The Feds finally caught the big (Silver) fish:

Here’s the lowdown from the NYT:

The complaint maintains that for more than a decade, Mr. Silver devised a scheme “to induce real estate developers with business before the state” to use a real estate law firm controlled by a lawyer who had once worked as Mr. Silver’s counsel who orchestrated payments to the speaker for referrals to the firm.

The complaint said that “there is probable cause to believe that Silver received approximately $4 million in payments characterized as attorney referral fees solely through the corrupt use of his official position.”

Prosecutors, according to the complaint, said that Mr. Silver did essentially no work for the payments.

Prosecutors seized approximately $3.8 million of Mr. Silver’s money on Thursday morning.

The New York Times reported today that:

The top federal prosecutor in Manhattan, who sharply criticized Gov. Andrew M. Cuomo’s shutdown of a commission he had formed to investigate political corruption in New York State, is now seeking records from the state’s ethics panel.

The state’s Joint Commission on Public Ethics received a grand jury subpoena recently from the office of Preet Bharara, the United States attorney for the Southern District of New York, for all complaints the commission has received on public corruption, according to two people briefed on the matter but not authorized to speak on the record.

According to the Times, the federal prosecutor who is issuing the subpoena said that JCOPE was not itself a target of their investigation.

Bharara has taken up the work of finishing the investigations of the Moreland Commission, which Cuomo shut down prematurely as part of a deal with Albany legislators in return for modest ethics law reforms.  Now, it looks like Bharara wants to help JCOPE do its job as well.

This does not bode well for anyone in Albany.  Bharara is on the warpath.  And, unlike the Moreland Commission, JCOPE or any other state ethics body, no one in New York state politics controls Bharara or his investigation.

Here is the Moreland Commission’s summary of findings in its Preliminary Report:

Among many other things that the Commission has been investigating, and will continue to investigate, our review includes the following:

Pay-to-play: The Commission is investigating a number of so-called “pay-to-play” arrangements, in which wealthy interests allegedly exchange targeted campaign contributions for targeted pieces of legislative action. Among other areas, these investigations include a tax abatement program benefiting certain real estate interests; a carve-out for a large retailer to the minimum wage increase; an exemption for a big company to an independent contractor law; and various custom-tailored laws that a particularly influential lobbyist has been able to secure for a disparate group of high-paying clients. Because these investigations are ongoing, the Commission has drawn no conclusions about the propriety of the particular actions and actors under review.

Loopholes: The Commission is investigating gaping loopholes, including the LLC and party “housekeeping” account loopholes, which allow wealthy donors to side-step already sky-high contribution limits. With respect to the LLC loophole, for example, the Commission has found that one entity has used 25 separate LLCs and subsidiary entities to make 147 separate political contributions totaling more than $3.1 million dollars since 2008. With respect to the housekeeping loophole, the Commission finds it to be unjustifiable in light of the apparent electioneering and coordination that is facilitated by the high contributions made into these accounts. For example, in one investigation, the Commission has uncovered seeming coordination between two party housekeeping accounts, in which one bankrolled attack ads that were run in the other’s name. With respect to both loopholes, the Commission has seen frank discussions about their utility as a contribution vehicle by those who take full advantage of them.

Use of Campaign Funds: The Commission is investigating certain legislators’ liberal use of campaign funds for apparently personal uses. The concern is that the contribution of almost unlimited campaign funds from wealthy donors to contract for specialized legislation can amount to legalized bribery when those “campaign” funds can be used by the legislator to buy anything from clothing to cigars to stereo equipment. More troubling than these itemized expenditures are the bulk unitemized expenditures that are regularly drawn from campaign accounts without any indication as to how and for what the money is being used. Perhaps most troubling of all are what may be instances of “double-dipping,” in which several legislators appear to lease or purchase expensive vehicles with campaign funds while personally claiming tens of thousands in travel reimbursement from the state. The Commission is mindful that these investigations are preliminary and ultimately may show nothing more than campaign finance deficiencies. However, the ongoing investigation – which will entail a careful review of campaign bank records, credit cards, and swipecards – will resolve these outstanding questions.

Conflicts of Interest: The Commission is investigating conflicts of interest, including conflicts arising from legislators’ outside employment and from their allocation of member item and other discretionary funding. In the intersection of these areas of investigation, the Commission has been examining the relationship between an elected official, a company the official owns, and an entity doing business with that company. We have found that the entity has paid large sums of money to the official, indirectly through the official’s company; at the same time, the official has been directing discretionary funds toward the entity. In one instance, after the entity received notification of a large grant procured with the assistance of the official, an executive of the entity remarked in an e-mail that “it was likely that over the last 15 years, we had paid [the Official] . . . more than [the Official] was now giving us.” Because the Commission continues to investigate context and relationships, and because it has not yet heard the perspectives of the official and the entity (both of whom have cooperated with the Commission), we emphasize that we have found no impropriety to date and reach no conclusion at this time.

Member Items and Legislatively-Directed Funding Grants: The Commission is looking closely at a group of non-profits in another investigation into potential conflicts of interest and legislatively-directed discretionary funding grants. In this investigation, the Commission has focused on one small storefront in New York City that appears to house several interconnected non-profit organizations that receive state funding to provide various medical services. Initial findings suggest that one organization alone has received nearly $3 million in legislatively-directed discretionary state funding from powerful out-of-district lawmakers to perform these services with little scrutiny and no medical oversight. Our undercover investigation and our analysis of subpoenaed documents raise questions about the justification for, and oversight of, the discretionary spending. Because the Commission continues to investigate this organization – which may well offer certain legitimate services – and because it has not yet heard the perspectives of the individuals involved, we emphasize that we have found no impropriety to date and reach no conclusion at this time.

Board of Elections: The Commission is investigating the State Board of Elections, focusing on the Board’s enforcement practices. In conducting this investigation, the Commission has held a public hearing, issued subpoenas, conducted numerous witness interviews, deposed a former Board investigator, conducted an in-depth audit of every complaint received by the Board since 2008, and analyzed hundreds of thousands of documents. We have found that the Board’s process for considering complaints is inadequate, and that the Board fails to prioritize complaints in any meaningful way. By Board policy, anonymous complaints are closed without inquiry, and complaints related to an upcoming election are ignored until the election has passed. When the Board does review complaints, there are inexcusable delays, and the Board almost never opens investigations. To the extent the Board engages in any enforcement-related activity, this activity is generally inadequate and inefficient. This activity generally consists of audits that are critically deficient and fail to single out the most significant offenders or repeat offenders for possible further enforcement action. In spite of the Board’s consistent refrain that it lacks the resources needed to engage in significant enforcement activity, the Board fails to make use of the resources and powers it has at its disposal. The Board has a “bipartisan” structure, whereby significant positions, including the commissioner positions, are split evenly between the Democrats and the Republicans. We have found that this bipartisan structure inhibits, and at times prevents, significant enforcement action from being taken. The Board has failed to carry out its duty to enforce the Election Law, enabling the culture of corruption in Albany.

The Commission’s preliminary observation is that both the general state of our political system, and the way business is transacted within it, cry out urgently for reform. New York needs comprehensive reform to restore the public trust, including changes to our election law enforcement, our campaign finance system, to our policing of conflicts of interest, and to the penal law tools that we give prosecutors to fight corruption. The reforms we propose are a strong and holistic step toward making our State an unwelcome, unforgiving environment for misconduct and public abuses.

Here is the full Report:  Preliminary Report of the Commission to Investigate Public Corruption

NY Assembly Speaker Sheldon (“Shelly”) Silver has taken a lot of heat for his role in “investigating” the sexual harassment charges against his Assembly colleague Vito Lopez.  This is now the second time in about a decade that Silver has faced criticism for his handling of a sex scandal.

About ten years ago, Silver’s former chief counsel, Michael Boxley, pleaded guilty to criminal charges arising from his alleged rape of a legislative staffer.  Boxely’s victim in that case was actually the second female staffer to report that she had been raped by Silver’s top lawyer.  The first woman alleged that when she reported Boxley to Silver, Silver just sat there and ate pretzels and then referred the matter to the Assembly’s notoriously lenient ethics panel, which was led by one of Boxley’s close colleagues and associates.

According to reports, Silver has no intention of resigning over his handling of the Lopez affair.  And why should he?  For some reason, his constituents in lower Manhattan simply don’t care enough about his repeated and blatant actions to shield the Assembly from sexual harassment and rape allegations to vote him out of office.

Nor is there any pressure from his fellow New York Democrats to push him out.  As some of the profiles of Silver below point out, after 20 years Silver is still very popular in his party.  And no wonder.  Not only does he hand out pork “member items” to his loyal followers, he has repeatedly demonstrated that he will reward that loyalty by doing his absolute best to protect Democrats in the Assembly from any ethics or criminal charges, no matter how disgusting, that anyone brings against them.

• Lopez Substantial Basis Investigation Report, JCOPE (Feb. 12, 2012)

• Shelly The Survivor, The Jewish Week (May 22, 2013) (“But as he emerges from the Vito Lopez scandal as powerful as ever — facing only muted calls for him to step down after an ethics commission faulted his handling of sexual harassment charges against the Brooklyn legislator and party leader — observers say it’s gratitude rather than fear that keeps him in power.”)

• Former legislative staffer says Sheldon Silver is ‘repeating’ mistakes with Vito Lopez case, NY Daily News (May 22, 2013) (Interview with former legislative staffer Elizabeth Crothers, who accused Silver’s top lawyer of raping her)

• How Shelly tarnished himself, NY Daily News (May 21, 2013)

• New York State Assembly Speaker Sheldon Silver says ‘I’m sorry’ for his role in the Vito Lopez sex scandal coverup, NY Daily News (May 21, 2013) (“Now in his 20th year as speaker, Silver (D-Manhattan) said he has given no thought to resigning his leadership post despite calls by Republicans and newspaper editorial boards that he step down.”)

• Bad Week Is Merely Bump for Assembly’s Master of Power, NY Times (May 20, 2013)

• Report Finds Lawmaker Was Shielded by Leaders, NY Times (May 15, 2013)

• SI DA blasts Silver for protecting Vito Lopez during harassment scandal, NY Post (May 15, 2013) (“My investigation revealed that during the mediation and negotiation of a settlement, the chief concern of those in the Assembly was mitigating the Assembly’s damages,” Donovan wrote. “That goal outweighed any interest in investigating or disciplining Assembly Member Lopez or in preventing similar occurrences in the future.”)

• Silver Wields Power by Keeping Albany Guessing, NY Times (June 20, 2007)(“In the last fiscal year he was the sole sponsor of $7.2 million in member items and directed about 70 percent of that to organizations and services in his district, many affiliated with his important Jewish and Chinese constituents.  Among the most favored beneficiaries in the last fiscal year was the Metropolitan Council on Jewish Poverty and its affiliated organizations, which received nearly $1 million. The group’s chief executive, William E. Rapfogel, is the husband of Mr. Silver’s chief of staff, Judith Rapfogel. The council is widely acknowledged to provide useful services to all ethnic and racial groups throughout the city, and has long received generous public financing.”)

• Sex-rap Shel aide returns as lobbyist, NY Post (May 2, 2013)

• Assemblyman Sheldon Silver Pestered by Yet Another Potential Felony, Village Voice (Sept. 17, 2012)

• SUNSHINE FOR SHELLY, NY Post (July 21, 2008) (“Cavalier. Outrageous. Disgraceful.  Those are the exact words that pit- bull Supreme Court Justice Emily Jane Goodman used last week to describe the conduct of Assembly Speaker Sheldon Silver in handling multiple sexual-assault allegations against his former chief counsel, Michael Boxley.)

• Silver Wins a Ruling Related To Aide’s Sexual Misconduct, NY Sun (July 17, 2008)(“Ms. Crothers chose not to file criminal charges and asked the Assembly to investigate the matter internally. While his office conducted its probe, Mr. Silver defended Mr. Boxley, calling him “a man of highest integrity and of the highest character.””)

• Ex-staffer says top Shelly aide raped her and Silver did nothing about it, NY Daily News (June 25, 2008)

• Albany Faces Its Sex Problem, and Nobody’s Snickering, NY Times (May 16, 2004)

• Aide to Silver Is Arrested In Rape Case, NY Times (June 12, 2003)