Long-time Assembly Speaker Sheldon Silver was hit last week with federal fraud and extortion charges.
Photo Courtesy of The Albany Project
As the smoke began to dissipate this week in the state Legislature, Assembly Democrats—those still standing, at least—were left with the gargantuan tasks of removing their embattled leader, and filling the void he leaves in his wake.
The power vacuum in the Lower House was prompted last Thursday by the arrest of long-standing Assembly Speaker Sheldon Silver (D-Manhattan) following a federal fraud and corruption probe charging one of Albany’s “Three Men in a Room” with using his official position to receive nearly $4 million in bribes and kickbacks from people and businesses in exchange for his official acts, according to U.S. Attorney for the Southern District of New York Preet Bharara.
Additionally, Bharara said, Silver, 70, masked these payments from public view by disguising them as income from what he claimed was a law practice primarily focused on personal injury matters.
Silver, who was released Thursday afternoon on $200,000 bail, has been 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. The presiding judge also issued seizure warrants to prevent Silver from accessing approximately $3.8 million in proceeds alleged to be traceable to the charges until the case is resolved.
According to the allegations in the 35-page criminal complaint unsealed in Manhattan federal court, for more than two decades, Silver used his position as Speaker—including his power over the real estate industry and his control over certain health-care funding—to unlawfully enrich himself by soliciting and obtaining client referrals worth millions of dollars from people and entities in exchange for his official acts, and attempting to disguise this money as legitimate outside income earned from his work as a private lawyer.
In particular, the complaint alleges that Silver claimed on financial disclosure forms required to be filed with the State and in public statements that the millions of dollars he received in outside income while also serving as Speaker came from Manhattan-based law firm, Weitz & Luxenberg P.C., where he claimed to work “representing individual clients” in “personal injury actions.” These claims were materially false and misleading—and made to cover up unlawful payments Silver received solely due to his power and influence as an elected official and the Speaker of the Assembly.
The alleged scheme provided Silver with two different streams of unlawful income: approximately $700,000 in kickbacks he received by steering two real estate developers with business before the state Legislature to a law firm run by a co-conspirator; and more than $3 million in asbestos client referral fees Silver received by, among other official acts, awarding $500,000 in state grants to the university research center of a physician who referred patients made ill by asbestos to Silver at Weitz & Luxenberg.
“Politicians are supposed to be on the people’s payroll, not on secret retainer to wealthy special interests they do favors for,” Bharara said. “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.”
Each of the five counts with which Silver has been charged carries a maximum penalty of 20 years in prison.
On Tuesday, Assembly Majority Leader Joe Morelle (D-Rochester) indicated that by next week, Silver will either resign from his Speaker post or be forced out of it by his party. Morelle will serve as Speaker on an interim basis until a new one is elected in February.
By Michael V. Cusenza
