NY Assembly Speaker Sheldon Silver Earned $5M in Bribery Scheme, Feds Say

Sheldon Silver arrested

New York State Assembly Speaker Sheldon Silver (D-Manhattan) was arrested Thursday for allegedly running a bribery and kick-back scheme that netted him nearly $5 million from two law firms since 2002, federal authorities said.

Silver was charged with honest services fraud, conspiracy to commit honest services fraud, extortion under color of official right and conspiracy to commit extortion under color of official right. The 70-year-old lawmaker surrendered to the FBI and was released on $200,000 bond by Judge Frank Maas in Manhattan federal court.

“Politicians are supposed to be on the people’s payroll, not on secret retainers for wealthy special interests they do favors for,” Preet Bharara, the U.S. Attorney for the Southern District of New York, told reporters during a news conference. “These charges, in our view, go to the very core of what ails Albany: Lack of transparency, lack of accountability and lack of principle joined with an overabundance of greed, cronyism and self-dealing.”

Silver, who has served as speaker since 1994, has been accused of using his influence in the state to pad his pockets with millions of dollars that he allegedly failed to report in annual state disclosure forms. The alleged schemes involve two law firms: one specializing in asbestos litigation, the other in real estate, prosecutors said.

“Silver has obtained millions of dollars in outside income as a direct result of his corrupt use of his official position to obtain attorney referral fees for himself, including from clients with substantial business before the State, and not as a result of legitimate outside income Silver earned as a private lawyer,” investigators said in a 35-page federal complaint.

Silver allegedly used his power as speaker to convince real estate developers, who conduct business with the state, to retain a real estate law firm controlled by Silver’s ex-counsel in Albany, according to the complaint. The alleged scheme netted Silver $700,000.

The remainder of Silver’s allegedly undisclosed earnings—$5.3 million—came from an annual salary from the law firm of Weitz & Luxenberg, plus $3.9 million in referral fees, the complaint states. The longtime lawmaker used his position to “secretly direct” $500,000 in state funds to help with a doctor’s research efforts. In exchange, Silver received referrals for asbestos cases to the firm, according to the complaint.

Federal prosecutors note that investigators spoke to more than 10 asbestos clients or their family members during their probe. None of the clients had ever contacted Silver to seek legal representation, the documents state.

“No asbestos client and/or surviving family member was aware of any role played by Silver in providing legal services to himself or herself or a family member,” prosecutors wrote in the complaint.

Silver earned considerably more money between 2002 and 2014 than he brings home as Assembly Speaker. In 2011, for example, he earned $922,849.19 in undisclosed profits, court documents claim. For his work as Assembly Speaker, Silver is paid $121,000 annually, plus he gets a car, a driver and travel reimbursements.

As for his alleged real estate dealings, prosecutors found that Silver has no background in real estate litigation and no experience performing any such work, according to the complaint.

“There is no record of Silver ever appearing before the Tax Commission,” the complaint states.

“We’re disappointed that the prosecutors have chosen to proceed with these meritless criminal charges,” Silver’s lawyers said in a statement, according to The New York Times. “That said, Mr. Silver looks forward to responding to them—in court—and ultimately his full exoneration.”

State lawmakers are not prohibited from earning outside income, but they are required to report such earnings in their annual financial disclosure statements. For years, Silver has publicly stated that he has worked as a private attorney for Weitz & Luxenberg.

The investigation stems from an anti-corruption probe that started in the summer of 2013 by the Moreland Commission and was disbanded by Gov. Andrew Cuomo in March 2014. At the time, Cuomo’s decision was controversial because the commission was actively investigating potential misdeeds by public officials.

The New York Republican State Committee was quick to pounce. In a statement, the GOP called for Silver to step down.

“Sheldon Silver must immediately resign from the State Assembly,” said NYGOP spokesman David Laska. “While this is another sad day for New York, we cannot be distracted from the important business of growing our economy and creating jobs.”

It’s unclear who Silver’s successor would be. Assemb. Earlene Hooper (D-Hempstead) currently serves as Deputy Speaker but that reportedly doesn’t mean she would be next in line.

Bharara said that he found the allegations to be “especially dispiriting” when considering Silver’s status as one of Albany’s most powerful lawmakers known as “the three men in a room” who negotiate the state’s legislative agenda together. The other two include New York Senate Majority Leader Dean Skelos (R-Rockville Centre) and the governor.

Silver faces up to 20 years in prison on each of the five charges, if convicted. Bharara noted that the investigation is continuing, adding ominously: “Stay tuned.”

—With Timothy Bolger