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Former Bronx state Sen. Pedro Espada Jr. was in Brooklyn federal court this month, looking trim and sharp in a black suit. A onetime amateur boxer, Espada was there for a status conference on his federal indictment on charges that he and his son embezzled more than half a million dollars from his Bronx health care clinics. “I’m feeling great,” he announced outside the courtroom. “Never better.”
That’s Pedro Espada for you: Chin up. No shame. Ready for the next bout. If there was a championship belt awarded for Leading Scoundrel of the State Legislature, Espada would win it hands down. This is a man who used funds from his clinics-for-the-poor to pick up his $110,000 restaurant tab, then stiffed his own tailor for the custom-made suits he ordered. He rates a category all his own. Espada was such a relentless schemer that even his own constituents rejected his re-election bid for the Senate last fall. And that’s not easy to do. As the Citizens Union reports, 96% of state incumbents won re-election over the past dozen years.
But while he’s no longer working the angles in Albany, the case of Pedro Espada Jr. still represents our clearest profile in political dysfunction. Even Brooklyn state Sen. Carl Kruger, Espada’s closest political ally, who was arrested last week in his own high-stakes, pay-to-play corruption probe, did his best to stay carefully (if unsuccessfully) below the investigative radar.
Not Espada. He flaunted it. His role models, he proudly proclaimed, were Ramon Velez, the scandal-scarred South Bronx political baron who also lived like a potentate off of his government-supported health clinics, and Rev. Louis Gigante, who built a nonprofit housing empire aided by pals of his brother, top gangster Vincent “The Chin” Gigante.
Given his fate, we’re not likely to see Espada’s type of brazen performance again anytime soon. But it’s worth taking a good look at how he prospered, who backed him up, and what his story tells us about our crippled state democracy.
For starters, let’s note that it’s only thanks to the voters in his northwest Bronx district that Espada isn’t still strutting the Capitol aisles. Law enforcement investigators from at least three agencies — the state attorney general, the FBI and the IRS — were combing through the records of his Soundview Healthcare Network at the time of his fall primary. A separate investigation by the Bronx district attorney was underway into where he really lived — in his ranch house in leafy Westchester County where he spent most of his time, or in the small Bronx apartment he claimed as his legal residence.
But his indictment on federal charges didn’t come until late December, months after he’d lost to Gustavo Rivera, the gutsy young rookie candidate who beat him in September.
Even under indictment, Espada would have remained in office, just like at least a dozen legislators who have stuck around long after being charged with wrongdoing. One of those was veteran Sen. Efrain Gonzalez, who had been facing his own federal corruption charges for more than two years when Espada defeated him in a 2008 primary.
Gonzalez was accused of pocketing $400,000 in state funds he routed to local nonprofit groups (he later pled guilty and got seven years in prison). Espada, believe it or not, ran as the reformer — the man who was going to clean things up. There was a tiny voter turnout that year, but Espada won decisively.
Which suggests that, minus Rivera’s spirited challenge last fall, Espada would still be a political force to be reckoned with, and presumably up to his old tricks.
“I have no doubt Espada would not have changed his behavior at all,” says Manhattan state Sen. Liz Krueger, who broke with Albany tradition by supporting Rivera’s challenge to a fellow incumbent.
That’s one thing you can say for the 57-year-old politician: He’s remarkably consistent. Espada’s first tour of duty in the Senate, representing a different Bronx district, began in 1993. While there, his biggest claim to fame came in 2002 when he decided he was tired of being a Democrat. He switched over to sit with then-Majority Leader Joe Bruno’s Republicans.
It didn’t take long to figure out how Bruno had lured the Bronx Dem across the aisle: Espada was awarded $2 million in member-item grants to give to nonprofit organizations of his choice. Back then, this insider pork-barrel trading was a closely guarded secret. Until a lawsuit by the Albany Times Union cracked open the process, the names of legislators doling out the pork were never disclosed.
Hidden behind this veil, Espada directed that the biggest chunk — $745,000 — go to what he said was the most deserving organization in his district: his own health care clinics, which were then paying him a $236,000 a year salary, and where many family members were also employed.
Even under the legislature’s porous ethics rules, this handover of taxpayer cash to an organization where he had a financial interest was a violation. But Senate officials saw nothing amiss until reporters started asking questions. The grants were quickly dropped. A state grand jury in Albany subpoenaed records about the transaction. Espada played victim. “It’s witch-hunt time,” he said when asked about the probe. No charges were ever filed.
Here’s the consistent part: As soon as he made it back to the Senate in 2009, Espada pulled the same stunt. This time he had a new twist that he hoped would avoid tripping the same alarms. After he and Kruger threatened to lead a breakaway contingent of Democratic senators to upend their party’s new majority, Espada was allotted a whopping $2.25 million in funds. The money came out of the same pork-barrel pot of member items that Bruno had doled out to his own allies.
The newly elected senator knew just where it should go: He directed $1.3 million to a group with the earnest-sounding name of Bronx Human Services Council; he earmarked $875,000 to another nonprofit outfit, called Green Eco Energy Inc.
Both groups had zero track records. That was because they were brand-new, formed just days before a state budget deal was reached. The chairman of the board of Bronx Human Services was a special assistant on Espada’s Senate staff; Green Eco Energy was incorporated by Espada’s own attorney. That spring, when I asked lawyer Daniel Pagano who the officers of Green Eco were, he said he had no idea. “I assume Mr. Espada sent them my way. All I am is an agent.”
This time, Senate staffers did their homework. They noted that the brand-new groups were based at Espada-tied addresses.
It was shortly after those grants were nixed that Espada reverted to form: He went over to the Republicans again.
This is where the real shame of Albany comes to light.
Espada’s M.O. was hardly a secret. Both parties had been down the road a piece with him already. Both had had a chance to see him for what he was: a political con artist in search of a big score.
This didn’t stop the GOP, and then the Democrats, when he soon returned to the fold, from embracing him. The political rationale here was that, in an evenly divided senate, Espada held a crucial and deciding vote.
But instead of denouncing his shakedowns, both parties wooed Espada with offers of huge political power. The Republicans made him Senate president, the second top job. When the Democrats got him back on the rebound, they did even better, naming him their majority leader.
The job came with big perks. Figures released this year show that, thanks to his lofty title, Espada had the Senate’s largest payroll, more than $1 million, with a 50-person staff. There were 20 “community outreach” employees, even a western New York office headed by a Buffalo-based political fixer named Steve Pigeon at a salary of $150,000 a year.
Thanks to his repeated threats to vote with the Republicans, Espada wrested another huge asset from his Democratic colleagues — head of the Senate housing committee. The post is one of those Albany sinecures, a spot that bank-robbing legend Willie Sutton would have recognized as “where the money is.” That’s because the chairman is the point man for legislation involving development and rent regulation — areas of vital interest to New York’s biggest landlords and developers.
Despite Espada’s growing reputation for self-dealing, the campaign checks rolled in, signed by prominent citizens who should have known better. Wealthy real estate tycoons poured more than $400,000 into Espada’s campaign coffers (a full accounting is impossible since Espada failed to file many of his required campaign disclosure reports).
The money kept coming even after then-Attorney General Andrew Cuomo filed a sweeping civil suit in April, alleging that Espada had looted millions out of his clinics. One of Espada’s biggest donors — contributing $25,000 to his re-election kitty — was landlord Laurence Gluck, who was seeking to raise rents at several subsidized apartment complexes he’d purchased. Other checks came from top members of the Real Estate Board of New York, the city’s leading landlord organization. When I asked REBNY president Steve Spinola last year why he and his members were keeping such company, he brushed the concerns aside. “I am not going to jump on him without seeing what happens,” he said. “Do you believe everything you read in the papers?”
The owners had a strong ally. Espada repeatedly squelched pro-tenant legislation in his committee, while promoting bills backed by the real estate industry. Ties between the legislator and the tycoons were so close that Espada’s Senate communications aide, Steve Mangione, moonlighted for a major landlord organization, scripting their radio ads. Meanwhile, Espada’s communication with tenant advocates was limited to angry exchanges outside the Senate chambers. In one memorable video-taped confrontation last summer, an enraged Espada is seen reaching into his pocket and throwing crumpled dollar bills at chanting protestors before escaping into the Senate men’s room.
If you freeze-frame that tape on Espada’s snarling face, a reasonable question arises: How did this happen? How did someone like this become an important lawmaker? The answer is that Albany’s standards have long been that low.
Back in 2002, investigators under Manhattan District Attorney Robert Morgenthau caught a Bronx assemblywoman named Gloria Davis stuffing $11,000 into her purse. The money was from a builder seeking her help on a state construction contract. Davis soon pled guilty and went to jail.
You’d think that Davis’ caught-on-video moment might have scared self-dealing politicians into going straight. Wrong. The clever among them just became more careful.
We got a good peek at this crafty, high-level cynicism at the 2009 corruption trial where Espada’s former Republican ally, Joe Bruno, was convicted of using his office to win high-paying private clients. On the witness stand, Bruno’s veteran senate legal counsel, Kenneth Riddett, testified that he regularly instructed senators not to put their personal financial disclosure forms in the mail. “They should be hand-delivered, not mailed,” Riddett said he told legislators. He made no bones about the legal thinking behind his warning: “There were, quite frankly, concerns with federal mail fraud statutes.”
Note that the senators understood that they had nothing to fear from their own Legislative Ethics Commission. The panel allegedly rides herd on members’ ethical performance. But it’s somehow managed to find little fault. So far, the commission has cited just one instance of wrongdoing: a legal defense fund that was set up by disgraced former Sen. Hiram Monserrate to raise money for his legal bills after he was charged with assaulting his girlfriend. And it took good government groups to flag this obvious breach of the law.
After his misdemeanor assault conviction, Monserrate, a longtime Espada cohort, became the first legislator expelled in 80 years. He is still yet to be punished for his ethics violation. But then, he’s got bigger troubles: He’s awaiting trial on separate corruption charges in Manhattan federal court, where he’s charged with illegally using a nonprofit group — one that he had supported with taxpayer contributions as a City Council member — in his political campaigns.
Legislators have made funneling money to nonprofits with which they have close ties into an art form. Currently, at least a half-dozen legislators are under investigation for such alleged schemes, including Brooklyn Assemblyman Vito Lopez and state Sen. Malcom Smith and Assemblywoman Vivian Cook, both of Queens.
Yet another jarring lesson in this legislative mindset emerged from audio tapes played at the sentencing hearing for Queens Assemblyman Anthony Seminerio. A veteran pol, Seminerio pled guilty in 2009 to bribery; he died in prison in January. Seminerio thought he was talking to an old friend when another convicted legislator, Assemblyman Brian McLaughlin, asked him for advice while wearing an FBI wire. On the tapes, Seminerio was heard offering his own cynical epitaph: “What the f – – – does it mean that we’re elected officials?” he said. “It doesn’t mean s – – -.”
Last month, the Brennan Center for Justice, which has long pushed for ethics reforms, tabulated the number of state legislators indicted or convicted in the past decade. The rogues gallery had 14 names. They’ll have to do an update, since the list grew by two last week, when Kruger and state Assemblyman William Boyland were charged with taking bribes from legislative favor-seekers.
At the press conference announcing those charges, Manhattan US Attorney Preet Bharara, who has made fighting public corruption a top priority, put the blame where it belongs. “No matter how many times the alarm goes off, Albany just hits the snooze button,” he lamented.
Gov. Cuomo repeated a threat he’s made several times in his effort to win approval for a tough ethics reform bill now pending in the Legislature, one that would finally put teeth into enforcement. “New Yorkers deserve a clean, transparent government,” he said.
If his bill’s not passed, warned Cuomo, he’ll invoke a Moreland Act Commission to scrutinize the Legislature’s many failings. Such commissions come with subpoena power, and virtually open-ended authority to dig behind the scenes. Just the kind of thing Albany hates most.
As Blair Horner, longtime Albany observer, puts it, “It really is still Dodge City, without Wyatt Earp.”
Longtime New York City reporter Tom Robbins is the Investigative Journalist in Residence at CUNY Graduate School of Journalism.