Senator To Seek Dismissal of Indictment

By JOSEPH GOLDSTEIN, Staff Reporter of the Sun August 11, 2008

Senator Efrain Gonzalez appears with then state Senator David Paterson at the 2004 Somos El Futuro Conference.

Two years after federal prosecutors indicted a senior state senator, Efrain Gonzalez Jr., on charges that he stole state funds from a charity, the prosecution will face its first test.

At oral arguments in U.S. District Court in Manhattan tomorrow, Mr. Gonzalez, a Democrat of the Bronx, and three co-defendants will seek to have the indictment dismissed by arguing that there are limits to the federal government's jurisdiction to prosecute alleged misappropriation of state funds. That argument, if the court accepts it, could prove an obstacle to a broad investigation under way by the U.S. attorney in Manhattan, Michael Garcia, into the use of state funds for organizations favored by individual state legislators and city council members.

For the last two years, Mr. Garcia's public corruption unit has focused on these expenditures, known as "member items," at both the state and city level.

"By bringing this prosecution, against a New York State Senator and charities registered with the State of New York based on member items obtained from the New York State Legislature, the federal government improperly intruded on the primary authority of New York State to define and enforce its laws," lawyers for one of Mr. Gonzalez's co-defendants, Neil Berger, wrote in a legal brief, which Mr. Gonzalez has joined. "The prosecutor's action destroys any distinction between what is truly national and what is truly local."

Mr. Gonzalez is accused of spending more than $400,000 of state money that he had allocated to a Bronx nonprofit group, Pathways for Youth. Prosecutors say Mr. Gonzalez used the money for personal expenses, such as paying a consultant to advise a cigar company he owns and college tuition for his daughter.

"We maintain his innocence," Mr. Gonzalez's lawyer, Murray Richman, said in an interview.

Mr. Gonzalez's son, Carlos, told The New York Sun that the prosecution of his father is politically motivated and is in response to the senator's public opposition to a 2003 merger of two Spanish-language broadcast companies, Univision and the Hispanic Broadcasting Corp., which the federal government approved.

"I feel there is a price you pay when you speak out against the administration currently in the White House," Carlos Gonzalez said.

Prosecutors say Mr. Gonzalez was aided in the alleged scheme by several nonprofit organizations. The 2006 indictment against him contends that the executive director of Pathways, Mr. Berger, redirected the money his organization received in state grants to another nonprofit, the West Bronx Neighborhood Association, which Mr. Gonzalez is alleged to have used as his personal bank.

Carlos Gonzalez said the payments from the West Bronx Neighborhood Association to his father were for "reimbursements for expenditures" that his father had made on behalf of the association.

In court papers, lawyers for Mr. Berger argue that he should not be charged alongside Mr. Gonzalez because he is not alleged to have taken any of the money for his own use. His lawyers also say Mr. Berger cut checks to the West Bronx Neighborhood Association believing that the money was going to be used for charitable purposes.

In responding to the defense's argument that the federal government is overstepping its jurisdiction, federal prosecutors note that Pathways received federal grants as well as state grants, according to court papers.