Friday, May 27, 2016

Another NYPD Official "Retires" From NYC Corruption

Bill De Blasio's legacy will be:  the Most Corrupt Mayor since William Magear (“Boss”) Tweed, the “Tiger of Tammany,” 

Boss Tweed

Police Commissioner Bill Bratton, Mayor De Blasio, Michael Harrington

Third High-Ranking NYPD Official Files for Retirement Amid Corruption Probe

NEW YORK CITY — A third high ranking NYPD official has filed for retirement amid the federal corruption investigation into a pay-for-favors scandal in the nation's largest police force, DNAinfo New York has learned.
Deputy Chief Michael Harrington, who was stripped of his badge and gun nearly two months ago, handed in his papers at Police Headquarters on Thursday, sources said.
The three-decade veteran, who was second in command in the NYPD’s citywide housing bureau, is the third top commander this week to leave the NYPD since Commissioner Bill Bratton said he expected arrests in the probe.
Harrington, who comes from a long line of respected officers, served previously as the right hand man for then-Chief of Department Philip Banks, who was the initial target of the now 2 1/2-year federal investigation.
Under city regulations, officers who retire are guaranteed their respective pensions even if they are arrested and convicted of a felony. Commissioner Bratton has 30 days to file charges against an officer, if warranted, that would halt their departure until the charges are resolved.
Banks, who has not been charged with any crime, took trips and junkets with two wealthy businessmen, Jona Rechnitz and Jeremy Reichberg, who served on Mayor de Blasio’s Inauguration Committee. 
The federal investigation of the NYPD centers on allegations that police officials took gifts in exchange for favors. The probe has also expanded to City Hall, where top mayoral advisers are being eyed over how they raised funds for various de Blasio political agendas.
Roy Richter, president of the Captain’s Endowment Association, declined to comment.
Deputy Chief David Colon, a 30-year veteran, filed for retirement on Wednesday, a day after Deputy Inspector James Grant pulled the plug on his career just shy of his 20th anniversary in the department.
Colon was known to hang out in the now-shuttered Harlem restaurant Hudson River Café, which was owned by Hamlet Peralta, a suspected con man recently arrested by the feds for operating a $12 million Ponzi scheme linked to the corruption scandal.
Deputy Inspector James Grant, who had served as the commander of the Upper East Side's 19th Precinct before his name surfaced in the scandal, is suspected of taking discounted jewelry and a trip to Las Vegas on a private jet from the two businessmen in exchange for police escorts.
Police officials said this week that they can't prevent individuals from retiring. However, they were able to reject a retirement application from Detective Michael Milici, who served as the Community Affairs officer at the 66th Precinct in Borough, because he took the Fifth when approached by the FBI — a violation of departmental policy.
Milci, who had more than 20 years on the force, was instead fired by Commissioner Bratton. But because of his tenure he is allowed to collect his full pension.
As many as another 10 officers — mostly high level officials — have been caught up in the federal probe, including two in the License Division who are suspected of taking money in exchange for gun permits without proper background checks.

Tuesday, May 3, 2016

Sheldon Silver Gets 12 Years in Prison

Sheldon Silver, Ex-New York Assembly Speaker, Gets 12-Year Prison Sentence

Sheldon Silver, the former State Assembly speaker, arrived at court Tuesday in Lower Manhattan for his sentencing. He was convicted of corruption in November. CreditGregg Vigliotti for The New York Times

Sheldon Silver, who rose from the Lower East Side of Manhattan to become one of the state’s most powerful and feared politicians as speaker of the New York Assembly, was sentenced on Tuesday to 12 years in prison in a case that came to symbolize Albany’s culture of graft.
The conviction of Mr. Silver, 72, served as a capstone to a campaign against public corruption by Preet Bharara, the United States attorney for the Southern District of New York,which has led to more than a dozen state lawmakers’ being convicted or pleading guilty.
But none had the power, cachet or longevity that Mr. Silver, a Democrat, had enjoyed, and prosecutors sought to make an example of him. They asked that he receive a sentence greater than the terms that had been “imposed on other New York State legislators convicted of public corruption offenses.”
The longest such sentence cited by the government was 14 years, the term imposed last year in the case of another former Democratic assemblyman, William F. Boyland Jr., who was tried and convicted in federal court in Brooklyn.
Carrie H. Cohen, an assistant United States attorney, asked that Mr. Silver’s sentence “reflect the massive damage caused to the public by his crimes.”
The sentence, Ms. Cohen continued, should “send a message that this is not how business is done in Albany,” adding that “no one, including Sheldon Silver, is above the law.”
Mr. Silver briefly addressed the court before his sentence was delivered, saying he had let down his constituents, family and colleagues. “I’m truly, truly sorry for that,” he said.
The judge, Valerie E. Caproni, said at first that the many letters written on Mr. Silver’s behalf demonstrated that he went “above and beyond the call of duty many times.” But she then outlined why she thought Mr. Silver deserved a serious sentence, certainly one that went far beyond the community service his lawyers had requested.
Judge Caproni said that there had been an “incalculable harm to the people of New York,” and that the cumulative effect of public corruption “makes the public very cynical.” She then listed some of Mr. Silver’s misdeeds, and addressed him directly: “Mr. Silver, those are not the actions of an honest person.”
Mr. Silver was convicted on Nov. 30 of charges that included honest services fraud, money laundering and extortion. Upon his conviction, he forfeited his Assembly seat. Two weeks later, Dean G. Skelos, who as majority leader had been Mr. Silver’s Republican counterpart in the State Senate, was also convicted of corruption.
Mr. Skelos is to be sentenced on May 12; a week later, John L. Sampson, a former leader of the Senate Democrats, will face his own sentencing. The scrutiny continues: Several inquiries are now focused on possible wrongdoing connected to the administrations of Gov. Andrew M. Cuomo and Mayor Bill de Blasio, both Democrats.
To date, however, Mr. Silver’s precipitous fall has no recent rival in the world of New York politics.
Mr. Silver had served for more than two decades as the Assembly speaker, imposing his will on matters large and small; he had a reputation as a staunch defender of New York City, a shrewd negotiator at budget talks and, at times, a recalcitrant opponent of anything he disliked.
But at a five-week trial in Federal District Court in Manhattan last fall, a different side of Mr. Silver emerged. Evidence showed that he had obtained nearly $4 million in illicit fees in return for taking official actions that benefited a prominent cancer researcher, Dr. Robert N. Taub, at Columbia University, and two real estate developers, Glenwood Management and the Witkoff Group.
Mr. Silver had expressed regret that his conviction — and the revelations of rampant kickbacks, bribes and influence-peddling — had made the State Capitol the object of ridicule. In a letter sent last month to Judge Caproni, he offered an emotional apology, saying that he had “failed the people of New York.”
His lawyers had argued that the former speaker should be allowed to use his “unique talents” to benefit others, and that a sentence of “extensive community service and little — if any — incarceration could do that.” On Tuesday, they suggested that he could work with the Fortune Society, which helps the formerly incarcerated.
“His obituary has already been written,” about his crimes, one of his lawyers, Joel Cohen, said. “Notwithstanding everything he has done.”
But prosecutors on Tuesday questioned the authenticity of Mr. Silver’s contrition, noting that he had insisted that he would be exonerated “until the very moment of the jury’s verdict.”
Judge Caproni, citing Mr. Silver’s age, said she would not adhere to sentencing guidelines that recommended a term of roughly 22 to 27 years, saying such a sentence would be “draconian and unjust.” The court’s probation office had recommended a 10-year sentence.
The judge, however, upheld the government’s request that Mr. Silver forfeit more than $5 million in proceeds from his crimes and pay a $1.75 million fine.
Mr. Silver must surrender himself by noon on July 1; his lawyers have requested that he serve at the Federal Correctional Institution in Otisville, N.Y., because of its familiarity with the housing of Orthodox Jewish prisoners.
In a statement issued moments after the sentencing, Mr. Bharara said that the “stiff sentence is a just and fitting end to Sheldon Silver’s long career of corruption.”
Last month, prosecutors, in a written submission to the judge, offered what they said was additional evidence of the ways Mr. Silver had abused his office “for personal benefit,” by helping two women with whom he had conducted extramarital affairs.
One of the women had regularly lobbied Mr. Silver on behalf of clients with business before the state; he had “used his official position,” prosecutors said, to help the other woman get a state job.

Monday, May 2, 2016

Corrupt Politics May Survive Because the Corrupt Politicians Are Not Acting "Officially"

Mayor Bill has got to go. Now, soon. whatever.

Betsy Combier
Editor, NYC Rubber Room Reporter
Editor, New York Court Corruption
Editor, National Public Voice
Editor, NYC Public Voice
Bill DeBlasio

Supreme Court making it even harder to convict corrupt politicians

Tired of New York’s pay-to-play politics?
Hoping that federal prosecutor
Preet Bharara
Preet Bharara will throw Mayor de Blasio in prison along with, soon, former state lawmakers Sheldon Silver and Dean Skelos?

Keep hoping. The Supreme Court could make it harder to secure corruption convictions — meaning we’ll have to kick dirty pols out at the ballot box, rather than wait for arrests.
Federal law is clear: A politician can’t take a donor’s money and promise something in return.
Bill de Blasio can’t take money from people who want to ban the horse carriages — and promise to ban the horse carriages in return.
Nor can he take money from people who don’t want to ban helicopter tours — and then protect the tours in return.
So why might the mayor skate when it comes to any pay-for-play shenanigans?
The key is the “in return” part.
The Supreme Court has long prohibited prosecutors from using timing as evidence: Jurors must believe it is just coincidence if a candidate gets a donation one day and does something for the donor the next.
Prosecutors need evidence of an explicit deal, and few politicians are dumb enough to have such a deal.
Now, the Supreme Court could make it even harder for prosecutors to prove a quid pro quo. Under a possible new reading of the law, politicians would be able to make explicit deals with donors — as long as they don’t act “officially.”
The case in question is federal prosecutors’ conviction two years ago of then-Virginia Gov. Bob McDonnell.
McDonnell received a prison sentence for taking $177,000 in plane trips, Louis Vuitton and Oscar de la Renta clothes, iPhones, a wedding for his daughter and a Rolex, all from a man, Jonnie Williams, who wanted the governor to promote his diet pill.
The jury was careful — it acquitted the governor on three counts. But jurors could see the obvious: No politician can take that much money and not know he is being bribed.
Still, McDonnell has a great lawyer, Noel Francisco — who convinced the Supreme Court to take the case.
Last Wednesday, the court heard a novel argument: McDonnell can’t be convicted of bribery, because the things he did for Williams were not “official acts.”
That is, when McDonnell asked researchers at the state University of Virginia to promote Williams’ drug supplements, he wasn’t acting as governor. He was just acting as any regular person, exercising free speech.
As Justice Elena Kagan observed of one of the governor’s techniques, “so that’s essentially hosting a party and allowing Mr. Williams to invite some people . . . Why is that an official act?”
Sure. We all have parties in our homes.
Except: The governor has parties in the Governor’s Mansion — not something anyone can do.
And, as Justice Department lawyer Michael Dreeben noted before the court, the guests from the university weren’t exactly there voluntarily.
The governor appoints the university’s board members. “He sets the budget,” Dreeben noted. “They know that he’s an important guy . . . The governor is taking every step he can” to signal to university folk to support this diet drug.
When you’re the governor, everything you do in public is an official act.
If corruption is only when you take direct action to help a donor, it will be difficult to secure corruption convictions.
A change in the law would affect New York’s recent cases — and chances for future convictions.
Take former state Senate leader Dean Skelos, convicted of bribery in December. US Attorney Bharara’s conviction of Skelos wasn’t mostly based on “official acts,” under the definition the court is considering.
Skelos convinced Long Island officials to help a company that employed his son, in return for that employment. But Skelos had no legal authority over those Long Island officials. Anyone can ask government officials for help.
The same is true with the mayor. Say prosecutors do find evidence of a deal between horse-carriage opponents and de Blasio. Any citizen can propose that the City Council consider a bill to ban horse carriages — just as any citizen can encourage regulators to look favorably upon helicopters.
(Silver’s conviction is more secure. Then again, it took two decades to catch the guy.)
No matter what the Supreme Court rules, we shouldn’t rely on the justice system to govern our politicians.
De Blasio doesn’t have to be found legally corrupt for the voters to think he is corrupt.
As long as he’s out of office, it doesn’t matter if he’s out of prison, too.

Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.

Wednesday, April 20, 2016

Two NJ Defense Attorneys Are Accused of Snooping on a Private Facebook Account

Lawyers Accused of Facebook Spying Can Face Ethics Complaint, State High Court Rules

New Jersey’s highest court ruled Tuesday that two defense lawyers accused of spying on a plaintiff’s Facebook page can be prosecuted for attorney misconduct.
The case dealt with what what the court described as a “novel ethical issue.” Two defense attorneys in New Jersey are accused of snooping on the private Facebook account of a plaintiff suing their client. The Facebook account was at first publicly viewable. But after the plaintiff tightened the settings and put his profile page behind a privacy wall, the lawyers didn’t stop monitoring it. A paralegal at their firm was able to get access by sending a Facebook friend request to the plaintiffs without revealing her employer.
The plaintiff, Dennis Hernandez, was suing the Borough of Oakland in Bergen County over injuries he claimed he sustained when a police car allegedly struck him in 2007. The two attorneys, John J. Robertelli and Gabriel Adamo, represented Oakland. Mr. Hernandez, according to the opinion, figured out the connection when the defense lawyers “sought to add the paralegal as a trial witness and disclosed printouts” from his Facebook page, according to the court’s opinion.
The New Jersey Supreme Court wasn’t deciding if the two lawyers violated ethics or should face sanction. The court was ruling on whether the head of the state’s attorney disciplinary body could prosecute the lawyers for alleged Facebook spying after a regional disciplinary body chose to drop the case. The local body didn’t think the lawyers’ actions, even if proven, constituted unethical conduct. The director of the New Jersey Office of Attorney Ethics, an arm of the state judiciary, disagreed and filed a complaint against the defense attorneys.
The state’s high court Tuesday unanimously ruled that the misconduct case could go forward. (You can read the opinion here.)
The complaint filed by the Office of Attorney Ethics director accuses the two lawyers of communicating with a represented party without proper consent and engaging in conduct “involving dishonesty, fraud, deceit or misrepresentation,” among other ethics charges.
The two lawyers charged in the complaint claimed that they had “acted in good faith” and “had not committed any unethical conduct.” In their explanation of what happened, they said they were “unfamiliar with the different privacy settings on Facebook.”
Michael S. Stein, an attorney representing the two lawyers, said that while the ruling didn’t go their way, the opinion underscored a lack of “playbook or precedent for how these attorneys should have dealt with the circumstances they were confronted with in 2008.”
The next big step in the slow-moving litigation is a hearing on the merits of ethics complaint, Mr. Stein said.
In the opinion, New Jersey Chief Justice Stuart Rabner noted the unusual nature of the attorney ethics probe in question: “No reported case law in our State addresses the sort of conduct alleged,” he wrote.
Bar association guidelines have discouraged lawyers from monitoring personal profile pages of jurors, witnesses and opposing parties if access to the content requires special permission.

2016 Voter Fraud in NYC Shows How Corrupt Politicians Get Their Way, or the Public Takes The Highway

Voter fraud is the ugly side of America's control by politicians which has resulted in the anger that America has against the powerful, rich, do-it-my-way minority.

Now that we have removed Silver and Skelos, we have to remove their partners in crime. Let's start with the Board of Elections.


Betsy Combier

Ben Gershman said the Board of Elections told him he shared initials with another man
in the Bronx.

KEW GARDENS — A voter who registered six months ago after moving to the city says he was tossed off the voter list because his name is similar to a man who lives in The Bronx, he said.
Ben Gershman, 27, registered at the Department of Motor Vehicles after moving to Ridgewood from Chicago six months ago, he said.
But when he checked last month, his name was nowhere on the voter list — because it matched someone else in another borough, the Board of Elections told him.
"They told me I shared the same initials as a voter in the Bronx, it confused both registrations and I had become de-registered," he told DNAinfo New York. 
Gershman spent hours Tuesday morning at the Board of Election office location on Queens Boulevard, driving there after realizing he wouldn't be able to vote, he said.
He finally voted after receiving a court order that allowed him to return to his Ridgewood poll site to cast a ballot.
"It's insane what I have to do, and I am registered," he said. "There's no accountability in the election process."
A spokeswoman with the Board of Elections did not immediately respond to a request for comment on Gershman's voting issues or any other problems at the polls today.
04.19.16 7:10 PM ET

Failure, Fraud and More In New York’s Punk Rock Voting Disaster
Voters across New York are telling horror stories about their inability to cast a ballot because of everything from broken voting machines to clerical errors over shared middle names.

Alba Guerrero was dumbfounded. She’d arrived at her polling place in Ozone Park, Queens only to be told that she had been registered as a Republican since 2004.

That was news to her. She remembers registering to vote for the first time as a Democrat so she could vote for Barack Obama in the general election in 2008. When she recently moved from Manhattan to Ozone Park, in Queens, she re-registered at the DMV, she says, and even checked online on March 9th to be sure she was registered at her new address.

But when she showed up to vote for Bernie Sanders at PS63 on Tuesday, she says she was told she couldn’t. New York is a closed primary, where only registered Democrats can vote in the Democratic Primary—and voters had to be registered by last October. She was told—very politely, she wants to make clear—by poll workers to take it up with a judge. She was given a court order in nearby Forest Hills.

Guerrero drove to the Queens County Board of Elections and pled her case, but Judge Ira Margulis initially turned her away.
“The judge tells me, ‘No, that’s it—2004.’ He shows me, I’m registered as a Republican. He says there’s nothing we can do,” she said.

But on her way out she saw a Board of Elections worker holding something with her name on it. It was her 2004 voter registration, replete, she remembers, with her name, her social security number, her birthday—and someone else’s signature.
“I said, ‘Excuse me, that’s not my signature,’” she said. “It’s not my handwriting. It showed completely different signatures.”

Sure enough, the signatures are strikingly different. Next to a box checked “Republican,” her 2004 signature is written in clear, deliberate, legible cursive and includes her middle name. Her more recent signature is a loopy, illegible scrawl. She insists she’s never changed it in her life, and says she can produce old tax forms to prove it.

So Guerrero went back to to Judge Margulis and showed him the discrepancy.

“He allowed me to change for that day,“ she said.

Guerrero’s voting nightmare had a happy ending. She says the people working the polling stations were incredibly helpful, and she was able to drive back and forth with her car and a lot of sticktoitiveness. But voting in New York’s primaries on Tuesday posed many unsolvable problems for would-be voters—from polling places that opened late to broken voting machines.
"We are deeply disturbed by what we’re hearing from polling places across the state. From long lines and dramatic understaffing to longtime voters being forced to cast affidavit ballots and thousands of registered New Yorkers being dropped from the rolls, what’s happening today is a disgrace," Bernie Sanders campaign spokesperson Karthik Ganapathy told The Daily Beast.

"We need to be making it easier for people to vote, not inventing arbitrary obstacles—and today’s shameful demonstration must underline the urgent importance of fixing voting laws across the country."

The many messes drew rare national attention to the sad sate of voting in New York City, where broken machines, erroneous counts and worse are commonplace experiences.

Mayor Bill de Blasio, who tweeted at 11:50 a.m., “There’s nothing more punk rock than voting. #GetOutAndVote”, had to change his tune by the end of the day. WNYC reported this morning that 126,000 Brooklyn Democrats had been removed from the voting rolls since last fall.

“It has been reported to us from voters and voting rights monitors that the voting lists in Brooklyn contain numerous errors, including the purging of entire buildings and blocks of voters from the voting lists,” he said in a statement released after 5 p.m. on Election Day. “I am calling on the Board of Election to reverse that purge and update the lists again using Central, not Brooklyn borough, Board of Election staff.”
Bernie Sanders supporters took to social media sites like Twitter and Reddit to decry what they believed to be rampant irregularities at polling places. On the largest subreddit dedicated to his campaign, users compiled a “Voting irregularities and issues megathread” that boasts over 1,700 posts and hotline numbers for voters who believe they have been disenfranchised.

A spokesperson for New York Attorney Eric Schneiderman told the New York Daily News that his office received “by far the largest volume of complaints we have received for an election since Attorney General Schneiderman took office in 2011.”
Some polling sites did not open on time, citing too few election workers. Others had faulty voting machines, or were delivered half the number of promised voting machines.
Then there are the extraordinary examples, like Guererro’s and Ben Gershman’s.

Gershman met Guerrero and took a cell phone video of her competing signatures at the Queens County BOE. He had arrived there to fight for his right to vote, also for Bernie Sanders.

He had checked his status two weeks before the registration deadline online to see if he was, in fact, registered to vote in the primary in Queens. He had registered at the DMV when he moved to Queens six months ago, but there was a hangup: There was a man in the Bronx with the same name and a shared middle initial, and he wasn’t registered to vote as a Democrat.

So Gershman repeatedly emailed the Board of Elections in the last few days to sort it out (he forwarded those emails to The Daily Beast to verify his story), and received assurances that he would be able to vote from various BOE workers.

Still, Gershman arrived at his polling place at 7:45 a.m. today to find that he could not vote and that he, too, would have to drive to Forest Hills to appeal for his right to vote.

By the end of it, Gershman didn’t get to work until 12 p.m., but—three car rides later—he did get to vote for his candidate.
“I spent three hours this morning trying to vote,” he said. “I’m at a loss for words. I don’t understand that in the 21st century you have to stand in front of a judge to get to vote. It was laughable.”

Gershman was peeved by what happened to him, but he wonders what would’ve happened if he didn’t have a car, or the ability to miss a morning of work to fight for his ballot. And he’s also confounded by what happened to Guerrero’s voter registration form, which he shared on YouTube and calls “pretty clear fraud.”

Guerrero calls the whole incident “creepy.” She has “no idea” who might want to forge her signature on a voter registration form.

“It’s just disheartening. We’re supposed to be the number one country in the world, but things like this you’d imagine would happen in a second or third-world country,” she said. “What happened to me, basically, was fraud.”

Repeated calls to the New York City Board of Elections went unanswered at press time.

Friday, April 15, 2016

Mayor Bill de Blasio, City Council, the NYPD, and the 2012 Responsible Banking Act - Not

If the powers that be in New York City can shine a light on Mayor Bill and the NYC City Council, I think that the disaster we have voted into office will be clear.

See Bill's bio. His real name is Warren Wilhelm, Jr. He became Bill de Blasio in 2002.

Mayor's Pal Yitzchok Leshinsky and Housing Bridge Are Under Investigation

Betsy Combier
Editor, Courtbeat

A top aide to Mayor de Blasio had warned against putting the businessmen now at the center of the NYPD corruption scandal onto Hizzoner’s 2014 inaugural committee, The Post has learned.
But Avi Fink was blown off by de Blasio’s chief fund-raiser — whose campaign-finance work is under investigation — and also by the committee’s chairwoman.
Fink, a mayoral adviser on Jewish issues who is on leave working for Hillary Clinton’s presidential campaign, told Ross Offinger and Gabrielle Fialkoff that he had concerns about Jeremy Reichberg and Jona Rechnitz, sources said Thursday.
NYC Mayor Bill de Blasio
“People in the Orthodox community told Avi they had questions about where his money comes from and said he’s not a community activist, he’s only out for himself,” one source said.The red flags included doubts about how Reichberg, a prominent member of the Orthodox Jewish community in Borough Park, Brooklyn, had attained his wealth, sources said.
Another source said Rechnitz was well-known in the Bukharan Jewish community in Queens for clashing with Israeli billionaire and diamond merchant Lev Leviev over a business deal.
Jeremy Reichberg (left) and Jona Rechnitz
“He had a falling out with [Leviev] that may have tarnished his reputation,” the source said.
Offinger and Fialkoff, a jewelry heiress who now holds a $203,000-a-year City Hall job, let them join the committee anyway.
Perks of a committee appointment included seating at the Jan. 1 inauguration ceremony and a spot on a receiving line to congratulate the mayor, as well as an invitation to a Gracie Mansion breakfast the next Sunday.
Avi Fink
Rechnitz and his wife each donated the maximum $4,950 to de Blasio’s campaign, which the mayor has said he would return.
After de Blasio’s election, Reichberg hosted a fund-raiser at his Borough Park home that raked in $35,000 for the Campaign for One New York, the mayor’s now-defunct nonprofit.
Fink, Offinger and Fialkoff — who runs the de Blasio-created Office of Strategic Partnerships — did not return calls for comment.
A de Blasio campaign spokesman didn’t deny Fink’s warnings but issued a statement describing the inaugural committee as “a large, ceremonial group” whose “members were recommended and vetted by campaign staff and chosen by staff in partnership with the volunteer chairperson.”
Additional reporting by Yoav Gonen

The Judge Who Saved New York

Mayor de Blasio is barred from regulating banks. Crisis averted.

A meteor headed straight for the world’s financial center has been knocked off course. Federal Judge Katherine Polk Failla of the Southern District of New York has prevented catastrophe in Gotham by knocking out the city’s 2012 Responsible Banking Act. The benefits will be felt far beyond New York.
The idea behind the law was to pressure banks to provide more loans to politically favored borrowers. The plan by the New York City Council was to take an obscure, routine function of approving banks to hold the city’s deposits and use it as leverage to assert a vast authority over lending that even many Washington regulators would envy.
Step one was creation of the Community Investment Advisory Board, charged with collecting data from banks on their efforts to offer services “most needed by low and moderate income individuals and communities.” The board was also deputized to examine what the banks were doing in “affordable housing,” foreclosure prevention, “community development” and other projects that might “positively impact” the city through activities such as “philanthropic work and charitable giving.”
Yes, the progressives who run New York City think it’s their business to pass judgment on private charitable donations. After the board had examined the banks and opined on how socially responsible they were, city bureaucrats were then empowered to use these judgments to determine which firms would be official deposit banks in New York City. The city would put out annual reports essentially grading each bank.
Former Mayor Michael Bloomberg thought this was illegal. Under longstanding precedent, banking regulation is conducted by the feds and states. Federal law states that “no national bank shall be subject to any visitorial powers except as authorized by federal law,” but the council overrode a Bloomberg veto.
The new board created by the law recently started demanding information from banks, including proprietary data that could reflect the health of the bank and involve trade secrets. A number of other big cities, including Philadelphia and Los Angeles, have also sought to enforce “responsible banking.”
Judge Failla found that the Responsible Banking Act is “preempted by federal and state law,” contains “unconstitutional provisions” at its heart and is “void in its entirety.” Under the Constitution’s Supremacy Clause, federal law trumps subordinate laws, so a city cannot simply choose to override national banking policy on a whim.
Mayor Bill de Blasio’s lawyers argued that compliance was voluntary and the city is free to choose which banking services to purchase. But Judge Failla noted that the law had nothing to do with getting a better deal on the city’s checking accounts and everything to do with broad social goals. Cities are free to use their proprietary power to select the best services at the lowest cost, but not to use this as a pretext for unrelated regulation of activity already governed by state and federal law. As for the idea that banks didn’t have to participate, the judge noted that the law “secures compliance through public shaming of banks.”
Good for Judge Failla, Sullivan & Cromwell counsel Robert Giuffra who argued the case, and the citizens of New York City who have been saved from another progressive onslaught.