U.S. Attorney Investigates Payments to Sheldon Silver From Law Firm That Represents Grand Street Co-ops

The United States Attorney has opened an investigation of payments made to State Assembly Speaker Sheldon Silver by a law firm that helps property owners, including some on the Lower East Side, win reductions in their real estate taxes. The story was first reported last night by the New York Times.  More details:

Prosecutors from the United States attorney’s office for the Southern District of New York and agents of the Federal Bureau of Investigation have found that the law firm, Goldberg & Iryami, P.C., has paid Mr. Silver the sums over roughly a decade, but that he did not list that income on his annual financial disclosure forms, as required, the people said. The prosecutors, from the office of the United States attorney, Preet Bharara, and the F.B.I. agents were seeking to determine precisely what Mr. Silver, a Manhattan Democrat, has been doing for the payments, the people said. Spokesmen for the F.B.I. and Mr. Bharara’s office declined to comment.

One of the firm’s two attorneys, Arthur Goldberg, has represented the Grand Street Cooperatives, where the Speaker lives. The Times reports:

The sizable number of properties on the Lower East Side for which Mr. Goldberg has sought real estate tax reductions include Mr. Silver’s own co-op, the Hillman Housing Corporation, a development of brick apartment buildings on Grand Street, tax records show, as well as the commercial building across the street that is listed in state records as the address for Mr. Silver’s campaign committee, Friends of Silver. Mr. Goldberg and his firm have also represented a related development along Grand Street and the Franklin D. Roosevelt Drive, the East River Housing Corporation, the records show, which like Hillman Housing is managed by a close Silver associate, Harold Jacob. A recent letter from the East River board president to shareholders heralded what it said were the successes of its tax certiorari firm, without mentioning it by name. “In almost every year they have been successful in reducing the increase in our taxes,” the board president, Gary Altman, wrote in the letter. Mr. Jacob, in a 2009 letter to East River shareholders, noted that the city had raised the development’s assessment to $28 million, and that its tax certiorari lawyer “was very successful in reducing what could have been a $3,000,000 increase to a $750,000 increase” in taxes. In an interview, Mr. Jacob said that Mr. Goldberg has been seeking tax reductions for the developments since Mr. Jacob began managing them, more than 25 years ago. He said that while he knew Mr. Goldberg personally — the tax lawyer grew up in the same Lower East Side neighborhood as Mr. Jacob — he was awarded the work because he regularly outbids his competitors. Tax certiorari work is done on contingency, with lawyers traditionally getting paid roughly a third of any reduction they obtain. Mr. Jacob said the developments have paid Mr. Goldberg substantially less.

The story notes that Silver is not known to have “any expertise in the complex and highly specialized area of the law in which Goldberg & Iryami practices.”  On his 2013 disclosure form, the Speaker reported earning $650,000 for his work at Weitz & Luxenberg, a personal injury law firm. New York does not require lawmakers to reveal any details about clients they represent. Over the years, Silver has declined to release any specific information about his outside work:

Public records contain no indication that he has ever appeared on behalf of clients in state or federal court… The people with knowledge of the matter, who spoke on the condition of anonymity because the investigation was continuing, would not say how much Goldberg & Iryami, and a predecessor firm, Jay Arthur Goldberg, P.C., had paid Mr. Silver in roughly a decade, with one characterizing it only as substantial.

The Times learned it’s not the first time Silver has been investigated by the feds:

Mr. Silver was the subject of two separate unrelated federal investigations in the last few years, according to several people with knowledge of those inquiries. One focused on loans he had made to a litigation funding company called Counsel Financial, which is related to Weitz & Luxenberg. The other focused on a lobbyist with a longtime relationship with Mr. Silver. Neither resulted in criminal charges.

Mr. Goldberg and his law firm have donated $7600 since 2001 to the Speaker’s political campaigns. Silver declined to comment regarding the Times story.