Last Updated: 4:43 AM, March 22, 2012
Posted: 1:28 AM, March 22, 2012
Pedro Espada Jr. found a clever way to avoid suffering a pay cut required by federal regulators of his Bronx nonprofit firm, a witness testified yesterday at the former state senator’s corruption trial.
The regulators told Espada when he was about to be promoted to state Senate majority leader that his added responsibilities in Albany would take him away from his work at the Soundview Healthcare Network. So his Soundview salary would have to be cut by 25 percent, they said.
But Espada didn’t lose money, because Soundview, which he controlled, gave him a steep pay hike just before the pay cut mandated by the regulators, Alexander Fear, ex-general counsel for Soundview Healthcare Network, told jurors.
Fear testified in Brooklyn federal court that the salary shuffle began Dec. 17, 2008, when Soundview’s board voted Espada a $61,680 pay increase — boosting his salary to $246,750.
A month later, Fear said, Soundview’s board lopped off that pay hike by an almost equal amount. The maneuver left Espada’s wallet no lighter than it had been.
In court, a prosecutor showed Fear the two Soundview documents that authorized the pay hike and cut. The documents were signed by Soundview board member John Feliciano.
“Were you aware that John Feliciano, the man who signed these two documents, was Espada’s uncle?” the prosecutor asked.
Fear answered, “No I was not.”
Prosecutors claim that even as he took a pay cut on paper — and filed legal documents stating he did so — Espada actually kept collecting the higher salary of $246,750.
He and son Pedro Gautier Espada are accused of looting government-funded Soundview and a cleaning company they controlled of more than $500,000 to fund a lavish lifestyle.
Also yesterday, a caterer testified she provided food at a June 2006 birthday party for Espada’s grandson in exchange for a $575 check from CEDC, the cleaning company.
“The people that came to pick [the food] up, they told me they were from the Soundview Health Center,” said caterer Carolyn Buckler.