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State Sen. Malcolm Smith (D-St. Albans) was arrested Tuesday morning on charges of orchestrating a wide-ranging bribery scheme to get himself on the Republican ballot for mayor while City Councilman Dan Halloran (R-Whitestone) was indicted as Smith’s deal broker while seeking extra kickbacks for himself, the Manhattan U.S. attorney said.
The two were involved in a web of alleged kickbacks that centered around Smith’s ambitions for Gracie Mansion, although Halloran envisioned himself as the deputy police commissioner or deputy mayor in Smith’s fantasy administration, according to a criminal complaint released from Manhattan federal court.
Queens County Republican Party Vice Chairman Vince Tabone was also arrested for allegedly accepting $25,000 to help get Smith on the ballot as a Republican, Preet Bharara, the U.S. attorney in Manhattan, said.
Smith, Halloran and Tabone were charged with corruption, bribery and several counts of wire fraud. Smith and Halloran face a maximum sentence of 45 years in prison each for all of the charges, according to prosecutors, while Tabone faces a maximum of 25 years behind bars if they are found guilty.
Smith agreed to steer $500,000 in state transportation money to an upstate project in exchange for the bribes paid on his behalf, according to the complaint, and in total Halloran allegedly accepted upwards of $60,000 in bribe money.
“That’s politics, that’s politics,” Halloran was recorded saying by an informant working for the FBI in September, according to the criminal complaint. “Not about whether or will, it’s about how much. And that’s our politicians in New York — they’re all like that because of the drive that money does for everything else. You can’t do anything without the [expletive] money.”
Halloran’s words figured large into a news conference held by U.S. Attorney Preet Bharara Tuesday morning, when he detailed the suspected bribes that were supposed to be paid to Republican leaders to get Smith on the ballot and how Halloran allegedly made them happen.
“These words should echo in the ears of every New Yorker who holds onto the dream of an honest government,” Bharara said, referring to the numerous corruption scandals that have plagued the city and state in the past several years.
Halloran’s office did not return a call asking for comment.
The alleged scheme basically took place in three parts. One part involved Halloran and the Republican leaders, and another involved two upstate officials that were allegedly involved in the fake real estate scheme, Bharara said.
“You have all these people circling around, and then you have Malcolm in the middle,” the Manhattan prosecutor said at the news conference.
Smith’s alleged role revolved around the fact that he is a registered Democrat, but wanted to run for mayor as a Republican. To do so, he needed three out of the five county GOP leaders to sign a certificate called a Wilson Pakula, according to the complaint.
Smith engaged in conversations with two men he thought were real estate developers, and who could help him obtain the certificates from county organizations open to accepting bribes, the complaint alleged.
Those real estate developers were actually working with the FBI — one as an undercover agent and another as a cooperating witness — and had several recorded conversations with Smith in hotel rooms and restaurants about the $500,000 in state transportation funds Smith allegedly agreed to provide to them for a fake project in Rockland County in exchange for financing the bribes. As recently as March 21 Smith had expressed his “crystal clear” desire for the mayor’s office, the complaint said.
On that day, Smith was recorded telling the undercover agent and cooperating witness that — after they had allegedly paid some money to Republican leaders — that no one should get any more money until they stand “on the Empire State Building and drop every person [he] endorsed and hold Malcolm up and say he’s the best thing since sliced bread. Matter of fact, he’s better than sliced bread.”
Smith’s office released a statement praising the lawmaker’s 13 years of service to the community and saying in part: “He will be vindicated when all the facts in the case are revealed.”
A second portion of the scheme involved the role of Halloran as an alleged deal maker along with Smith and in an unrelated action involving his failed bid to run for Congress in 2012.
The undercover agent and cooperating witness on numerous occasions met with the councilman, who Bharara described as the man who “essentially quarterbacked [the] drive by finding party chairmen who were wide open to receiving bribes.”
Halloran negotiated both the meetings between the cooperating witness, the undercover and the Republican leaders — for which he received $20,500 — and he also negotiated the amounts of the bribes for the Wilson Pakula certificates, the complaint alleged.
One of those county leaders was Tabone, according to the complaint, who allegedly accepted a $25,000 cash bribe in February with the promise of $25,000 more after the certificate was signed. Tabone at one meeting even patted down one of the men working for the FBI to check if he was wearing a wire, Bharara said at the news conference.
Tabone had been working on the campaign of Republican mayoral candidate John Catsimatidis, who the Queens party had endorsed. Catsimatidis said in a Twitter post that he had previously known about the investigation and had cooperated.
Bronx Republican Chairman Joseph Savino was also charged in the complaint, though Bharara went out of his way at the news conference to emphasize that Queens Republican Party Chairman Phil Ragusa had not been implicated.
“Nothing in the complaint makes a detailed reference to the party chairman,” he said.
Separately, Halloran also allegedly negotiated bribe money for his unsuccessful congressional campaign last year, according to the complaint.
Halloran allegedly told the cooperating witness and the undercover agent that he would steer city member items to them — in the form of a no-show consulting job at a Queens senior center paid to the pair’s fake company — in exchange for about $18,000 in cash and $6,500 in straw donations to his campaign, the complaint said.
Halloran lost in a general election to now U.S. Rep. Grace Meng (D-Bayside) in November.
The cooperating witness initially asked for $20,000 in city discretionary funds, according to Bharara, but Halloran said that he could likely deliver more.
“Halloran was true to his word, and agreed to direct $80,000 to a company he believed was controlled by the cooperating witness and the undercover,” Bharara said.
The last piece of the scheme had to do with the fake project in upstate Spring Valley that Smith allegedly believed the cooperating witness and undercover agent were trying to get pushed through the Legislature and that he allegedly pledged to steer $500,000 in state funds towards in exchange for the pair financing the bribes, the prosecutor said.
Spring Valley Mayor Noramie Jasmin and Deputy Mayor Joseph Desmaret were both named in the complaint. Jasmin allegedly wanted a silent partnership in the fake project in exchange for ushering it through a public review process, while Desmaret allegedly sought a bribe to make the project happen, according to the complaint.
Reach reporter Joe Anuta by e-mail at email@example.com or by phone at 718-260-4566.
©2013 Community Newspaper Group
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