Massive Corruption Sweep Busts Politicians Trying To Rig Republican NYC Mayor's Race

Earlier this morning, law enforcement carried out  a massive corruption sweep in NY, with multiple arrests of local politicians.

State Sen. Malcolm Smith and city Councilman Dan Halloran were arrested this morning on charges they were plotting to rig this year’s mayoral election through fraud and bribes.

The pols allegedly formed an alliance built on cash payments and fraud to get Smith — one of the state’s top Democrats — placed on the GOP mayoral ballot, sources said.

FBI agents arrested them both at their Queens homes shortly after 6 a.m.

“I have no idea,” Halloran, in handcuffs, told a Post reporter when asked if he knew why he was being arrested.

Others arrested includeBronx Republican Chairman Joseph Savino and Queens GOP Vice Chairman Vincent Tabone, and they are all being accused of trying to rig the mayoral election.

As alleged, Senator Malcolm Smith tried to bribe his way to a shot at Gracie Mansion - Smith drew up the game plan and Councilman Halloran essentially quarterbacked that drive by finding party chairmen who were wide open to receiving bribes. After the string of public corruption scandals that we have brought to light, many may rightly resign themselves to the sad truth that perhaps the most powerful special interest in politics is self-interest. We will continue pursuing and punishing every corrupt official we find, but the public corruption crisis in New York is more than a prosecutor's problem."

The 28-page complaint offers up a bunch of juicy details, but it boils down to money for access:

Council member Halloran was to receive $20,500 while Tabone and Savino received $40,000 in bribes with a promise of $40,000 more.

If Halloran's name sounds familiar, it's because he was a blowhard who alleged that Sanitation workers purposefully slowed down snow removal during the blizzard a few years back. Investigations found no evidence of any kind of slowdown. And the FBI had already been investigating Halloran when they sniffed out the potential bribery for ballot access plan.

Smith's name should sound familiar as well, as he was part of the breakaway Democrats in the State Senate who gave temporary control of the Senate to Republicans in a coup against Democratic leaders. Smith joined a group of independent Senators, earning himself and his staffers a pay raise in the process. Smith's defection also enabled Gov. Andrew Cuomo to maneuver and exploit the divisions in the Senate to advance his own agenda with less opposition - including on matters like the same sex marriage act and the NYS SAFE Act.

Not only does this scandal threaten the disrupt the political balance in the State Senate, but this scandal threatens to upturn the entire Republican campaign for NYC mayor, as key behind-the-scenes officials are involved and it's entirely possible that others could find themselves perp-walked. Tabone has been working for the campaign of John Catsimatidis.

These people are instrumental in getting the campaigns of multiple candidates off the ground and working support for candidates already in the running. It could potentially derail existing campaigns for those who are in the race and indirectly helps those Democrats who are already in the race, including Democrat City Council honcho Christine Quinn.

Expect Tabone and Savino to flip on Smith and Halloran who are the big fish in this particular scandal in exchange for less time behind bars.

The Aqueduct Casino Bidding Process: A Scathing Indictment of NY Graft and Political Folly

A new report by the state inspector general has found widespread problems with the process by which the Aqueduct racetrack was set out to bid for turning it into a hotel and casino complex and how several key Democrats engaged in unethical behavior in order to secure a bid for AEG.

Suffice it to say, none of the top Democrats in Albany come off looking good in this. That includes Governor David Paterson, top Senate Democrats John Sampson and Malcolm Smith, and Assembly Speaker Sheldon Silver:

The report says that the bidder, a consortium called the Aqueduct Entertainment Group, marshaled funds at the behest of the state’s Democratic Senate Campaign Committee, casting “a taint on the motives behind the Senate leadership’s support of” Aqueduct Entertainment. The investigation included interviews with senators and other state officials, as well as internal e-mail among Aqueduct Entertainment members and lobbyists.

Citing possible violations of laws governing public officials by John L. Sampson, the Senate Democratic leader from Brooklyn; Malcolm A. Smith, the Senate president from Queens; and Angelo Aponte, the appointed Senate secretary, the inspector general’s office said it was referring its findings to federal and state prosecutors and the Legislative Ethics Committee.

“At each turn, our state leaders abdicated their public duty, failed to impose ethical restraints and focused on political gain at a cost of millions to New Yorkers,” Inspector General Joseph Fisch said in a statement. “Shamefully, the public’s best interest was a matter of militant indifference to them.”

The report — following a classic outline of state business distorted by lobbyists, politics and money — emerges in the final weeks of an election season in which candidates across New York State have vowed to clean up Albany.

Besides the Senate leaders, the report faults close aides to Gov. David A. Paterson for not keeping him apprised of concerns about Aqueduct Entertainment, blames the governor himself for relinquishing control of the process and criticizes the Assembly speaker, Sheldon Silver, for Sphinx-like silence despite his own knowledge of Aqueduct Entertainment’s problems.

Mr. Paterson, along with leaders of the Senate and the Assembly, selected Aqueduct Entertainment in January to operate 4,500 electronic slot machines at Aqueduct, a franchise worth tens of millions of dollars a year to the operator and an estimated $1.5 million a day in tax revenue for the state’s depleted coffers.

The franchise was ultimately revoked by Gov. Paterson over outcry over the problems with the AEG bid and the new contract was ultimately won by Genting New York, a subsidiary of the Malaysian casino consortium.

This wont be the last we hear of this as the matter has been referred to federal investigators look into criminal and ethical malfeasance by those named in the report. Most egregious is the finding that Senate officials leaked confidential information to AEG’s lobbyists, and got campaign contributions in return. Also named in the investigation is Buffalo Democrat State Sen. Antoine M. Thompson, who allegedly received $8,600 for his lobbying efforts on behalf of AEG for pushing the AEG bid.

New York Political Scandals Coming To A Head

It's getting pretty tough to keep track of all the political scandals in New York these days.

There are the multitude of scandals - all involving top Democrats. There is the huge scandal involving Governor Paterson, his former top staffer David Johnson and state troopers which threatens to take down the governor. 911 calls from Johnson's apparent assault have been released, but the key issue is what did Governor Paterson say and do in his phone call to the alleged victim, Sherr-una Booker.

Paterson feels jilted that Assembly Speaker Shelly Silver isn't continuing to back Paterson. Well, no one in their right mind wants to do business with Paterson and his political capital is pretty much gone. Silver is the most powerful man in Albany at the moment, and the one least tainted by scandal. That's bad news for state taxpayers since the state budget is due April 1 and there's little chance that a fiscally prudent budget plan will be negotiated by the leadership in Albany. It also means that Silver is in the driver's seat and Silver has never seen a spending plan that couldn't be improved - by more spending. Silver says that he wants to deal with Lt. Gov. Richard Ravitch on budget issues - almost expecting Paterson to resign or be impeached in the near future, but Paterson is holding on and is freezing Ravitch out of the process for now (lieutenant governors have no real power under state law).

The Paterson scandal is keeping Attorney General Andrew Cuomo busy, and it appears that the investigation into Paterson's wrongdoing is keeping Cuomo's own potential plans to run for governor under wraps until after Cuomo finishes his investigations into both Paterson and Pedro Espada Jr (another Democrat involved in unethical conduct).

There's the ongoing scandal involving Gregory Meeks and Malcolm Smith and the "charity" they ran that never seemed to be able to actually follow the money and hundreds of thousands of dollars never went where it was supposed to.

Then, there's the ongoing mess with US Congressman Charles Rangel, who continues to hold on to the Chairmanship of the House Ways and Means Committee even though Rangel should have been tossed out for violating House rules and that doesn't even begin to scratch the surface with his tax troubles with the IRS and multiple state and local tax authorities. The New York Times again reiterated its call for Rangel to be removed from the chairmanship.

In what must be the most hilarious juxtaposition of corruption and cronyism, Rangel, Malcolm Smith, Charles Barron, and several other key African-American Democrats including Al Sharpton tried to rally support for David Paterson. It was a who's who of people who should be tossed from office and those who should never be allowed near elected office again. Sadly, H. Carl McCall was among those at that confab and he dirtied his own reputation with his presence.

UPDATE:
Paterson spoke at a conference this morning and said that he wont resign and that he's not going to delegate budget authority to Ravitch. He says that he's going to govern for the next 306 days. Right - this from a guy who apparently likes the trappings of being governor than actually governing.

Meeks and Smith Stiffed Another Charity

Once again, it looks like prominent New York Democrats, Gregory Meeks and Malcolm Smith have stiffed another charity. Make that charities. In fact, it appears that the charity, New Direction LDC collected $600,000 from 2000 through 2008, and managed to chew up 2/3 of that amount in overhead and expenses.

That's an abysmal rate, and that meant that most of the money, which was delivered via state grants steered by Smith, Meeks, and other Democrats, went into the pockets of those operating the "charity".

More than $400,000 raised by a nonprofit started by Congressman Gregory Meeks and state Sen. Malcolm Smith was never given to the community they represent, including a youth football league that requested a donation, a Post investigation has found.

The Rosedale Jets Football Association went hat in hand to the New Direction Local Development Corp., hoping for a piece of a $250,000 grant that was to go to community groups.

The Jets dutifully submitted an application, hoping to get up to $25,000 to fix up their field. They never got a cent.

"They said they never received our application," said Gerald Karikari, an immigration lawyer and the football team's chief financial officer.

Karikari said the Rosedale Jets, a squad that mixes football and cheerleading with life lessons for 200 kids ages 7 to 13, is always struggling. It had to stop low-cost equipment rentals to players because it could not pay for refurbishing the helmets and protective pads.

Instead of helping the plucky pee-wee players, New Direction spent $405,000 on salaries, mysterious consultants, office expenses and meals, according to paperwork filed by the nonprofit. By 2008, $55,254 was left sitting in its bank account, untouched.

The Post has reported how the charity started by Meeks and Smith, both Queens Democrats, raised at least $31,000 for Hurricane Katrina victims but gave out hardly any of that money.

Yet the problems with New Direction are much broader. The group collected about $600,000 over seven years, but spent just under $200,000 -- 33 percent -- on community programs, according to its tax returns. And even that number is suspicious, as paperwork often lists a "cash donation" with no details as to where the money went.

Smith is currently the top Democrat in the State Senate, and Meeks is a prominent Democrat.

Not One Dime

An adviser for a "charity" run by New York Democrats Gregory Meeks and Malcolm Smith says that no money ever went to the intended purposes - helping victims of Hurricane Katrina.

A former Louisiana Democratic official says Katrina victims "never got a dime'' from a charity set up by two New York politicians.

Louis Rainey served as an unpaid adviser for the project. He lost his own home in the hurricane and now lives in Dallas.

The charity, New Yorkers Organized to Assist Hurricane Families (NOAH-F), claims that it raised $31,000 and that it disbursed nearly $1,400 for hurricane relief. It claims that it sought to help 30 families who were displaced by the hurricane.

Meeks and state Sen. Malcolm Smith, also a Queens Democrat, established NOAH-F shortly after the storm to help 30 displaced families -- and made the new charity part of their previously organized New Direction Local Development Corp.

At the time, Meeks told the Times-Ledger, a Queens weekly, "Every dime, every dime, will go to these 30 families."

Rainey was chosen to ensure the assistance went where it was needed most, Meeks said.

"It's important to have Mr. Rainey on the ground because you have people trying to take advantage of the situation," Meeks told the weekly.

Rainey, an unpaid adviser, said he gave Meeks' then-director of communications, Candace Sandy, a list of some of the neediest families.

But Rainey said he was not told what kind of assistance they would get -- money, food, shelter -- or whether the help would be distributed through an agency or directly.

At least some of the people he identified, Rainey said, were contacted directly by the fund.

"A few months later, some of the families called and asked about the money," he said.

"They said that Meeks' representatives told them they were going to send down money. That's the first I heard about any money."

Rainey can recall only one tractor-trailer shipment of used clothes in connection with NOAH-F. Even if managed that paltry sum, it is an astoundingly bad track record because it appears that most of the money went to pay for administrative costs. It's the kind of charity that Attorneys General and prosecutors around the nation would investigate, shut down, and/or prosecute for fraud. Scam artists around the country are continuing to try and cash in on the goodwill and charity of others.

It would appear that the scam artists include Gregory Meeks and Malcolm Smith, both of whom refuse comment and both of which appear to have used taxpayer money to line the pockets of someone when they both claimed that the money would go for helping hurricane victims. Prosecutors should have a field day with this.

Feds Investigating Aqueduct Casino Deal

While Governor Paterson has said that he'd serve out his term in office and that the only way he'd leave is either because the voters ousted him or he left in a box, it looks like federal prosecutors might find something that would send him packing in a far more colorful fashion.


They're investigating the Aqueduct casino deal.

PIX News has learned that federal prosecutors are investigating Governor David Paterson’s awarding of a lucrative contract to a politically connected group to run a gaming center at Aqueduct Raceway.

The embattled Governor who appears to have dodged the bullet of rumors and innuendo that had been circulating over a purported “bombshell” story being prepared by the New York Times, is now part of a probe by the Eastern District U.S. Attorney’s office in Brooklyn.

Two reliable sources confirm the investigation is “very fresh,” but could not say precisely what it is prosecutors are looking at other than questions about public integrity.

Paterson has been under fire by members of his own staff and legislative leaders for awarding the contract to Aqueduct Entertainment Group, a group that includes former Congressman Rev Floyd Flake, whose political support the Governor had been aggressively seeking.

There are quite a few influential Democrats involved in this deal, and if prosecutors bring charges, it's going to hit at the Democratic establishment in Queens and New York City in general. This isn't something that can be so easily brushed off. Among those who might find themselves perp walked is none other than Malcolm Smith, who is the top Democrat in the State Senate.

Casino Operators Mulling Lawsuits Over Aqueduct Shenanigans

Casino operators who lost out in their bid to build a casino/hotel at the Aqueduct race track in Queens are contemplating lawsuits against the state for improper conduct in the bidding process. The winning bid, by AEG Group, was apparently lower than other bids, including by Penn Gaming, but was allowed to increase its bid to match the Penn Gaming bid. Moreover, only yesterday the AEG group took steps to alter its management group to remove a convicted felon from the mix.

The Aqueduct Entertainment Group announced yesterday that the Darman Group -- headed by convicted criminal Darryl Greene -- would be removed as a key partner in the project.

Greene has closes ties to AEG partner Floyd Flake, the influential Queens preacher and former congressman, and such politicians as state Senate President Malcolm Smith (D-Queens).

One of the conditions in the legal "Memorandum of Understanding" for the project bars people with criminal records from obtaining a gambling license. Green had been convicted of misappropriating $500,000 in government funds in 1999.

A rival bidder, Penn National Gaming, had already complained that it was passed over after offering a $300 million up-front license fee -- $100 million more than AEG. But AEG was then allowed to match the higher bid, the rival company said.

Allowing AEG to remove a tainted partner is another example of favoritism, fumed Penn National senior vice president Eric Schippers. "We're all exploring all of our options," Schippers said of potential litigation. "The universal sentiment is something stinks in Albany."

Another source involved in the Aqueduct deliberations said, "AEG is being given a chance to raise its bid, change its equity partner team and management and alter its design to meet the required footprint. It's almost like they, and they alone, are getting a chance to rebid." The footprint refers to whether the project complies with the state Environmental Quality Review Act.

This is a contract that needs to be relet and conducted in an impartial manner. Today's Post article also gives some insight into possibly why AEG won the bid; the connections to Flake and Senate Majority Leader Smith (who has other problems to contend with).

Also, did no one notice the criminality clause when putting together the team? Or, did they figure that if they jettisoned Greene before things got out of hand, AEG could continue to work towards winning the bid and starting the work on the casino? It seems that the primary reason Greene was involved was because of his political connections. He was a former business partner to Smith and the Darman Group's client list is a who's who of NYC construction and commerical real estate firms.

Charities Run By NY Democrats Can't Track Where Money Went

New York Rep. Gregory Meeks and State Senator Malcolm Smith, both Democrats, call your lawyers. You have some serious accounting to do.

They formed a charity in the wake of Hurricane Katrina to help victims of the hurricane, and raised about $31,000 in the process.

Yet, only $1,392 actually made it to the victims of the hurricane.

Meeks said in a statement that "the funds were utilized to help sustain displaced evacuees," but refused to provide further detail. He said money was administered by an unidentified director and that "a committee of community representatives functioned as advisers to the fund."

But three of those advisers said they had no idea whether cash was given out by the group, New Yorkers Organized to Assist Hurricane Families, or NOAH-F.

"I had nothing to do with any disbursement of any funds," said the Rev. Edward Davis, pastor of the Presbyterian Church of St. Albans in Queens. "I can't tell you. I don't know."

Another advisory board member, Candace Sandy, said she volunteered to help Katrina refugees living temporarily at a hotel near Kennedy Airport, but did not distribute money.

Sandy, who works for Meeks, said another advisory board member, Claude Stuart, was in charge of the money. Stuart did not return phone calls for comment.

Pamela Moore, chief-of-staff to Assemblywoman Barbara Clark, was listed as a member of the advisory board but said that it was a position in name only.

"I never attended any board meetings," she said, adding that she did not know if board meetings were even held.

Clark, a Queens Democrat, said she was upset about the charity's lack of accountability. "I'm very, very disturbed and disheartened," she said.

The lawmaker said she helped set up a gospel concert that raised $11,210 after Hurricane Katrina struck in August 2005.

"We turned this money over to the congressman [Meeks]," Clark said. "I don't know exactly how it was given out."

Where did the rest of the money go?

No one knows. Not Meeks. Not Smith.

It's a mystery.

And it's just the tip of the iceberg as nearly $150,000 is unaccounted for.

Some $150,000 in donations, including thousands the community raised to help victims of Hurricane Katrina, remains unaccounted for, according to Ken Boehm, head of the National Legal and Policy Center.

"When you see lots and lots of consulting fees with large amounts flashing around, at some point one wonders if an elected official is trying to sell their office," said Boehm.

"Sen. Smith, with respect to New Direction, violated several provisions of New York state law," he said.

Boehm says his group will lodge a complaint with the state's Public Integrity Commission this week.

This sounds like a job for NYS Attorney General Andrew Cuomo to investigate and determine whether Meeks and Smith set up a bogus charity where the money meant for victims ended up in someone else's pockets. When only 4% of the money goes to the purpose of the charity in Katrina relief and 96% ends up sucked up in "administrative costs" for lack of a better word, something is up.

Typically, better charities limit their administrative costs to less than 15% so that the bulk of the money goes to the given purpose - not sucked up in administrative costs that enrich no one but those responsible for operating the charity. This "charity" appears to give 4% to its stated purpose.

In fact, a search on the Attorney General's charity database reveals no sign of this charity (NOAH-F) at all. New Direction LDC does show up. New Directions LDC, which operates out of Queens, appears to be little more than a slush fund for local politicians, including Meeks and Smith, for their member items (pork).

UPDATE:
Lest I forget, Smith was the Senate Majority Leader following the Democrats' takeover of the NYS State Senate, and was the minority leader previously. That put him in a position to dole out the member items.

NYS Politicians Need Crash Course In Basic Math

The NY Post reports that New York Governor David Paterson is going to withhold $1 billion in payments because the state is out of money.

New York Gov. David Paterson today ordered that 10 percent of state aid payments to schools and local governments be delayed, accusing legislators of being irresponsible and asleep on the job.

The Democrat blamed the need to delay payments on the Legislature's failure to cut spending to schools and health care, which are protected by Albany's most powerful special interests. As a result, he said the state is projected to fall $1 billion short of the sum needed to pay bills due Tuesday.

For New Yorkers, the delays could mean restrictions on social services for the poor and working poor provided through counties and cities, reduced programs at schools, threats of layoffs at schools, and potentially higher local property taxes if schools and municipalities have to borrow to cover the shortfall.

Governor David Paterson is holding back 10 percent of school aid because the state is short by about $1 billion on bills it has to pay Tuesday.

Paterson told reporters Sunday from Manhattan that "many legislators, not all of them" made an irresponsible choice by failing to address the full deficit earlier this month. "The question is, who is going to wake up and face reality and who is going to continue sleeping on the job?" Paterson said.

"I can't say this enough: The state has run out of money. We are $1 billion short," he said.

New York City will apparently lose $85 million in the process, if the legislature and municipalities don't sue to block Paterson's actions.

Legislators accused the governor of overstepping his boundaries.

"Case law says the Legislature is the branch of government with the power to enact and amend the budget," said Sen. Eric Schneiderman (D-Manhattan). "He may have difficulty working with the Legislature, but it is his constitutional obligation to do so."

Added Senate Democratic majority spokesman Austin Shafran: "New Yorkers don't want political rancor or self indulgent theatrics. They want their leaders to work together to get things done."

Education groups have said they have already prepared lawsuits to file should their funding be withheld.

Well, here's where the remedial math comes into play. Paterson said that the state was facing a $3.2 billion deficit. The legislature claimed to close $2.7 billion in a budget hole. That left $500 million, not $1 billion in debt to close.

In other words, either the deficit is $500 million more than Paterson was warning about just days ago and New York's fiscal situation is even worse than he was claiming or he's exaggerating the fiscal situation in yet another ploy to get the legislature to cut spending by some amount between $500 million and $1 billion.

The state's elected officials can't even figure out what the fiscal situation is, let alone how to close the budget gap. Paterson is right that spending has to be cut in a big way, but this is something that should have been addressed when putting together the FY 2009-2010 budget, not now. Paterson and the rest of the Albany Democrats knew, or should have known, that the state was facing a fiscal disaster because of declining revenues, yet they grew the budget by 5% - increasing taxes and fees by billions to make it happen no less.

Now, tax revenues are down, including the recently enacted payroll tax (which means the MTA will have to cut service and raise fares). And lawsuits are the likely outcome of all this. Yet, every day brings the state closer to fiscal ruin because of overspending. That's the fault of everyone involved in the budget process; primarily the Democrats running the show in the Assembly (say hello Shelly Silver) and in the Senate (say hello Malcolm Smith).  This disaster is on their heads - along with Paterson.

Espada's First Moves? Tax Hikes

The New York Times and other media outlets consider the five week delay to have cost the state and the city tens of millions of dollars in the form of lost revenues from tax hikes.

Newly installed Senate Majority Leader Pedro Espada Jr. saw to it that those tax hikes were passed today.

The senators stayed until about 2 a.m. Friday to pass bills that were largely noncontroversial but often critical to balancing the budgets of cities and counties across the state. They concluded by passing a sales tax increase for New York City after a vigorous debate, increasing the tax by one-half of a percentage point, to 8.875 percent.

Senator Pedro Espada Jr.’s defection on June 8 threw the Senate into turmoil and hobbled the state government, making the body a national laughingstock as the feuding factions shouted and gaveled over each other in simultaneous legislative sessions. It led Gov. David A. Paterson to take the extraordinary step this week of appointing a lieutenant governor, Richard Ravitch, to clarify the state’s line of succession, though it is far from clear that the governor had the authority to do so. Republicans are challenging the appointment.

On Friday, a state judge in Nassau County adjourned a hearing on the legitimacy of Mr. Ravitch’s appointment until the middle of next week. However, a restraining order put in place in the early hours of Thursday morning has since been rescinded, leading the governor’s legal team to declare Friday that at least for the moment, Mr. Ravitch is the state’s lieutenant governor.

The Senate stalemate had prompted anger from voters and local officials, and denunciation from newspapers across the state.

“To all 19.5 million people in the state of New York, we apologize,” Senator John L. Sampson, a Brooklyn Democrat, said at a news conference. “Sometimes you have a dysfunctional family, dysfunctional family members, but at the end of the day, we understand that we are all one family and we are all home now. Home to stay.”

Espada used the GOP to get what he really wanted. Espada couldn't care the cost, but he saw to it that Malcolm Smith was booted from the leadership role and replaced by himself. John Sampson takes over as leader of the Democratic caucus, and Smith becomes President of the Senate, which is a largely ceremonial role.

Also, keep in mind who will be paying for all this. New York City consumers will be hit with a tax hike (this was a home rule measure that required legislative approval before enactment). The five week delay meant that the City couldn't obtain those additional revenues to balance its budget, but it also was a temporary reprieve from the additional tax.

Some Senate Democrats warned that the sales tax would hit the poor hard, but some deferred to Bloomberg because of the need to balance the budget.

Developing: Espada Flips Back To Democrats; GOP Loses Senate Control

This is a developing situation, but State Senator Pedro Espada has flipped back to the Democrats, giving them the numbers to control the State Senate.

Espada, whose defection to the Republicans was the main reason for Gov. Paterson's controversial action yesterday "naming" Richard Ravitch as lieutenant governor, revealed his startling plans to The Post.

The defection would bring a quick end to the Senate's current 31-31 vote stalemate, in which Espada has repeatedly joined with the 30 Republican members in opposition to the Democrats.

"I'm going to tell (Republican leader Sen.) Dean Skelos that I have a handshake agreement with (Democratic leader Sen.) John Sampson to become the majority leader,'' Espada revealed.

Espada, who had been designated as the Senate president by a bare majority vote during the June 8 "coup'' in which he and Sen. Hiram Monserrate (D-Queens) joined 30 Democrats to oust Democratic Majority Leader and Senate President Malcolm Smith of Queens, said that Smith would retain his "president'' title under the arrangement until the end of the year.

Smith would then be replaced by Democratic Sen. John Sampson of Brooklyn, who ousted Smith as the top Democratic leader in the wake of the "coup.''

Espada said, "Unfortunately, Dean rejected an opportunity to reach a compromise under which Republicans would have had equal access to all the resources of the Senate.''

It was never about doing what was right. It was about Espada playing politics and pushing his weight around. He wanted to play kingmaker because Malcolm Smith hurt his feelings over not supporting some of Espada's pork projects.

State taxpayers suffer as a result.

This is the clown circus in action.

NYS State Senate Remains In Chaos; Monserrate Flips Again

Hiram Monserrate has gone back to the Democrats, and the chaotic situation on the Third Floor remains just that - chaotic.

"I'm coming home," the Queens Democrat told the Daily News in an exclusive interview on Sunday.

Monserrate stunned the state's political establishment and paralyzed the Legislature a week ago when he rebelled against his own party and voted with fellow Democrat Sen. Pedro Espada Jr. of the Bronx to hand control of the Senate to the Republican minority.

The mercurial Monserrate is set to announce at a morning press conference on Monday that he is returning to the Democratic caucus - without Espada.

His decision creates an astonishing 31-31 deadlock in the Senate and further muddles the question of which party controls that body.

"I said I wouldn't return to the caucus without a leadership change among the Democrats, and that has happened," Monserrate told The News.

Monserrate met with Al Sharpton and New York Daily News Report Juan Gonzales at the Georgia Peach Diner on Queens Boulevard to break the news. The diner has great food, and I've eaten there on occasion, so we know that they ate well.

Monserrate is a piece of work, whose assault of his girlfriend remains in the news as details of her injuries notes that the wounds went all the way to the bone. She needed more than 20 stitches to close the wounds.

It also comes as little surprise that current Democrat leader Malcolm Smith is out, and John Sampson is in as conference leader. Smith has been disastrous as leader, and the situation has meant that the strongest politician in Albany right now is Democrat Sheldon Silver, who is the Assembly Speaker. He's the only one of the troika (Senate Majority Leader, Governor David Paterson, and Speaker) who seems to know what he's doing, even though Silver's out to enlarge his power at the expense of the rest of the state.

Court Rules Democrats Republicans In Charge Of New York State Senate

You have got to be kidding me.

Democrats went to court to challenge the coalition, which included two dissident Democrats, that claims it seized control of the 62-member chamber on Monday.

The GOP announced Monday afternoon that Pedro Espada Jr. (D-Bronx) and Hiram Monserrate (D-Queens) had jumped ship and decided to caucus with Republicans.

The move gave the GOP a slim 32-20 majority, although Democrats said they would bring the matter to court.

A state Supreme Court judge in Rensselaer County heard initial arguments and rendered a decision this morning, according to Republicans.

There's no word on the grounds for which this judge ruled, but I have no doubt that the Democrats forum shopped until they found a judge with a preference for putting the Democrats back into power in the State Senate. Democrats sought an injunction from State Supreme Court Justice George B. Ceresia (the trial court level in NY is called the Supreme Court).

Ceresia received a phone call last night at 10 p.m. asking for the emergency hearing, which he conducted with lawyers for Smith and Sen. Pedro Espada, a Democrat who on Monday joined Sen. Hiram Monserrate and the 30 members of the chamber's Republican conference to engineer a takeover.

Andrew Celli, representing Smith, said the senator was elected to a two-year term as leader in January. He said no resolution was made in committee to replace him, nor did senators make a "privileged" request.

"There is no vacancy. Senator Smith remains the temporary president," Celli said. He referred to the opposition as "Sen. Espada and his confederates."

Celli also told the judge that Sen. Neil Breslin, the Democrat who was presiding over the Senate at the time of the coup, said Republican Sen. Tom Libous was out of order when Libous called for a change in leadership on the Senate floor. He said Libous never tried to challenge Breslin's statment.

John Ciampoli, a lawyer for Espada, told the judge that the majority of the Senate voted for the change in leadership, adding "What Malcolm Smith is asking you to do is step in and substitute yourself for the 32 senators who represent the majority of the Senate."

Republicans vow to appeal, and the Appellate Division for the Third Department will take up the case next.

Stay tuned.

This clown circus isn't over by a long shot.

UPDATE:
It appears the NY Post report was incorrect (hat tip: anonymous emailer), and the judge ruled in favor of the GOP, which went into session.

A state judge refused to block leaders of a Republican-led coalition from taking over the Senate Thursday.

The new majority immediately went into session without the Democrats - except for the two who joined the coup.

Supreme Court Justice George Ceresia rejected a request from Democrats to delay the takeover - but agreed to hear more arguments.

Republicans argued that if Ceresia halts the Senate session, the judicial branch would be inappropriately meddling with the legislative branch.

Shortly before 11 a.m., apparent Majority Leader Dean Skelos walked through a crush of media and protestors, took out a key and unlocked the Senate doors that have been sealed since Mondays leadership coup.

Expect the Democrats to appeal.

The judge correctly noted that this was a political question, and refused to address it.

What a mess.

UPDATE:
More fodder for discussion. Monserrate is blocking any further business at the moment because he's choosing not to. Meanwhile, State Senator John Sampson (an Albany Law alum) may replace Malcolm Smith as Democratic Leader (Majority or Minority, depending on how things go) because of Smith's incompetence.

NY State Senate Showdown; The Clown Circus Continues

Senate Democrats and Republicans are huddling over what to do now that the Republicans have managed to get back in charge. Democrats are contemplating legal challenges, but I give them no chance of success.

Senate Democrats are getting interested in the malfeasance of fellow Democrats Hiram Monserrate and Pedro Espada Jr? When they were in the majority, they ignored calls to investigate their criminal and elections issues, but now that the two have gone and sided with the Republicans and handed power back to Dean Skelos and the Republicans, the Democrats want to see if Espada actually lives in the district he claims to represent and will look closer at Monserrate's criminal behavior (he's currently under indictment for assaulting his girlfriend).

There are additional legal and ethical issues surrounding Espada, including the fact that Democratic leader Malcolm Smith spiked a multimillion dollar project that Espada was championing that may have been illegal, but which was definitely pork.

Austin Shafran, Smith's spokesman, claimed that only after Espada (D-Bronx) learned that he wouldn't be getting the "member item" funding for the Bronx Human Services Council and Green ECO Energy Inc. did he join in with Monday's GOP revolt to oust Smith.

"Two words come to mind: political extortion," said Shafran, adding, "Malcolm prevented Espada from setting up these sham nonprofits that were essentially bilking taxpayers out of millions."

Member items are the currency of power in Albany, and the legislative leaders dole out hundreds of millions of dollars every year to various groups, some of which have dubious backgrounds. Instead of questioning the whole process, Smith's people want to go after Espada. It's personal.

The Democrats can't win on a direct legal challenge to the Republican takeover, so their best bet is this collateral attack on Monserrate and Espada. They might actually win against Espada, but in the meantime all business in Albany has come to a standstill.

Gov. David Paterson wont leave New York, because it would put a Republican in charge. Boo hoo. Where would Paterson need to go that is more important than attending state business in any event?

Senate Democrats have locked the chamber, but Republicans vow to hold session at 3PM.

Tom Golisano is widely believed to be behind the GOP takeover, and the Daily News reports that Golisano was peeved at Smith. The two were in a meeting, and Smith spent the entire time on his Blackberry. After that meeting, Golisano was determined to make Smith pay.

"When I travel 250 miles to make a case on how to save the state a lot of money ... and the guy comes into his office and starts playing with his BlackBerry, I was miffed."

Golisano, who spent millions helping Democrats take control of the Senate for the first time since 1965, said Smith and party leaders reneged on a promise of reform and engaged in a secretive budget process that resulted in $8 billion in new taxes and fees.

After the meeting, Golisano, who founded the Independence Party, asked political operative Steve Pigeon to see if he could work a deal with Republicans.

Golisano had a good relationship with Sen. George Maziarz (R-Erie), who introduced him to Deputy Minority Leader Tom Libous (R-Binghamton).

Read more: http://www.nydailynews.com/news/2009/06/10/2009-06-10_fiddled_with_blackberry_as_senate_burned.html#ixzz0I28RumFl&C

None of this has anything to do with actually governing. There is nothing here except naked personal ambition, political maneuvering, and all this takes place against a backdrop of a state budget for FY 2009-2010 that is already billions in the hole, and which will require additional attention because the state is spending billions more than it is taking in (and the state budget was nearly 6% higher than the prior year, despite the dire situation and loss of Wall Street income).

These are the clowns who are in charge in Albany, and people wonder why the state is in the dire shape it is?

UPDATE:
Paterson is deeply unpopular? You don't say. A budget fiasco, poor decision making, and a bad economy all play a role, but he's not seen as being in control of the process, which means that he's heading for trouble if he wants to run for reelection.

Meanwhile, via Jammie, there's one tidbit about Tom Golisano that I find incredibly surprising. Apparently, he's dating former tennis star Monica Seles.

UPDATE:
Rowdy Yates sends along the following video update:

Parker's Problems Propagate

New York State Senator Kevin Parker's problems continue growing. He was arrested yesterday after assaulting a New York Post photographer, and today his fellow State Senators have stripped him of his leadership posts.

That means he's losing $22,000 in perks for his problems, and throws into question how he's ever going to repay his obligations to lenders on his real estate holdings.

The reason that the photographer was there in the first place was to get Parker's mug for a photo for stories to run alongside the reports about Parker's pending foreclosure on a Brooklyn home.

Lopez got into his car and attempted to leave. But Parker allegedly followed him, forcing his way into the Subaru.

As the two tussled in the car, Parker managed to allegedly kick an inside panel off a door, sprain Lopez's finger and break the camera's flash.

Parker finally gave up and got out of the car, but immediately began blaming Lopez for the incident.

"You see this guy? He's a sellout," he said to a group of neighbors who had gathered, according to Lopez. " 'The Man' is using him to make me look bad."

"You all saw him assault me," he said, then called 911.

But when cops showed up, witnesses corroborated Lopez's story. The police ended up booking Parker.

It's not Parker's first brush with the law, nor the first time he allegedly tried to weasel out of trouble by blaming someone else.

Last year, Parker allegedly clocked aide Lucretia John, 32, and crushed her glasses with his foot after she told him she couldn't work for him anymore.

John filed a complaint, but the combustible senator filed a cross-complaint hours later, claiming John had punched him in the face. In press reports, he accused her of being lazy and slow to learn.

This isn't the first time Parker's assaulted someone either. He went after one of his employees, although he claimed that it was a misunderstanding and he agreed to go to an anger management course. I guess that didn't do the trick.

The man is a menace.

Senate Majority Leader Malcolm Smith showed how politicians can act swiftly to discipline fellow members. Good on him to take this action. It's a shame that it happens so infrequently as members are more likely to shield those who engage in criminal acts or other ethical misconduct than excoriating and casting them out.

The New York Numbers Game

The new New York state budget is a fiasco and is the exact opposite of a fiscally responsible budget. The budget is billions above the amounts that Gov. David Paterson suggested just four months ago. That budget was svelte and responsible in comparison to the monstrosity that Albany conjured up over the weekend in the dead of night as the troika of Paterson, Speaker Shelly Silver and Senate Majority Leader Malcolm Smith. This budget is a tax and spend dream, but a nightmare to the taxpayers who will be seeing massive hikes in taxes.

Democratic leaders yesterday released details of a state budget deal that would push spending to a staggering $132 billion next year -- an increase of 10 percent -- while they ask residents to fork over a record-breaking $7.8 billion in taxes and fees.

The huge spending plan is $10.7 billion higher than the bare-bones plan Gov. Paterson released less than four months ago in a call for fiscal austerity.

It comes in the wake of a $4 billion soak-the-rich income-tax hike, the elimination of a $1.5 billion property-tax rebate plan, and $2.3 billion in new and extended business taxes and nuisance fees.

Among other things, the budget would add nickel deposits to bottled water, ratchet up taxes on beer and cigars, and raise income taxes at least 14.5 percent on families making more than $300,000 a year.

But Assembly Speaker Sheldon Silver (D-Manhattan) and Majority Leader Malcolm Smith (D-Queens) refused to give up even a dime of the notorious $170 million slush fund lawmakers use to dole out grants to favored nonprofits and community groups.

Meanwhile, lawmakers restored about a third of the spending cuts proposed by Paterson. They rolled back 70 percent of the governor's proposed health-care savings, but accepted some reforms in the way the money gets doled out.

They added $405 million in school aid, which Paterson had hoped to cut by $698 million. In all, they made a record $5.2 billion in program cuts.

Paterson said much of the overall spending increase is due to an influx of federal stimulus funds, and he insisted the budget's architects made "tough choices."

First among the tax hikes is the elimination of the STAR property tax relief program.

There were no cuts to services or the state workforce. It never happened. The money will just get doled out differently, but the amounts are going to remain the same or exceed the levels previously set - an increase in spending.

This is a fiscally irresponsible mess and New York taxpayers and voters have no one to blame but themselves for continuing to vote sheep to the Assembly and Senate who accept their paychecks but do nothing more than rubber stamp the leadership's decisions.

The STAR property tax relief program cost $1.5 billion, and the rebate amounts depend on the school district and income level of the taxpayer. Eliminating that tax relief program is a tax hike on all homeowners.

Failing to cut spending means that taxpayers are shouldering an even higher level of spending over which they have absolutely no control. The state is hiking all manner of taxes and fees to accomplish their higher spending levels, which are unsustainable in a recession and will lead to falling short of budget projections. This is a recipe for disaster for the state.

Attempting to hide the fees and taxes among the $2.3 billion in new and extended business taxes and nuisance fees, including new deposit fees for bottled water (additional expenses to businesses to collect and recycle), ratchet up taxes on beer and cigars, and raise income taxes at least 14.5 percent on families making more than $300,000 a year doesn't make this a fiscally responsible budget. It makes for a bloated mess that relies on the one-shot of federal aid to hide the fact that no serious attempt was made to contain spending.

The GOP losses in 2008 in Albany have meant a surge of lobbyist power and control by Democrats over all the apparatus of Albany operations, and this budget is a product of that mess, combined with the corruption and scandal within the Governor's Office and the Comptroller's Office.

You think people are howling now? Just wait until next year when the real bill comes due and there isn't any financial aid available from the federal government to mask the gaping deficit. New York is following California's path to fiscal oblivion with this budget.

Taxing Times in New York

It's a done deal. Legislative leaders and Governor David Paterson have figured out their tax and spend plan for the fiscal year, and it's not pretty at all. While folks in other parts of the country might think that people making $250,000 per year are not in the middle class, in New York City and the metro area, it is.

While the state proponents for the taxes call this a millionaire's tax, the fact is that many of those who are going to get slammed by the tax hike are in the middle class - because of the high cost of living in the region.

They're going to get hammered. Hard.

The two-tier tax plan would bring in $4 billion annually, in part by hiking income taxes a stunning 31 percent for all New Yorkers making more than $500,000 a year, the sources said.

A second, slightly lower tier would increase incomes taxes by 14.5 percent for singles earning $250,000 to $500,000 annually and for married and joint filers earning $300,000 to $500,000.

Taxpayers now hit the current top rate of 6.85 percent when their incomes reach $65,000. The Paterson plan would tax top-tier earners at 8.97 percent and second-tier earners at 7.85 percent.

The staggering hike was one of the last elements of a $121 billion spending deal Paterson and legislative leaders forged behind closed doors in a race to make the April 1 budget deadline.

Sources said that other elements of the deal include:

* $6.5 billion in spending cuts;

* $6 billion in federal stimulus money, and

* Numerous other taxes and fees including expanding the deposit law to include plastic water bottles.

Don't buy into the part about the $6.5 billion in spending cuts. If that were truly the case, the state budget would be smaller than previously. With a sleight of hand, the cuts do not exist - particularly because the state is using the federal money to fill that gap. Any cuts are merely for show because the ultimate state budget will remain higher than last year when all dollars are counted.

The state has 200,000 employees. Paterson had claimed that he would cut 8,900 - or less than one half of one percent 4.45% [ed: correction courtesy of Jason Van Steenwyk in the comments] of the state workforce. That raised such hackles with the unions that he's backed down. The unions pulled the strings and Paterson balked, even though he was right to put those jobs down for good. A bloated state workforce is a luxury that the state cannot afford. It hasn't been able to afford the huge state workforce for years, but the costs are now ballooning out of control because revenues simply can't cover the costs hence the tax hikes all over the place.

The state's forecasts for revenue generation will come up short because people will spend even less and those who are hit hardest by the tax hike - many of whom are connected to Wall Street - will contemplate moving out of the state, whether to Connecticut, where the tax rates are significantly less (ranging from 3% to 5%) or even to Pennsylvania, where the rate is 3.07%. New Jersey's current top tax rate is 8.97% and the state is in nearly as bad fiscal shape as New York. However, New Jersey does benefit from having lower overall sales and use tax rate compared with the NYC metro area rates that can top out at just under 10% compared with 7% for New Jersey (or 3.5% for enterprise zones that include Paterson, Elizabeth and Jersey City). There's a huge reason that so many New Yorkers do their shopping in New Jersey; they're coming for the favorable tax rates. New Jersey also benefits from having good transit options to Manhattan, which makes it a favorable option to moving to Connecticut or the more distant Pennsylvania from which commutes could take 3-4 hours each way.

The state's revenue projections will come up short, and not just on the personal income tax revenues. Other state revenues will drop as well as the disposable income of those taxpayers is eroded by the still higher taxes, meaning that sales and use tax revenue will decline, corporate franchise tax revenues will decline, as will other taxes and fees that are generated from the purchasing power from those affected individuals.

The kicker to this situation is that it was done in complete secrecy in back room deals between the the two legislative leaders - Assembly Speaker Shelly Silver, Senate Majority Leader Malcolm Smith, and Gov. Paterson. It's no different than any of the budgets produced in the past decade despite claims that Albany would open up the process and be more inclusive of other legislators.

There's plenty of corruption everywhere you look in Albany and new scandals crop up regularly. In the past two weeks, there were two prominent scandals, one involving the former state tax commissioner, and the other involving aides to former comptroller Alan Hevesi (who himself was ousted on corruption and criminal charges).

And the lack of transparency over the legislative process means that the legislative leaders throw around their weight and determine the issues that will proceed and bottle up those that they oppose, even if members of their caucus want them. Throw in the fact that you have people like Silver working at Weitz and Luxenberg (a very prominent personal injury lawfirm that engages in class action suits on asbestos, tobacco, and other major damages cases), but who refuses to divulge his income from that association despite working with the firm for years and the dysfunction in Albany is far worse than you can imagine.

These are truly taxing times in New York.

Legislature Planning MTA Bailout Through Tax Squeeze

New York legislative leaders have claimed that they've come up with a plan that would result in bridging the gaping budget gap at the MTA without relying on implementing new tolls along the East River and Harlem River bridges.

The solution isn't reducing costs or addressing massive structural deficits, but rather raising taxes and fees on motor vehicle registrations and other motor vehicle fees.

Legislators will gather in Albany on Monday to discuss the proposal, and they could vote on the plan as early as next week, around the same time as the state's overall budget.

"We are going to work straight through the weekend," Smith said. "I think, as [Silver] said, we are faster moving on the budget items, but I think the MTA will be right in that same area."

Lawmakers previously said the MTA rescue wouldn't be considered until well after they approved the state budget.

The levies could include a $25 added fee on vehicle registrations, a surcharge on drivers' licenses, and 13 "other auto-related taxes," the source said.

Paterson and Silver told Smith to pick several taxes and fees from that menu that would be approved by his lawmakers and that would add up to $200 million to $300 million in yearly revenue for the MTA, the sources said.

The 12 counties that receive MTA service would pay the additional fees, the source said.

Other MTA funding ideas, such as income and gasoline taxes, were ruled out, the source said.

The automobile fees would be paired with two original bailout proposals, the sources said. That includes an 8 percent fare hike for riders -- much less than Wednesday's 23 percent increase -- and a 33-cent tax on every $100 of a business' payroll. It's not yet clear what an 8 percent hike would mean for the cost of single-ride, monthly and other MetroCards.

While this proposal would mean a much lower increase in the fares on subways and buses and commuter trains, it still leaves the budget short. It also means that we'll be back in this position again next year.

None of these options and proposals address soaring costs, but for the moment will apparently stave off the crippling cuts in mass transit service on which the City depends to not only get people to and from work, but to reduce the traffic on bridges and tunnels.

State Officials Ignore Tax Law

It's a common theme of late. This time, NYS officials, including Senate Majority Leader Malcolm Smith (D) and a whole host of other state and local officials ignore the requirement to report their use of state vehicles.

The senators, including Majority Leader Malcolm Smith (D-Queens), did not report any personal use to the state Comptroller's Office last year.

The comptroller issues W-2 forms to workers so they can declare the benefit when they file their taxes.

Smith's office blamed the lapse on former Majority Leader Joseph Bruno, a Republican who stepped down in June and eliminated any tracking or reporting of vehicle use about 15 years ago.

Smith's spokesman, Austin Shafran, said his office did not know about the change until The Post called.

"This is a policy that we're going to absolutely look to change as soon as possible and make sure that all our members act in accordance with it," he said.

All state Assembly members with cars reported personal use to the comptroller except Manhattan Democrat Herman "Denny" Farrell.

Farrell's office said the lawmaker never drives his state car for personal use, preferring to tool around in his own convertibles.

Almost 1,000 state workers reported some personal use of a car from Nov. 1, 2007, to Oct. 31, 2008, according to a database obtained by The Post from the comptroller's office.

Personal car use can be calculated in one of three ways - by adding up miles driven; by using a flat rate of $3 per round trip per day if the worker earns less than $139,600; or based on the car's fair market value.

Funny how Smith is blaming former Senate Majority Leader Joe Bruno (R) for the tax mess and a failure to report the personal use of the vehicles. Sorry, but ignorance of the law is not a defense. You are required to do so by the state Department of Taxation and Finance, regardless of what you claim was the official policy of your predecessor.