Vincent Leibell and the Corruption of Power

Vincent L. Leibell III, the former New York Republican state legislator, stands as yet another example of a politician who started out with idealistic intentions and then gradually gave in to the temptations of greed, abusing his power for personal gain. 

Leibell pleaded guilty in December to obstruction of justice and tax evasion. You can read the full federal complaint against him here.

Leibell was not a likely figure to end up before a judge. His father had been a prosecutor in New York City who went after the mob. And Leibell had followed the call of public service. He gave back to his community not only as a dedicated legislator, but through involvement in non-profit foundations. 

But, as so often seems to happen, his values changed somewhere along the line and he allegedly became deeply involved in various corrupt activities and deals. As the New York Times reports:

In the end, everything about Mr. Leibell is now being questioned: that $1.4 million mansion with the adjacent land declared parkland, the foundations with the extravagant legal bills that turned out to be paths toward kickbacks, the remarkably low land price he managed for the senior housing his foundation is planning, the kingmaker role now up for grabs.

Blair Horner, of the New York Public Interest Research Group, said that the Leibell case should push ethics reform back to the front burner in Albany:

It is critical that ethical changes must be made. After all, New Yorkers should not have to rely on the FBI or the Attorney General to police ethics.  Taxpayers already pay for ethics and lobbying oversight.  We should start getting our money’s worth.

Fixing the ethics and lobbying laws must be a top priority of the governor and the legislature once they convene next month.

The specific actions that brought Leibell down were recounted by federal authorities in a press release around his plea:

Since April 2010, a federal grand jury sitting in the Southern District of New York, the FBI, and the IRS had been investigating allegations that, as a New York state senator, LEIBELL had unlawfully extorted cash payments from attorneys doing business in Putnam County under color of official right. The investigation focused on whether LEIBELL had demanded and received cash payments from an attorney, described in the Information as Attorney #1, who provided legal services to a Putnam County based not-for-profit organization (the "NFP") that received millions of dollars in New York state senate member item grants that LEIBELL sponsored as a state senator. According to the Information, the investigation focused on whether LEIBELL had threatened to cause the NFP to refuse to pay the invoices ATTORNEY #1 submitted to the NFP for legal services that ATTORNEY #1 had rendered to the NFP unless ATTORNEY #1 agreed to give half of the invoiced amount of money to LEIBELL in cash.

LEIBELL became aware of the investigation in late April 2010 when FBI and IRS agents began approaching, subpoenaing, and interviewing witnesses about the allegations. After LEIBELL learned about the investigation, he began meeting with ATTORNEY #1 to discuss what ATTORNEY #1 should say when approached by federal agents.

On June 6, 2010, at LEIBELL’s request, ATTORNEY #1 met with LEIBELL on a street in Carmel, New York, to discuss the pending federal investigation. During the June 6, 2010 meeting, LEIBELL repeatedly directed ATTORNEY #1 to lie to federal investigators about the cash payments ATTORNEY #1 had previously made to LEIBELL. LEIBELL instructed ATTORNEY #1 to falsely say: (1) that he had never made cash payments to LEIBELL; (2) that when investigators question him about cash withdrawals ATTORNEY #1 made from his bank account to pay LEIBELL, ATTORNEY #1 should falsely say that he withdrew the money to have around in case of a national or family emergency and that he used the money for living expenses, including caring for his elderly mother.

During the meeting, LEIBELL repeatedly urged ATTORNEY #1 to maintain their false denials: "You and I say there was never any cash relationship. Period... Since you and I are in agreement, it didn’t happen... All I know is, as long as you and I are consistent, I’m fine, you’re fine. There was never any cash between you and I, Okay?"

During the plea allocution, LEIBELL also admitted to filing false federal income tax returns with the IRS for the tax years 2003 through 2006. LEIBELL acknowledged that he failed to report at least $43,000 in cash he received during these years from ATTORNEY #1 and ATTORNEY #2, also mentioned in the Information, both of whom did business in or for Putnam County. LEIBELL also acknowledged that he failed to advise the accountant preparing his income tax returns that he had received the cash payments.

The Fall of Pedro Espada

After pleading not guilty to five charges of stealing more than a half million dollars from his Bronx network of healthcare clinics, Pedro Espada, Jr. -- the former New York State senator and a longtime power player -- took a moment to talk to reporters. His remarks were a reminder of the idealism that once seemed to guide Espada. 

The clinics he founded, said Espada, had "provided millions of visits over those years to people who would otherwise go without care." 

All very true. And there lies the great irony of Pedro Espada's life and career. This was not a man who set out to become rich or focus strictly on his own needs. Espada is man who worked hard to take care of the desperately poor people in his Bronx neighborhood. In the 1970s, he had been a community organizer both to the ease the poverty of New York's poorest people but also to increase their sense of empowerment. (Read more about his story here.)

Yet somewhere along the line, Espada turned. And, according to authorities, he began to enrich himself at the expense of the people he had dedicated his career to serving. It always hard to say what why dedicated public servants go wrong. Maybe it is a sense of entitlement -- a feeling that they deserve more financial rewards for their accomplishments. Maybe it is a sense of real financial need. Maybe it is a corruption so slow that even they don't notice -- whereby the division between their work and the personal expenses fades away in their mind and becomes one. In any case, here is what the government alleged in indicting Espada:

The various schemes allegedly executed by the defendants to convert Soundview income and assets include the following:

■ Pedro Espada caused Soundview to pay charges for his personal expenses on the Soundview corporate American Express card; those charges included: more than $100,000 in personal meals for Pedro Espada and his family members, window treatments for Pedro Espada’s home, and tickets to Broadway shows and sporting events;

■ Pedro Espada and Pedro Gautier Espada used a for-profit janitorial company known as Community Expansion Development Corporation (CEDC) and controlled by them to divert funds from Soundview and then spent such funds for personal use and political expenses; those expenses included: the rent for Pedro Espada’s campaign headquarters, printing costs for campaign materials, heating and air conditioning work done on Pedro Espada’s home, pony rides and a petting zoo for a family member’s birthday party, and a $49,000 check Pedro Espada attempted to use as a downpayment on a Bentley automobile;

■ Pedro Espada and Pedro Gautier Espada diverted rental payments owed to Soundview to two different entities – CEDC and another for-profit janitorial company known as Soundview Management Enterprises (SME) and also controlled by them, and thereafter used such funds to pay personal expenses for themselves and family members; and

■ Pedro Gautier Espada rigged the awarding of a Soundview janitorial services contract by providing false contract requirements to other bidders, thereby ensuring that SME was awarded the contract at an inflated price, thus enriching himself and Pedro Espada.

The total amount allegedly embezzled by the defendants exceeded $500,000.

“The indictment alleges that funds that could and should have been applied to purchase medical equipment and enhance health care services for an historically under-served population were diverted by the defendants for their personal use and to benefit friends and family members,” stated United States Attorney Lynch. “In these difficult economic times, the charged crimes are all the more reprehensible.” Ms. Lynch added that the government’s investigation is continuing.

In April 2010, Andrew Cuomo had made similar charges against Pedro Espada, but in the context of lawsuit. Cuomo's complaint was striking in that it alleged that a huge web of Espada's relatives and friends benefited from, or enabled, his actions. Here's the list provided by Cuomo:

The individuals named in today’s suit are:

• Pedro Espada, Jr., President and CEO of Soundview, Bronx NY and Mamaroneck, NY
• Kenneth T. Brennan, Vice President of Finance and CFO, Tarrytown, NY
• Lydia Almeyda, Bronx, NY
• Barbara Braxton, Bronx, NY
• Constance Bruno, Woodridge, NY
• Jacqueline Collazo, Bronx, NY
• Beverly Crosby, New York, NY
• John Feliciano a/k/a Juan Feliciano, address unknown
• Victor Feliciano, Bronx, NY
• Marzetta Harris, Bronx, NY
• Monica Harris-Coleman, New York, NY
• Evette Maduro Pagan, Bronx, NY
• Charlotte McDuffie, Bronx, NY
• Lidisbelle Pacheco, Yonkers, NY
• Lourdes Rivera a/k/a Lourdes Mocete a/k/a Lourdes Espada, Fairfield, CT
• Victor Sierra, address unknown
• Genoveva “Jenny” Torres, Bronx, NY
• Jeanette Torres, Mamaroneck, NY
• Andrew Yong, New York, NY

Doris Yong, Forest Hills, NY

Charlie Rangel's Personal Culture of Corruption

The ethics charges continue to pile up for disgraced-but-still-electable New York Congressman Charlie Rangel, who is now being accused of misusing his campaign funds for his legal defense. If anyone needs more proof that Rangel intentionally engaged in questionable professional behavior throughout his 21-term (and counting) career, I recently found some in the Ed Koch’s political memoir, Mayor, published in 1984.

Early in the book, Koch recounts an incident in 1975, when Koch and Rangel were both members of the House of Representatives. The Federal Government, concerned that the drug programs administered by the city are incompetently run and prone to waste, decides to investigate. The man in charge of the programs, Jerome Hornblass, contacts both Koch and Rangel, urging them to fight the Federal Government on the issue. Koch recounts:

Charlie’s response was, “Well, the Feds may be right, but we still have to get this money for the drug programs.”

I said to him, “Look there are a lot of allegations relating to these programs that the Federal Government finances. Why don’t we do a study on them? If they are bad, let’s end them. Or change them.”

Rangel said, “No, we don’t want them to do any study of our programs and possibly lose us the funding. If they’re going to do a study, let them study the whole country. Maybe some programs are bad in the whole country, but we have to get our share of the funds.”

Rangel’s attitude reminds me of a line from The Wire, “You’d rather live in shit than have the world see you work a shovel.” If Koch’s account is accurate, even back in 1975 Charlie Rangel was prone to take the easiest, most politically beneficial path, and avoid tough choices that might harm his constituents or his re-election chances in the short term. It’s pretty easy to see the Rangel from Koch’s book taking the unethical shortcuts that Rangel has been accused of taking. It’s also easy to see how Rangel earned those 21 terms of his.