Friday, February 12, 2010

Thou Shalt Not Steal

War on Fraud Widens:

U.S. Attorney and DOI

Following Money Trail

By Henry J. Stern
February 12, 2010

A political maelstrom (less than a tsunami) has been caused by the arrest Tuesday of Councilman Larry Seabrook for numerous crimes. The charges are mostly fraud and larceny, with a side order of forgery (amending his bagel bill from $7 to $177). That was the same day the State Senate expelled Senator Hiram Monserrate for slashing his girlfriend's throat after he was elected but before he took office. In his freshman year, he switched back and forth between the parties with control of the Senate in the balance, which did not endear him to his colleagues. The cases are unrelated, lust and anger in one, greed and gluttony (the bagel) in the other.

The coincidence of the two events, as well as the award of an extremely large contract at Aqueduct race track to a firm supported by former Congressman Floyd Flake and Senate Majority Leader (in name only) Malcolm Smith, set up a feeding frenzy in the hunt for corrupt politicians. It is widely believed that the sticky fingers syndrome that strikes elected officials goes beyond Assemblymen Brian McLaughlin and Anthony Seminerio, Assemblywoman Diane Gordon and former Senate Majority Leader Joseph L. Bruno, and City Councilmembers Miguel Martinez and Larry Seabrook (limiting ourselves to elected officials recently convicted or sentenced, except for Seabrook, who enjoys the legal presumption of innocence.) Former Comptroller Alan Hevesi remains in limbo.

Press attention has now focused on three other lawmakers as possible lawbreakers: Assemblywoman Maria del Carmen Arroyo of the Bronx, Senator Malcolm Smith of Queens and Congressman Gregory Meeks of Queens. Meeks succeeded his pastor, Reverend Floyd Flake, when Flake gave up his Congressional seat in 1997 Smith and Meeks are regarded as proteges of Flake, who is the influential leader of a cathedral-sized church in southeastern Queens, with a host of subsidiaries. It was Flake who met with Governor Paterson shortly after the video lottery terminal contract was awarded to the Aqueduct Entertainment Group. No legal action has been taken against any of these officials; their transactions are said to be the subjects (or objects) of enhanced scrutiny by law

The whiff of scandal has also enmeshed the New Direction Local Development Corporation, a Southeast Queens "nonprofit" funded by member items from legislators. The latest mystery comes from $31,000 said to have been collected by the group seeking contributions for Haitian earthquake relief. Only a few thousand dollars seem to be on hand at this time, and no one can account for where the rest of the money went. Some principals of NDLDC are said to be friends and former employees of Smith and Meeks.

It is not unusual that the discovery of one fraud leads to the unmasking of others. It is here that the city's Department of Investigation, because of its experience in dealing with city officials' misconduct, has a particular role to play. DOI was very helpful in the Seabrook, Martinez and McLaughlin cases. Under the leadership of Commissioner Rose Gill Hearn, the agency investigated these jointly with the U.S. Attorney's office for the Southern District of New York. The current U.S. Attorney, Preet Bharara, former chief counsel to Senator Schumer, acknowledged this co-operation while announcing the Seabrook indictment. Commissioner Hearn made the point on that occasion that additional oversight is needed, including the introduction of a competitive element into the process of selecting member items for funding.

Competition between agencies has adversely affected the United States' ability to gather and distribute intelligence on the national scale. It is refreshing to note that, in New York City, the federal and municipal agencies fighting corruption work together closely. They have the difficult task of rooting out the thieves and cheaters, some of them elected officials, who swarm whenever the government spends money, particularly when contractors or phony non-profits seek to dip deeply into the honeypot.

CORRECTION. Yesterday we suggested that the dispute over the pay of judges might influence the decision in the Monserrate lawsuit against the Council. We overlooked the fact that the reinstatement suit is in Federal court. The state legislature does not set the salaries of Federal judges, Congress does. There is some bitterness because the legislature has not acted on cost of living increases for state judges for eleven years. This led to a lawsuit by the judges, now working its way through the courts on which they themselves sit. Monserrate was prosecuted in the state courts by Queens District Attorney Richard A. Brown, who endured insults and accusations of bias for performing his duty as an elected public official.

StarQuest #647 02.12.2010 755wds

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