Real estate money flowed into Queens Democratic Party committee headed by U.S. Rep. Joseph Crowley before gentrification-friendly Council Speaker Corey Johnson was named : report

Donations made by real estate interests made their way into four campaign or political committees under the direction or influence of Council Speaker Corey Johnson or his maker, U.S. Rep. Joseph Crowley :

  • Councilmember Corey Johnson's committee to reëlect

  • U.S. Rep. Joseph Crowley's committee to reëlect

  • U.S. Rep. Crowley's Super PAC

  • The Democratic Organization of Queens County, which is chaired by U.S. Rep. Crowley

By LOUIS FLORES

Prominent real estate developers collectively made six-figure contributions to the Democratic Organization of Queens County, also known as the Queens Democratic County Committee, in the time before its chair, U.S. Rep. Joseph Crowley (D-Queens), named Councilmember Corey Johnson (D-Chelsea) as the speaker of the New York City Council. The real estate donations to the party committee, which nominally totaled $190,000, according to one estimate, were revealed in a report filed by the journalist Will Bredderman for Crain's New York Business.

Rudin Management Company, The Brodsky Organization, BFC Partners, The Durst Organization, Zucker Group, and Rockrose Development used limited liability companies to funnel the political contributions into the Democratic Organization of Queens County, according to the Crain's report. The report confirmed that real estate donations flowed into four separate campaign or political committees under the direction or influence of either Councilmember Johnson or U.S. Rep. Crowley.

In the time leading up to the November general election, Councilmember Johnson faced a third-party challenger, whose campaign team published research and analysis, showing that Councilmember Johnson was conflicted by the large amounts of campaign contributions he received from big business interests, the real estate industry, in particular.  "An analysis of my opponent’s campaign contributions shows that 70% of all of his campaign contributions were donations of $1,000 or more. Of those large donations, 68% came from individuals with ties to real estate, Wall Street, nightlife, and corporate philanthropy," read a post on one of the challenger's campaign-backed Web sites. Amongst the supporters from whom Councilmember Johnson's committee to reëlect accepted donations included members of the Rudin family, who profited from the controversial luxury condominium conversion of the former campus of the shuttered St. Vincent's Hospital. Councilmember Johnson is veiwed by Government reform activists as having the full support of the real estate industry due to his support for unregulated real estate development ; the City Council district he represents has been been the target of nonstop gentrification since he took office in 2014.

As previously reported by Progress Queens, information published online by OpenSecrets.org, a transparency Web site backed by the Center for Responsive Politics, showed that the real estate industry was the largest private business sector to donate to U.S. Rep. Crowley's committee to reëlect in the 2016 election cycle, serving as the source of donations in excess of $340,000, and that a real estate developer was the largest source of donations to U.S. Rep. Crowley's political action committee, the Jobs Opportunity and Education Political Action Committee, or JOE-PAC.

The Crain's report, as with prior reporting by Progress Queens, noted that the City Council, and the Council speaker, in particular, wield enormous powers and discretion over matters pertaining to changes to zoning and land use applications. Law enforcement authorities and anti-corruption activists have long questioned the role of big money political donations in shaping each of the passage of legislation and the making of public policy. At a speech delivered on 23 January 2015 at New York Law School by then U.S. Attorney Preet Bharara on the day after Federal corruption charges were unsealed against then New York State Assembly Speaker Sheldon Silver (D-Lower East Side), the now former Top federal prosecutor in Manhattan said, in relevant part, of the spree of public corruption cases initiated by Federal prosecutors, "Given the allegation in case after case after case, how many other pending bills were born of bribery ? And worse, how many passed bills were born of bribery or improper influence ? How about items in the budget ? How much of the work of the City and the State Government is tarnished by tawdry graft ?"

Compelling Federal interest in combating public corruption

In recent years, Federal prosecutors have expressed interest in defending, and in launching, public corruption investigations whenever the makers of large campaign contributions have appeared to purchase official acts from the recipients of the campaign contributions. When an anti-corruption investigation panel, known as the Moreland Commission, was prematurely disbanded by Gov. Andrew Cuomo (D-New York), the U.S. Attorney's Office in Manhattan seized the panel's records in an apparent effort to continue some investigations. It had been reported that the panel had been investigating large campaign contributions from the real estate industry. The same U.S. Attorney's Office launched a wide-ranging, Federal corruption investigation, later closed without the filing of any charges, of the campaign finance activities of Mayor Bill de Blasio (D-New York). It had been reported that the Federal prosecutors' office had been investigating whether Mayor de Blasio had been granting official acts to at least one real estate donor, Jonah Rechnitz.

Ever since the U.S. Supreme Court ruled in McDonnell v. United States, the standard of proof that Federal prosecutors must meet in proving Federal corruption charges has become more strict. To prove that a public official was guilty of public corruption, honest services, or extortion charges, for example, the Government needed to show that the charged public official was granting official acts. Minor acts, such as "[s]etting up a meeting, talking to another official, or organizing an event -- without more -- does not fit that definition of 'official act,' " which would be needed to prove guilt, the U.S. Supreme Court held, in part, in its ruling.

It is not known if any promises were made to induce real estate developers to make such large campaign contributions to the four campaign or political committees. An earlier report published by Progress Queens and based on records obtained by Government reform activist Michael Petrelis under the State's Freedom of Information Law showed that Councilmember Corey Johnson has met with an array of lobbyists, who have represented real estate developers. For prior reports, Erik Bottcher, chief of staff to Councilmember Johnson, has not answered press inquiries made by Progress Queens. Lauren French, a spokesperson for U.S. Rep. Crowley, did not answer advance questions submitted by Progress Queens for this report, nor has she answered prior press inquiries.

Even though Federal prosecutors now face a higher standard to prove charges of public corruption, the standard to open a general crimes or public corruption investigation remains low. An investigation relating to a Federal crime may be conducted, or commenced, as a preliminary investigation, for which the requirement for establishing a predicate is very low or delayed, according to information obtained by Progress Queens. The New York Field Office of the Federal Bureau of Investigation, which is generally tasked with conducting investigations of public corruption cases on behalf of Federal prosecutors, did not immediately answer a request for procedural information.

Although the top Federal prosecutors in New York City have changed in recent years, some key personnel remain at each U.S. Attorney's Office. In Manhattan, which handles complex public corruption cases, often outside of its immediate jurisdiction, former Acting U.S. Attorney Joon Kim decided against remaining with the Federal prosecutors' office following the appointment of Geoffrey Berman as the new, interim U.S. Attorney, according to information obtained by Progress Queens. Nevertheless, Assistant U.S. Attorney Tatiana Martins remains the chief of the public corruption unit, and Assistant U.S. Attorney Russell Capone remains her deputy. They continue to hold their posts from the prior leadership of former Acting U.S. Attorney Kim, according to information obtained by Progress Queens. In Brooklyn, former Acting U.S. Attorney Bridget Rohde has resumed her prior post as First Assistant U.S. Attorney, a title she held before she was elevated to the top Federal prosecutor in Brooklyn following the purge at the U.S. Department of Justice ordered by President Donald Trump (R) and carried out by U.S. Attorney General Jefferson Sessions III. The new, interim U.S. Attorney in Brooklyn is Richard Donoghue. As with the Manhattan office, the chief of the public corruption unit in Brooklyn respectively remains the same officer, Assistant U.S. Attorney Nicole Argentieri, who held that post under both former Acting U.S. Attorney Rohde and former U.S. Attorney Robert Capers, according to information obtained by Progress Queens.

That senior leadership remains the same at the public corruption units of both the Manhattan and Brooklyn Federal prosecutors' offices is an indication, to some anti-corruption activists, that there may be some continuity in the cases originating from the units. In Manhattan, former Acting U.S. Attorney Kim indicated in an exit interview that Federal prosecutors would retry the public corruption cases against former Speaker Silver and former New York State Senate Majority Leader Dean Seklos (R-Rockville Centre) after their convictions were overturned on appeal due to the U.S. Supreme Court ruling in McDonnell, revealing a willingness to try public corruption cases under the stricter standard of proof.

Investigations are based on a predicate or a law enforcement purpose

Prior to the publication of information of the role of real estate money into the four campaign or political committees of Council Speaker Johnson and U.S. Rep. Crowley, Progress Queens reported that Council Speaker Johnson may have violated campaign finance and ethics laws by having never formed a dedicated campaign committee for the Council speaker race and by having reportedly accepted free campaign consulting services from a lobbyist. For that prior Progress Queens report, the office of U.S. Rep. Crowley declined to respond to the report that the Council speaker of U.S. Rep. Crowley's choosing may have violated laws to win the Council speaker race. Additionally, press reports last year questioned the activities of lawyers and officials with connections with the Democratic Organization of Queens County. It is not known if any of these separate issues, or the confluence of these issues, are enough to either establish a predicate for a public corruption investigation or to open a preliminary investigation, the latter for which a predicate may not be required at the inception of such.

Because of how the two Federal prosecutors' offices divide New York City into different jurisdictions, there is some ambiguity over which U.S. Attorney's Office would exert jurisdiction over any full investigation or preliminary inquiry of the Council speaker race, if any is warranted. Council Speaker Johnson's district is in Manhattan, which is now subject to oversight by interim U.S. Attorney Berman. U.S. Rep. Crowley is based in Queens and The Bronx, which can become the jurisdiction of either interim U.S. Attorney Berman or interim U.S. Attorney Donoghue. For this report, the U.S. Attorney's Office in Manhattan declined to answer advance questions, and the U.S. Attorney's Office in Brooklyn failed to respond to advance questions. Although Federal prosecutors divide New York City into two separate jurisdictions, the New York Field Office of the F.B.I. treats all of New York City as one jurisdiction. As the chief investigatory arm of both of the U.S. Attorneys' Offices in New York, the New York Field Office of the F.B.I. is in a unique position to commence a public corruption investigation, irrespective of which U.S. Attorney's Office takes the lead on the prosecution. Public corruption in the bureau's top criminal investigative priority, according to its Web site.

If no investigation or inquiry is conducted on a Federal level, a probe can be conducted on the Municipal level with a much narrower focus. Nicole Turson, a spokesperson for the New York City Department of Investigation, declined to answer advance questions submitted last week by Progress Queens.

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