Senate President Malcolm Smith (l.) and Senate Democratic Leader John Sampson have already spoken to Inspector General's Office probers about the controversial Aqueduct racino deal. In addition to Senate President Malcolm Smith and Senate Democratic Leader John Sampson, the Inspector General's Office has asked to speak to three other senators.
The three are Senate Majority Leader Pedro Espada, Senate Racing and Wagering Committee Chairman Eric Adams and Sen. Joe Addabbo, who represents the district Aqueduct is in.
"I'm willing to talk about whatever the IG wants to know," Adams (D-Brooklyn) said.
He said he does not believe the IG will find anything improper.
"We think everything was done fairly," he said.
Also being called in to testify is a key Racing and Wagering committee staffer, sources said.
Senate Democratic spokesman Austin Shafran said the meetings, which will be done under oath, are in the process of being scheduled.
In addition, Shafran said Senate lawyers are "voluntarily" compiling information sought by the IG's office, including internal e-mails about the Aqueduct project.
But Shafran wouldn't say if all the e-mails and other documents the IG's office demanded in subpoenas will be turned over.
State leaders in January selected Aqueduct Entertainment Group as the winning bidder, but the deal fell apart in March.
It was the Senate that for months held out for AEG over rival bidders.
A one-time key AEG investor, Queens Rev. Floyd Flake, has close ties with Smith, who denies any wrongdoing.
Meanwhile, former senator-turned-lobbyist, Carl Andrews, filed legal papers to quash a subpoena for testimony and information after abruptly ending a recent informal meeting with the IG's office, sources said.
Andrews lobbied the Senate on behalf of AEG.
Scene at the Soundview HealthCare Network, where FBI and IRS agents raided the offices of Pedro Espada, Jr. Schwartz for NewsA team of FBI and IRS agents, along with investigators from Attorney General Andrew Cuomo's office, began raiding the offices of Soundview HealthCare Network on White Plains Road about 7 a.m.
They used bolt cutters to get into two trailers behind the building and began toting out white file boxes, some marked "payroll" and others labeled "time sheets."
After sifting through the materials in a rear parking lot for eight hours, the agents loaded more than 30 boxes into a blue Ford Econoline minivan and left.
As the raid played out, passing motorists honked in celebration and yelled out, "Lock him up!" and "It's about time!"
"He's a crook," said patient Muriel Moreno, 48, who said she was appalled at Cuomo's accusation that Espada used clinic money for vacations, restaurant bills and campaign expenses - and padded the staff with relatives.
"These are poor people. He's using us to get away with illegal acts," she said.
Espada, who was excused for the day from the legislative session in Albany, called the charges against him "false and unfounded" and declared himself proud to have given his sons jobs.
He claimed Cuomo installed cameras outside his house and offices "to catch every movement of myself, my neighbors and family."
He called the clinic raid a "media show" and said Cuomo was "trying to create the impression of wrongdoing where there is no wrongdoing."
And while Espada has claimed the probe was payback for his involvement in a Senate leadership coup last summer, The News had reported a month earlier that Cuomo was preparing an investigation into the senator.
As the Daily News reported Wednesday, Cuomo's investigation is proceeding jointly with Brooklyn U.S. Attorney Benton Campbell. Possible charges include mail fraud, wire fraud, theft of government funds and conspiracy.
"This was not the private playground of Mr. Espada. These were public funds," Cuomo said. "These funds were to go to provide for needy people."
Espada's clinic, which opened 30 years ago to serve the indigent, remained open during the raid. Few patients mourned the state Senate majority leader's fall.
"He's a bottom feeder. I'm glad [federal agents] are here, because we need this place clean," said longtime patient Vernelle Jenkins, 69.
Fidel Calero, 59, who said the clinic treats his diabetes even when he can't always pay, was among those worried it might be shuttered.
"No matter what Espada's doing on his own, this place is good for the community," he said.
In Albany, a number of pols said Espada should step down as state Senate majority leader, a post that gives him little power but plenty of perks, including a large office suite and a big staff.
Senate Democratic Conference Leader John Sampson of Brooklyn said he has has no intention of forcing Espada out over a civil matter.
The Feds are closing in on Senate Majority Leader Pedro Espada Jr. in the wake of a state civil suit accusing him of looting $14 million from his taxpayer-funded health clinic.
State Attorney General Andrew Cuomo charged Espada used his not-for-profit health center as a "personal piggy bank" to pay for family trips and $80,000 in restaurant bills - including $20,000 in sushi.
Sources say Espada stuck his health clinic with the tab for $9,480 in JetBlue tickets to San Juan and $20,000 in sports and theater tickets.
"Siphoning money from a charity would be egregious under any circumstances, but the fact that this was orchestrated by the state Senate majority leader makes it especially reprehensible," Cuomo said.
A more serious joint criminal investigation by Cuomo and Brooklyn U.S. Attorney Benton Campbell is zeroing in on Espada for wire and mail fraud, sources said, adding that several search warrants have been issued. Prosecutors are even considering a racketeering indictment of the Bronx Democrat, built around the allegations outlined in the civil suit.
Prosecutors say Espada, founder and president of the Bronx's Soundview HealthCare Network, used the organization as a line of credit, running up $450,000 in personal expenses on his corporate credit card and $100,000 in campaign expenses.
He got away with it, the suit alleges, by packing the Soundview board with family members, Senate staffers and other stooges.
The suit seeks repayment and the removal of Espada as Soundview's CEO and president, as well as the ouster of the entire board, which rubber-stamped his expenses.
Espada called the suit "lies and falsehoods" and dismissed it as political payback for the Senate leadership coup he helped launch last summer that briefly put Republicans in control.
Espada cautioned against a rush to judgment and took a personal shot at Cuomo, whose father was once governor.
"I find it disingenuous to demonize my family simply for working for a business that I founded when I was 22 years old," he said. "It is no more inappropriate than working for your daddy as the hatchet man and then aspiring to step on his shoulders to be governor of this great state."
Created in 1978 as a nonprofit health care agency to serve impoverished Bronx patients neglected by the medical system, Soundview operates on $12 million a year in state and federal money.
Cuomo said Espada put his personal finances ahead of those of the medical clinics.
The suit, which names 19 current and former Soundview officers, alleged the following dizzying array of corruption:
- Espada received a severance package worth an estimated $9million - a deal that would bankrupt the nonprofit if the senator collected. Espada would be paid even if he is forced out for wrongdoing.
- Espada charged Soundview $80,000 for 650 restaurant meals - including $20,000 in deliveries from a pair of sushi restaurants near the senator's Westchester home.
- Soundview paid for lavish trips to Las Vegas, Miami and Puerto Rico for Espada and his family members.
- Espada put at least 12 relatives on his payroll, paying them more than $2 million over the past five years.
- Espada's son, Pedro Gautier Espada, rigged bids to ensure a $400,000 janitorial contract at Soundview went to a for-profit company owned by the senator.
- Another of Espada's private companies got $35,000 in 2007 and 2008 for placing appointment "reminder" calls to Soundview patients.
- Espada covered the cost of $100,000 in campaign literature by funneling money through Soundview.
- Soundview paid for a Mercedes-Benz for Espada and the insurance on the car.
The suit also says Espada's main residence is in Mamaroneck, Westchester County, outside his Bronx district. When Espada was gearing up for his 2008 run, he had the Soundview board approve a $2,500 a month pay bump to cover the cost of buying a co-op in the borough, Cuomo charged.
"This is not a corporate abuse. It's a public abuse," Cuomo said.
Espada vowed to retain his position and focus on his job.
He charged that "this game of politics is sabotaging thousands of Bronx Hispanics and African-Americans who rely on Soundview."
Espada also has political trouble. He faces a tough primary challenge this September from community organizer Desiree Pilgrim-Hunter.
In the Bronx, patients leaving the widely admired clinics had little good to say about Espada. "It makes me sad, that someone would do such a thing, when there are so many poor kids and elderly people who need so much," said Adis Kessler, 74.
This week, on Wednesday, March 18th at 6PM Roberto Perez will be interviewing Pedro G. Espada...
To listen to the interview go to:
THE PEREZ NOTES airs every Wednesday from 6-8PM so spread the news and tell a friend.
For a bio of Pedro Espada click here...
Photo from Village Voice...New York - Espada: Now That There's No Downside, A Loyal Democrat - Runnin' Scared blog...
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