides investigations, what does Schumer actually propose doing to fix the system? Is he willing to call for the construction of new airports to relieve congestion at existing airports? Push for more money to bolster the rail system in areas where major cities are close enough to make rail travel a viable alternative?

Arresting Illegal Aliens in New Haven: Terrorism?

That's exactly what those pro-open borders/illegal aliens rights groups are claiming. The feds cracked down on New Haven area businesses, arresting 31 illegal aliens.

When will it sink in with most people that the people arrested were arrested because they are violating US law every day they're here in this country. They are not undocumented workers. They are illegal aliens. As such, they do not have the same rights as those who immigrated to the US legally - including those legal residents who obtained Green Cards.

If coming to the US is so important, do so legally. Expand the number of those who can come into the US legally, but to claim that crackdowns on illegal aliens amounts to terrorism is not only hyperbole, but shows the rank hysterics that the open borders crowd will use to push their extreme agenda.

Afterward, local officials’ cellphones lighted up with dozens of frantic phone calls from residents and community leaders saying that people were missing. There were rumors of a mass arrest at a supermarket. Fair Haven resembled a ghost town, with residents huddling inside their houses, afraid that they, too, could be arrested at any moment.

“At 10 in the morning, the streets were just empty,” said John Lugo, an organizer for Unidad Latina en Acción, an advocacy group. “People were really very afraid all of the sudden. They still are. They think it will happen again.”

On Wednesday, Mr. Lugo and others passed out hundreds of fliers outlining immigrants’ rights, instructing them not to give federal authorities any information without a lawyer present and advising them to not answer their doors.

Mayor John DeStefano and other city leaders angrily accused the federal government of “terrorizing” the immigrant community. Many of them speculated that the mass arrests — the first of their kind in recent memory here — were retaliation for the acceptance of municipal identification cards and other immigrant-friendly city policies.

UPDATE:
As if to underscore the complete incompetence of the federal government to deal with border control, the feds are waiving the new requirement for US citizens to obtain passports to travel to the Carribean, Canada, or Mexico. The excuse - the number of applications involved was too burdensome to provide timely turnaround on passports.

The Bush administration on Friday suspended some of its new, post-Sept. 11 requirements for flying abroad, hoping to placate Congress and irate summer travelers whose vacations have been thwarted by delays in processing their passports.

The proposal would temporarily lift a requirement that U.S. passports be used for citizens flying to and from Canada, Mexico, the Caribbean and Bermuda. The rule, and its suspension, does not affect Americans driving across the Canadian or Mexican borders or taking sea cruises, although those travelers are expected to need passports beginning next year.

The suspension should allow the State Department to catch up with a massive surge in applications that has overwhelmed passport processing centers since the rule took effect this year. The resulting backlog has caused up to three-month delays for passports and ruined or delayed the travel plans of thousands of Americans.

Until the end of September, travelers will be allowed to fly without a passport if they present a State Department receipt, showing they had applied for a passport, and government-issued identification, such as a driver's license. Those who have not applied for a passport will not be allowed to travel.

Those with receipts but no passports would receive additional security scrutiny, which could include extra questioning or bag checks.

"This is further evidence that the Department of Homeland Security and the State Department are simply not ready to make this program work as well as it must," said Sen. Charles Schumer, D-N.Y.

If the number of passports issued was too burdensome, how can anyone in their right mind expect the same to be done with any program dealing with illegal aliens and/or guest worker programs where the number of applications will be significantly higher.

Of course, Schumer and other Democrats wont make that very logical conclusion. They're too fixated on finding a way to bash the Administration.

Annual Whack An Oil Industry Exec Hearings Underway

This time, it's Sen. Chuck Schumer (D-NY) who's leading the annual charge against oil companies. He thinks that they're monopolies and need to be busted up.

Oil companies have grown too big and powerful, and it may be time for a new trust-buster in the mold of Teddy Roosevelt to break up the monopolies, Sen. Charles Schumer, D-N.Y., said Wednesday at a congressional hearing.

"America's families are getting a raw deal, while oil companies make out like the robber barons of Roosevelt's time," Schumer said, as he opened a hearing into the oil companies' market power at the congressional Joint Economic Committee.

"It isn't clear that we have anything that can be remotely called competition," said Schumer, chairman of the committee. If there were competition, "wouldn't these companies be investing in new production rather than sending back the oligopolistic profits back to shareholders? He said ExxonMobil, for instance, had spent $29 billion in share repurchases last year and just $20 billion in investing in production.

Going after oil companies makes for good soundbites and people love to hate the oil companies because the price of gasoline is at record levels. However, making such statements ignores the facts, and why would Schumer want to let facts get in the way of a good rant.

Consider that once upon a time the price of oil hit $11 per barrel. Gasoline was under $1 a gallon. There weren't claims of monopolistic price gouging or other inane claims of price fixing when the oil companies were hurting because they could barely squeeze a profit. If there was a time for them to try and fix prices, it was when they were extremely low and they would benefit from pushing the price upwards.

Oil companies weren't doing well back then, but the price has gone up steadily because of one primary factor from which all others flow - supply and demand.

There is simply more demand than there is supply. Supply is limited because oil-producing countries may be having issues, like Nigeria or Iraq or Venezuela or Iran. Refineries are another bottleneck causing an increase in prices and no new refineries have been built in decades because of onerous regulations. More people are in need of petroleum products - from China and India, to the millions of American drivers who are driving more - than ever before. More demand means that supplies dwindle and the price goes up.

As I've previously noted, how about Schumer and other demogogues should hold hearings about the high and onerous taxes imposed if they're truly that interested in lowering the price of gasoline. The taxes make up a far greater share of the price of a gallon of gasoline than the oil companies make, and yet the oil companies are the bad guys?

Schumer really needs to buy a clue.

Meanwhile, the House has approved a measure that would impose fines for price gouging. Good luck trying to find price gouging considering that there's no evidence that it even exists in the oil/gas industry. High prices, in and of themselves, is not an indication of gouging.

All these measures do is let politicians claim that they're doing something about a problem, when there is no such fix.