Morning Roundup: The Arrest of Sheldon Silver on Corruption Charges

The morning papers are filled with stories about yesterday’s shocking arrest of Assembly Speaker Sheldon Silver on federal corruption charges. The breathtaking allegations are rocking New York politics and, of course, Silver’s home district here on the Lower East Side. Here’s a roundup.

The New York Times broke the story late Wednesday night and has the most comprehensive coverage again today. Here’s how the newspaper sums up the case against the longtime Speaker:

For years, Mr. Silver has earned a lucrative income outside government, asserting that he was a simple personal injury lawyer who represented ordinary people. But federal prosecutors said his purported law practice was a fiction, one he created to mask about $4 million in payoffs that he carefully and stealthily engineered for over a decade. Mr. Silver, a Democrat from the Lower East Side of Manhattan, was accused of steering real estate developers to a law firm that paid him kickbacks. He was also accused of funneling state grants to a doctor who referred asbestos claims to a second law firm that employed Mr. Silver and paid him fees for referring clients.

At a news conference yesterday afternoon, U.S. Attorney Preet Bharara did not mince words. A few excerpts from what’s been described as his “swaggering” performance:

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.

At the end of the day, all told, we allege that Sheldon Silver effectively converted $500,000 in public money into over $3 million in personal riches, which is a nice profit on being a public official… Politicians are supposed to be on the people’s payroll, not on secret retainer to wealthy special interests they do favors for.

The greedy art of secret self-reward was practiced by particular cleverness and cynicism by the speaker himself… 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.

A federal magistrate froze $3.8 million Silver had dispersed among eight accounts and barred him from leaving the country. He was released on a $200,000 personal recognizance bond. Silver signed a court illustrator’s sketch on his way out of the courtroom and then told reporters, “I’m confident that after a full hearing and a due process, I will be vindicated.”

The five-count indictment charges Silver with wire fraud, mail fraud, conspiracy, and extortion. Although unnamed in the 35-page criminal complaint, a small law firm, Goldberg & Iryami, is at the center of the case against Silver. Prosecutors say the Speaker received about $700,000 for referring two real estate development companies to the firm. As the Times explains, investigators believe there was a clear quid pro quo:

One of the developers was Glenwood Management, according to people familiar with the matter. Glenwood develops luxury apartment buildings in Manhattan, has been an enormous contributor to state politicians and has a significant interest in matters before the Legislature, such as measures dealing with real estate taxation. While receiving fees from the real-estate law firm, Mr. Silver took actions that benefited the developers, prosecutors said.

Silver’s arrest threw Albany into chaos. Predictably, Republicans called on him to resign. But for the moment, Democrats remain in the Speaker’s corner. Majority Leader Joseph Morelle said, “We have every confidence that the speaker is going to continue to fill his role with distinction.” Mayor de Blasio, who is counting the Speaker to advance his progressive agenda in Albany, said “I’ve always known Shelly Silver to be a man of integrity, and he certainly has due-process rights.” Meanwhile, Governor Cuomo told the Daily News editorial board that the new ethical scandal is “a bad reflection on government,” but he added that its up to the Assembly to decide whether Silver should continue in his pivotal leadership role. A piece in the Times examines the political consequences:

His power unbending, his whims often unexplained, Sheldon Silver, in his two decades as speaker of the State Assembly, became a seemingly indestructible presence at the nucleus of the New York political world, a steady advocate for liberal causes and a master tactician in Albany’s closed and entrenched way of governance. But Mr. Silver’s arrest on Thursday on corruption charges has thrown into question that arrangement, in which the governor and the leaders of the two chambers of the Legislature privately decide the most crucial policies of the state. It is a potentially seismic shift in power whose reverberations may be felt throughout the state, from the speaker’s home district on the Lower East Side of Manhattan to the grounds of the State Capitol.

The Post notes that Silver has lived “a low-key, modest lifestyle — never leaving his boyhood Lower East Side neighborhood.”  Silver’s wealth, the headline reads, was a “well-kept secret:”

The Orthodox Jewish assemblyman still lives with his wife, Rosa, in a Lower East Side co-op apartment at 550 Grand St., which is just blocks away from the apartment he grew up in. He’s a fan of cheap haircuts at Astor Place Hairstylists — and insisted on driving his own car around when assembly was in session… When Silver, 70, moved into the Cooperative Village’s Hillman Houses many years ago, his apartment was a “limited dividend co-op,” meaning it merited some serious tax exemptions in exchange for price regulations. Back then they might have paid less than $10,000 for the property — but its sale price is likely now $500,000.

The editorial pages, as you might expect, are having a field day with the story. The Daily News:

After Gov. Cuomo made an issue of Albany ethics, Silver fought tooth and nail against every reform. Ultimately, Silver used his muscle in a court battle to stop Cuomo’s Moreland Commission from obtaining the same information now uncovered by a federal grand jury. Cuomo disbanded the panel, surely to Silver’s short-lived relief. But today he’s toast. And how sweet it is.

The Times:

As astonishing as it was to see Sheldon Silver, the speaker of the New York Assembly, surrender to the F.B.I. on corruption charges Thursday morning, it is even more incredible that he can choose to go on serving in his job while he defends himself against bribery and kickback charges involving millions of dollars. In New York’s sleazy political world, where fairly obvious corruption is not just tolerated but encouraged by ethics laws that barely deserve the name, Mr. Silver does not have to relinquish his power even temporarily. That, in fact, is something he should have done two years ago after the disclosure of his role in silencing a sexual harassment complaint against another lawmaker.

The Post:

…The US attorney tells us Silver “sat back and collected millions of dollars by cashing in on his public office and political influence.” That explains why Silver fought so hard to prevent the Moreland Commission from getting a look at his outside income. But it doesn’t explain why the governor agreed to close the commission down. Meanwhile, Albany goes its merry way — nothing to see here, folks, move along — upholding the pathetically low bar New York’s pols have set for “public service”: So long as you haven’t been convicted of a crime, just put your interests above the people’s and cling to office. It’s high time to change that. Silver must go.

The Forward argues that Silver’s arrest “signals the end” of a Jewish era in New York politics:

(His) fall… comes as the Lower East Side old boys network he ruled continues to self-immolate. Silver was a member of a tight-knit coterie of Jewish political operators who came up together in the co-op developments on Grand Street. Many had working class roots, belonged to the Bialystoker Synagogue on Willett Street, and developed power together through the same few Jewish institutions. Now, that Lower East Side crew is falling to pieces. William Rapfogel, Silver’s close ally, is in state prison after pleading guilty to embezzling millions a executive director of the Metropolitan Council on Jewish Poverty. Silver was a key benefactor of the Met Council, and William Rapfogel’s wife Judy is Silver’s chief of staff. Heshy Jacob, the traditional third member of Rapfogel and Silver’s Lower East Side power troika, was traveling in Israel and said he was unaware of Silver’s arrest when reached via telephone.

And finally, back to the Times, which trudged up and down Grand Street yesterday in search of the local angle:

When not in Albany, Sheldon Silver, the speaker of the New York State Assembly, has spent much of his life within a small pocket of the district that he has represented for almost four decades on the Lower East Side of Manhattan. It is an area bounded by the tenement building he grew up in, the synagogue he attended and the brown-brick condominium complex where he resides today. Mr. Silver, 70, a Democrat, is an outsize presence in this enclave near the foot of the Williamsburg Bridge — one regularly roiled by tensions between gentrifiers and neighborhood mainstays, between recent immigrants and his largely Jewish base — and opinions of him whipped through the Lower East Side on Thursday, pitting neighbor against neighbor. Throughout the day, the topic of his arrest bounced from bialy shop to bus stop, bandied between those who loved him and those who said they would love to see him fall.

Silver is due back in court Feb. 23.