The U.S. attorney's office produced this chart showing NYS Assembly Speaker Sheldon Silver's reported income over the period 2002-14 as well as income from law firm Weitz and Luxenberg and an unnamed real-estate law firm that has been identified as Goldberg and Iryami.
*Silver's reported income only includes payments from Weitz and Luxenberg. Records from 2002 and 2003 are incomplete, and Silver's 2014 income report was not included in court files.
Officially, as I promised last night, we're supposed to be looking at the question, "What do "Smelly Shelly" Silver and not-quite-humbled Russian ex-oligarch Mikhail Khodorkovsky have in common?
But first I think we have to make sure that non-New York Staters -- and probably even many New Yorkers -- grasp the magnitude of the convulsions in the Empire State with the arrest and indictment Thursday of Assembly Speaker Sheldon Silver
, a guy they may never even have heard of? After all, as far as I'm aware Shelly never really sought the limelight. It seems to have been enough for his purposes that the people who mattered knew who he was. For those people, if there's any truth to the allegations in the five federal counts lodged against him by U.S. Attorney Preet Bharara, his name was enough to make unseemly quantities of dollars move, many of them unrelated to the workings of government, with millions of those dollars landing in his personal accounts.
It's traditional to describe the clout of the NYS Assembly speaker in terms of the storied "three men in a room," the others being the governor and the Senate majority leader, the three men who, going back to the days of Gov. Nelson Rockefeller, pretty much hammered out the state budget, and most other legislative initiatives, amongst them. What's more, for decades the system was arranged so that the Assembly was controlled by Democrats and the Senate by Republicans. As long as everyone understood the system, it wasn't hard to rig with some hard-headed gerrymandering every time the legislative redistricts had to be redrawn.
Obviously that didn't leave a whole lot for Assembly Republicans or Senate Democrats to do, but there were enough financial rewards in the way legislative cash was disbursed to keep them reasonably content, and there was lots more cash disbursed to Assembly Democrats and Senate Republicans as they carried out the will of, you know, the "three men in a room." Who, you'll notice were pretty well guaranteed to be of different parties. Yes, bipartisanship was rigged into the system! Governor Rockefeller himself, of course, tended to get whatever he wanted whenever he wanted it. Later governors had to manage to work with one legislative solon of the opposite party.
More recently, however, the system began to break down, notably as the state Republican party began to crumble, not helped by the national trends in Republicanism. Oh, the NYS GOP has always had its share of far-righters, though they might not throw the proper scare into other states' far-righters. They were there, and we even had our own Conservative Party to keep the GOP in line. But Nelson Rockefeller obviously wasn't any kind of right-winger, and the NYS GOP embraced a wide political spectrum that ran well to the center (and I mean the old
center) and beyond, easily enough encompassing people like Sen. Jacob Javits and NYC Mayor John Lindsay.
The slide of the NYS GOP reached a point where not only did it become hard to field credible statewide candidates, but the storied party grip on the state Senate bergan to loosen. Eventually, for only the second time in living memory, Democrats actually won control of the Senate. (I remember the first time fairly well. Howie and I were seniors in high school in Brooklyn, which means dinosaurs had only recently trod the earth.) Of course Senate Democrats once again proved wholly unequal to the job of trying to run the place; you may be familiar with the recent follies whereby greedy and/or crackpot Dems joined the useless mass of Senate Republicans to form their own little Senate majority.
The decline of the NYS Senate Republican caucus had a perhaps less noticed consequence. It meant that the Senate majority leader, though obvious still a person of great consequence, since after all every piece of legislation that passed through the legislature, including authorization for spending every dollar of state money, required the consent of the Senate. Bu† the majority leader wasn't quite the colossal figure he once was. (By the way, I can keep saying "he" in connection with these mighty figures because the "three men in a room" have still always been men. Oh, we have women in our state legislature, both houses, but they don't get much of a cut of the power.)
Whereas, you'll recall, Shelly Silver has been running the Assembly since February 1994. And so, while his governmental power is theoretically equivalent to that of the Senate majority leader, in reality it isn't. It's significantly larger.
And now let's go back and take a closer look at the chart atop this post. Note the time frame studied by the office of the U.S. attorney for the Southern District of New York. The period covered is 2002-14. Let me stress again the presumption of innocence. Nothing has been proved yet either in a court of law or a plea-bargaining hideaway. But you don't have to look all that closely at the federal indictment to see that the charges concern misbehavior that looks: (a) massive, (b) appalling, and (c) extremely well-documented.
LET'S REVISIT THE CASE
Here is some of how it was described Thursday by the NYT team
of William K. Rashbaum, Thomas Kaplan, and Marc Santora:
In a statement, Richard Frankel, the F.B.I. special agent in charge, said, “Those who make the laws don’t have the right to break the laws.”
“As alleged, Silver took advantage of the political pulpit to benefit from unlawful profits,” he said. “When all was said and done, he amassed nearly $4 million in illegitimate proceeds and arranged for approximately $500,000 in state funds to be used for projects that benefited his personal plans.”
The criminal complaint outlining the charges accuses Mr. Silver of “using the power and influence of his official position to obtain for himself millions of dollars of bribes and kickbacks masked as legitimate income.”
He is charged with honest services mail and wire fraud, conspiracy to commit honest services mail fraud, extortion “under the color of law” — using his official position to commit extortion — and extortion conspiracy.
The complaint maintains that for more than a decade, Mr. Silver devised a scheme “to induce real estate developers with business before the state” to use a real estate law firm controlled by a lawyer who had once worked as Mr. Silver’s counsel. That lawyer, according to the complaint, orchestrated payments to the speaker for referrals to the firm.
The complaint, referring to the personal injury firm, Weitz and Luxenberg, also said that “there is probable cause to believe that Silver received approximately $4 million in payments characterized as attorney referral fees solely through the corrupt use of his official position.”
Prosecutors, according to the complaint, said Mr. Silver did no work for the payment. Investigators could find no court appearances by him and no records at either law firm that showed he had done any legal work whatsoever, except for one case in which he represented an employee of the Legislature in a property dispute, but took no fee.
Then there was this:
While it is legal for lawmakers, who work part time, to hold outside jobs, investigators said Mr. Silver failed to list all the payments from the Goldberg firm and Weitz and Luxenberg on his annual financial disclosure filings with the state.
The real estate firm is led by Jay Arthur Goldberg, 75, who once served as Mr. Silver’s counsel and also on New York City’s Tax Commission during the administration of Mayor Edward I. Koch.
In the past, Mr. Silver has been criticized for his outside law practice, a lucrative career that supplements the $121,000 he earns as speaker.
In 2013, on his most recent financial disclosure filing, Mr. Silver listed at least $650,000 in law practice income, including work for the personal injury law firm, Weitz and Luxenberg.
But what he does to earn that income has become one of Albany’s enduring mysteries, and Mr. Silver has refused to provide details about his work aside from saying the bulk of his work was as a personal injury lawyer.
The complaint said Mr. Silver was credited with referring more than 100 clients to the firm, the majority for potential asbestos litigation. Investigators, however, spoke with more than 10 of those individuals or their surviving relatives and found that none had ever contacted Mr. Silver to seek legal representation, nor had they been contacted by him or knew of any role he played in providing any legal service.
Remember too that when the feds went to impound a chunk of Smelly Shelly's cash, they don't seem to have had any trouble finding "approximately $3.8 million" lying around available for seizing -- and they don't seem to have had any trouble getting legal authority to do so. Now this isn't Koch Bros. kind of dough, but for the leader of one house of a state legislature to have racked up from, allegedly, blatantly corrupt use of his office, it seems to me a lot.
For now I would just direct attention to one other thing about Smelly Shelly's alleged misbehavior: that it isn't alleged to have taken hold, at least in a way that would draw the attention of federal prosecutors, until he had been speaker for going on a decade. What is it they say about all power corrupting but absolute power corrupting absolutely?
I promised yesterday that I would explain why it seems to me not only proper but almost to refer to Smelly Shelly as Smelly Shelly. It's something that I doubt would have occurred to me or anyone else on, say, Wednesday. Wednesday Shelly was still riding high. But everything changed Thursday.
Anyone who has spent time on a playground with a kid named Sheldon may have had the experience of discovering that fate has ordained him to be called "Smelly Shelly." On Thursday when FBI Special Agent Richard Frankel's team collared our Shelly, he officially became Smelly Shelly. For better or worse, legal presumptions don't affect the smell.
I KNOW WE HAVEN'T GOTTEN YET TO RUSSIAN
ONETIME OIL MOGUL MIKHAIL KHODORKOVKSY
Which I also promised yesterday. It'll take us another post to get there. But maybe you'll see where we're heading with this quote from Julia Ioffe's profile in the January 12 New Yorker
. Before Khodorkovsky was brought down by Russian strongman Vladimir Putin, you'll recall, he had at a remarkably young age amassed a fortune that made even the fortunes amassed by the other rampaging oligarchs look ho-hum. And today, while he remains, as Ioffe puts it, "unapologetic," he's a little, um, defensive about what he did. He told Ioffe:
When people say, ‘It was impossible to live back then without violating the law,’ I say, ‘Come on, don’t make me out for a fool,’ ” he said, with a sneer. “When there are so few laws and they’re so imperfect, you have to be a total idiot not to be able to find a way to do what you want without violating the existing laws.”
He had only taken colossal advantage of a nearly lawless landscape. “Back then, I didn’t grasp the fact that people of a slightly older generation than me simply couldn’t adequately assess the opportunities in front of them,” he said. “In this case, we are—or I was—also victims of the same problem. Because we got property but in a flawed way.”
He went on, “We weren’t the Rockefellers, but we weren’t modern Americans, either.”
Labels: Culture of Corruption, New York State