Feds: N.Y. Assembly speaker obtained $4M in graft

New York State Assembly Speaker Sheldon Silver was arrested Thursday on charges that he used his position as one of the state’s most-powerful politicians to amass millions of dollars in bribes and kickbacks, federal prosecutors said.

Silver’s remarkable fall from grace came one day after he shared the stage with Gov. Andrew Cuomo during the State of the State address in Albany.

As Speaker of the Legislature’s Democrat-controlled lower house, Silver held significant power over the operation of New York government, particularly over the real estate industry and health care funding.

Silver, 70, was taken into custody at about 8 a.m. Thursday by FBI agents and charged with two counts of “honest services fraud, one count of conspiracy to commit honest services fraud, one count of extortion under color of official right and one count of conspiracy to commit extortion under color of official right,” said Preet Bharara, the U.S. Attorney for the Southern District of New York.

The charges, if resulting in a conviction, carry a maximum penalty of 100 years in prison.

Silver’s attorneys, Joel Cohen and Steven Molo, said in a statement: “We’re disappointed that the prosecutors have chosen to proceed with these meritless criminal charges. That said, Mr. Silver looks forward to responding to them – in court – and ultimately his full exoneration.”

Silver, who was released on bail, spoke briefly to reporters as he left court.

“I am confident that when all the issues are aired, I will be vindicated,” he said, according to CNN affiliate NY1.

In a criminal complaint, prosecutors said Silver abused his political influence and “obtained about $4 million in payments characterized as attorney referral fees solely through the corrupt use of his official position.”

“We hold our elected representatives to the highest standards and expect them to act in the best interest of their constituents,” FBI Special Agent-in-Charge Richard Frankel said in a statement. “In good faith, we trust they will do so while defending the fundamental tenets of the legal system. But as we are reminded today, those who make the laws don’t have the right to break the laws.”

Read the complaint

The lawmaker, who has been Assembly speaker for more than two decades, allegedly masked the payments from public scrutiny by disguising the graft as income from what he claimed was a personal injury law practice, according to the complaint.

“Over his decades in office, Speaker Silver has amassed titanic political power,” Bharara told reporters. “During that same time, Silver also amassed a tremendous personal fortune.”

The criminal complaint highlights the role of power and influence in what Bharara described as the “show-me-the-money culture of Albany.”

“These charges go to the very core of what ails Albany – a lack of transparency, lack of accountability, and lack of principle joined with an overabundance of greed, cronyism, and self-dealing,” Bharara said in a statement.

The complaint outlined an elaborate, alleged corruption scheme driven by influence and greed, including the siphoning of state funds to a doctor referring cases to the law firm where Silver worked and securing tax breaks for real estate developers.

The graft provided Silver about $700,000 in kickbacks from steering two real estate developers with business before the state to a law firm connected to the speaker, according to the complaint.

In addition, Silver allegedly collected more than $3 million in asbestos client referral fees. He received those fees by, among other official acts, awarding $500,000 in state grants to a university research center of a physician who referred patients with asbestos-related illnesses to Silver at the law firm where he worked, the complaint said.

Prosecutors also accuse Silver of actively interfering with the work of the state’s Moreland Commission to Investigate Public Corruption so it would not learn of his illegal income, including negotiating with Cuomo to prematurely end the commission. The panel issued subpoenas seeking information on the the outside income earned by lawmakers.

Cuomo, a fellow Democrat, appointed members of the anti-corruption commission in 2013, but disbanded the panel one year later in exchange for changes in campaign finance reporting requirements and bribery laws for the Legislature, the complaint said.

Bharara said Cuomo’s decision came as “great relief” to Silver.

Cuomo’s office declined to comment but, in a meeting with the New York Daily News editorial board, the governor called Silver’s arrest “a bad reflection on the government” and said the case against the speaker “vindicates” the commission’s work.

Bharara told reporters that a number of other public corruption investigations were continuing. “You should stay tuned,” he warned.

The state Assembly canceled its session on Thursday. Silver can continue to serve as speaker despite his arrest but would have to leave office if convicted of a felony, according to NY1.

Born on Manhattan’s Lower East Side, Silver is a graduate of Yeshiva University and Brooklyn Law School.