Two Queens politicians, State Senator Malcolm Smith and City Councilman Dan Halloran, appeared in court for the first time Tuesday in connection with an alleged attempt to rig the upcoming race for mayor.
In addition to Smith and Halloran, several other people connected to the federal probe appeared before a judge in White Plains. They include Bronx Republican Party Chairman Jay Savino, Queens Republican Party leader Vincent Tabone, Spring Valley mayor Noramie Jasmin and her deputy, Joseph Desmaret.
Preet Bharara, the U.S. Attorney for the Southern District of New York, says Smith, a 56-year-old Democrat, drew up the game plan and Halloran, a 42-year-old Republican, executed it by finding Republican Party chairmen who were open to receiving bribes in return for placing Smith on the ballot as the Republican candidate.
"At the heart of the allegations is a sitting Democratic Senator from Queens, Malcolm Smith, who believed he could, and should, be the mayor of New York City, and who, in the service of that ambition, tried to bribe his way to a shot at Gracie Mansion," Bharara said.
The U.S. Attorney's office says Smith, Halloran, Tabone and Savino face a wire fraud charge that could result in a 20-year prison sentence and a bribery conspiracy charge that could bring a five-year sentence.
Smith also faces a Hobbs Act corruption charge, Halloran has another wire fraud charge, and Jasmin and Desmaret each face a mail fraud charge, which each carry a maximum 20-year prison sentence.
None of the defendants entered pleas Tuesday, and they were all released on $250,000 bonds with travel restrictions. Halloran also was given 24 hours to surrender a gun in his possession.
Their next court appearance is scheduled for April 23.
Speaking to reporters outside the courthouse, Smith's lawyer, Gerald Shargel, said his client plans to enter a not-guilty plea and present his side of the story.
"The allegations in this complaint do not tell the full story. I think that there is much more to this story," Shargel said. "I ask anyone who is reading this or reading about this to withhold judgment."
Halloran declined to comment as he left the courthouse, but his attorney, Dennis Ring, gave a quick statement.
"The councilman denies all allegations, and he looks forward to clearing his name and coming back to court," Ring said.
The U.S. Attorney's complaint says the two Republican Party leaders, Savino and Tabone, accepted $40,000 in cash payments and were promised another $40,000 more.
In exchange for the money, they allegedly promised to help Smith get on the ballot as a Republican, something he could only do if three of the five GOP county leaders in the city signed off on the deal.
"Senator Smith talks a lot about who is able to be bought, and for how much, and on what terms, and on what timetable," Bharara said.
For his efforts, Bharara said Halloran, a former city police cadet, not only profited handsomely but was also setting his sights on becoming deputy police commissioner under a Malcolm Smith administration.
The complaint says he was still involved in the scheme as recently as late March.
Authorities say Smith wanted to hold off on giving the Republican Party leaders any more money until they publicly backed his campaign.
Smith allegedly told the undercover agent that before anyone got "even a nickel more, [he'd] have to stand on the Empire State Building and drop every person [he] endorsed and hold Malcolm up and say he's the best thing since sliced bread. Matter of fact, he's better than sliced bread."
Aside from the bribery scheme, the complaint outlines a separate scandal involving City Council discretionary funds.
Halloran is alleged to have accepted bribes in exchange for agreeing to steer some of his member item money to an undercover agent and cooperating witness through a company he thought they controlled.
When the witness asked Halloran for $20,000 in City Council discretionary funds, Halloran was allegedly heard on a recording saying, "Absolutely. That's easy. That's not even an issue. In fact, I might even be able to get you more."
Halloran then allegedly agreed to direct up to $80,000 to the phony company for no services in return.
In exchange, it is alleged Halloran received more than $18,000 in cash and approximately $6,500 in campaign contribution checks from straw donors in his failed bid for Congress.
Rounding out the complaint, federal prosecutors say Smith also agreed to use his state Senate office to help fund a project in Spring Valley, N.Y., which he thought would help a real estate developer, who was actually an undercover FBI agent providing money for the bribes.
The complaint states Mayor Noramie Jasmin of Spring Valley and Deputy Mayor Joseph Desmaret corruptly approved the sale of property in Rockland County at the request of the undercover agent and cooperating witness.
Desmaret allegedly accepted more than $10,000 in cash bribes in exchange for his vote on the sale. In exchange for her vote, the complaint alleges Jasmin demanded to be a secret part owner in the company that purchased the property Smith believed he was assisting and directing money to.
During a press briefing, Bharara said the scheme only further reduces the outlook New Yorkers have on honest government, noting that at one point, Halloran allegedly told a cooperating witness, "Money is what greases the wheels -- good, bad, or indifferent."
"Today's charges demonstrate, once again, that a show-me-the-money culture seems to pervade every level of New York government," said Bharara. "The criminal complaint describes an unappetizing smorgasbord of graft and greed involving six officials who together built a corridor of corruption stretching from Queens and the Bronx to Rockland County and all the way up to Albany itself."
In a statement, a spokesman for Smith said, "The Senator has record of 13 years of dedication, hard work and integrity to the people he serves in Queens. He has provided to the heath, safety and well-being of the almost 20 million residents in New York. He will be vindicated when the all the facts in the case are revealed."
The FBI also issued a statement saying, "At the very least, public officials should obey the law. As alleged, these defendants did not obey the law; they broke the law and the public trust. There is a price to pay for that kind of betrayal."
Following the announcement of Smith's arrest, Independent Democratic Conference Leader and Senate co-leader Jeffrey Klein said Smith is being stripped of his committee assignments and conference leadership position.
In a statement, Klein added, "By participating in the alleged scheme, Senator Smith breached the trust of the Independent Democratic Conference. I trust that the U.S. attorney's office will act expeditiously to resolve this matter and to ensure that justice is served. Finally, given the level of criminality alleged, I believe that Senator Smith should seriously consider whether or not he can continue to effectively serve his constituents."
Governor Andrew Cuomo called the allegations against Smith troubling.
"I hope that he fully cooperates with the investigation, and I hope the investigation is thorough and speedy and gets to the facts, but it is very, very troubling," Cuomo said. "We have zero tolerance for any violation of the public integrity and the public trust, so they're very serious."
City Council Speaker Christine Quinn, a leading Democratic mayoral candidate, told reporters Tuesday that Halloran was stripped of his committee appointments but is still free to serve in the council.
Quinn also said that she helped pass reforms to keep graft from being even more rampant in the city.
The unfolding political scandal may be a boost for Democrats seeking to reclaim City Hall, as there are further connections between the defendants and other Republican mayoral candidates.
While Halloran is accused of trying to orchestrate Republican backing of Malcolm Smith, the councilman publicly endorsed another Republican candidate, Joe Lhota, just last month.
Another Republican candidate, John Catsimatidis, employed Vincent Tabone for at least five years. The Queens Republican Party leader served the billionaire businessman as both a paid political consultant and in the legal department of Catsimatidis' company.
In a statement, Catsimatidis said, "Earlier this year we learned that an investigation was underway and since that time my campaign and my business have fully cooperated with law enforcement."