NY Assembly Speaker Arrested for Accepting $4 Million in Bribes

Originally published on January 25, 2015, at NationofChange.org

The FBI arrested New York Assembly Speaker Sheldon Silver on Thursday charging him with multiple counts of conspiracy, fraud, and extortion. Accused of accepting roughly $4 million in bribes and kickbacks, Silver allegedly abused his position by providing state funding and other benefits to the highest bidders while funneling the dirty money through two corrupt law firms. After Silver convinced Governor Andrew Cuomo to terminate the commission investigating his illegal activities, a lobbyist and close friend of Silver decided to cooperate with the Justice Department by testifying against him.

Elected to the New York State Assembly in 1976, Silver has been Speaker since February 11, 1994. By soliciting and obtaining client referrals worth millions of dollars in exchange for official favors, Silver allegedly abused his power over the real estate industry and healthcare funding. Instead of reporting the bribes, Silver attempted to disguise the money as legitimate income earned from his work at the two law firms accused of laundering his kickbacks.

For steering real estate developers with business before the state legislature to a law firm run by a co-conspirator, Silver received approximately $700,000 in kickbacks. Although Silver had performed no legal work to earn those payments, the law firm Goldberg & Iryami received millions of dollars in legal fees from real estate developers. Goldberg & Iryami reportedly paid Silver to use his official power and influence to refer potential clients to their firm.

In a separate scheme, Silver allegedly awarded $500,000 in state grants to the university research center of a physician who referred asbestos patients to the personal injury law firm where Silver has worked for over a decade. After receiving $500,000 in state grants, the Director of Columbia University’s Mesothelioma Center, Dr. Richard Taub, referred possible asbestos victims to Silver’s other law firm, Weitz & Luxenberg. Acquiring the majority of its revenue from asbestos litigation, Weitz & Luxenberg ended up paying Silver $3.9 million for the referrals and $1.4 million in salary even though he does not perform legal work for the law firm.

“Over his decades in office, Speaker Silver has amassed titanic political power,” stated U.S. Attorney Preet Bharara. “But, as alleged, during that same time, Silver also amassed a tremendous personal fortune – through the abuse of that political power. All told, we allege that Silver corruptly collected some $4 million in bribes and kickbacks disguised as ‘referral fees.’ Those disguised bribes and kickbacks account for approximately two-thirds of all of Silver’s outside income since 2002.”

“Politicians are supposed to be on the people’s payroll, not on secret retainer to wealthy special interests they do favors for,” Bharara continued. “These charges go to the very core of what ails Albany – a lack of transparency, lack of accountability, and lack of principle joined with an overabundance of greed, cronyism, and self-dealing.”

Created by New York Governor Andrew Cuomo in 2013, the Moreland Commission to Investigate Public Corruption was suspiciously shut down the following year as the commission began issuing subpoenas to Silver and others with ties to Gov. Cuomo. After Cuomo disbanded the commission, U.S. Attorney Bharara took over the files and launched investigations into the commission, possible interference by the governor’s office, and Silver.

A close friend of Silver and top lobbyist at Meara Avella Dickinson, Brian Meara helped the feds to take down Silver. In exchange for a non-prosecution deal, Meara is scheduled to serve as a witness against Silver. According to the criminal complaint, Silver convinced billionaire developer Leonard Litwin and an associate to hire the law firm run by Jay Arthur Goldberg & Dara Iryami in order to funnel kickbacks using his political influence. Meara had been representing Litwin during the scandal.

“As alleged, Silver took advantage of the political pulpit to benefit from unlawful profits,” said FBI Special Agent-in-Charge Richard Frankel. “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. We hold our elected representatives to the highest standards and expect them to act in the best interest of their constituents. In good faith, we trust they will do so while defending the fundamental tenets of the legal system. But as we are reminded today, those who make the laws don’t have the right to break the laws.”

Silver has been charged with two counts of honest services fraud, one count of conspiracy to commit honest services fraud, one count of extortion under color of official right, and one count of conspiracy to commit extortion under color of official right. He faces a maximum penalty of 100 years in prison.

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