Saturday, July 26, 2008

SMOKING OUT THE FAT

Bronx state Sen. Efrain Gonzalez Jr. goes under the “pork” microscope

Original Link
www.nypress.com/19/51/news&columns/JohnDeSio.cfm

By John DeSio


The often discussed culture of corruption that engulfs Albany’s body politic reared its very ugly head last week, when for the second time in less than a year Bronx state Sen. Efrain Gonzalez Jr., was indicted on corruption charges. To be specific, Gonzalez has been charged, along with three others, with funneling more than $400,000 worth of taxpayer money through a network of not-for-profit organizations and then back to his own pocket.

Going after an elected official is a great way for an attorney to make his or her career, and United States Attorney Michael Garcia, following in the footsteps of those before him, has made it clear that he will be relentless with Gonzalez. Just days earlier, Garcia dropped the hint that such funding, commonly known as “pork,” would be subject to new scrutiny in an interview with the New York Post. “You have this pool of nearly $200 million a year. Where there is that type of stream of money, it’s going to create opportunities …,” Garcia said. “The federal government has a responsibility here. When we smell something, we’ll follow it.”

And Gonzalez smells pretty bad. The indictment charges that the Bronx Democrat used the money to pay rent, college tuition, membership dues in a vacation club in the Dominican Republic and, most notoriously, for the design of bands for cigars for his private, Dominican-based business, Gonzalez y Rojas Cigars, named for both his parents. Ironically enough, the names of those cigars held legislative names. Once they finally kicked production into high gear, consumers would be able to purchase “Senator,” “Assembly,” “Speaker” and “Council” varieties of cigars from Gonzalez y Rojas.

Just moments before the rumor of Gonzalez’s impending indictment began to swirl through political circles (about 15 minutes, to be exact), his colleague, state Sen. Jose M. Serrano, a fellow Democrat representing both Manhattan and The Bronx, spoke about the culture of “pork” funding and just what criteria he uses to fund groups in his own district. Serrano has been brutally honest about his own member items, even going as far as publishing a full list on the Room Eight political blog. Having been in the state Senate a short time and also serving in the Democratic minority, Serrano gets just $150,000 to distribute each year. But that small amount is subject to rigorous background checks.

“I’m not accusing anyone of anything, but this funding should not be used as an electoral tool, as a way to get brownie points,” said Serrano, adding that he would never fund any organization that would bring him or anyone else close to him a profit. “I only fund well-established programs.”

During his long career in the State Senate, Gonzalez has only faced a primary challenge once. He has no real public profile outside of the recent indictments, which he attributes to a desire to stay behind the scenes and out of the media spotlight. Few press releases have ever been issued from his office, all of which have contributed to his reputation in many Bronx political circles as a do-nothing legislator. That he has again been indicted for abusing his “pork” privileges surprises few, if any, and Bronxites saw a harbinger of his future problems in August, just before his first indictment, when a local Bronx newspaper asked several legislators to produce a list of each of their member items. Only Gonzalez refused.

Had that list been made public during the past few years, local media and others would have likely picked up on exactly what Garcia has found, and Gonzalez might not have been able to hold on to his seat for as long as he has. But the media and other activists might be alone in calling for Gonzalez’s head at this point, since Bronx elected officials, all Democrats, have been reluctant to say anything critical of their fellow traveler. Several legislators have publicly taken a “wait and see” attitude, refusing to even entertain the idea that these charges might be true (Gonzalez claims he’s innocent). No one has returned his contributions, and Bronx Assemblyman Peter Rivera, a Gonzalez ally, even charged that Garcia’s indictment was politically motivated, part of an effort to hurt the legislature as they returned to Albany last week to reportedly consider a pay increase. No such goodwill was extended to another Bronx legislator, Guy Velella, when he was indicted on corruption charges in 2004, despite having a considerably greater legislative and community resume than Gonzalez ever had. But Velella was a Republican and apparently not worthy of such consideration.

Many feel that Gonzalez and Queens assemblyman and labor leader Brian McLaughlin, who was indicted in October on similar charges, are just the tip of the iceberg. A cursory look at “pork” requests for the past few years indicates that while they might not be criminal, many other items are certainly questionable. As long as such business continues in Albany, it is unlikely that legislators would ever be able to push through a raise of any kind without significant backlash, with or without any perfectly timed indictment.

http://www.usdoj.gov/usao/nys/pressreleases/December06/gonzalezs2indictmentpr.pdf

Gonzalez Indicted

Original Link
http://www.bronxmall.com/norwoodnews/past/090706/news/N60907page1.html


State Senator Charged In Defrauding Non-profit

By ALEX KRATZ

If State Senator Efrain Gonzalez is found to have defrauded the West Bronx Neighborhood Association, as a recent indictment alleges, he didn’t have to go very far to do it.

In July, Gonzalez sat down for an interview with the Norwood News in a virtually empty two-room suite on the same floor of his district office on the Grand Concourse. Paintings of him as a stately, younger, slimmer lawmaker adorn the wall along with framed logos of his Dominican cigar company.

The suite, which Gonzalez has a punch code for and referred to as his other office, is the headquarters of the West Bronx Neighborhood Association (WBNA), the same non-profit group Gonzalez stands accused of siphoning money from for his own purposes.

On Aug. 25, Gonzalez, who represents the entire Norwood News readership area, was indicted on federal mail fraud charges. The indictment accuses the veteran Bronx lawmaker of using $37,412 of WBNA’s money for personal expenses, including rent in Monroe, NY, and in the Dominican Republic, Yankees tickets, membership at a Dominican vacation club, clothes and college tuition.

That Friday morning, Gonzalez, 58, surrendered to federal authorities. In the afternoon, he appeared in front of a federal judge at a courthouse in Manhattan, but did not enter a plea. According to his lawyer, Murray Richman, Gonzalez will plead not guilty.

The senator was released on $25,000 bail and told not to leave New York. Gonzalez is scheduled to return to court for a pre-trial conference on Oct. 13.

“I will fight for my constituents like I’m going to fight for this case,” Gonzalez told reporters on the courthouse steps Friday afternoon, adding that he would continue to serve as a state senator.

Richman, Gonzalez’ attorney of 30 years, says the indictment is missing something, most notably a charge saying the senator actually stole money.

“An alleged crime that appeared over a period of six years and this is what they come up with?” Richman said. “What is mail fraud anyway? I’m asking you? Do you see the word ‘larceny’ anywhere?”

In Richman’s opinion, the mail fraud charge smacks of a witch-hunt. “He was a target and they were looking for a charge,” Richman said. “What could be sexier than getting a politician?”

The mail fraud count carries a maximum sentence of 20 years and a fine of $250,000.

The Gonzalez indictment stems from a joint investigation by the U.S. Attorney’s Office, Southern District, and the New York City Department of Investigation (DOI).

“Individuals are elected to public office in order to represent the public’s interests. Instead of using government funds to help the community he represents, this defendant served his own interests while allegedly siphoning government money into his own pockets,” DOI Commisioner Rose Gill Hearn said in a statement.

Heather Tasker, a spokesperson for the U.S. Attorney’s office, said the investigation is ongoing.

Richman said he doesn’t believe federal prosecutors will go to trial with only the one count of mail fraud. He expects superseding charges, or replacement charges, if prosecutors intend to take the case to trial.

The investigation began in August 2004. Gonzalez, his wife and several other Bronx officials were subpoenaed by federal prosecutors who were investigating the senator’s relationship with a handful of non-profits, including WBNA, the National Hispanic Policy Institute and the Institute for Multicultural Communication, Cooperation and Development. Gonzalez helped found all three groups and each employed family members and/or associates of the senator. The state attorney general’s office, which tracks tax records for all state non-profits, said that the National Hispanic Policy Institute is delinquent in filing forms and that the Institute for Multicultural Communication, Cooperation and Development didn’t have to file because it had less than $25,000 in assets.

“I haven’t done anything wrong,” Gonzalez told the Norwood News in September 2004. “Everything is just speculation. Whatever the investigators are looking for will come out in the process.”

A year ago, the Norwood News reported that, despite tax forms indicating that West Bronx had spent $210,000 on “conventions, conferences, and meetings,” Bronx community leaders had never heard of WBNA. On tax documents, WBNA states that its purposes include educational, cultural, youth programs, community issues, family values, environmental issues, voter registration drives and scholarships.

“We shun all publicity,” said a volunteer who answered the phone at WBNA in 2004. “We don’t really say all the things we do. We prefer to remain silent and help people. If the Lord acknowledges us in the afterlife, that’s good enough for us.”

According to public campaign finance records, Gonzalez’ Friends of Senator Gonzalez campaign committee donated $38,800 to WBNA over a four-year period beginning in 1999.

The Albany Times Union reported on Aug. 26 that WBNA received $112,000 over several years from Pathways for Youth, a New York City non-profit. Pathways, in turn, received at least $30,000 from Gonzalez in member items — state funds doled out at the discretion of individual lawmakers. The senator distributes $290,000 to non-profits in member item funds each year, according to the Times Union. For a story in the previous edition of the Norwood News, Gonzalez refused to divulge his member items.

In July of 2005, Pathways for Youth and an affiliate, the Gloria Wise Boys & Girls Club, were cut off from city contracts – which ran into the millions of dollars – after allegations of impropriety stemming from a DOI probe, according to a Daily News article.

A week after the indictment came down, Lucia Sanchez opened the locked door of Gonzalez’s district office at 1780 Grand Concourse. She looked apprehensive and said she’d been flooded by calls from reporters. On tax documents from 2003, Sanchez is listed as the only director, officer, trustee or key employee of WBNA (Gonzalez’ brother is also listed in previous filings), though she had no title and received no compensation for her work. On 2004 tax forms, Sanchez, who lived with Gonzalez for a time, and a woman named Kenia Castanos, are listed as secretaries who received no compensation.

Sanchez said she’s employed by Senate Minority Leader David Paterson’s office, but is assigned to Gonzalez’ office. When asked about her relationship with Gonzalez, Sanchez said, “No comment.” A Paterson staffer said the office would look into Sanchez’ employment but didn’t call back to comment.

Several calls to WBNA’s voice mail seeking comment were not returned. No one answered when the Norwood News knocked on their door last Thursday.

Gonzalez’ indictment is just the latest in a series of troubles for Bronx politicians. In 2003, Assemblywoman Gloria Davis stepped down after pleading guilty to bribery. And in 2004, State Senator Guy Velella also pleaded guilty to bribery charges and resigned.

Many of the senator’s Bronx colleagues said they respected Gonzalez and hoped the charges against him weren’t true.

One of the longest serving Hispanic state senators, Gonzalez is up for re-election this fall. He’s running unopposed in the Sept. 12 Democratic primary and faces Conservative Party candidate Ernest Kebreau in the November general election.


http://www.usdoj.gov/usao/nys/pressreleases/December06/gonzalezs2indictmentpr.pdf

N.Y. State Senator Is Charged With Stealing More Than $400,000













Original Link
http://www.nytimes.com/2006/12/14/nyregion/14senator.html

James Estrin/The New York Times

Efrain González Jr., a Bronx Democrat, on the Senate floor. He declined to comment on a new indictment, but said he was innocent.

Published: December 14, 2006

A New York state senator was charged yesterday with stealing more than $400,000 in state money appropriated for charities in his district and using it for personal expenses and luxuries for himself and his family.

The charges against the senator, Efrain González Jr., a Bronx Democrat, were contained in a new indictment announced by the United States attorney in Manhattan and came four months after he was indicted on charges of stealing $37,000 from a nonprofit organization.

Federal prosecutors said Mr. González funneled the money through two nonprofit companies, the West Bronx Neighborhood Association and United Latin American Foundation, which did little if any charitable work. The association’s office, according to prosecutors, was nothing more than a room adjoining Mr. González’s district office in the Bronx.

Federal prosecutors said Mr. González then used the state money — and some $40,000 in federal grants to the same charities — for a variety of personal expenses. Those included financing his private cigar company, paying membership fees in a vacation club in the Dominican Republic, paying rent and renovations for homes used by his wife and mother-in-law, paying college tuition for his daughter, and buying items like Yankees tickets and jewelry.

Moments after his latest indictment was announced in Manhattan, Mr. González was asked for comment on the Senate floor during a break in a special session and replied, “No comment; talk to my lawyer.” Then he added: “I’m innocent. You know, we’ve got to keep moving.”

He is scheduled to be arraigned tomorrow in federal District Court in Manhattan.

Mr. González’s chief of staff, Miguel Ponce, said yesterday that the senator “is looking forward to his day in court.”

At a news conference yesterday announcing the new indictment, Michael J. Garcia, the United States attorney for Manhattan, said the senator’s indictment pointed out the risk of corruption inherent in the Legislature’s practice of setting aside a pot of money for member items, the pet projects of individual lawmakers in their districts. Critics have objected that the budget does not identify the legislator sponsoring each item.

“This was a process that had little transparency in it, and that created risk,” Mr. Garcia said. “What we’re saying today is that that risk played out.”

Mr. Garcia declined to say whether federal prosecutors were investigating other lawmakers for the abuse of member items and whether any other charges were likely, saying only that his office was “obviously very focused on public corruption.”

Rose Gill Hearn, the city’s commissioner of investigation, who joined Mr. Garcia at the news conference, called on lawmakers to police the member item process better.

“The transparency, accountability and integrity of the member item process is an issue that should be analyzed on the state and city level,” Ms. Hearn said.

If convicted, Mr. González, 58, first elected in 1989 and re-elected in November, could be sentenced to 20 years on the most serious charges of “theft of honest services as a state senator” by embezzling member items and conspiracy to commit money laundering.

The Legislature sets aside $200 million a year for member items, federal prosecutors said yesterday. That includes $85 million each in the Senate and Assembly, and $30 million for the governor.

Yesterday’s indictment expands on the earlier one, charging that from October 1999 to January 2005, Mr. González allocated $423,000 in member items to a nonprofit corporation called Pathways for Youth, based in the Bronx, which said its mission was to help young people.

Pathways in turn directed the money to the West Bronx Neighborhood Association, whose stated mission was to promote civic and community affairs, but which in fact, prosecutors contend, served as a personal piggybank for Mr. González and two associates, Neil Berger, the executive director of Pathways, and Lucia Sanchez, a director of the association.

Mr. Garcia said yesterday that while Pathways did perform some legitimate charitable activity, the association and the third charity, United Latin American Foundation, did not perform “any substantial nonprofit work.”

Mr. González and the president of the United Latin American Foundation, Miguel Castanos, 46, of the Bronx, are charged with conspiring to steal more than $225,000 from that organization.

Danny Hakim contributed reporting.


http://www.usdoj.gov/usao/nys/pressreleases/December06/gonzalezs2indictmentpr.pdf

Gonzalez Case Puts Focus on Member Items

Original Link
http://www.nysun.com/new-york/gonzalez-case-puts-focus-on-member-items/45131/


By JOSEPH GOLDSTEIN, Staff Reporter of the Sun | December 14, 2006

A Bronx state senator is facing charges that he stole state funds to pay personal expenses that included rent on two residences in the Dominican Republic and the bills from his cigar company.

Federal prosecutors say the senator, Efrain Gonzalez Jr., 58, regularly directed state funds to a Bronx charity and then used the charity as a personal bank. The allegations are expected to put pressure on the Legislature to curb the $170 million it spends annually funding so-called member-items, which are the pet projects of assemblymen and senators.

"Demonstrated by this case is the fact that member-item expenditures present corruption vulnerabilities," the commissioner of the city's Department of Investigation, Rose Gill Hearn, said yesterday at a news conference announcing the charges.

Mr. Gonzalez, a Democrat, is the seventh member of the city's delegation to Albany to be indicted on corruption-related charges in the last three years. In all, nine politicians from the city's 80-member delegation have been charged with crimes in that time.

In the past six months, state prosecutors have charged Assemblywoman Diane Gordon of Brooklyn with accepting bribes and federal prosecutors have charged Assemblyman Brian McLaughlin with racketeering and embezzlement.

Even as Ms. Hearn announced the latest charges against a legislator, she cautioned against jumping to the conclusion that Albany was experiencing a crime wave, as one political observer, Henry Stern of New York Civic, suggested in July when Ms. Gordon was indicted.

She said that there are "dozens and dozens of lawmakers working very hard in Albany."

The "common-denominator" in the latest three such cases was her office's investigative work, she said.

The U.S. Attorney for Manhattan, Michael Garcia, who is prosecuting the case, said, "I am not going to say everyone in this particular branch of government is corrupt."

The charges unsealed yesterday replace an indictment against Mr. Gonzalez unsealed in August charging him with mail fraud by taking money from the Bronx nonprofit, the Pathways for Youth, Inc. The old indictment did not allege that Mr. Gonzalez used his elected office illegally, as the new indictment does.

"As a New York State Senator, Efrain Gonzalez, Jr., the defendant, therefore owed New York State citizens a duty to refrain from abusing the member items process for personal gain," according to the indictment.

An attorney for Mr. Gonzalez, Murray Richman, said, "We assert that we are not guilty and we will confront these allegations in court."

The indictment also charges three other individuals associated with Mr. Gonzalez, including the director of Pathways, Neil Berger, who is accused of writing numerous checks from Pathways' account to an organization that Mr. Gonzalez controlled. The second organization, the West Bronx Neighborhood Association, occupies an adjoining room to Mr. Gonzalez's district office, and served to cover the senator's personal expenses, prosecutors said.

Mr. Gonzalez is accused of spending more than $400,000 of Pathways' money to pay for renovations to his mother in law's Dominican Republic home and rent for his wife's apartment in the Dominican Republic among other expenses, according to the indictment. Between the years 1999 and 2005 he directed $423,000 of state money to Pathways, according to the indictment.

Mr. Garcia also said that $9,000 of state funds went to design and print cigar bands for the New York-based cigar distribution company that Mr. Gonzalez owns. The cigar bands were labeled with politically-themed names such as "Senator" and "Assembly," prosecutors said.

Pathways' stated intent was to improve the welfare of young people and was formerly known as the Boys' Athletic League. The federal government is a large source of its funding.

Mr. Gonzalez is scheduled to be arraigned on the new counts of mail fraud and wire fraud in U.S. District Court in Manhattan on Friday.

When the charges against him were announced, Mr. Gonzalez was in Albany for a special legislative session. First elected in 1989, Mr. Gonzalez has a reputation for his unassuming presence in Albany.

He is currently the chairman of the Senate Democratic Conference. He was born in Puerto Rico and entered politics as a representative of the city's transit worker's union. He is involved with the National Hispanic Caucus of State Legislators, and requested for his August bail order to be changed to allow him to attend various caucus events in five states, Puerto Rico, Ecuador, and Washington D.C.

"He hasn't done anything," the previous senator from Mr. Gonzalez's district, Israel Ruiz, said, referring to Mr. Gonzalez' tenure. "He hasn't improved anything. You don't hear him on any issue. He's not involved in any issue. He could care less. He deserves whatever he gets because he should have known better."

Mr. Ruiz said Mr. Gonzalez had once worked in his Bronx district office in the late 1970s. Mr. Gonzalez won the Senate position in 1989, after Mr. Ruiz was convicted of making false statements on a bank loan application.


http://www.usdoj.gov/usao/nys/pressreleases/December06/gonzalezs2indictmentpr.pdf

Tuesday, January 2, 2007

Years Ago, Efrain Won His Case


Original Link
http://www.nypress.com/blogx/display_blog.cfm?bid=99316495

Bronx State Senator Efrain Gonzalez has been found on the wrong side of the law in the past, but in 1978 he was able to avoid any consequences.

With a little bit of digging, reporter Candice M. Giove has found that nearly three decades ago Gonzalez was indicted by federal prosecutors for his part in a scheme to allegedly bilk a non-profit group out of tens of thousands of dollars through a shady real estate deal.

According to the indictment, Gonzalez, his current defense attorney Murray Richman, the late Bronx State Senator Joseph Galiber and Victor Risso, chairman of the Hispanic Association for a Drug Free Society (SERA), purchased a South Bronx building for $75,000 and just hours later sold it to SERA for $350,000. Prosecutors accused the four of profiteering.

In the end, this ordeal had a happy ending for Gonzalez, who saw his charges dropped after Galiber, Richman and Risso were acquitted.

Gonzalez is currently under indictment for allegedly pilfering over $400,000 in taxpayer funds from a non-profit organization for his own personal use. My recent piece outlining his indictment and the culture of member items in Albany can be found here.

Posted by John DeSio at 3:06 PM

Efrain and Jabba, Separated at Birth?

You Be the Judge

Chatting on the phone today with a political friend of mine we, naturally, got on the topic of the latest political indictment. My friend's comment was that he'd never met Senator González, but that "he looks like Jabba the Hutt." I looked him up and well, you be the judge.


http://www.usdoj.gov/usao/nys/pressreleases/December06/gonzalezs2indictmentpr.pdf

I’ll Take ‘Pork Barrel’ for $400,000

Porky














official link
http://www.nytimes.com/2006/12/15/opinion/15fri4.html?_r=1&oref=login

Published: December 15, 2006

This is what happens when governments hide their money under a rock: On the eve of what is supposed to be a new day in Albany, another New York state senator has been indicted, this time charged with diverting to his own pocket more than $400,000 in state money that he earmarked for charities in his district.

State Senator Efrain González Jr., a Democrat from the Bronx, has told reporters that he is innocent of charges that he routed the funds to such things on the prosecutor’s list as his cigar company, his daughter’s college tuition, jewelry, home renovations and Yankee tickets. Mr. González is scheduled for arraignment today and is said to be looking forward to his day in court.

But this $400,000 is just part of the notorious member-item scheme, which allows legislative leaders to parcel out $170 million a year with little or no public record or oversight. The problems with the member-item system have become so obvious that even the very leaders who spent years hiding this money have now been forced by the courts to make the details public.

What details they are. Some were quirky — like a yurt in Suffolk County and a cage for mountain lions in Watertown. Others highlighted how politics work in the state. For example, the Senate majority leader, Joseph Bruno, who got to parcel out most of the $85 million claimed by his chamber each year, steered $500,000 to Evident Technologies.

The company’s former co-chairman, Jared Abbruzzese, is under investigation by the State Lobbying Commission for providing private flights at no cost to Mr. Bruno, whose office said that the state funds were meant to attract high-tech companies upstate.

Assembly Speaker Sheldon Silver, who commanded about $7 million a year of his chamber’s member-item funds, funneled a lot to Jewish and Chinese groups, both important in his district on the Lower East Side. Even if Mr. González is not convicted and not thrown out of the Legislature, the system itself is a scandal.

When there are millions of dollars being spread around and nobody is really watching, it “created risk,” as Michael Garcia, the United States attorney for Manhattan put it. This is public money, and the public deserves to know how it is spent, why and whether it is worth it.

http://www.usdoj.gov/usao/nys/pressreleases/December06/gonzalezs2indictmentpr.pdf