Citizens Action NY Justice Works Conference - June 4th and 5th

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On June 4th and 5th, hundreds of New Yorkers who fight for justice came together in Albany. Justice Works was a conference that brought together a cross section of progressive politics and activism in New York State. Bringing together people working on different issues, all going in different directions. But the fact is, we are all in this together, fighting for a society where we all do better, where government and the economy work for every person, not just the rich, and where justice is something shared by everyone, regardless of the color of our skin, our sexual orientation, our religious beliefs, where we live or how much money we make. Because Justice Works, we work for it, every day.

The keynote speaker at the event was Melissa V. Harris-Perry professor of political science at Tulane University, where she is founding director of the project on gender, race, and politics in the South.She is a columnist for The Nation magazine. Harris-Perry is a contributor to MSNBC, appearing as a bi-weekly guest on the Thomas Roberts Show and a frequent guest on the Rachel Maddow Show and The Last Word.

The other principal speaker was NYS Attorney General Eric Schneiderman. As Attorney General, Schneiderman is the highest ranking law enforcement officer for the State, responsible for representing New York and its residents in legal matters. Schneiderman has worked to restore the public’s faith in its public and private sector institutions, by focusing on areas including public integrity, economic justice, social justice and environmental protection.

Among the other speakers were Bob Master. Bertha Lewis, Stephen Allringer, Richard Kirsch, Richard McNary, Ana-Maria Archila, Dan Cantor and many others. For bios, click here.

The event was sponsored by Salsa Labs, Solidago Foundation, Public Policy and Education Fund of New York and Citizens Action of New York.

Ex-car Czar Steve Rattner Settles Pay-to-play Scandal by Dan Primack - Fortune

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After more than a year of wrangling, obfuscation and name-calling, Steven Rattner has effectively 'fessed up to having done wrong.

The former car czar and private equity boss today agreed to pay $10 million in restitution to the State of New York, for his role in the state's public pension kickback scandal. He also has agreed to refrain from "appearing in any capacity" before any New York pension fund for the next five years.

This follows Rattner's earlier deal with the SEC, under which he agreed to repay $6.2 million and agree to a two-year ban from the securities industry.

In an official statement, Rattner said:

"I am pleased to have reached a settlement with the New York Attorney General's Office, which allows me to put this matter behind me. I apologize if during the course of this process there is anything I did that may have made reaching this agreement more difficult. I respect the work of the Attorney General and his staff to ensure that the New York State Common Retirement Fund operates properly and in the best interests of New Yorkers."

That's a far cry from what Rattner said just last month:

While settling with the S.E.C. begins the process of putting this matter behind me, I will not be bullied simply because the attorney general's office prefers political considerations instead of a reasoned assessment of the facts.

This episode is the first time during 35 years in business that anyone has questioned my ethics or integrity — and I certainly did not violate the Martin Act. That's why I intend to clear my name by defending myself vigorously against this politically motivated lawsuit.

For the uninitiated, Rattner's restitution is based on his time as a co-founding partner of Quadrangle Group, a New York-based private equity firm that invested in media, communications and information services companies. Here's the rundown, based on legal filings (note, I'm cribbing what follows from earlier posts, because nothing in the settlement appears to alter the underlying allegations):

• Rattner secured a video distribution deal for the brother of New York pension fund CIO David Loglisci, via a (now defunct) Quadrangle portfolio company. The deal was done over the initial objections of portfolio company management. Not only does this indicate pay-to-play, it also would seem to mean that Rattner violated his fiduciary obligations to Quadrangle limited partners (not letter of obligations, but spirit).
• Rattner also helped connect Logiscli's brother with people at film channel IFC, in which Quadrangle was an investor.
• Presumably at Loglisci's suggestion, Rattner secretly hired Hank Morris as a "placement agent," in order to secure a $100 million fund commitment for Quadrangle from the New York State Common Retirement Fund (it was later increased to $150m). This came after Quadrangle's legitimate placement agents had only been able to secure between $25 million and $50 million. Morris got Quadrangle the money without ever setting up or attending any meetings with CRF on Quadrangle's behalf.
• Morris also helped get Quadrangle $75 million from New York City pension systems, via a third-party who since has pled guilty to securities fraud.
• One of Loglisci's brothers put Rattner in touch with potential investors on the West Coast. These included Elliott Broidy, who sat on the board of the Los Angeles Fire & Police Pension Fund. LAFPPF committed $10 million to Quadrangle, and Broidy has since pled guilty to felony charges of rewarding official misconduct.
• In 2006, Morris allegedly asked Rattner for a contribution to the reelection campaign of State Comptroller Alan Hevesi (Loglisci's boss, who last week pled guity to fraud). Rattner demurred, saying that he had a policy against making contributions to public officials with oversight over investments, Morris suggested that Rattner contribute the money via a third party. Soon after, Rattner tapped a Democratic donor who subsequently contributed approximately $25k to Hevesi (plus another $25k from the donor's wife). That donor was not identified in court documents, but appears to have been Haim Saban. A source tells me that Saban was unaware of Rattner's backroom shenanigans.

A few final thoughts on this story:

1. This could have been FAR worse for Rattner, and perhaps would have been were Cuomo not leaving the AG's office in just two days. Cuomo originally sought restitution of between $18 million and $20 million in private, and then bumped it up to $26 million in a pair of lawsuits (both dropped today, as part of the settlement). He also had precedent on his side, based on the $20 million shelled out by Riverstone Group founder David Leuschen, for other activities related to Hank Morris, New York pensions and the aforementioned film (a horrendous piece of dreck called "Chooch"). Finally, Cuomo also was seeking a lifetime securities industry ban.

Not only did Rattner get off relatively cheaply -- and never face possible criminal charges -- but he even got a bit of a PR boon by settling on a day when half of the world is on vacation (or still stuck at an airport, as the case may be).

2. On the other hand, the timing makes a bad week even worse for Mike Bloomberg. Hizzoner used to employ Rattner as his personal money manager, via a Quadrangle wealth management group, and still sort of does (the Quadrangle unit broke off into a new group with which Rattner is affiliated).

When asked about Rattner over the summer, Bloomberg said: "I don't think [Rattner] did anything wrong… I happen to think the charge against him is ridiculous... I've always stood up for anybody that works with me who gets attacked by the press." He has since stuck by his friend, refusing to cut ties with someone who has tacitly admitted to public corruption in Bloomberg's own state.

3. We've seen private equity kickback scandals in a variety of state pension systems, including California and New Mexico, but the New York affair was enabled by a sole fiduciary structure. It's not coincidence that the only other state with such a structure, Connecticut, was rocked by a similar scandal that ended up with its treasurer in prison. A bill was proposed last year to drop the single fiduciary in favor of a board structure, but went nowhere. It's almost as if New York legislators are begging for its public pensioners to again be defrauded.

4. Now that this is settled, here's hoping that Rattner will sit down to speak about the situation with an informed interviewer who sdoesn't mind asking hard questions. No, not you Charlie Rose. I'll officially throw my hat in the ring, but won't hold my breath...

GOP Attorney General Candidate Daniel Donovan Relying on Controversial Figures by - NY Daily News

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GOP attorney general candidate Daniel Donovan is 'willing to do anything to get elected,' says Eric Schneiderman's camp.

GOP attorney general candidate Daniel Donovan has promised to clean up Albany - but he's relying on controversial figures Armand D'Amato and former Erie County Executive Joel Giambra to help him with a fund-raiser on Thursday.

D'Amato, brother of former U.S. Sen. Alfonse D'Amato (R-N.Y.), was convicted in 1993 of mail fraud, though the conviction was later reversed. And Giambra was investigated by then-state Attorney General Eliot Spitzer for pay-to-play shenanigans but was never charged.

Donovan spokeswoman Virginia Lam said the two work for the ex-senator, "who has been a great friend to the campaign." Rival Eric Schneiderman's camp blasted Donovan for being "willing to do anything to get elected."

Guilty Plea Expected by Ex-N.Y. Comptroller Alan G. Hevesi in Corruption Case by Danny Hakim and William K. Rashbaum - NYTimes.com

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Alan G. Hevesi, the former state comptroller, is poised to plead guilty to a felony corruption charge after a lengthy investigation into his office’s rewarding of pension investment business to firms that provided financial benefits to Mr. Hevesi and his aides, people with knowledge of the case said on Tuesday.

Barring an 11th-hour change of heart, Mr. Hevesi would become the highest-ranking state official convicted in the case and one of the most likely to serve time in prison: in 2006, he pleaded guilty to a separate felony after admitting he had used state workers to chauffeur his ailing wife, but avoided jail time in that case after he agreed to resign.

The pension investigation, conducted by the office of Attorney General Andrew M. Cuomo, is one of the longest running in Albany and came to symbolize the ethically troubled culture of the capital. It has focused on allegations that Mr. Hevesi’s friends, family and associates sold access to the state’s $125 billion pension fund, one of the world’s largest, to reward allies, pay back political favors and reap millions of dollars for themselves.

The deal comes as Mr. Cuomo, the Democratic nominee for governor, is seeking to burnish his credentials as a reformer who can clean up state government, and his office has been in plea negotiations with Mr. Hevesi’s lawyer.

Mr. Hevesi, a Democrat, has long maintained that he did not know of the wrongdoing taking place among his subordinates, and he has not been formally implicated in the scandal.

But last December, a California money manager, Elliott Broidy, admitted paying nearly $1 million in gifts in exchange for a $250 million investment from the pension fund. Mr. Broidy, according to the attorney general’s office, paid at least $75,000 to send a “very high-ranking” official in the comptroller’s office and the official’s relatives on five trips to Israel, including first-class airfare, luxury hotel accommodations and a security detail. The high-ranking official was Mr. Hevesi, people with knowledge of the investigation have said.

A guilty plea by Mr. Hevesi would not end the broader investigation. His former political consultant and confidant, Hank Morris, was indicted last year on 123 counts; he has denied wrongdoing and remains determined to fight the charges.

Also unresolved is the fate of Steven J. Rattner, the New York financier who led the Obama administration’s rescue of the auto industry. This year, the Quadrangle Group, the investment fund Mr. Rattner founded, paid $12 million to settle allegations that it paid kickbacks to win pension fund business, and said it was publicly disavowing conduct engaged in by Mr. Rattner.

Bradley Simon, Mr. Hevesi’s lawyer, was traveling in Europe and declined to comment. Mr. Cuomo’s office had no immediate comment. People with knowledge of the matter said no plea agreement had been signed yet.

It remains unclear what specific offense Mr. Hevesi would plead guilty to, or what wrongdoing he would admit.

But it appears that it was the fate of Mr. Hevesi’s two sons, Assemblyman Andrew Hevesi and former State Senator Daniel Hevesi, that led him to accept the plea deal. Their role in the investigation, and potential prosecution, have been a part of discussions over the plea agreement, people with knowledge of the case said.

Documents in the case have suggested that Mr. Morris, Mr. Hevesi’s most trusted political adviser, was the architect of the corruption in the comptroller’s office and reaped millions of dollars by acting as a gatekeeper for private equity firms and hedge funds looking to do business with the pension fund.

But the activities of Mr. Hevesi’s sons have also drawn scrutiny: investigators have questioned why an obscure firm operated by Daniel Hevesi was paid more than $1 million in fees for deals with pension funds in New York City and New Mexico, and whether any legitimate work was done for the payments.

Andrew Hevesi had more limited exposure in the case: Prosecutors say the state’s former Liberal Party boss, Raymond B. Harding, maneuvered to force a vacancy in an Assembly seat in Queens so that Andrew Hevesi could assume the position. Mr. Harding pleaded guilty last year after accepting more than $800,000 for doing political favors, prosecutors said, including securing a private sector job for Andrew Hevesi’s Assembly predecessor, Michael Cohen.

Andrew Hevesi did not return calls Tuesday.

The investigation by Mr. Cuomo’s office, and a parallel inquiry by the Securities and Exchange Commission, led to a nationwide re-evaluation of public pension practices and the role of placement agents, the middlemen who brokered business for the investment firms from the comptroller’s office. Last year, the current comptroller, Thomas P. DiNapoli, banned placement agents and other paid intermediaries from doing business with the state fund. The city comptroller, John C. Liu, has taken a less rigid approach; this year he ended a ban on placement agents put in place by his predecessor, but established other safeguards to curb abuses.

A number of other Hevesi lieutenants have been implicated in the investigation, which began in 2007 amid allegations that Mr. Hevesi’s former chief of staff, Jack Chartier, had obtained, among other things, a loan from Mr. Broidy for his friend, the actress Peggy Lipton from TV’s “Mod Squad.” Mr. Chartier has been cooperating with investigators, people with knowledge of the case have said.

In March, David J. Loglisci, the former chief investment officer in the comptroller’s office, pleaded guilty to securities fraud, saying he helped steer pension money to Mr. Hevesi’s political contributors and to companies that paid kickbacks to Mr. Morris.

The case has also entangled prominent New York figures and institutions. Last year, theCarlyle Group, the private equity firm that once employed the first President Bush, paid $20 million to settle charges related to the investigation.

The inquiry has also extended into Mr. DiNapoli’s office; a meeting between Mr. DiNapoli and a prominent Democratic fund-raiser and money manager has been the subject of scrutiny. Mr. DiNapoli has denied doing anything improper.

For some time, it has been clear that Mr. Hevesi was the ultimate target of the investigation. This year, after Mr. Loglisci pleaded guilty, he said in court that senior officials in the comptroller’s office had instructed him to clear investment decisions with Mr. Morris, an alarming admission since Mr. Morris was Mr. Hevesi’s outside political consultant.

At the time, Mr. Cuomo declined to discuss whether Mr. Hevesi was one of the senior officials, but said: “This is the chief investment officer. He did report directly to the comptroller, at that time Mr. Hevesi.”

Danny Hakim reported from Albany and William K. Rashbaum from New York.

Aqueduct at the Stretch: AG Andrew Cuomo Signs Off on Racino Contract with Genting New York by Glenn Blain - NY Daily News

It's coming down to the wire...Just one more step to go in the process - the sign-off by Tom DiNapoli - NYS Comptroller...

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Aqueduct Raceway is nearing the final process of acquiring a racino.Pace for News

Attorney General Andrew Cuomo formally signed off on the long-awaited Aqueduct racino contract Wednesday.

State Controller Thomas DiNapoli, whose okay is required to complete the deal, said he'll wrap up his review of Genting New York's plan to run the lucrative video slots parlor by Tuesday.

"It's a 30-year license that carries the future of New York's racing industry on its back," DiNapoli said. "Thoroughness must not be sacrificed for expediency."

Gov. Paterson and legislative leaders have already given Genting the thumbs up.

Andrew Cuomo’s Announcement Event at Tweed Courthouse - Photos and Video Link...

All I can say is I'm glad Andrew finally decided to announce that he's running for governor and wish him the best of luck...It's a day many of us have long looked forward to...I think he's what New York needs now, he's got my vote...It was great to see Mario and Matilda Cuomo there, too...They both looked fantastic...

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I attended NYS Attorney General Andrew Cuomo's announcement to run for NYS Governor at Tweed Courthouse Park today...Here's a link to the campaign's official photo album from the event...

See today's announcement speech at the New York Times website...

There are also a few photos at the end of a couple of my favorite political reporters, Liz Benjamin, Adam Lisberg and Wayne Barrett...

Are You Ready For a New NY? Andrew Cuomo Announces His Run For Governor of the State of New York - Cuomo 2010

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The Plan from Andrew Cuomo on Vimeo. Video length: 21:21

Check out some highlights from Andrew’s Announcement Video:

On his mission:
"Every single day for the past three years, I've gone to work with one mission: to represent the people. Period. To fight for you, no matter how powerful the foe, no matter how long the odds."

On his campaign:
"My campaign is this simple: I represent the people of the great State of New York and we want our government back."

"I want to generate a positive dialogue and a unifying approach. I don't wage a campaign against anyone or against anything, but rather, a campaign for something: for competence, for integrity, for reform and for the people."

On reform in Albany:
“New York State is upside down and backwards; high taxes and low performance. The New York State government was at one time a national model. Now, unfortunately, it's a national disgrace. Sometimes, the corruption in Albany could even make Boss Tweed blush.”

On taxes:
"Raising taxes is not an option -- Period. Sometimes the answer is just 'no.'"

On his approach:
"As I hope you have seen, I don't run from a problem. I run at it."

"I know how to manage. I know how to bring people together. And I know the people of this great State."

"The time for baby steps is over. We must make New York State the economic capital of the world again."

Statement from Attorney General Andrew Cuomo

I am sure this is a difficult choice and a sad day for the Governor and his family. It is in the best interests of all New Yorkers that the state government function through this difficult time and address the pressing budgetary problems we face. This is an election year and I will announce my plans at the appropriate time. In the meantime, I will continue to focus on my job as Attorney General and the many important issues we are pursuing.

New York Gov. Paterson Won't Seek New Term - msnbc.com

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Visit msnbc.com for breaking news, world news, and news about the economy

Gov. David Paterson, who repeatedly and defiantly said he would let voters decide if he should run the state, abruptly quit his nascent election bid Friday amid a stalled agenda, faltering popularity and criticism of his handling of a domestic abuse case involving one of his most trusted aides.

"I cannot run for office and try to manage the state's business at the same time," Paterson said at a televised news conference announcing his decision.

The governor said that he is "being realistic about politics," and will step aside after serving out the remainder of his term.

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Paterson, who had publicly prided himself on beating the odds, including overcoming blindness to rise through treacherous New York politics, formally announced his campaign last weekend but faced mounting calls to drop out of the race in the midst of controversy. A top aide is ensnared in a domestic-violence scandal, the governor was finding dwindling support in his own party and his campaign bank account paled in size to those of his rivals.

Alluding to allegations that he personally intervened in a domestic violence case involving trusted aide David Johnson, Paterson insisted that he did not use his position improperly. "I have never abused my office. Not now, not ever," he said.

Entire Press Conference
 

Paterson became governor in 2008, when former Gov. Eliot Spitzer resigned in a prostitution scandal. Paterson's decision paves the way for Andrew Cuomo to make an unimpeded run for the Democratic nomination.

"The governor isn't feeling pushed out," said a person who talked with the governor about his decision and who spoke to the AP on the condition of anonymity. "He certainly realizes it's very difficult to do a campaign and govern, and the focus now is on governing and the best interests of the state."

Paterson was the scion of a Harlem political power base that included his father, former state Secretary of State Basil Paterson; the late Percy Sutton, who was Manhattan borough president; Rep. Adam Clayton Powell; former Mayor David Dinkins; and embattled U.S. Rep. Charles Rangel.

Calls to step aside
On Wednesday, the most alarming call for Paterson to end his campaign came from state Sen. Bill Perkins, the Democrat in Paterson's old Harlem seat, who told the AP that Paterson's cabinet is "falling apart" and his campaign was crippled.

"The crisis we are suffering in this state and in the community is being distracted by these reports and very, very serious allegations," Perkins said. "What we are learning is unacceptable, and the viability of his candidacy is obviously crippling."

It has been widely expected — and among some Democrats, eagerly awaited — that the more popular Cuomo would run for governor and help prop up the state's reeling Democratic party. Cuomo, son of former Gov. Mario Cuomo, has already built a campaign fund five times larger than Paterson and consistently outpolls Paterson among New York Democrats, who hold a 2-to-1 edge over Republicans statewide.

Paterson's campaign "was going nowhere very quickly and the numbers couldn't have been any more bleak for him before this," said Lee Miringoff of the Marist College poll. "Regardless of the legalities involved and this specific controversy, the odds of him taking the oath of office next January were very remote."

Paterson's decision lets Cuomo avoid an expensive and divisive primary, Miringoff said.

Mike Groll / AP David Johnson, an aide to Gov. David Paterson walks to his office at the state Capitol in Albany, N.Y., in March 2008.

For Republican candidate Rick Lazio, it means he can no longer try to split the Democrats and now must confront the far better funded and more popular Cuomo.

"The fundamental issue is not who is going to be nominated for governor, at this point the fundamental issue is governing," said Gerald Benjamin, a political scientist and former dean at SUNY New Paltz. "You have a lame duck governor, a governor that has been ineffective already."

Paterson has been weighed down by low approval numbers for months. His problems intensified in recent weeks with a series of critical articles in The New York Times. The last, published Thursday, raised questions about how Paterson and state police officials responded to a domestic abuse complaint lodged against Johnson.

Court papers said state police may have pressured the woman to not level criminal charges against Johnson. The newspaper also said Paterson spoke with the woman personally, although the governor's office said it was the woman who placed the call.

Renewed calls for Paterson's exit were made hours after the story's publication, including one from a longtime ally, Rep. Steve Israel. The Long Island Democrat said he felt compelled to tell his friend that he should not seek election to a full term.

Paterson, an affable, slightly built politician, was never really seen as gubernatorial in the eyes of legislators, lobbyists or voters. Until he recently insisted on more formality, his staff and even rank-and-file lawmakers referred to him as "David."

He had been forced to confront allegations of sexual affairs and drug use since the day he rose to office on March 17, 2008, some of which were true. He held an extraordinary news conference detailing past affairs he and his wife were involved in during an 18-month period when it appeared their marriage would end. He also recounted past drug use from his youth.

He said he made the extraordinary admissions so that he couldn't be compromised as governor and to avoid further fracturing of a government rocked by Spitzer's resignation.

"We in public service and in life have all these great plans," Paterson said in a press event in Queens in the fall. "There's an old Jewish expression, I can't quote it, that man plans and plans and plans and God laughs. Because things change in a moment ... 24 hours in politics is a lifetime."

Statement from the Office of Attorney General Andrew M. Cuomo on the NYS Senate's Expulsion of Hiram Monserrate...

“We are gratified that the Court has confirmed our position that the Senate had the authority to expel Mr. Monserrate. The time for changing the culture of Albany is long past due. Today's ruling is a step in that direction. The Office of the Attorney General will continue to represent the Senate in this matter.”

NY State Attorney General Andrew Cuomo Endorses Bill Thompson for Mayor...

In another sign of the changing momentum, Bill Thompson gained another major endorsement today when Attorney General Andrew Cuomo endorsed him for Mayor in the Bronx.

The Attorney General cited Thompson’s lifelong commitment to addressing issues facing middle-class New Yorkers, including jobs, schools, the rising costs of housing, transportation, water rates, sales and property taxes. Cuomo praised Bill for his plans to make our city more affordable. Cuomo also complimented Bill’s vision for tackling the biggest challenges we are facing and cited his leadership as the reason why Bill is ready to lead New York during these difficult economic times.

Attorney General Cuomo said "Bill Thompson's years of dedicated public service, his vision for a better future for our City, and his commitment to improving the lives of working families are among the reasons why Bill is ready to lead New York during these difficult economic times"

“It is an honor to have the support of NY State Attorney General Andrew Cuomo,” said Bill Thompson. “Andrew is a great friend and has been an outstanding public servant. Andrew has helped move New York State forward and has ensured that no one is above the law and all New Yorkers are treated equal,” stated Thompson.

For the past eight years, our Republican mayor has prioritized the wealthy, developers and Wall Street – while ignoring the needs of working families across the city. Today, the result is a 16-year high unemployment rate, rising taxes and fees, and working families leaving the city because it’s become unaffordable. Bill Thompson will be a mayor who puts City Hall back on the side of working men and women.

On November 3rd, New Yorkers will have the opportunity to bring change to our City. Mike Bloomberg’s Republican policies have catered to the wealthy and special interests, while communities across New York City continue to struggle. When Bill Thompson takes office, he will be a Mayor for all New Yorkers.

Atty Gen Andrew Cuomo Endorses Elizabeth Crowley for Re-Election - Calls Crowley “The Kind of Leader that Middle Class New Yorkers Need”

Today, the Campaign to Re-elect Council Member Elizabeth Crowley is honored to announce that Attorney General Andrew Cuomo has endorsed Elizabeth Crowley for re-election to City Council. The endorsement adds to the growing momentum of support for Council Member Elizabeth Crowley’s grassroots campaign to fight for the middle class and working New Yorkers and to be the voice to address our neighborhood's needs.

“Elizabeth Crowley is the kind of leader that middle class New Yorkers need,” said Attorney General Andrew M. Cuomo. “Elizabeth has spent her career fighting hard for working people and getting results for Queens. We need Elizabeth in City Hall fighting for our neighborhoods and for hardworking New Yorkers.”

“I am honored to receive the endorsement from Attorney General Andrew Cuomo,” said Council Member Elizabeth Crowley. “Like me, Attorney General Cuomo comes from a family tradition of leadership and fighting for the rights and services of all New Yorkers. I am proud to have the support of Attorney General Cuomo who has remained committed to protecting the middle class, and creating jobs for the working people.”

Andrew Cuomo was elected the 64th Attorney General of New York State on November 7, 2006. As the highest ranking law enforcement officer in the State, Cuomo has prioritized public integrity and enhancing transparency in New York State government, as well as instigating a dramatic and historic expansion of the Civil Rights bureau within the Attorney General’s office. Throughout his time in office, Cuomo has focused on using individual cases collectively to identify the larger systemic problems with entire industries and then develop solutions that directly affect people’s lives. One notable case spearheaded by Cuomo took place in 2007 when he launched an investigated into widespread appraisal fraud within the mortgage industry, examining practices used by some of the country’s largest banks of pressuring appraisers to artificially inflate the value of homes. As a result of these investigations, Fannie Mae and Freddie Mac agreed to abide by new appraisal guidelines defined by the Attorney General and to fund an Independent Valuation Protection Institute to implement and monitor those guidelines. Another notable case took place in 2008 when Cuomo launched an industry-wide investigation into a scheme by health insurers to defraud consumers by manipulating reimbursement rates.

Attorney General Andrew Cuomo’s endorsement today of Council Member Elizabeth Crowley comes on the heels of the Italians for Crowley rally at Juniper Valley Park in which fifty Italian-American leaders vocalized their support for the re-election of Elizabeth Crowley to the City Council for four more years. Since being sworn into office in January 2009, Council Member Elizabeth Crowley has achieved numerous accomplishments, including but not limited to: rezoning over 300 blocks in Glendale, Middle Village and Maspeth to protect neighborhoods from over development; preventing 50 OBGYNS from closing their doors to women in need; securing millions in funds to expand mammogram programs and to ensure that breast imaging is covered by Medicare and Medicaid; and securing $2 million for local classrooms, making technology accessible for every student.

Queens Craigslist Call Girl Ring, Room Service Entertainment, Busted by Larry McShane - NY Daily News

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A Queens-based 24-hour-a-day call girl ring that advertised exclusively on craigslist was busted Wednesday with the indictment of seven people - including its co-owners.

The operators of Room Service Entertainment ran the prostitution business between June 2007 and December 2008, according to Attorney General Andrew Cuomo.

The 47-count indictment, unsealed in Queens County Court, named the ring's owners as Scott Rosenberg, 45, of Massapequa, L.I., and Josef Davenport, 31, of Brooklyn.

Five other bookers for the operation - all women, including a pair using the aliases "Nikki" and "Tina" - were also named in the indictment.

The company used craigslist to promote its business, posting under the "Erotic Services" section, Cuomo said.

Customers used the number in the ads to call the bookers, who arranged appointments and transportation for the hookers to meet the johns, the indictment said.

Room Service Entertainment had customers in all five boroughs, as well as Westchester County and Long Island, the indictment charge. It ran around the clock, seven days a week.

The operation, in its effort to avoid law enforcement, used code for its services: Clients could ask for a "GFE" (girlfriend experience) or inquire about "skiing" or "rock climbing" (drugs).

Under the top count of enterprise corruption, the defendants face up to 25 years in prison. Cuomo said authorities had phone records, physical surveillance and other evidence linking the defendants to the ring.

Comptroller Scandal: Crony Was Paid For Cohen’s Seat: AG Cuomo by Brian M. Rafferty - Queens Tribune

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Current Assemblyman Andrew Hevesi gained his seat only after an illegal payout to a political crony set in motion Assemblyman Mike Cohen’s move to a health industry job and pressure from then-Comptroller Alan Hevesi pushed for a quick special election, according to Attorney General Andrew Cuomo.

Raymond Harding, the former head of the New York State Liberal Party, was charged Wednesday with obtaining $800,000 in illegal fees from state pension fund in exchange for decades of political favors, one of which was facilitating Cohen’s departure from the Assembly.

“Harding helped [Michael Cohen] get a six-figure job at an insurance company to generate a vacancy in the Assembly seat,” according to Cuomo. An unnamed official in the Comptroller’s office, alleged to be un-indicted co-conspirator Jack Chartier, “helped arrange for the Queens Democratic Party to endorse Andrew Hevesi for the open seat. [Chartier] then met with an aide to [then-Gov. George Pataki] and requested that the Governor certify a special election for the vacant Assembly seat as quickly as possible, which would discourage competition for the seat. Andrew Hevesi was elected to the open Assembly seat in May of 2005.”

Cuomo was clear to point out that Andrew Hevesi was not aware of the deal that was cut to arrange for his seat. The criminal complaint also fails to clearly connect the dots between Harding receiving the money and his interceding to arrange the meeting between Cohen and HIP, which ended up giving Cohen a $150,000-a-year position in the insurer’s marketing department.

Andrew Hevesi had no comment on the indictment, but a spokesman was clear to point out Cuomo’s absolution of any knowledge the younger Hevesi may have had about the scheme. A Cohen spokesman said that the former Assemblyman would continue in his bid to replace Melinda Katz in the City Council.

The charges against Harding are the latest to come from Cuomo’s investigation into wrongdoing in Alan Hevesi’s office. A few weeks ago Cuomo secured indictments against Hevesi campaign consultant Hank Morris and the Comptroller’s Chief Investment Officer David Loglisci on 123 counts of corruption, fraud, money laundering, falsifying business records and grand larceny.

Alan Hevesi remains un-indicted, though in several sections of criminal complaints against all three, it appears that Chartier was acting under the direct orders of Alan Hevesi.

Hevesi was re-elected Comptroller in 2006, but quickly stepped down amid a scandal involving his un-reimbursed use of a state vehicle and chauffer to take his wife around town.

In the current investigation, in addition to his alleged influence in the Assembly seat, Harding is said to have been paid off for decades of political support on behalf of the Liberal Party, including for Alan Hevesi’s campaigns for Assembly from 1971-1993, Mayor in 2001 and State Comptroller in 2002.

According to Cuomo, Harding participated in a corrupt scheme devised by Hank Morris and David Loglisci to skew the process of selecting investments at the State pension fund to favor political allies, friends and family. “Morris and Loglisci allegedly made Harding a sham placement agent for three investments in order to repay him for past political favors to Hevesi,” Cuomo said. “Through investment deals with Paladin and Pequot, two private equity firms, Harding is charged with securing over $800,000 in sham placement fees.”

In May 2004 the state invested $20 million into Paladin Homeland Security, for which Harding received $300,000 in bogus placement fees, Cuomo said. In October 2005 and June 2006 the state pension fund invested $100 million into Pequot Diversified Offshore Fund, netting Harding $500,000 in bogus fees.

NYC Comptroller Bill Thompson Moves to Ban Placement Agents, Asks State Attorney General to Investigate Quadrangle Transaction

New York City Comptroller William C. Thompson, Jr, in the wake of continuing investment scandals involving the State pension fund, is calling for a ban on the use of placement agents in investments with the New York City Pension Funds.

Additionally, Thompson has referred to the New York State Attorney General the issue of whether the Pension Funds “were intentionally misled or deceived” as to the identities of any placement agents involved in an investment by the Funds in the Quadrangle Group.

The New York City Pension Funds invested $125 million in Quadrangle in 2005 and 2006, but at no time did the Pension Funds’ consultant ever identify Hank Morris or Searle & Company as a placement agent in that transaction. In fact, in a due diligence questionnaire issued by the Pension Funds’ consultant, Quadrangle identified Monument Group and Helix Associates Limited as the only placement agents.

“The recent indictment and felony complaint by the New York Attorney General and complaints filed by the Securities and Exchange Commission have called into question the conduct of certain entities and individuals that identified themselves or allegedly acted as placement agents in connection with investments made by the New York State Common Retirement Fund,” Thompson said.

“I am extremely troubled by the allegations and believe that such improper conduct underscores the need for broad and comprehensive reform nationally with respect to the activities of placement agents. At this time, the wisest course of action would be to immediately prohibit the use of such paid intermediaries in connection with our investments.”

Thompson has called a meeting with Pension Fund trustees – who ultimately must approve the prohibition on placement agents. “We need to prevent any recurrence of the type of egregious conduct detailed in the indictment and complaints,” he said.

“The Comptroller and the many other trustees of the New York City Pension Funds endeavor to invest with the highest quality managers, not just in terms of performance, but in terms of integrity and adherence to the highest ethical standards,” Thompson said. “We take any ethical lapses by our managers seriously and will consider any remedies available to investors, and would certainly view any confirmed instances of wrongdoing as a disabling factor in any consideration of future investments.”

Trustees of the Pension Funds include Mayor Bloomberg, his commissioners, and representatives and appointees from labor unions. The funds are the: New York City Employees’ Retirement System, Teachers’ Retirement System, New York City Police Pension Fund, New York City Fire Department Pension Fund, and Board of Education Retirement System.

The Comptroller serves as a member of the Board of Trustees of four of the five Funds and is investment advisor to, and custodian of, the five. The Funds cover more than 237,000 retirees and beneficiaries and more than 344,000 City and City-affiliated employees. The Funds have combined assets of more than $82.5 billion as of December 31.

The Comptroller said the Pension Funds’ assets are invested for the benefit of the plan participants and their beneficiaries. All assets of the Pension Funds are managed by registered investment advisors.

Besides Thompson, the New York City Pension Funds’ trustees (chairs in bold) are:

New York City Employees’ Retirement System: New York City Finance Commissioner Martha E. Stark (Chair); New York City Public Advocate Betsy Gotbaum; Borough Presidents Scott Stringer (Manhattan), Helen Marshall (Queens), Marty Markowitz (Brooklyn), James Molinaro (Staten Island), and Acting Borough President Earl D. Brown (Bronx); Lillian Roberts, Executive Director, District Council 37, AFSCME; Roger Toussaint, President Transport Workers Union Local 100; and, Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.

Teachers’ Retirement System: New York City Finance Commissioner Martha E. Stark (Chair); Deputy Chancellor Kathleen Grimm, New York City Department of Education; and, Sandra March, Melvyn Aaronson and Mona Romain, all of the United Federation of Teachers.

New York City Police Pension Fund: Mayor Michael Bloomberg; New York City Finance Commissioner Martha E. Stark; New York City Police Commissioner Raymond Kelly (Chair); Patrick Lynch, Patrolmen’s Benevolent Association; Michael Palladino, Detectives Endowment Association; Edward D. Mullins, Sergeants Benevolent Association; Thomas Sullivan, Lieutenants Benevolent Association; and, Roy T. Richter, Captains Endowment Association.

New York City Fire Department Pension Fund: Mayor Michael Bloomberg; New York City Fire Commissioner Nicholas Scoppetta (Chair); New York City Finance Commissioner Martha E. Stark; Stephen Cassidy, President, James Slevin, Vice President, Robert Straub, Treasurer, and John Kelly, Brooklyn Representative and Chair, Uniformed Firefighters Association of Greater New York; John Dunne, Captains’ Rep.; John J. McDonnell , Chiefs’ Rep., and James J. McGowan, Lieutenants’ Rep., Uniformed Fire Officers Association; and, Joseph Gagliardi, Marine Engineers Association.

Board of Education Retirement System: mayoral appointees Schools Chancellor Joel Klein (Designee, Kathleen Grimm, serves as co-chair), Alan Aviles, Philip Berry, David Chang, Tino Hernandez, Edison O. Jackson, Richard Menschel and Marita Regan; Patrick Sullivan (Manhattan), Wendy Gilgeous (Brooklyn), Joan Correale (Staten Island); and Dmytro Fedkowskyj (Queens); Anna Santos (Bronx); and employee members Joseph D'Amico of the IUOE Local 891 and Milagros Rodriguez of District Council 37, Local 372 (serves as co-chair).

Broad Channel Marina Owner Guilty of Dumping Sewage, Faces Jail by Brendan Brosh - NY Daily News

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A Queens Marina owner is facing four years in jail for dumping raw sewage into Jamaica Bay.

John Schmitt, 56, who owned Schmitt's Marina in Broad Channel, was convicted of discharging untreated waste from sinks and toilets into the fragile ecosystem, state Attorney General Andrew Cuomo announced Wednesday.

The conviction comes at the end a 20-year-old saga between Schmitt and various government agencies, which have accused him of unlawful use of city-owned land and illegal dumping.

"It's incredible that it took so long to shut him down," said Don Riepe, a local environmental activist and head of the American Littoral Society. "A lot of the agencies dropped the ball on this one. This goes way back."

The feds sued Schmitt's Marina in 1989, claiming he unlawfully expanded his family boatyard to create space for more than 200 boats. Schmitt's Marina was ordered in 1998 to remove tons of debris from the marshland.

Schmitt found himself in trouble again in February 2007 when the city said he damaged about 9 acres of marshland by polluting the area with fuel, concrete and other toxins. At the time, city sheriffs ordered him off the property at W. 19th Road.

This week's conviction was the result of a state probe launched two years ago.

"He's been under formal surveillance since July 2006," said a state official. "He illegally expanded his marina 600,000 square feet."

Schmitt's attorney said he's going to appeal the latest conviction.

"The city and state have conducted a vendetta against this guy for decades," said Michael Dowd. "This is a case over a toilet and a sink. There are people in Broad Channel today who still don't have sewer lines."

Schmitt has proved to be a divisive character in the tight-knit community.

"Sometimes justice takes a long time," said a person who owns a nearby home. "He was burying car seats, foam, springs and other debris. People barricaded the street so his trucks couldn't dump anymore. It still needs to be remediated."

Schmitt faces up to four years in jail and $200,000 in fines. He will be sentenced Oct. 28.

"John Schmitt's actions have been truly disgusting," Cuomo said. "If you blatantly disregard the environment in New York State, you'll end up cleaning up your mess in court."

Queens Man Dumped Sewage Into Jamaica Bay - North Country Gazette

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A Queens man has been convicted for discharging untreated sewage into Jamaica Bay.

John Schmitt, 56, owned and operated Schmitt’s Marina on the shores of Jamaica Bay in Broad Channel, Queens. Schmitt resided in the same building. The pipes from a sink and the toilets in the building flushed directly into Jamaica Bay, in violation of New York’s Environmental Conservation Law.

Schmitt also owned and operated a telephone answering service at a second building nearby, where the toilet was connected to a pipe that discharged onto the ground and into the groundwater. The pipe had been concealed beneath pieces of old wood and raw sewage had been sitting on the ground beneath it, according to the Attorney General’s office.

The two buildings are located a short distance from a designated tidal wetlands area, and Schmitt was also convicted for digging a trench on the tidal wetlands and attempting to drain it without a permit. These areas are environmentally sensitive and provide habitat for a variety of birds, fish, and other wildlife, in addition to providing protection from storm surges and flooding.

Finally, when law enforcement personnel executed a search warrant at Schmitt’s building seeking evidence of his environmental crimes, they found him to be in possession of an unlicensed firearm.

Schmitt was convicted of two class E felonies, a misdemeanor, and two violations for his environmental crimes. He was also convicted of a misdemeanor for the criminal possession of a weapon. He faces up to four years in jail and up to $200,000 in fines. Sentencing will occur on Oct. 28. 9-24-08