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Feds investigating Silver’s influence over civil court
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| Sheldon Silver |
LINK
The country’s most important civil court is under federal investigation, an insider says.
The probe is focusing on the state Supreme Court’s civil division at 60 Centre St. in lower Manhattan, where many tentacles reach to disgraced Assembly Speaker Sheldon Silver, the court source said.
Silver was arrested last month on corruption charges, and Manhattan US Attorney Preet Bharara warned the public to “stay tuned” for more developments.
The case against Silver centers on his freelance legal “work” and the millions of dollars in bribes and kickbacks he hauled in from real-estate and asbestos claims, the feds say.
Many of these cases landed in the courtrooms at 60 Centre St., presided over by judges with ties to Silver and his lifelong pal, Jonathan Lippman, the chief judge of the state Court of Appeals.
Both men grew up on the Lower East Side, and Silver has been Lippman’s political godfather, pushing him to reach New York’s top judicial post.
“The appointment of Sheldon Silver’s childhood friend, Jonathan Lippman, as the state’s chief judge based on his administrative experience made about as much sense as the Yankees making their accountant the manager of the team,” said Charles Compton, former president of the Supreme Court Officers Association. He added that Lippman was appointed “to protect and promote Silver’s interests.”
At least three judges at 60 Centre St. are connected to Silver from the Lower East Side.
Judge Martin Shulman
Judge Martin Shulman is a former president of Silver’s synagogue, and the two are neighbors in a Grand Street co-op complex. In 1999, the judge was appointed an acting Supreme Court justice by Lippman, then the state’s chief administrative judge.
Shulman has been handling tax-reduction claims at the Centre Street courthouse for at least a dozen years and now presides over most of these cases. Many of these cases were filed by the Goldberg & Iryami law firm.
Judge Jonathan LippmanPhoto: AP
Silver stands accused of raking in $700,000 in secret kickbacks from Goldberg & Iryami. Firm principal Jay Arthur Goldberg had worked for Silver in the Assembly as his counsel.
The indictment accuses Silver of steering billionaire developer Leonard Litwin, pictured at left, the state’s largest political donor, to the firm, along with another unnamed developer. In exchange, Silver reaped referral fees.
http://www.crainsnewyork.com/article/20141103/POLITICS/141039941/cuomos-biggest-donor-is-also-the-oldest
Jay Arthur GoldbergPhoto: Gregory P. Mango
The Goldberg firm handled tax appeals for 15 buildings owned by Litwin’s organization, Glenwood Management, and its limited liability companies, prosecutors said.
Court records show that in one case that landed in Shulman’s court — involving a high-rise building on York Avenue — Glenwood won a $3.4 million reduction in the building’s assessment, which is used to determine its taxes.
Judge Sherry Klein Heitler
It was settled before trial, and Shulman signed off on the agreement in 2010.
David Bookstaver, a court system spokesman, denied there were conflicts of interest in Shulman’s court.
“The issue of conflict really doesn’t exist as most of these cases in the tax part settle and the ones that go to trial are jury trials. Furthermore, Judge Shulman has no knowledge whatsoever of any compensation to Mr. Silver,” Bookstaver said.
But the apparent ties do not end in Shulman’s courtroom.
Litwin owns a rental building, The Fairmont — the same high-rise where Lippman and his wife rented a one-bedroom apartment between 2007 and 2010, The Post found. And Lippman’s son, Russell, a Harvard-educated lawyer, rented an apartment there between 2003 and 2005, public records show.
Lippman, who earned $156,000 in 2010, moved into the rent-stabilized building in 2007 shortly after he was appointed presiding justice of the Appellate Division in Manhattan and was required to live in The Bronx or Manhattan. He had lived in Westchester.
Bookstaver said Lippman paid market-rate rent of $3,195 for the apartment. He said Lippman rented at the Fairmont because he needed to move quickly and knew of the building because his son had lived there.
He said Lippman did not know Litwin owned the property.
“He has no idea who this guy is,” Bookstaver told The Post.
Silver’s influence was also apparent in another part of the iconic civil courthouse on Foley Square, where the grand entrance has been used as a backdrop for movies including “The Godfather” and
“12 Angry Men” and countless episodes of “Law & Order.”
Weitz & Luxenberg, the law firm where Silver was “of counsel” until he was dumped last week, practically rules a special section of the court dealing with complex asbestos litigation.
Critics say the firm gets the “red-carpet treatment” including a fast track, “better judges” and first dibs on jurors to hear its cases.
Sherry Klein Heitler, the chief asbestos judge, as well as the top administrative judge at 60 Centre
St., has handled dozens of the firm’s cases in what is called New York City Asbestos Litigation or NYCAL.
Last year, at Weitz & Luxenberg’s request, Heitler reversed a 20-year rule barring punitive damages in asbestos cases, paving the way for much bigger jury awards.
Another judge, Joan Madden, consolidated unrelated asbestos cases, which resulted in huge increases in jury verdicts — from an average of $7 million to $24 million per plaintiff between 2010 and 2014, data collected by Bates White Economic Consulting show. In one consolidated case, Silver’s firm won a $190 million award.
Of 15 mesothelioma verdicts in the last four years, Silver’s firm won $273.5 million of $313.5 million awarded by NYCAL juries.
The average award for an NYCAL asbestos case — nearly $16 million per plaintiff between 2010 and 2014 — is reportedly two to three times larger than those in other courts nationwide.
The American Tort Reform Association last year called the asbestos court the nation’s top “judicial hellhole” where plaintiffs’ lawyers are “brazenly favored by the judges.” Silver has been blocking tort-reform bills for decades in Albany.
It’s unclear whether any individual judge is being targeted by the investigation. The US Attorney’s Office said it could neither confirm nor deny any probe. An FBI spokesman would not comment.
“We are not aware of any federal investigation,” Bookstaver said.
De Blasio picks Silver pal to help with city’s 2016 DNC bid
NY POST
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| NYC Mayor Bill De Blasio |
A week after he defended Sheldon Silver following the disgraced Assembly speaker’s arrest on corruption charges, Mayor Bill de Blasio on Thursday officially named a developer at the center of that scandal to help the city’s bid for the 2016 Democratic National Convention.
Big-time political donor Leonard Litwin was on Hizzoner’s 119-member list for the convention host committee, even though Litwin’s luxury apartment-rental company, Glenwood Management, is tied to Silver’s alleged dirty deals.
According to the feds, Silver steered two developers, including 100-year-old Litwin, toward the law firm Goldberg & Iryami, so Silver could rake in hundreds of thousands of dollars in referral fees.
Litwin agreed to hire the two-person firm to curry favor with the influential Silver, Manhattan US Attorney Preet Bharara has charged.
“And that is not surprising, because Silver is a powerful political leader in the state who holds sway over so many laws and policies near and dear to the developers’ bottom lines,” the prosecutor said.
Glenwood hasn’t been charged with any wrongdoing — but Litwin found out about the fee-sharing arrangement in January 2012, when the firm sent him a new retainer agreement, court papers say.
Litwin refused to sign the new agreement, although he later signed a “side letter” acknowledging the deal.
De Blasio’s decision to keep Litwin on his list could spell more trouble for the mayor’s bid to hold the convention in the city. It reportedly has already taken a hit among national Democrats because of the mayor’s ongoing feud with cops.
Last August, the Sergeants Benevolent Association took out full-page newspaper ads saying it could not “in good conscience” support his bid to bring the convention to the Barclays Center.
Litwin, who donated $4,950 to de Blasio’s mayoral campaign, was first named a member of de Blasio’s host committee last November.
He is known as one of the top political donors in New York state — and has skirted around caps on campaign contributions by funneling millions of dollars in donations through more than 20 limited-liability companies controlled by Glenwood.
When asked about Litwin’s continued inclusion on the committee, City Hall officials would only say they were proud of all the people chosen.
In the press release, de Blasio also announced his 10 host committee co-chairs, including Council Speaker Melissa Mark-Viverito, Vogue editor Anna Wintour and tech giant Sean Parker, who recently gave $250,000 to the mayor’s nonprofit Campaign for One New York.
“As we head into the final weeks of the selection process, it’s more critical than ever that we show the DNC that New Yorkers are enthusiastic and united in our desire to bring the convention back to New York City,” the mayor said in the statement.
As of Thursday, de Blasio’s host committee had raised $20 million in pledges, with $6.5 million in cash on hand, according to the statement.
The Opinion Pages | Op-Ed Columnist
New York’s Real Scandal
LINK“The scandal isn’t what’s illegal,” goes one of Michael Kinsley’s best-known sayings. “The scandal is what’s legal.” I offer you l’affaire Sheldon Silver as a case in point.
Silver, who for two decades was the all-powerful speaker of the New York Assembly, was indicted last Thursday for a variety of alleged illegal actions. Chief among them was his failure to list outside income on his financial disclosure forms, and his steering $500,000 from a state slush fund he controlled to a doctor who specialized in mesothelioma — a rare, deadly cancer — in return for client referrals. Silver says he’ll be vindicated, but Preet Bharara, the U.S. attorney who indicted him, has won the cooperation of a number of key participants, including said doctor, whose name is Robert Taub. We’ll return to him in a minute.
Despite the rather obvious potential for conflict of interest, it’s perfectly legal for a New York legislator to earn outside income. Few took fuller advantage of this than Silver, who for more than a decade was paid millions of dollars by two law firms. One of them was Weitz & Luxenberg, a big-time New York plaintiffs’ firm that specializes in bringing lawsuits on behalf of people with mesothelioma, which results primarily from exposure to asbestos.
Though Silver is a lawyer, he knew nothing about asbestos litigation — nor did he ever do any actual lawyering for the firm. So what did he do? The firm now says it brought him on — at a base salary of $120,000 a year — purely to lend it prestige. But in truth, Silver did much more than that. As speaker of the Assembly he could ensure that the legislature did nothing to clip the wings of the plaintiffs’ bar, like setting a cap on damages.
He could also solicit client referrals, for which he would receive a piece of the action. This is where Taub comes in. Many doctors who specialize in mesothelioma have a pretty explicit tit-for-tat: They refer patients to firms that help fund their research. A legal bribe, you might call it. Before Taub and Silver began doing business, the doctor asked for funding from Weitz & Luxenberg. The firm said no. So instead, Silver instructed the Department of Health to make two $250,000 grants to fund Taub’s research. (In a statement, Weitz & Luxenberg said it had no knowledge of Silver’s quid pro quo.)
When the grant money ran out, Taub began referring most of his patients to Simmons Hanly Conroy, a big asbestos firm in Illinois. But he still made the occasional referral to Weitz & Luxenberg to curry favor with Silver. In return, Silver got Taub’s son a job, and directed $25,000 in state funds to his wife’s charity. Perfectly legal.
There is one other thing Silver could do for Weitz & Luxenberg. He could help make sure that the New York judiciary would look favorably on asbestos cases. The chief judge of the New York State Court of Appeals, Jonathan Lippman, is a childhood friend of Silver’s. And, in 2008, Lippman placed Silver’s good friend Arthur Luxenberg — yes, the same Luxenberg who was paying Silver $120,000, plus referral fees — on a committee that recommends judicial appointments. Six months later, a judge named Sherry Klein Heitler was assigned to lead New York City’s dedicated asbestos court.
Defense lawyers say that since then, the asbestos court has become the plaintiffs’ bar’s best friend. Prior to Heitler’s appointment, the court had deferred punitive damages claims indefinitely for the sensible reason that since companies stopped making asbestos products decades earlier there was no behavior to correct. But after Weitz & Luxenberg requested that this deferral be lifted, Heitler brought punitive damages back. Mesothelioma cases that had very little in common were consolidated, which pressured defendant companies to settle and, when they didn’t, could lead to huge jury awards. According to a 2013 report by the American Tort Reform Association, the average jury award for an asbestos claim in New York City since 2007 is $21.7 million. That is “roughly seven times the $3.1 million average award in courts throughout the rest of New York State.”
And no firm has had more success than Weitz & Luxenberg. According to the economic consulting firm Bates White, it handles some 53 percent of the city’s mesothelioma filings. The court itself acknowledged Weitz & Luxenberg cases take precedence over others. It has also won the most money. In July 2013, it won $190 million for five plaintiffs, the most awarded in a New York City asbestos case.
Weitz & Luxenberg insists that the judiciary treats everyone fairly, and that it reaps the biggest awards because it does the best job. That may be so. But it couldn’t hurt that Silver also played an important role in setting judicial pay, and that in 2011 his commission appointee cast the deciding vote in getting the state judges a 27 percent raise.
Which, of course, is perfectly legal.
