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Silver faces corruption charges

ALBANY – In what Assembly Democrats privately fear appears to be a strong criminal case that could send him to prison for years, Assembly Speaker Sheldon Silver was charged Thursday with pocketing nearly $4 million through kickbacks and bribes while serving as a powerhouse in New York State politics for the last generation.

The federal case against Silver, involving allegations that he enriched himself by getting real estate developers and a physician to retain the services of two law firms with which he was connected, appears to be stronger than the federal prosecution that several years ago drove former Senate Majority Leader Joseph L. Bruno from office, sources in Albany and Manhattan say.

Word that U.S. Attorney Preet Bharara was gathering a strong case against Silver has been whispered about at the Capitol for months, but the breadth of the material in the complaint against the Lower Manhattan Democrat was stunning, even by Albany standards.

“These charges, in our view, go to the very core of what ails Albany: lack of transparency, lack of accountability and lack of principle joined with an overabundance of greed, cronyism and self-dealing,” Bharara said at a Manhattan news conference after Silver surrendered to FBI agents earlier in the day.

“For many years, New Yorkers have asked the question: How could Speaker Silver, one of the most powerful men in all of New York, earn millions of dollars in outside income without deeply compromising his ability to honestly serve his constituents? Today, we provide the answer: He didn’t,” said Bharara, who has earned a reputation fighting Albany corruption.

Law firm at the center

Bharara said the five separate counts against Silver carry prison terms of up to 20 years each. More cases are coming involving state officials, he said.

The image of Silver, 70, in the rear seat of a car after being arrested, with his hands behind his back clearly handcuffed, beamed throughout the day on television sets throughout the Capitol. A judge released Silver on his own recognizance after setting bail at $200,000. Also on Thursday, prosecutors obtained a court order freezing $3.8 million of Silver’s money that they said he tried to hide in eight bank accounts.

Silver said he is confident of his vindication, and his two lawyers issued a statement saying that they are “disappointed that the prosecutors have chosen to proceed with these meritless criminal charges” and that the Democratic leader looks forward to “his full exoneration.”

Silver’s campaign account balance totals $3.3 million as of week ago, and he can dip into that to pay his defense team.

The federal case runs deep, as court papers appear to show that numerous people have been cooperating in the investigation.

The 35-page complaint released Thursday portrays a politician engaged in bribery and kickbacks since at least 2000.

The fraud and corruption complaint portrays a chilling series of allegations in which a politician enriched himself at the public’s expense. Silver, a recent Buffalo News analysis showed, has negotiated more than $2 trillion worth of state budgets since he became speaker a generation ago.

Collecting millions

Federal prosecutors accused Silver of illegally getting $4 million over the years by tapping into the power of his office to affect the outcome of New York City rent control laws to the benefit of developers and steering Health Department contracts to a physician who agreed to Silver’s request to send business to a Silver-connected law firm.

The federal complaint alleges that Silver took home $3 million in a scheme involving a physician who referred asbestos cases to the Weitz & Luxenberg law firm and that he later helped the doctor get $500,000 in state funding for his research work. State Health Department officials were among those who raised red flags with investigators. Various media accounts identified the physician as Dr. Robert N. Taub of Columbia University’s Mesothelioma Center. Silver also got $700,000 from another law firm after real estate developers, with business before the state, used the law firm to represent them.

The complaint does not identify that firm, but media reports have said Silver got the income from Goldberg & Iryami.

One developer, not identified in the complaint, was a major political player, as well, making more than $10 million in contributions over the last decade to various state politicians and political campaign accounts, including the Democratic Assembly Campaign Committee.

The complaint says Silver received “corrupt kickbacks” from the real estate law firm, after he steered to the firm developers “who had and continue to have significant business before Silver and the state.” It said Silver performed “no work whatsoever” for the law firm.

Moreland connection

Investigators say in the complaint that information prosecutors obtained from a state anti-corruption panel known as the Moreland Commission was used as part of the evidence in their federal case against Silver. Gov. Andrew M. Cuomo shut down the state panel in March after reaching a political deal. The federal case against Silver commenced in June 2013.

Bharara’s office also has been looking into whether anyone in the Cuomo administration interfered with the work of the investigation panel.

Cuomo’s office declined immediate comment, but the governor Thursday told the Editorial Board of the New York Daily News that the federal complaint against Silver is a “bad reflection on government.” He declined to say whether Silver should resign.

Federal investigators noted that Silver and other lawmakers took legal steps to try to stop the Moreland Commission from looking at the full disclosure about their outside law firm clients.

Silver has long identified his outside income as coming from the New York trial law firm of Weitz & Luxenberg. He has never identified his clients, but his spokesman, court papers say, characterized the clients as “plain, ordinary simple people.”

‘Dispiriting’ conduct

The complaint field Thursday says that since late 2002, Silver has received more than $6.2 million in outside income from the two law firms. Silver also makes a base pay of $79,500 in the Assembly and a stipend of $41,500 for his speaker’s post. Investigators combed files to check Silver’s claims that he did work on personal-injury cases for “individual clients” but could find “no cases in which Silver had entered an appearance as a lawyer.”

After getting a grand jury to issue subpoenas, investigators obtained documents from Weitz & Luxenberg showing that Silver was credited with referring more than 100 clients to the firm over the years.

Investigators said records from the law firm showing “work actually performed by Silver” for the firm involved a single property dispute case – and that the represented individual worked for the Assembly. Bharara said it is “especially dispiriting”that so high an official as Silver abused his public trust by using his office to “monetize” himself.

Silver received a $120,000 salary from one of the law firms. “But that wasn’t enough for the speaker,” Bharara said.

Federal prosecutors twice sought to convict Bruno, the former Senate GOP leader, on fraud charges, but the second case ended in his acquittal.