NY Assembly Leader Sheldon Silver Arrested: Obama Payback?

Sheldon Silver

In a development that some believe may be a little housekeeping before President Barack Obama leaves office is the arrest of New York Assembly Speaker Sheldon Silver on charges that he traded influence for millions in kickbacks and bribes over the past 10 years.

Mr. Silver, a Democrat who represents the Lower East Side of Manhattan area of the Empire State has served as speaker for more than 20 years. During that time, he has used is his power to intimidate colleagues, reward allies and allegedly enrich himself in the process.

The charges arise from what prosecutors say was a series of schemes to collect bribes and kickbacks from a prominent cancer doctor and a personal injury law firm in exchange for research grants, official state recognition and referrals – an amount of money that the charging documents say exceeded $6 million during the life of the schemes.

Prosecutors allege that Silver used his position to direct state research grants to a prominent oncologist who referred asbestos related cancer patients to a law firm where Silver said he worked that paid him for the referrals even though he provided no legal services to the firm.

Another charge involved helping real estate developers win tax breaks.

Mr. Silver, 70, turned himself in to federal authorities at the Federal Bureau of Investigation (FBI) last Thursday in Lower Manhattan. Preet Bharara, United States attorney for the Southern District of New York brought the charges.

Mr. Bharara said Mr. Silver made “a nice profit on being a public official” adding “politicians are supposed to be on the people’s payroll, not on secret retainer to wealthy special interests they do favors for.”

Prior to the federal investigation but after evidence surfaced that Silver was involved in illegal activity, Gov. Andrew M. Cuomo, a fellow Democrat and political ally, created a special anti-corruption group known as the Moreland Commission to root out corruption in state government.

This past March, Gov. Cuomo abruptly shut down the commission after it had issued subpoenas in an investigation into the outside income earned by lawmakers including Silver that Silver sought to challenge in court.

It was apparent to many observers that Cuomo saw where the investigation was going and pulled the plug before evidence could be presented against Silver or depositions taken under oath.

The plot thickens.

Back in 2008, when the Senator’s Hillary Clinton and Barack Obama were locked in a no holds barred battle to win the Democratic Party presidential nomination, Speaker Silver – already the most powerful Democratic establishment politician in the state – through his weight behind Clinton. Silver’s action allowed Clinton’s candidacy to remain viable in the weeks leading up to the 2008 Democratic Convention in Denver, Colorado.

So when Gov. Cuomo ended the political corruption investigation just as investigators were closing in on Silver, Obama’s Justice Department under Attorney General Eric Holder was passed the baton in the investigation.

Some believe this is payback for Silver’s early support for Clinton during the 2008 nomination fight – and investigation and prosecution launched while there is still time to sink Silver while President Obama remains in office.

The New York State Assembly canceled its session last Thursday so Democratic leaders could plan their course of action in the wake of the indictment.

Silver’s lawyers, Joel Cohen and Steven Molo, said in a statement: “We’re disappointed that the prosecutors have chosen to proceed with these meritless criminal charges. That said, Mr. Silver looks forward to responding to them — in court — and ultimately his full exoneration.”

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.” … “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 charging document 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.”

Quoting a story by William K. Rashbaum, Thomas Kaplan and Marc Santora in last Thursday’s issue of The New York Times, Silver 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 authorities seized approximately $3.8 million of Mr. Silver’s money on Thursday morning adding credence to the old adage – what goes around, comes around.