Espada Is Bedeviled By FBI, IRS, NYSAG. Sampson Undisturbed

By Henry J. Stern
April 22, 2010

The roof is falling in on the State Senate's most conspicuous scoundrel.

Senator Pedro Espada, Jr., elected leader of the Democratic majority in the State Senate, was sued Tuesday by Attorney General Andrew Cuomo, who alleged multiple crimes involved with Espada's management of the Soundview Health Center.

All three dailies covered the suit. A front page story in the Times, written by Nicholas Confessore, was titled CUOMO ACCUSES ESPADA OF DIVERTING MILLIONS FROM CLINICS. Frederic Dicker and Brendan Scott, writing in the Post on pages 8 and 9 under the headline ESPADA HIT WITH 'LOOT' SUIT, reported that Espada had charged "$20,000 sushi bills and $9,400 trips to Puerto Rico" to his health clinic (which, never forget, was partially funded by federal tax dollars). The Daily News article was titled PEDRO ESPADA JR. LOOKED $14M FROM NON-PROFIT, INCLUDING $20K SPENT ON SUSHI: SUIT. Greg Smith and Kenneth Lovett, the article's authors, quote Attorney General Andrew Cuomo, who accused Espada of using the health center as a "personal piggy bank."

Then, early Wednesday morning, the Soundview offices were raided by agents of the FBI, IRS and NYS Attorney General, who removed 30 large boxes of records.

The dailies covered the raid as thoroughly as they covered the lawsuit only a day before.

Page One of Wednesday's News ran a large silhouette of Espada, and a block headline BOOT THE LOOTER. Pp 4, 5 and 6 are devoted to the Espada story, under the headline, HE'S KING SCAM OF THE BRONX. DIVERTING MILLIONS FROM CLINICS. The Post ran a news story headlined FEDS RAID ESPADA'S BRONX CLINIC, and editorialized on p28, PEDRO'S PLUNDER. The lawsuit alleged a history of fraud "breathtaking in its utter contempt for common decency." The Times' story, on page A22, was headlined F.B.I. RAIDS OFFICE OF CLINIC LINKED TO PEDRO ESPADA JR.

The de facto leader of the senate Democrats reacted to the lawsuit with characteristic indifference. John Sampson said he would not strip Espadas title as majority leader over the charge. "This is a civil matter There hasn't been any indictment. He deserves his day in court like any other person with respect to a civil matter."

"That means any one of us that gets involved in a civil matter, such as maybe a landlord-tenant dispute or a collection agency, any civil matter (could face the same thing). I think that's the wrong road to go down. There has been no indictment.

We believe that it is quite possible that the masters of Albany have never heard of the Honor Code, adopted by many colleges and military academies.

"A cadet will not lie, cheat, steal, or tolerate those who do." -- United States Military Academy. Link to other examples.

The key word here is 'tolerate'. Whether or not the Albany kingpins can be proven to be liars, cheaters and thieves themselves, it is clear that they tolerate such behavior on the part of their colleagues. Senators Neil Breslin of Albany and Martin Golden of Brooklyn stand alone in calling for Espada's withdrawal as majority leader. While it is true that indictments and civil complaints are merely accusations, the overwhelming weight of Cuomos civil complaint (Link to it here) should make it clear to anyone that there has been considerable misconduct in the financial management of Soundview.

The irony here is that the reason Espada is majority leader is his hegira last summer, which ended after a month when he rejoined his tribe of Democrats on condition that they award him the position they had denied him in January 2009, when they elected Senator Malcolm Smith. To regain their Senate majority, which they had lost as a result of the desertion of Espada and his co-conspirator, former Senator Hiram Monserrate, the Democrats chose John Sampson for the new position of conference leader, replacing Smith in substance as Democratic leader, although Smith remains as president pro tem of the Senate. Smith, Sampson and Espada all receive a large staff and lulu.

Although he is facing legal difficulties in Southern Queens as a result of his support for the Aqueduct Entertainment Group and selected nonprofits who received state funds and charitable contributions for New Orleans hurricane relief which have not been accounted for, president pro tem Malcolm Smith remains next in the line of succession to the governorship after Lieutenant Governor Richard Ravitch. Fortunately, both Governor Paterson and Mr. Ravitch appear to be in good health, nor has either been reported in the company of prostitutes, so they should last out the year in their current offices.

Senator Espada says that he is innocent of all wrongdoing, and that the charges against him are political retaliation for his dalliance with the Republicans. There may be a kernel of truth in the retaliation allegation, because Espada has been engaged in the same pattern of conduct for many years, and it was relatively recently that he became an object of intense pursuit by the authorities, state and federal. In prior years, Espada won a few preliminary skirmishes with the law (if winning is defined as not being convicted). This may have emboldened him to believe that he could get away with using Soundview as, in the words of Cuomo, a "private playground."

In many of these cases, there is one symbol of excess which captures the public imagination. In the Espada matter, it is the $20,000 worth of sushi delivered to his home in Mamaroneck at the expense of Soundview Health Center. Since no one person could gorge himself on that much sushi, it is likely that numerous guests assembled to feast on the Japanese delicacy. It is possible that some other treat, perhaps a beverage, was delivered to the Mamaroneck residence of the Bronx senator under the rubric sushi. Perhaps the records just seized by the Feds will provide enlightenment on that issue. Could the sushi claim be a fish story?

What is the public to make of all this? The sins of one man do wash over some of the others, especially if they cover for their buddy. The fact is that every Democrat, including Eric Schneiderman, a candidate for Attorney General, voted to make Espada majority leader of the Senate. There are mitigating circumstances everyone else did it. But they were not seeking to be the chief law enforcement officer of the State of New York. They all had a pretty good idea of what Pedro Espada did, both with regard to the Senate and to the Soundview Health Center, but they enabled him to become majority leader. Professional courtesy?

We have not yet mentioned here Espada's attempt in August 2009 to install one of his sons in a $120,000 a year job on the State Senate staff, deputy director of intergovernmental relations. The young man had no particular qualifications for the position. After Attorney General Cuomo said he would look into the hiring, the son hastily quit his new Senate job and returned to his duties as a vice president of the Soundview Health Center. The other two VPs were his brothers.

Hopefully, the United States Attorney for the Eastern District of New York will complete its investigation with the assistance of the newly acquired Soundview records, and we will move to the next phase of the case. If Espada is to be prosecuted, which seems likely, where will the case be tried? And how much time will be consumed by motions made before the trial.

It is beyond the competence of even diligent bloggers to measure and compare sins of avarice and lust. However, when one weighs Monserrate's losing his temper when he thought that someone he loved might be straying, with his colleague Espada's systematic operation of a health center now alleged to have $14 million less than it should, it would appear that, in terms of damage to the public interest and the public purse, the expelled Monserrate may have caused lesser public and greater personal harm. This does not minimize Monserrates crime, which would have been a felony except for the trial judge's scruples about reasonable doubt. But if the voters had re-elected Monserrate, he would still be a senator, since no one suggested refusing to seat him. What he received was an unscheduled recall election, which he lost by a 2 1 margin.

Espada is more intelligent than many of his colleagues. It is sad that he did not devote his gifts to legitimate public service. His brook too wide for crossing probably was his desertion from his party on June 8. The coup succeeded for the moment, but eventually the weight of the establishment, shown when the Court of Appeals upheld the appointment of Richard Ravitch, brought the insurrection to an end. And you should know what happens to unsuccessful conspirators. If you don't, read up on what Assembly Speaker Sheldon Silver did in a similar situation.