Attorney General Eric T. Schneiderman and NYPD Commissioner
Raymond W. Kelly today announced the indictment of 16 members of a
criminal ring that flooded New York City, Albany County and Schenectady
Video by Rafael Martínez Alequín
YORK – Attorney General Eric T. Schneiderman and NYPD Commissioner
Raymond W. Kelly today announced the indictment of 16 members of a
criminal ring that flooded New York City, Albany County and Schenectady
County with more than a million cartons of untaxed cigarettes illegally
imported from Virginia. A 244-count indictment, unsealed in Brooklyn
Supreme Court, charges 16 co-conspirators with enterprise corruption,
money laundering and related tax crimes. Each of the defendants faces up
to 25 years behind bars.
a 12-month investigation, law enforcement seized more than 65,000
forged NYC/NYS cigarette tax stamps that were not yet affixed to packs
of cigarettes, and nearly 20,000 cartons of untaxed cigarettes. The
investigation, which has so far uncovered $55 million in illegal
cigarette sales, is continuing. While it hasn’t been established yet
where the illicit proceeds ended up, similar schemes have been used in
the past to help fund organizations like Hamas and Hezbollah.
cheating New Yorkers out of tens of millions of dollars in tax revenue,
this dangerous criminal ring was able to generate astounding profits
that we are still continuing to trace,” said Attorney General Schneiderman.
“Not only did this organized crime ring hurt law abiding mom-and-pop
shops and other businesses in New York by putting those who do pay taxes
at a competitive disadvantage, there is a very real concern about the
possibility of violence related to this type of enterprise. I am
committed to putting criminals like this behind bars.”
Police Commissioner Raymond W. Kelly
said, “The association of some of the suspects in this case to the Ari
Halbestram’s killer, the Blind Sheik and a top Hamas official concerns
us. While it hasn’t been established yet where the illicit proceeds
ended up, we’re concerned because similar schemes have been used in the
past to help fund terrorist organizations like Hamas and Hezbollah. I
want to commend Attorney General Schneiderman and Homeland Security
Investigations Special Agent in Charge James Hayes for their outstanding
work in this case, as well as our Operation Sentry partners including
the States Police of Delaware, Maryland, and New Jersey, and of course
our own NYPD personnel, including Deputy Commissioner of Intelligence
David Cohen, Assistant Chief Thomas Galati and the lead investigator on
the case Detective Sean Foley.”
proceeds from this alleged scheme can be used to fund a host of other
criminal acts that threaten national security and public safety of
Americans at home and abroad,” said James T. Hayes Jr., special agent in charge of HSI New York.
“We remain committed to working with our local, state and federal law
enforcement partners to ensure criminals are tracked down and brought
before a court of law.”
search warrants were executed up and down the Eastern Seaboard
yesterday, investigators seized three handguns from ring-leader Basel
Ramadan. The Attorney General’s Office also grabbed $1.4 million stashed
throughout Ramadan’s Ocean City, Maryland, residence, including stuffed
into black plastic garbage bags. Investigator seized over 20,000
cartons of cigarettes from defendants’ homes, cars and storage
facilities in four states. They seized $200,000 in cash from defendants’
located in New York City.
of non-taxed cigarettes deprive the state of millions of dollars in
lost cigarette tax revenues, hurt law-abiding small businesses and
undercut public health measures designed to discourage smoking.
joint investigation by the Attorney General's Organized Crime Task
Force and the New York City Police Department, and with the assistance
of Homeland Security Investigations, uncovered the trafficking ring and
its connections to Brooklyn, Queens, Staten Island, the Bronx, Albany,
Schenectady and multiple other states, including Maryland, Delaware,
Virginia and New Jersey.
the use of electronic surveillance, physical surveillance and the
review and analysis of financial records in conjunction with other
investigative tools, the Attorney General’s investigation revealed that
the head of the enterprise, Basel Ramadan, and his brother, Samir
Ramadan, obtained cigarettes from a wholesaler, Cooper Booth Wholesale,
Inc., in Virginia and stored them in a public storage facility in
times a week, co-conspirator Adel Abuzahrieh, of Brooklyn, drove with
tens of thousands of dollars in cash from New York to Delaware where he
gave the Ramadans the cash in exchange for cigarettes.Beyond
the $55 million in purchases to cigarettes, the Ramadans have generated
more than $10 million in profits from their illegal activities.
addition to the Ramadans, the criminal enterprise – all of whose
members are Palestinian – consisted of several New York-based cigarette
distributors, several New York-based cigarette resellers and Abuzahrieh,
who transport of cash, sometimes over $100,000 per trip, and cigarettes
between New York and Delaware.
the distributors took possession of the merchandise – approximately
20,000 cartons of cigarettes a week - they distributed it to the
resellers, who in turn sold the untaxed cigarettes to a myriad of Arab
markets and grocery stores in Brooklyn, Queens, the Bronx and Staten
Island. One of the resellers, Mohannad Seif, also resold the untaxed
cigarettes to various grocery stores in Albany and Schenectady Counties.The sales tax revenue lost to New York State is estimated to be significantly in excess of $80 million.
Ramadan brothers furthered the criminal enterprise by depositing more
than $55 million from their untaxed cigarette sales into small local
financial institutions in and around Ocean City, MD., and used that
money to purchase additional cigarettes for illegal sale.
indictment, unsealed before Brooklyn Supreme Court Justice William
Miller, charged the following individuals with enterprise corruption,
and other crimes in relation to their involvement in the untaxed
cigarette-based money laundering enterprise. Each defendant faces up to 8
1/3 to 25 years in prison.
BASEL RAMADAN, 42, boss of the enterprise, Ocean City, MD
SAMIR RAMADAN, 40, enterprise treasurer, Ocean City, MD
ADEL ABUZAHRIEH, 42, transporter, Brooklyn, NY
AHMAD ABDELAZIZ, 42, distributor, Brooklyn, NY
YOUSSEF ODEH, 52, distributor, Staten Island, NY
MUAFFAQ D. ASKAR, 46, reseller, Brooklyn, NY
MUFEED ATTAL, 62, distributor, Brooklyn, NY
RIBHI AWADEH, 39, distributor, Guttenberg, NJ
MOHAMED AWAWDA, 47, distributor, North Bergen, NJ
SAAD BADR, 58, distributor, Brooklyn, NY
MURAD BISHARAT, 37, reseller, Ridgewood , NY
MUNTHER MAHMOUD, 52, distributor, Brooklyn, NY
IZZAT NIMER, 46, distributor, Brooklyn, NY
MOHANNAD SEIF, 39, reseller, Brooklyn, NY
ISSA SULieman, 44, distributor, Brooklyn, NY
BASSAM TWAM, 47, reseller, Brooklyn, NY
Members of the criminal enterprise are set to be arraigned before Brooklyn Supreme Court Justice William Miller beginning today.
General Schneiderman said that all packs of cigarettes sold in New York
City must bear a joint New York City/New York State tax stamp and only a
licensed stamping agent can possess untaxed cigarettes and affix the
tax stamps on the cigarette packs.
of the members of this untaxed cigarette distribution and money
laundering operation are authorized to sell tobacco products in New York
City or New York State.
General Schneiderman thanked the following agencies for their
partnership in the investigation. The New York National Guard
Counterdrug Taskforce; the New York State Department of Taxation and
Finance; the New York City Sheriff’s Office; the Albany Police
Department; The New York State Police; the Brooklyn District Attorney’s Office; the
Delaware and Maryland State Police Departments; and the United States
Attorney’s Offices in Delaware, Maryland and New Jersey and especially
the U.S. Attorney’s Office in the Eastern District of New York which is
working together with us on the forfeiture aspect of this case.
investigation was directed by OCTF Senior Investigators Jeffrey Sauter
and Peter Odiot. They were supervised by OCTF Supervising Investigators
William Charles and Arthur Schwartz, Upstate Deputy Chief Eugene Black,
Downstate OCTF Deputy Chief Christopher Vasta andunder the overall supervision ofInvestigations Bureau Chief Dominick Zarrella. From the NYPD,Detective
Wafkey Salem worked under the supervision of Sergeant Robert Olson and
Lieutenant James O'Sullivan of the Intelligence Division and under the
supervision ofDeputy Commissioner
David Cohen. From Homeland Security, Special Agent Andrew Borra,
supervised by Deputy Special Agent-in-Charge Anthony Scandiffio.
The case is being prosecuted by OCTF Assistant Deputy Attorneys General Jonathan Sennett and Tarek Rahman,
under the supervision of Deputy Attorney General Peri Alyse Kadanoff
and under the overall supervision of Executive Deputy Attorney General
for Criminal Justice Kelly Donovan.
charges against the defendants are accusations and the defendants are
presumed innocent until and unless proven guilty in a court of law.
Senators Gustavo Rivera and Marcos Serrano calling Senators Skelo and Jeff Klein, coalition leaders to bring the woman equality bill for a vote on the senate's floor.
Video (1) by Rafael Martínez Alequín
William C. Thompson Jr., a Democrat, has received a
sorely needed jolt of high-powered fund-raising help from former Senator
Alfonse M. D’Amato, a Republican, as he seeks to project energy and
momentum in the wide-open Democratic primary for mayor of New York.
This is the first time that Alfonse M. D’Amato, leader of the state
Republican Party for a quarter-century, has been a major fund-raiser in a
New York City mayoral race.
Griffin (C) listens as James Manship reads from the U.S. Constitution
during a Tea Party Patriots rally on the west lawn of the U.S. Capitol.
(photo: Ron Lamkey/Getty Images North America)
The Real I.R.S. Scandal
By Jeffrey Toobin, The New Yorker
15 May 13
scandal machinery, rusty from recent disuse, is cranking back up to
speed due to the alleged targeting of conservative groups by the
Internal Revenue Service. Darrell Issa, the chairman of the House
Committee on Oversight and Government Reform, said, "It's the kind of
thing that scares the American people to their core. When Americans are
being targeted for audits based on their political beliefs, that needs
to change." Senator Susan Collins, of Maine, called on the President to apologize. George Will said President Obama could be impeached.
Obama himself is taking the path of contrition. At a news conference
Monday, the President said, "If in fact I.R.S. personnel engaged in the
kind of practices that have been reported on and were intentionally
targeting conservative groups, then that's outrageous. And there's no
place for it." More hearings, with more outrage, are planned.
In light of this, it might be useful to ask: Did the I.R.S. actually do anything wrong?
The stories began to come to light on Friday, when the Associated Press reported
that a draft report by a Treasury Department inspector general had
found that the I.R.S. subjected certain Tea Party-affiliated groups to
undue scrutiny. Lois Lerner, head of the I.R.S. tax-exempt-organizations
division, said the agency was "apologetic" for what she termed
"absolutely inappropriate" actions by lower-level workers.
It's important to review why the Tea Party groups were
petitioning the I.R.S. anyway. They were seeking approval to operate
under section 501(c)(4) of the Internal Revenue Code. This would require
them to be "social welfare," not political, operations. There are
significant advantages to being a 501(c)(4). These groups don't pay
taxes; they don't have to disclose their donors - unlike traditional
political organizations, such as political-action committees. In return
for the tax advantage and the secrecy, the 501(c)(4) organizations must
refrain from traditional partisan political activity, like endorsing
If that definition sounds murky - that is, if it's
unclear what 501(c)(4) organizations are allowed to do - that's because
it is murky. Particularly leading up to the 2012 elections, many
conservative organizations, nominally 501(c)(4)s, were all but
explicitly political in their work. For example, Americans for
Prosperity, which was funded in part by the Koch Brothers, was an instrumental force
in helping the Republicans hold the House of Representatives. In every
meaningful sense, groups like Americans for Prosperity were operating as
units of the Republican Party. Democrats organized similar operations,
but on a much smaller scale. (They undoubtedly would have done more, but
they lacked the Republican base for funding such efforts.)
So the scandal - the real scandal - is that 501(c)(4)
groups have been engaged in political activity in such a sustained and
open way. As Fred Wertheimer, the President of Democracy 21, a
government-ethics watchdog group, put it, "it is clear that a number of
groups have improperly claimed tax-exempt status as section 501(c)(4)
'social welfare' organizations in order to hide the donors who financed
their campaign activities in the 2010 and 2012 federal elections."
Some people in the I.R.S. field office in Cincinnati
took the names of certain groups - names that included the terms "Tea
Party" and "patriot," among others, which tend to signal conservatism -
as signals that they might not be engaged in "social welfare"
operations. Rather, the I.R.S. employees thought that these groups might
be doing explicit politics - which would disqualify them for 501(c)(4)
status, and set them aside for closer examination. This appears to have
been a pretty reasonable assumption on the part of the I.R.S. employees:
having "Tea Party" in your name is at least a slight clue about
partisanship. When the inspector-general report becomes public, we'll
surely learn the identity of these organizations. How many will look
like "social welfare" organizations - and how many will look like
political activists looking for anonymity and tax breaks? My guess is a
lot more of the latter than the former.
It is certainly true that the I.R.S., and every other
part of the government, should be evenhanded in how it applies the law,
regarding liberal and conservative groups alike. If left-leaning
organizations were disguising their true purposes to obtain 501(c)(4)
status, the I.R.S. should have turned them down, too. And there will
also be questions about how the Service, which is an independent agency,
answered questions from Congress.
But let's be clear on the real scandal here. The
columnist Michael Kinsley has often observed that the scandal isn't
what's illegal - it's what's legal.
It's what society chooses not to punish that tells us most about the
prevailing ethical standards of the time. Campaign finance operates by
shaky, or even nonexistent, rules, and powerful players game the system
with impunity. A handful of I.R.S. employees saw this and tried, in a
small way, to impose some small sense of order. For that, they'll likely
be ushered into bureaucratic oblivion.
Mayoral hopeful Bill Thompson (left) on Tuesday won the endorsement of Bronx Borough President Ruben Diaz Jr.
Mayoral hopeful Bill Thompson
won the endorsement of Bronx Borough President Ruben Diaz Jr. on
Tuesday, a potentially key step in building a potent coalition of black
and Hispanic voters in the campaign.
Diaz is the city’s most prominent Hispanic elected official. His
endorsement was announced just days after Thompson unveiled the support
of two other prominent Hispanic Democrats from the Bronx, Rep. Jose E.
Serrano and his son, state Sen. Jose M. Serrano.
“Although he backed Thompson’s 2009 campaign for mayor, Diaz was
actively courted by all the top Democratic mayoral candidates this year.
Their attempts to land his support underscores the importance of Latinos voters and Bronx voters in the Democratic primary.
Diaz praised Thompson as a “coalition builder” - which is exactly what Team Thompson is trying to do.
His campaign says it has been working with Latino officials and
community organizers to link them to Thompson’s African-American base.
“I have known Bill Thompson for two decades,” said Diaz, a Democrat.
“He was the right man to lead our city as mayor four years ago, and he
remains the right man today.”
Mario Tama/Getty Images
Mayoral candidate Bill
Thompson, who won a key endosement Tuesday, Bronx Borough President
Ruben Diaz Jr. The support could help him build a coalition of black and
Successfully creating such a black-Hispanic coalition would put
Thompson in prime position to at least force a runoff in the Democratic
However, Thompson’s effort to build a black-Hispanic coalition is not
certain to work - while most Latinos and African-Americans vote
Democratic in general elections, they have not always supported the same
candidates in a primaries.
His Democratic rivals this year have also have trotted out high-profile
Latino endorsements, including Bronx State Senator Gustavo Rivera for
Quinn and Bronx Assemblyman Luis Sepulveda for de Blasio.
Previous minority mayoral candidates have had mixed results in unifying
those voters. David Dinkins did well with Latinos during in his 1989
and 1993 campaigns; former Bronx Borough President Fernando Ferrer
failed to win an overwhelming majority of black votes in 2005.
Diaz repeatedly praised Thompson’s “temperament,” though he later
denied it was a swipe at either City Council Speaker Christine Quinn
(D-Manhattan) or former Congressman Anthony Weiner, who both have been
accused of being quick to boil.
But Diaz did not shy away from ripping his predecessor in as Bronx
borough president, Adolfo Carrion Jr., the lone Latino in this year’s
mayoral race. Carrion, a former Democrat, is running as an independent.
“Just because you're a Latino candidate, this is not about satisfying
your ego. This is not about proving a point," said Diaz. "Running for
mayor of the city of New York is serious. It's real serious business."
In return, the Carrion campaign said, "that kind of statement is not worthy of a response.”
DOJ Secretly Obtains Months Of AP Phone Records; AP Condemns 'Unprecedented Intrusion'
WASHINGTON (AP) — The Justice Department secretly obtainedtwo months of telephone records of reporters and editors for The
Associated Press in what the news cooperative's top executive called a
"massive and unprecedented intrusion" into how news organizations gather
The records obtained by the Justice Department listed
outgoing calls for the work and personal phone numbers of individual
reporters, for general AP office numbers in New York, Washington and
Hartford, Conn., and for the main number for the AP in the House of
Representatives press gallery, according to attorneys for the AP. It was
not clear if the records also included incoming calls or the duration
of the calls. In all, the government seized the records for more than
20 separate telephone lines assigned to AP and its journalists in April
and May of 2012. The exact number of journalists who used the phone
lines during that period is unknown, but more than 100 journalists work
in the offices where phone records were targeted, on a wide array of
stories about government and other matters. In a letter of protest sent to Attorney General Eric
Holder on Monday, AP President and Chief Executive Officer Gary Pruitt
said the government sought and obtained information far beyond anything
that could be justified by any specific investigation. He demanded the
return of the phone records and destruction of all copies. "There can be no possible justification for such an
overbroad collection of the telephone communications of The Associated
Press and its reporters. These records potentially reveal communications
with confidential sources across all of the newsgathering activities
undertaken by the AP during a two-month period, provide a road map to
AP's newsgathering operations and disclose information about AP's
activities and operations that the government has no conceivable right
to know," Pruitt said. The government would not say why it sought the records.
Officials have previously said in public testimony that the U.S.
attorney in Washington is conducting a criminal investigation into who
may have provided information contained in a May 7, 2012, AP story about
a foiled terror plot. The story disclosed details of a CIA operation in
Yemen that stopped an al-Qaida plot in the spring of 2012 to detonate a
bomb on an airplane bound for the United States. In testimony in February, CIA Director John Brennan
noted that the FBI had questioned him about whether he was AP's source,
which he denied. He called the release of the information to the media
about the terror plot an "unauthorized and dangerous disclosure of
classified information." Prosecutors have sought phone records from reporters
before, but the seizure of records from such a wide array of AP offices,
including general AP switchboards numbers and an office-wide shared fax
line, is unusual. In the letter notifying the AP, which was received
Friday, the Justice Department offered no explanation for the seizure,
according to Pruitt's letter and attorneys for the AP. The records were
presumably obtained from phone companies earlier this year although the
government letter did not explain that. None of the information provided
by the government to the AP suggested the actual phone conversations
were monitored. Among those whose phone numbers were obtained were five reporters and an editor who were involved in the May 7, 2012, story. The Obama administration has aggressively investigated
disclosures of classified information to the media and has brought six
cases against people suspected of providing classified information, more
than under all previous presidents combined. Rep. Darrell Issa, R-Calif., chairman of the
investigative House Oversight and Government Reform Committee, said on
CNN, "They had an obligation to look for every other way to get it
before they intruded on the freedom of the press." The American Civil Liberties Union said the use of
subpoenas for a broad swath of records has a chilling effect both on
journalists and whistleblowers who want to reveal government wrongdoing.
"The attorney general must explain the Justice Department's actions to
the public so that we can make sure this kind of press intimidation does
not happen again," said Laura Murphy, the director of ACLU's Washington
legislative office. Rules published by the Justice Department require that
subpoenas of records of news organizations must be personally approved
by the attorney general, but it was not known if that happened in this
case. The letter notifying AP that its phone records had been obtained
through subpoenas was sent Friday by Ronald Machen, the U.S. attorney in
Washington. William Miller, a spokesman for Machen, said Monday
that in general the U.S. attorney follows "all applicable laws, federal
regulations and Department of Justice policies when issuing subpoenas
for phone records of media organizations." But he would not address
questions about the specifics of the AP records. "We do not comment on
ongoing criminal investigations," Miller said in an email. The Justice Department lays out strict rules for
efforts to get phone records from news organizations. A subpoena can be
considered only after "all reasonable attempts" have been made to get
the same information from other sources, the rules say. It was unclear
what other steps, in total, the Justice Department might have taken to
get information in the case. A subpoena to the media must be "as narrowly drawn as
possible" and "should be directed at relevant information regarding a
limited subject matter and should cover a reasonably limited time
period," according to the rules. The reason for these constraints, the department says,
is to avoid actions that "might impair the news gathering function"
because the government recognizes that "freedom of the press can be no
broader than the freedom of reporters to investigate and report the
news." News organizations normally are notified in advance
that the government wants phone records and then they enter into
negotiations over the desired information. In this case, however, the
government, in its letter to the AP, cited an exemption to those rules
that holds that prior notification can be waived if such notice, in the
exemption's wording, might "pose a substantial threat to the integrity
of the investigation." It is unknown whether a judge or a grand jury signed off on the subpoenas. The May 7, 2012, AP story that disclosed details of the
CIA operation in Yemen to stop an airliner bomb plot occurred around
the one-year anniversary of the May 2, 2011, killing of Osama bin Laden. The plot was significant both because of its
seriousness and also because the White House previously had told the
public it had "no credible information that terrorist organizations,
including al-Qaida, are plotting attacks in the U.S. to coincide with
the (May 2) anniversary of bin Laden's death." The AP delayed reporting the story at the request of
government officials who said it would jeopardize national security.
Once officials said those concerns were allayed, the AP disclosed the
plot, though the Obama administration continued to request that the
story be held until the administration could make an official
announcement. The May 7 story was written by reporters Matt Apuzzo
and Adam Goldman with contributions from reporters Kimberly Dozier,
Eileen Sullivan and Alan Fram. They and their editor, Ted Bridis, were
among the journalists whose April-May 2012 phone records were seized by
the government. Brennan talked about the AP story and investigation in
written testimony to the Senate. "The irresponsible and damaging leak of
classified information was made ... when someone informed the
Associated Press that the U.S. Government had intercepted an IED
(improvised explosive device) that was supposed to be used in an attack
and that the U.S. Government currently had that IED in its possession
and was analyzing it," he wrote. He also defended the White House decision to discuss
the plot afterward. "Once someone leaked information about interdiction
of the IED and that the IED was actually in our possession, it was
imperative to inform the American people consistent with Government
policy that there was never any danger to the American people associated
with this al-Qa'ida plot," Brennan told senators.
City Council candidate Raquel Batista is six months pregnant — and looking to take on the big boys of Bronx politics.
Raquel Batista knows what’s wrong with the Bronx — politics as usual.
The 38-year-old attorney says her election to succeed term-limited Councilman Joel Rivera
will usher in an entirely different era of Bronx politics, where power
is currently handed down from one connected pol to the next, from
generation to generation.
Rivera, for example, succeeded his father in the 15th District. His
chief of staff, Albert Alvarez, is running. And so is Ritchie Torres, is
the hand-picked protege of neighboring Councilman James Vacca.
“This could really be an opportunity for the voters to take a closer
look at who's representing them,” said the CUNY Law grad Batista. “As
we've seen in the past there is cronyism, nepotism, and the issue of
Batista, who is six months pregnant, is confident that her status as an
outsider and an immigration advocate will resonate with Bronx voters
tired of dealing with Democratic dynasties.
“This area is undergoing a political turmoil and this can actually be a
blessing in disguise,” she said, referring to the recent corruption
scandals involving Assemblymen Eric Stevenson, who was arrested, and
Nelson Castro, who resigned.
“An insider is anyone who is either related to an elected official or works for an elected official.”
“I’m not doing anything that different,” the mother-to-be said when
asked about her August due date, which falls only weeks before the
“Working women all over the state deal with being pregnant. That’s why paid sick leave and health care reform are such important topics.”
Batista, born and raised in the Bronx, spent much of the last decade as
executive director of the Northern Manhattan Coalition for Immigrant
The 15th District covers three square miles of heavily populated
residential neighborhoods including Bathgate, Belmont, West Farms, and
Van Nest. Batista believes the growing immigrant communities within
those neighborhoods will be some of the first to benefit from the
term-limit rules that will bring a number of fresh faces to the City
And she’s not entirely critical of Rivera, who “did some positive things.”
“But after 12 years it is time for new blood,” she added. “That's why I
think that term limits are such a great idea. It really helps to
increase the level of civic participation in the community.
“I am coming from outside the political arena,” Batista added.
“But I still have a background working with the community and with the people of the Bronx.”
The mom-to-be hopes to be changing more than diapers after the September primary.
Adi Talwar, State Senate, State Assembly, U.S. Congress, Queens BP/City Limits
The powerful lobbying firm Parkside Group represents the developers
of Willets Point. It also has provided campaign advice to State Sen.
Jose Peralta, Queens Borough President Helen Marshall, Assemblyman
Michael Simanowitz, State Sen. Toby Stavisky and Congressman Joe
Crowley—all of whom have some direct or indirect influence over whether
the project will go forward. Peralta alone opposes it.
When Campaign Aides Are Lobbyists, Questions Mount
Some of the top firms advising
candidates for state and local office also lobby those offices for
clients like corporations and unions. Some believe the potential
conflict demands reform.
Remaking the cratered world of Willets Point, Queens has been a
developer's dream since the imperious and seemingly everlasting reign of
Robert Moses. A veritable galaxy of auto repair shops in the shadow of
Citi Field, Willets Point is without sewers or paved roads, but its
land, long eyed hungrily by developers, may undergo seismic change over
the next decade. According to the glowing blueprints, a shopping mall,
affordable housing and glittering office buildings will replace the
greasy repair shops that tourists eye warily from the expressways.Actually
making this development—controversial, among other reasons, because it
will displace many property owners and immigrant laborers—a reality is
partially the job of the Parkside Group, perhaps the most dominant
political force in the borough that is not elected by anyone. Since last
May, they have represented the Queens Development Group LLC, the name
for the duo of real estate companies that have won the bid for phase one
of the Willets Point development, Sterling Equities and Related
Companies. That's one of many lobbying clients Parkside claims. Last
year alone, according to the city's lobbying database, the firm billed
$1.8 million for its work with city officials on behalf of clients.Parkside has another job, too—getting candidates for city and state
offices elected, and re-elected. Over the 2005 and 2009 municipal
election seasons, Parkside earned $3.2 million for advising candidates.
On the state level, since 2005, the firm has earned $15 million for
Some of Parkside's Willets Point lobbying has
been directed at the City Council, where sit some of the very people the
firm helped elect. That's because Parkside, founded more than a decade
ago, is among a handful of influential firms in New York State that
lobby elected officials while also serving as consultants for political
campaigns, a practice that is perfectly legal but raises several ethical
questions. What happens when lobbying and political jobs overlap? Will
elected officials, already subject to a barrage of lobbyists, be even
more unduly influenced if the consulting firms they employ for their
campaigns are also turning around to lobby them soon after?
firms that both consult and lobby turn the typical pay-to-play concerns
of government watchdogs on their head. The issue here is not who's
giving money to a campaign, but who's receiving candidates' money—in
exchange for valuable help. Consultants are, according to political
observers, vital components of any operation: They are in many instances
the quarterbacks of campaigns, plotting get-out-the-vote efforts,
crafting media strategy and exploiting the weaknesses of the opposition.
By accepting or rejecting a client, skilled consultants can
significantly affect the odds of a campaign succeeding.
firm helps someone get elected to office, that firm may have an easier
time getting access to that office when they're trying to influence how
they're going to vote on a particular issue," says Bill Mahoney, the New
York Public Interest Group's legislative research coordinator. Making points on Willets
$3 billion proposed development at Willets Point has gone through
several incarnations. Challenged relentlessly by Willets Point property
owners who have protested the use of eminent domain to take away private
property, the development, according to its backers, will bring
thousands of jobs and economic benefits to Queens.
over Willets Point illustrates how a consultant like Parkside manages to
occupy almost every pivotal sphere of the issue. Besides its work for
the Queens Development Group, Parkside also lobbies for labor unions
that are in support of the Willets Point development, like Local 1500
UFCW and 32BJ SEIU. Meanwhile, Parkside often works side-by-side with
the Queens County Democratic Party to ensure, in most instances, their
handpicked candidates gain or retain their offices. Four of the elected
officials with districts that include or border the Willets Point
development—Assemblyman Michael Simanowitz, State Sen. Jose Peralta,
Congressman Joe Crowley and State Sen. Toby Stavisky—have employed
Parkside for their political campaigns, funneling the firm many
thousands of dollars.
The county organization picked Simanowitz
to run in a 2011 special election and he paid Parkside roughly $40,000
during that race. And Stavisky, facing tough re-election fights in 2010
and 2012, has funneled almost $300,000 to Parkside over the last decade.
Stavisky and Simanowitz did not return requests for comment. Both have
been very supportive of the Willets Point development.
of the Queens County Democratic Party, Rep. Crowley, is also an
unambiguous supporter of the Willets Point project. The scrapyards lie
in his Congressional district. Parkside lists Crowley as one of their
few Congressional clients on their website. As county leader, Crowley
holds sway over many Democratic elected officials, but because it is not
a federal issue he'll have no legislative say on the development.
to lobbying records, on behalf of QDG, Parkside has lobbied former or
current clients like Peralta, Stavisky and Simanowitz over the past
decade. Beyond the state legislature, QDG's lobbying targets have
included the City Council and the Queens borough president's office,
where Parkside's ties have run particularly deep.
behalf of the Flushing Willets Point Corona Local Development
Corporation in 2009, Barry Grodenchik was a key Parkside lobbyist in the
early years of the approval process for the development. In 2010 he
became a deputy borough president to Queens Borough President Helen
Marshall. Now running for borough president himself, Grodenchik, who is
not employing Parkside for his borough president race, declined to
Though derided as a toothless tiger in the political
world, the borough president's office nevertheless plays a pivotal role
in the city's lengthy Uniform Land Use Review Procedure. The beep's
approval is an important indicator to the City Council whether a
project, no matter how controversial, has received the proper vetting
locally. Marshall so far has been one of the biggest boosters of the
Willets Point development, penning an op-ed and attaching her support in
a Bloomberg press release last year. She employed Parkside for her
re-election campaign in 2009.
Last year, Attorney General Eric
Schneiderman charged the Flushing Willets Point Corona LDC with
illegally lobbying—by law, local development corporations are restricted
from "trying to influence legislation by propaganda or otherwise."
Forced to pay a fine, the city's Economic Development Corporation, which
oversees the LDC, restructured itself to comply with the law. During
the Attorney General investigation into the LDC's lobbying activities,
Parkside lobbyists Stavisky, Grodenchik, Williams Driscoll and Harry
Giannoulis were served with subpoenas in 2009.
make juicy targets for critics. "Parkside consultants have become kings
because they use their business client's resources, including the Queens
Democratic machine, to attract candidates and fund their campaigns,"
says political consultant and journalist Gary Tizler. Consulting fees in municipal campaigns, 1989-2009 (2009 dollars) Spending
on consultants increased dramatically over the 1990s. Most consultants
do not, however, double as lobbyists. For more on the data behind this
story, click here.Source: CFB
however, denies anything unseemly about its consultant relationship
with potential targets for its lobbying work. "We are proud of the work
we do for a variety of clients and we pride ourselves on upholding the
highest standards of ethical conduct in all of our activities," stated
Evan Stavisky, a partner at Parkside and the son of Toby Stavisky. "Our
firm, and our clients, file more than 550 reports each year with city
and state regulators outlining our compensation and our activities.
These reports are available online to the public because government and
politics function best when everything is open and transparent."
not every Parkside client is a supporter of the Willets Point plan.
Peralta has paid Parkside more than $200,000 over the course of a decade
to consult on various campaigns. He was recently an enthusiastic backer
of development at Willets Point, pushing for a convention center to be
placed there, but has since soured on the development because the
affordable housing component is being delayed and scaled back. "It's hard to make money if you have to wait every other year"
a 2011 report, the good government group Citizens Union highlighted the
possibility of the overlap of political consulting and lobbying leading
to, at the minimum, a perceived ethical issue. The group applauded all
the disclosure of lobbying and campaign expenditures but added: "The
perception persists, however, that candidates who get elected through
the campaign services of lobbying firms may feel obligated to support
policies advocated by the lobbying firms after they are elected.
According to data provided by the [New York City Campaign Finance
Board], of the 80 companies earning over $100,000 for campaign-related
services in the 2009 election cycle, nine, or 11.5 percent, were
registered lobbyists that provided campaign consulting-related services.
Three of these firms made upwards of $1 million from selling such
Besides Parkside, Sheinkopf Ltd., MirRam Group and the
Advance Group are all major firms that lobby and consult on political
campaigns simultaneously. Statewide, Berlin Rosen, a firm that consults
and lobbies, was the biggest recipient of campaign money in the 2010
election cycle among firms that perform both functions, according to
NYPIRG. All of this activity is legal, but it has sometimes raised
eyebrows when elected officials take stances on hot button issues.
the Bloomberg Administration has fought for a ban on large sugary
drinks, many elected officials have lined up to savage the proposal. Two
prominent clients of MirRam, Brooklyn Councilwoman Letitia James,
running for public advocate, and former Comptroller Bill Thompson,
running for mayor, are outspoken critics of the mayor's proposal. James
even co-wrote an opinion piece in the Huffington Post last year titled
"Why the Soda Ban Won't Work," citing how it would hurt small businesses
and infringe on civil liberties.
Thompson wrote a letter to the
Health Department last year asking the commissioner to table the vote on
the ban. In the letter, he said the soda ban, "pretends to address the
problem [of obesity] while accomplishing nothing more than limiting
individual choices and hurting small buisnesses."
and 2013 mayoral campaigns have paid for $637,000 in MirRam's services;
James' public advocate bid has spent $16,000 so far on MirRam. Under
its lobbyist hat, MirRam works for Coca-Cola, which has paid MirRam
$30,000 so far this year on top of $90,000 in 2012. Their target,
according to lobbying records, was the City Council where James serves.
"MirRam adheres to the highest standards of ethics and law. We maintain
a separation between our campaign clients and lobbying projects,"
MirRam said in a statement, speaking also for their clients James and
Thompson. James' allies argue she was long an opponent of the soda ban
before hiring MirRam. Municipal Lobbying Fees (2012 dollars) Total lobbying compensation fluctuates considerably. For more on the data behind this story, click here.Source: City Clerk
of the practice of firms lobbying and consulting argue that, beyond it
being perfectly legal and protected by the First Amendment, it allows
firms to remain financially viable when it is not campaign season.
hard to make money if you have to wait every other year," said a
Democratic insider. "I understand why they do it. They try to create a
wall where one has nothing to do with the other."
Indeed, in conversations with City Limits,
firms insist that they keep lobbying and consulting operations
separate, and do nothing unethical because their activities are
disclosed. Access is key
The Advance Group, headed
by Scott Levenson, is one of the more visible consulting firms in the
city. Consulting for a bevy of candidates during this election cycle,
the group is also producing a series of television advertisements
attacking Council Speaker Christine Quinn, the front-running candidate
for mayor. While steering campaigns, many of them for the City Council,
the group is also lobbying the City Council for a number of interests,
chief among them hotel groups.
The city, undergoing a hotel
building boom, in 2011 added 4,404 new hotel rooms to the city's
existing 74,025 rooms, an annual increase of 5.9 percent and the highest
on record, according to a story last year in the New York Times.
To make their case for hotel development, the Hotel and Motel Trades
Council and the Hotel, Restaurant and Club Employees and Bartenders
Union Local 6 have paid the Advance Group $24,000 since the beginning of
2012 to lobby the City Council. These labor groups have seen their
membership swell as hotels rise in New York and unionize. For Democratic
mayoral candidates, the Hotel Trades Council in particular has become a
much coveted endorsement because of their organizing strength.
serving in the City Council are several elected officials who
Levenson's group helped elect in 2009, including Council members Ydanis
Rodriguez, Inez Dickens, Vincent Gentile and Erik Dilan. Lobbying
records do not specify which individual candidates the Advance Group
lobbied and Levenson declined a request for comment. He recently told
the Daily News he doesn't receive special favors from politicians
he helps elect, but said the access they have is inevitably a part of
their sales pitch.
"We're a lobbying organization," Levenson told
the newspaper. "One of the things we do is talk about our ability to
Henry Sheinkopf, a Democratic political consultant
and long-time lobbyist, also did not insist, unlike Parkside, that
lobbying and consulting activities were always completely separate.
you do it, sometimes you don't. It depends on the client," he said. "It
depends on the client and it depends on the appropriateness of the
situation and it depends on what you consider lobbying." Reforms sought, scrutinized
Union recommended in their 2011 report that candidates who participate
in New York City's campaign finance program should be prohibited from
using matching funds to purchase campaign consulting services from firms
that also provide lobbying services. The recommendation has not been
adopted. Top consultants, total campaign fees, 2009-2013 Source: CFB For more on the data behind this story, click here.
the state level, Sen. David Valesky, a member of the breakaway
Independent Democratic Conference (IDC) that governs the State Senate
with Republicans, proposed a bill on May 6 that would bar campaign
consultants from turning around to lobby those that they elect to
Whether any law could actually be passed on the city or
state level to limit this practice is unlikely, political observers say,
precisely because of the close relationship between legislators and the
consultants whom the law would affect. Members of the IDC like State
Sen. Jeffrey Klein and State Sen. Diane Savino have employed firms that
do double duty like MirRam and the Advance Group for past campaigns.
Meanwhile, some are suspicious about whether reforms are about cleaning up politics, or just silencing inconvenient voices.
"I have a very jaundiced view about all the people who call for clean
government because most of them never worked a day in their lives or put
a callous on their hands," Sheinkopf said. Reporting for this project was generously supported by the Fund for Investigative Journalism.
The mayoral campaign of Bill Thompson has quietly picked up several significant endorsements.
He's the stealth candidate for mayor.
As rivals Christine Quinn and Bill de Blasio attack each other and John
Liu rails against a federal investigation of his fund-raising, former
city Controller Bill Thompson seems content to barely make waves at all.
At a recent Democratic candidates forum in Manhattan, Thompson sat
silently when de Blasio portrayed Quinn as a puppet of Mayor Bloomberg.
At a City Hall news conference, Thompson interrupted to change the
subject when a supporter blasted other candidates as driven by ego.
And when Liu said former Rep. Anthony Weiner should “shut down his
tweeting account” before plunging into the mayoral race, Thompson simply
said Weiner had every right to run.
Thompson’s decision to act above the fray is both true to his even-keel personality and a deliberate strategy.
He has staked his candidacy on building a coalition of blacks,
Hispanics and Orthodox Jews, a game plan that relies more on grabbing
endorsements than grabbing headlines. RELATED: BILL THOMPSON POISED FOR ENDORSEMENT FROM POLICE
He is also trying to project gravitas, to reflect his government
experience and reassure moderate whites who might be uneasy about voting
for an African-American.
“He’s at it like a long-distance race while the others are sprinting,”
said Prof. Christina Greer of Fordham University. “While the others
fight, it leaves him as the even-keeled grownup in the middle.”
But ceding the spotlight carries risk. Rivals believe it could lead to
another defeat, after Thompson’s surprisingly narrow loss to Bloomberg
in the 2009 mayoral race.
“Four years ago, people thought he was passionless,” said a top staffer
on another campaign. “How is this mild-mannered, ‘say nothing’ run
going to change that?”
Confidants maintain that Thompson is a different candidate in 2013.
While his public schedule is not as frenzied as those of rivals, he’s
attending more events and devoting more time to fund-raising than he did
in 2009, insiders say. His campaign team has undergone a makeover, too.
He has hired veteran operatives from state and national races, notably
Jonathan Prince, who worked on the presidential campaigns of Bill
Clinton and John Edwards.
“He has stepped up significantly," said a former aide. “He’s got more
fire in the belly this time. And he’s surrounded by fresh faces, who are
more able to push him to do things he’d shrug off before.” RELATED: TWO TO ENDORSE THOMPSON
“I think I am a stronger candidate this time, a better-prepared
candidate,” he said. “I’m building an even stronger team and learning
lessons from 2009.”
Thompson, 59, is running the most traditional campaign of the top Democrats.
He has steadily rolled out endorsements as he attempts to build his
coalition. He has touted the support of civic leaders like Merryl Tisch,
chancellor of the state Board of Regents, and former Lt. Gov. Richard
Ravitch, an effort to reassure a business community nervous about
He also has positioned himself in the center on some of the hot-button
issues — for example, declaring that he would reform, not eliminate, the
controversial police tactic known as stop-and-frisk. But there are
Although he was his party’s nominee in 2009, Thompson is the least
known of the top Democratic candidates in 2013 — 52% of those surveyed
in an April Quinnipiac Poll said they had no opinion of him.
Thompson believes that is because he is the lone major Democratic candidate not in office.He is a managing director at a municipal bond firm, earning $727,621 in 2012, his tax returns show.
Thompson’s stoicism could revive criticisms that surrounded him four years ago.
“People asked, ‘Where’s the ‘there’ there?” Greer said. “Even when he was riled up about something, it didn’t seem real.”
The rare moments Thompson displays emotion remain surprising. When he
pounded the table and yelled at Liu during an exchange over
stop-and-frisk at a Queen forum in March, it drew gasps from the crowd.
“If you try and project something you‘re not, it doesn‘t sell,“ said
Thompson. “This is who I am and I think this is what the voters want to
Good government group Citizens Union released a report Monday,
detailing its investigation into alleged illegal campaign activity on
the part of the state’s political clubs.
It claims that “at least 224 clubs in New York State are hidden from
public view because they have not registered as political committees or
filed needed disclosure reports detailing their receipts and
Among the clubs listed as part of this “shadowy world of political
activity” is local political powerhouse, the Benjamin Franklin Reform
The 122-page report says the club’s political activities mean it “is
not in compliance with the law regarding disclosure of its contributions
and expenditures,” and that more transparency is necessary to determine
whether the club may be using money it receives from members, elected
officials and unions in order to campaign for candidates.
Dick Dadey, executive director of Citizens Union, said in an
interview that the group’s interpretation of state law is that any
political club that makes endorsements and engages in transactions of
$1,000 or more annually needs to register with the state BOE as a
political committee. But the BOE hasn’t been enforcing the law, Mr.
“It’s a failing of the state Board of Elections not to make it clear,” Mr. Dadey said.
The Benjamin Franklin Reform Democratic Club says it does not use
funds for campaigning and therefore does not need to register, but if
the BOE were to require it to file, it would comply.
Citizens Union began digging into the messy filings in light of
Councilman Larry Seabrook’s corruption trial. Mr. Seabrook was convicted
of using the political club he founded as his personal piggy bank, but
it went unnoticed because the club did not file with the state Board of
Elections and therefore did not file expenditure reports.