YES! Espada Slush Operation Raided By FBI, IRS

Fare Hike Four member and Senate turncoat cum Senate Majority Leader Pedro Espada may finally face justice. In a state with no shortage of seedy political actors, Pedro Espada may be the sleaziest of them all. He is an out and out scumbag, thief, liar, and worse.

Espada conspired with Hiram Monserrate to swing control of the Senate to the Republicans, and ultimately extorted his current leadership position. He conspired with Monserrate, Carl Kruger, Ruben Diaz (each of whom have primary challengers I'm supporting this year) and Senate Republicans to block sustainable transit funding last year. He is directly responsible for the upcoming bus service cuts in Brooklyn.

Espada claims to represent a Bronx district, but in reality lives in a fancy house in Westchester. Perhaps that's why he has shown little sympathy for the needs of working New Yorkers: he lives in the suburbs! And for many years Espada has been operating a crony and family controlled slush fund in the form of Soundview Healthcare Network, which he has bled millions in public funding.

I am excited beyond words that Espada, a public menace, might finally be brought to justice. Attorney General Andrew Cuomo's actions yesterday and the raids by federal agents this morning give me a renewed sense of hope.

FBI, IRS raid state Sen. Pedro Espada's Bronx clinic
http://www.silive.com/news/index.ssf/2010/04/fbi_irs_raid_ny_state_senators.html

Bloomberg Campaign Ties To Jailhouse Bar Mitzvah Rabbi?

New York politics can be fascinating stuff.

The rabbi[Leib Glanz] at the center of an investigation into a bar mitzvah that was held at a New York City jail last year had three scheduled meetings in the last four months of 2008 with Deputy Mayor Kevin Sheekey, the man in charge of Mayor Michael R. Bloomberg’s political operation, records show.

The sordid details of the jail as Orthodox party hall made for some great tabloid fodder.

But to truly appreciate the story you must read this Gatemouth piece on Rabbi Glanz over at Room 8.

Whither the State Senate?

Things just get curiouser and curiouser.

“We have access, we have keys, and we’re going to open the door to do our business,” Mr. Espada said early Wednesday.

But that never happened. Mr. Monserrate’s talks with lawmakers on both sides of the leadership fight held up a planned 3 p.m. session, and he ultimately asked Mr. Espada and Republicans to delay the reopening of the Senate for a day while he continued to talk to Democrats; he said he wanted “to continue the discussions” with other Democrats “that I believe will build our coalition.”
. . . .
Mr. Espada’s former Democratic colleagues spent much of the day mulling over their leadership. Democrats met privately Wednesday morning for about 40 minutes in their conference room on the third floor of the Capitol. When they emerged, few were willing to express any confidence that Mr. Smith would be able to hang onto his job.

Senator Jeffrey D. Klein of the Bronx, the Democrats’ deputy leader and a sometime rival of Mr. Smith’s, said, “I can’t speculate on that,” adding, “We live day to day.”

Pedro Espada is done for politically.

So is Malcolm Smith.

This little coup may yet turn out to be the best thing that ever happened in the NY Senate.

Defector Espada Failed To get $2MM In Earmarks For Related Entities

Via the NYT CityRoom blog.

State Senator Pedro Espada Jr. requested more than $2 million dollars in Senate earmarks this year for two groups with links to the health care organization that he founded and which appeared to have been created in part to receive such grants, according to several Democratic officials and aides with knowledge of the requests.
. . . .
When Senate officials expressed reservations about the grants to Mr. Espada’s staff, aides to the senator asked to resubmit the grants with a new address for both organizations: 742 East Tremont Avenue in the Bronx. Several weeks later, as Senate officials continued to balk, Mr. Espada finally asked that all the money be earmarked for the Bronx Chamber of Commerce, an existing and well-established organization.

The GOP can have these two sleazy pols. It is clearly where they belong.

UPDATE: Speaking of where they belong, I almost forgot that Pedro Espada doesn't even live in his district in the Bronx . . . he lives in Westchester! Espada is a fraud and a crook.

Two Members Of "Fare Hike Four" Reveal True Colors

Indicted domestic abuse suspect Hiram Monserrate (Queens) and campaign finance train wreck Pedro Espada (Bronx), two grasping, power-hungry nominal Democrats just went full-dirtbag and joined the Senate Republicans in an attempted coup.

It remains to be see how this mess will sort out, but one thing is certain: progressive Democrats need to unite to ensure these two treacherous, self-serving walking scandals never see another term in elected office.

Massive Mortgage Fraud In Queens: NYC Media Ignore It

Back in 2007, I wrote three posts on an unbelievably sleazy criminal, one Thomas Kontogiannis.

I contacted the news rooms at several local papers, including the Times, the Daily News, the Post, and a paper or two in Queens. Nothing but crickets in response. This is no boring story: Tommy K is now in prison for bribing California GOP Congressman Duke Cunningham. This was HUGE news on the West Coast - but not a single column inch of coverage here in NYC. Why?

Via Talking Points Memo, Reuters has a story up on Kontogiannis's $92 million dollar mortgage fraud. Maybe this contributed to Queens foreclosure rates dwarfing those of every other borough.

Real estate developer Thomas Kontogiannis, 60, and eight other defendants are accused of orchestrating fraudulent loans that were subsequently sold to the financial firms.

Federal prosecutors and the FBI said the scheme was centered around property developments that Kontogiannis bought and subdivided from 2001 to 2003 in the New York City boroughs of Brooklyn and Queens.

To finance the projects, the defendants are accused of staging sales of the properties financed by mortgage loans. Bogus appraisals supported the price of the properties, even where buildings had not yet been constructed or had fictional addresses, said the U.S. Attorney's Office in Brooklyn, which is prosecuting the case.

The Daily News failed to cover any aspect of this story, except for this mention in an article about tax delinquents:

Federal prosecutors who indicted Long Island financier Thomas Kontogiannis for laundering bribes to California Rep. Randy (Duke) Cunningham tied him to at least 22 companies including Westshore 480 Development, which, the city says, owes $751,708 in taxes on a waterfront property in Brooklyn.
A lawyer for Kontogiannis denied his client owned Westshore 480 or owed money for its property taxes. "He has no ownership and no liability," lawyer Robert Wolf said. "It would not be accurate to report that he does."

Apparently this guy was also involved in some shady business with spy agencies. All the more reason local papers should take an interest in an investigative story - but so far, no takers. What gives?

DOB Reform Rally; Scarano Charged

The Four Borough Neighborhood Alliance held a rally on the steps of City Hall this afternoon demanding reform of the DOB. I was there, along with numerous elected officials, other council hopefuls and civic organizations.

Raul Rothblatt of Four Borough put together a powerful alliance to call for reform. I am reminded that it was just in April that John Hatheway, Vince Favorito and I went to the Assembly hearing on DOB's governance failings to provide testimony on stricter regulation. Sure lancaster was ousted, but to what effect? At the hearing, it was clear to all that the interim successor, LiMandri, was an apologist for the current regime and would not effect change.

Sure enough, LiMandri's DOB pulled back their crane inspections as soon as they thought no one was looking . . . just in time for another tragedy to occur. We need REAL change at DOB . . . there is talk of loosening requirements to let LiMandri become the permanent DOB Commissioner. This is exactly wrong: LiMandri must GO!

In better news, Brownstoner reports that the DOB has finally taken action against scofflaw architect and serial bad actor Robert Scarano. The entire City press release is posted at Brownstoner. Check it out.

Credit where due; more like this please.

2 Dead In Manhattan Crane Collapse

Via Curbed.

What in bloody hell is it going to take before we reform the Department of Buildings? This is the singular failure of the Bloomberg administration: an abject failure to exert even a modicum of restraint on development in this City.

The Wild West atmosphere of development has to be checked. As we've seen lately in the finance arena, anything the Bush administration is supposed to regulate, and tragically our DOB: when regulators turn a blind eye, abuses will multiply.

Beef up enforcement at DOB . . . and end the disgrace of self-certification NOW. Getting rid of DOB chief Patricia Lancaster (who "resigned" in disgrace after the last crane collapse) was only a start. Lancaster's interim successor, Robert LiMandri, proved to be an evasive apologist for the administration and the DOB when grilled at the Assembly hearing on April 24th. Vince Favorito, John Hatheway and I were all at the hearing to submit testimony on reforming the DOB.

Credit where due: Assemblymember Jim Brennan has been one of the choice few that has shown true leadership in this area. Remember that at election time.

One Last Post On Fossella

Commenter Slappy over at Gothamist had this to say on the latest news on Fossella:

So tired of hearing about the sex lives of politicians. Its their political, not personal actions that are important. If there was more expose about what they are doing that really affects all of us, it might be more interesting. But I don't really care about their personal lives.

Ben Franklin contracted syphilis. Poor guy. So what.

It's a good point. I take some glee when real family values hypocrites like Larry Craig, Mark Foley, Ted Haggard, or others flame out. And I'll be glad to see Fossella lose his seat in the election later this year. But it's HYPOCRISY that makes me angry, not who's shtupping who or has engaged in some stupid drunken behavior.

Excessive prying into people's private failings is corrosive, and ultimately, the calls on Fossella to resign his job are overblown. What if your banker, insurance agent, personal trainer, doctor, or other professional exhibited the same failings? Should they be forced to quit as penance? Wear a scarlet letter?

Fossella will almost certainly lose his seat in November. He's damaged his family life, perhaps irreparably. But nowhere has it been said that these failings had anything to do with his job performance. The people can choose to turn him out of office in November, or he can decide not to run again. But resignation? Let's keep some perspective here.

I say this as a staunch Democrat who is eagerly looking forward to picking up that seat. But let's keep our fairness and humanity intact. I wonder how perfect are those who are piously calling for Vito Fossella's head right now.

Fossella Love Child

What a week it's been.

If it had just been the DWI, Republican Congressman Vito Fossella (Brooklyn & Staten Island) probably could have hung on this year. But now that he's acknowledged an affair and a love child, he's got to be finished.

Fossella's got two experienmced opponents coming at him in the form of Domenic Recchia and Steve Harrison. Long time readers will recall that Domenic Recchia (along with Simcha Felder and Bill deBlasio) strongly support our efforts to improve subway service on the Culver Line (full express and local service).

I hope we can keep the Democratic primary civil. If we win this seat, we make the NYC congressional delegation 100% Democratic. A strengthened NYC delegation will help us realize major projects like the Cross Harbor Tunnel, the Gowanus Expressway Tunnel, and other major infrastructure programs that require federal funds.

You Know What Grinds My Gears? MTA Escalator Edition

Last week Curbed posted a story about the broken escalator at Union Square (which is supposed to be maintained by the Zeckendorf Tower owner). Not only has the escalator been left broken for months on end, but the management has FENCED IT OFF . . . so that no one can use it, forcing people to use a narrow, cramped staircase. This type of stupidity is enraging to the commuters who have to look at the broken escalator every day . . . after all as the late comic Mitch Hedberg observed, "an escalator is never temporarily out order - it's temporarily stairs."

Notes a commenter:

The Zeckendorfs were able to build much larger than usual, and therefore the public had to deal with the extra shadows on the park and on the street, in exchange for providing this public amenity in the form of an improved subway station entrance. It is the Zeckendorfs' responsibility to make sure everything is functioning, and it is their responsibility to keep the area clean. They got a bonus worth tens of millions of dollars for providing the improved subway entrance. They NEED to fix it. Those escalators have been broken for YEARS not months. the City should fine them big time.

Sunday, I went to the Pottery Barn up on 59th and encountered another fenced off, broken escalator, and an extremely long one at that.

Today AMNY fuels my rage with another article about broken escalators, this time at 53rd and 3rd. Again, the escalator is supposed to be maintained by a developer who reaped substantial benefits from the City (to the tune of $3 million a year in rent).

Over the decades, it's been a common practice for the city, NYC Transit and its parent agency, the Metropolitan Transportation Authority, to forge deals that would give valuable floor space to real estate developers in return for subway improvements. In the case of the escalator at 875 Third Ave., a deal worth $3 million a year in rental income for the developer was forged more than 20 years ago. Today, after the property has changed hands several times over and the city and transit officials who struck the deal have moved on, the agreement seems forgotten, leaving no one accountable for maintaining it.

This has become an epidemic. Socialized costs in the form of lower quality of living for the sake of private profit. Mr. Bloomberg, where is the enforcement? How long will this continue?

And until then: a broken escalator is still a perfectly functional set of stairs! What the hell is wrong with these people?

Khalil Gibran School

The New York Times has a must read article about how a handful of ideologues, including the execrable Daniel Pipes and a dishonest reporter at the Post, sandbagged the school's principal with a smear campaign. Truly disgusting people.

“This was a situation where she was subject to sanction not for anything she said, not for anything she did, but because a newspaper reporter twisted what she said and the result of it was negative press for the city and the Board of Ed,” Judge Jon O. Newman told a city lawyer at a hearing in February.

Ms. Almontaser’s case will proceed in the Federal District Court in Manhattan.

Oh yeah, Rupert Murdoch's New York Post, that bastion of journalistic integrity. They let him by the Wall Street Journal, and now he wants to buy Newsday . . . along with Fox News, Fox Business News, and Fox. This is why we (used to) have laws against concentration of media ownership. Those laws need to be reinstated, and more stringent than before.

Friday News Roundup

A few important bits of news:
- After an animated discussion, CB6 Land Use Committee voted 9-4 to support closing the "wide streets" loophole. The Committee, as well as Bill deBlasio (who was instrumental in making this happen) and our other local elected officials (Millman and Connor) all deserve praise for working to preserve the character of our community. Several steps still to go. Next is the full Board, then the Borough President.

- Another sign that DOB is a broken organization that needs a major cultural change, not just a new Commissioner: "City officials admit they wrongly gave the green light to the project at 303 East 51st St., where a tower-crane collapse on March 15 killed seven people." We must end the farce called self certification that outsources DOB oversight to the developers. Now.

- Consumer confidence "fell deeper into recessionary territory, to 62.6 from 69.5 in March . . . the lowest since March 1982's level of 62.0., when the "stagflationary" period of low growth and high inflation was still an issue for many Americans." We are in for a serious adjustment; the real estate recession has not even begun here yet, but realtors with long memories will remember what the early 1990s were like, and that's what we're facing in the near future.

- Generalissimo Francisco Franco is still dead. Have a good weekend!

Lancaster OUT at DOB

Well, this is tremendous news.

Facing pressure from City Hall and growing criticism for a spike in fatal construction accidents, Buildings Commissioner Patricia J. Lancaster resigned on Tuesday, becoming the first commissioner to leave the Bloomberg administration under a cloud of public controversy.

We can only hope that this resignation engenders the same kind of sea change as the replacement of Iris Weinshall with Jeanette Sadik-Khan at DOT. The person at the top sets the tone for the whole organization. Of course, you need the Mayor's support . . . but Bloomberg has shown big changes before, and perhaps this signals positive change coming at DOB.

And here I am, and many others across the city I'm sure, preparing testimony for the Assembly Hearing on DOB's shortcomings and a passel of bills by Assemblymen Brennan, Lentol, and Hevesi to reform DOB. I think Lancaster was smart to get out of dodge before being ripped a new one publicly on Thursday morning.

We can and must do better. Let's start, Mayor Bloomberg, with having a panel that includes interests besides developers and the building trades vet the next DOB commissioner.

Previously at FirstandCourt: Scarano - Lancaster Scandal

MUST READ: Definitive Spitzer Timeline

Looseheadprop has posted an exhaustive timeline of the Spitzer debacle over at FireDogLake.

As I suspected, it appears there is a lot of chicanery going on here behind the scenes . . . on the GOP side. This whole thing stinks. The apparent abuses of power here are far more scandalous than patronizing prostitutes. This is a GOP power play for the governorship, using dirty tricks and abuse of police powers.

Spitzer Skullduggery

I am pretty confident we're going to learn, over the next 2 years, more about how the Fall of Elliot Spitzer was engineered. Hubris? Of course. But this was a man with many enemies. One of them, Roger Stone, (click here for larger version of picture big enough to read) is a sleazebag GOP political operative and dirty trickster going back to the Nixon administration. He had a role in halting the Florida recount in 2000. He is a complete and total scumbag. He is also a swinger . . . on that count, to each their own - I don't really care what he and his wife do with their private parts. Consenting adults can do whatever the hell they want behind closed doors, in my view.

But he reported Spitzer to the FBI for using hookers four months before this scandal broke. . . . and it does add some irony that HE, of all people, should be reporting someone to the FBI for sexual misconduct.

Did I mention that Roger has a tattoo of Richard Nixon's face on his back? Must make for an interesting conversation piece at the orgies.

UPDATE:
Scott Horton has a much better distillation of the politicization of the Spitzer prosecution over at Harper's. It is a must read. Concludes Horton,

This marks a strong shift in position in Justice Department explanations of the case, increasingly bringing into focus the fact that Eliot Spitzer was a target because he was Eliot Spitzer. The comparison of this case with the handling of the “D.C. Madam” case produces a very curious bifurcation. Eliot Spitzer is worthy of being a target, and the dedication of massive resources to nab him. But G.O.P. Senator David Vitter and Bush Administration Director of USAID Randall Tobias are not. What, other than the fact that the latter are Republicans and the former Democrats, provides the basis for distinction? This investigation increasingly looks like a political hit.

Spitzer: Kid Stays In The Picture?

The Sun reports a rumor that Spitzer might not resign after all.

I'll stipulate right off the bat that he hired a hooker(s), and we can all agree that is wrong on several levels.

However, what is troubling me is HOW he came to be ensnared in this investigation. First blush was, he was caught up in a vice takedown of a high-class callgirl operation. Now we come to find, the investigation centered on Spitzer from the beginning, which led to the prostitution ring. Scott Horton has a look at the shifting story in Harper's.

So far, the explanations (anti-money laundering audits) don't add up to me. I worked in banking for 5 years. I wasn't a compliance officer, but we did have regular KYC (Know Your Customer) training. And something about this whole thing just seems fishy.

Again, I'm not going to defend Spitzer's actions. But I am highly concerned about the possibility of a politically motivated prosecution. Particularly in light of the US Attorney scandals and most egregious of all, the railroading of Alabama Governor Don Siegelman. 60 Minutes had a piece on Siegelman that is worth a watch.

With the Bush Administration conducting warrantless wiretapping on American citizens, is there any privacy left? Mindblowing is this story from yesterday's Wall Street Journal, which was buried under the Spitzer circus:

According to current and former intelligence officials, the spy agency now monitors huge volumes of records of domestic emails and Internet searches as well as bank transfers, credit-card transactions, travel and telephone records. The NSA receives this so-called "transactional" data from other agencies or private companies, and its sophisticated software programs analyze the various transactions for suspicious patterns. Then they spit out leads to be explored by counterterrorism programs across the U.S. government, such as the NSA's own Terrorist Surveillance Program, formed to intercept phone calls and emails between the U.S. and overseas without a judge's approval when a link to al Qaeda is suspected.

The NSA's enterprise involves a cluster of powerful intelligence-gathering programs, all of which sparked civil-liberties complaints when they came to light. They include a Federal Bureau of Investigation program to track telecommunications data once known as Carnivore, now called the Digital Collection System, and a U.S. arrangement with the world's main international banking clearinghouse to track money movements.

The effort also ties into data from an ad-hoc collection of so-called "black programs" whose existence is undisclosed, the current and former officials say. Many of the programs in various agencies began years before the 9/11 attacks but have since been given greater reach. Among them, current and former intelligence officials say, is a longstanding Treasury Department program to collect individual financial data including wire transfers and credit-card transactions.

Do you trust the Bush administration with this program? I sure as hell do not. You can ignore that phrase "al Qaeda" in that second bolded phrase; the lack of ANY judicial oversight whatsoever ensures that no one will ever ask if there were suspicions of al Qaeda. Theoretically, you have to have suspicions of al Qaeda links, but no one will ever ask you. See how nicely that works?

This cannot continue. For that reason alone, I'm looking forward to a bare-knuckle brawl between Spitzer and the Justice Department, with full discovery as to just how this investigation came about. Spitzer has hired the firm Paul, Weiss to defend him in this matter, and they are no lightweights. Get your popcorn ready.

Holy Crap: Spitzer and Prostitutes?

I nearly fell out of my chair when I read this. Not what I was expecting today.

Gov. Eliot Spitzer has informed his most senior administration officials that he had been involved in a prostitution ring, an administration official said this morning.

Stunned.
UPDATE: TPM Muckraker has transcripts of the calls. Ouch.

L.I. War Profiteer Makes Bail

Via Newsday, it looks like war profiteer and stock fraud indictee David H. Brooks has been released into a special situation on bail. Why do I think they'll regret this? Oh, that's why:

Court documents alleged that "literally dozens" of witnesses said they feared Brooks, based on a "history of intimidation and threats." The documents alleged he had ties to organized crime and, more recently, sent $4 million to tribal holy men in Senegal, West Africa, for religious ceremonies to win his acquittal. That country does not have an extradition treaty with the United States.

Sheesh.

Picture of the virtuous, railroaded and completely innocent Brooks taken from Newsday.

Earlier post on David H. Brooks indictment HERE.

Scarano - Lancaster Scandal

So we heard yesterday that Buildings Department commish Patricia Lancaster entered into a secret, sweetheart deal with infamous architect (what is the opposite of "starchitect"?) Robert Scarano. Essentially, Lancaster would sweep Scarano's various misdeeds under the rug.

This Daily News article visits with one of the victims of Scarano's chicanery, who thinks that Lancaster should be brought up on charges for the questionable deal with Scarano. But note this:

Bloomberg spokesman John Gallagher did not respond to a question about whether the mayor knew of the Scarano deal before it was signed. He said such nondisclosure deals since have been banned.

This stinks to high hell. We need action, including an investigation of Ms. Lancaster's dealings with Scarano. More broadly speaking, we need to reverse the damage done by years of Republican maladministration, starting with Rudy Giuliani's ill-advised self-certification program. It was self-certification that allowed Scarano to get away with the worst of his abuses.

We need a buildings Department with some teeth!

UPDATE: Gowanus Lounge has the response from DOB.