New York Times
June 9, 2014
WHITE PLAINS, N.Y. — State Senator Malcolm A. Smith had a Plan A and a Plan B.
He told two men who were working surreptitiously for federal authorities that he wanted to run for mayor of New York on the Republican line, even though he was a Democrat. Short of that goal, he wanted to be restored as the leader of the Democrats in the Senate, a position he had lost a few years before.
To pave the way for Plan A, testimony in his trial for bribery and wire fraud charges revealed, he wanted to try to cement Plan B to burnish his credentials. And so on Nov. 16, 2012, he met at the Ritz-Carlton Hotel here with the two government informers. One was posing as a businessman who called himself Raj but was really an F.B.I. agent who used the name Anil Modi. The other was Moses Stern, a Rockland County developer who, facing the threat of a prison sentence, had agreed to serve as a government lure and informer.
The three men talked about which state senators might need some incentives to support Mr. Smith. According to Mr. Modi, who testified Monday for a third day at United States District Court here, Mr. Smith pointed out that campaign donations might not be enough to sway some senators. Some, Mr. Smith elaborated, might want paid consultancies.
“Sometimes it takes cash, sometimes it takes checks, sometimes it takes a job,” Mr. Modi said in a recorded conversation.
“Right, right, right,” Mr. Smith replied.
Gerald L. Shargel, Mr. Smith’s lawyer, said after the day in court that the judge had alerted the jury that “Senator Smith is not charged with any conduct relating to senatorial elections.”
Nevertheless, the conversation was important not just for what it revealed about New York State politics, but because it was part of the “American Hustle”-style seduction by government informers to see how far Mr. Smith would go to secure the mayoral nomination.
On Monday, the jury heard Mr. Smith in a secretly recorded conversation talk to Mr. Stern about persuading the Republican county leader of Brooklyn, Craig Eaton, to switch from supporting Adolfo Carrión Jr., the former Bronx borough president, to supporting Mr. Smith. When Mr. Stern said he knew someone close to Mr. Eaton, Mr. Smith told him: “I need you to make that phone call.”
The United States attorney’s office in New York has charged Mr. Smith with orchestrating a campaign to bribe three of the five Republican county chairmen to give him a letter authorizing his run on the Republican line.
The go-between in that alleged plot to run for mayor was Daniel Halloran III, a Republican city councilman from Queens who is also on trial for bribery and wire fraud charges. To get him to go along with Mr. Smith’s ambitions, Mr. Stern and Mr. Modi gave him almost $40,000 in cash and $6,500 more in checks to his fruitless congressional campaign in 2012. His lawyer, Vinoo P. Varghese, contends the $40,000 was a series of personal loans and said the $6,500 was reported as campaign contributions.
Mr. Modi’s testimony painted an unflattering portrait of Mr. Halloran as a councilman eager to use his so-called member-item discretionary account to pay back large contributors like Mr. Stern and Mr. Modi. In this case, the quid pro quo was a no-show management consulting contract worth up to $80,000 for the renovation of a senior center in his northern Queens district run by a nonprofit called Greater Whitestone Taxpayers Civic Association.
“Whitestone Taxpayers are definitely in need of assistance, so the question becomes how do we put you guys in play with them so that it’s beneficial for you guys as well as for us,” Mr. Halloran said on a recording. In return he sent a series of text messages. “Better be 20,” he wrote, which Mr. Modi testified was a request for $20,000.
Mr. Halloran eventually wrote a letter on City Council stationery to three community organizations declaring that he was allocating $80,000 of his discretionary money for the project and emailed a letter authorizing Mr. Modi and Mr. Stern’s holding company to do the consulting. Mr. Varghese said that Mr. Halloran was playing along with the contributors to get a donation but never ordered the money from the city treasury.
The transcripts of the recorded conversation from mid-November show Mr. Halloran was seeking contributions in cash; he had lost the race for Congress and no longer needed to secure matching funds.
“I can take green,” he said.