Top N.Y. lawmaker arrested on corruption charges

Joseph Spector | USA TODAY

Show Caption Hide Caption NY Assembly speaker Silver arrested New York Assembly Speaker Sheldon Silver was arrested on corruption charges and accused of using his position as one of the most powerful politicians in Albany to obtain millions of dollars in bribes and kickbacks masked as legitimate income. (Jan.

ALBANY, N.Y. — The New York Capitol on Thursday was again rocked by scandal as the Assembly speaker, one of the most powerful leaders in New York, was arrested on federal corruption charges alleging he was involved in a multimillion-dollar kickback scheme for more than a decade.

Sheldon Silver's arrest in Manhattan on a five-count indictment put state business on hold, and it led to questions about how the state Legislature would function under the cloud of Silver's arrest.

"I'm shocked," Assemblyman Barbara Lifton, a Democrat from Ithaca, N.Y., said in the halls of the Capitol. Democratic colleagues rallied around Silver; Republicans called for his ouster.

Federal prosecutors alleged that Silver, 70, the speaker since 1994, was in a scheme since at least 2000 to defraud the public and use his power to obtain at least $6 million from two outside law firms. Prosecutors said about $4 million of that came in kickbacks from real-estate developers and referrals in asbestos cases in New York City.

Silver was taken into custody shortly before 8 a.m. In the afternoon, he was released on $200,000 bail. Amid a swarm of reporters, Silver said, "I am confident that when all the issues are aired I will be vindicated."

U.S. Attorney Preet Bharara painted a different picture of Silver, alleging that the Manhattan Democrat used New York's porous ethics laws to hide his scheme — allowing him to become wealthy off his position in power. The FBI froze $3.8 million of Silver's savings from six banks in eight accounts. He could face more than 20 years in prison on each count if convicted, Bharara said.

"Over his decades in office, Speaker Silver has amassed titanic political power, but as alleged during that same time, Silver also amassed a tremendous personal fortune to the abuse of that political power," Bharara said at a news conference Thursday.

Silver's arrest was the highest profile case since Gov. Eliot Spitzer resigned in 2008, and it again sent shock waves through a Capitol that has seen nearly 40 lawmakers caught up in scandal since 2000. It also raised new questions about a corruption-busting panel that Gov. Andrew Cuomo shuttered last year that was, among other cases, looking into Silver's outside income.

The complaint alleged Silver received payments from two law firms, but that he didn't do any legal work. The 35-page complaint said Silver received at least $5.3 million from the personal-injury law firm Weitz & Luxenberg in Manhattan since late 2002.

The complaint also alleged that Silver "took legal action and other steps to prevent the disclosure of such information" as part of the Moreland Commission probe that Cuomo ended in March.

Bharara condemned Albany's culture of corruption. He said he has picking up the Moreland Commission's cases, but was already investigating Silver before the panel's work started.

"Politicians are supposed to be on the people's payroll, not on secret retainer to wealthy special interests they do favors for," Bharara said. "These charges in our view go to the very core of what ails Albany: the lack of transparency, lack of accountability and lack of principle joined with an overabundance of greed, cronyism and self dealing.

Silver's lawyers dismissed the charges.

"We're disappointed that the prosecutors have chosen to proceed with these meritless criminal charges," Silver's lawyers, Joel Cohen and Steven Molo, said in a statement. "That said, Mr. Silver looks forward to responding to them — in court — and ultimately his full exoneration."

Assembly Democrats huddled behind closed doors Thursday morning, but emerged to say they would support Silver, saying he's innocent until proven guilty.

"People are concerned. They're concerned for the speaker, they're concerned for the institution," Majority Leader Joseph Morelle, a Democrat from Irondequoit, N.Y., said. "Having said that, there's a strong belief — we believe in the Constitution, we believe in the presumption of innocence, we believe in the speaker who for 20 years has done such incredible things on behalf of the people of the state."​

Silver wouldn't have to resign as speaker over the charges. Lawmakers need to be convicted of a felony to be forced to resign from office. They are considered part-time officials and thus can earn outside income.

Some Republicans, including a few Democratic lawmakers, called for Silver to step down as speaker.

"His resignation as speaker is in the best interest of the Assembly, of the state, and the best way for us to conduct the business that we are elected to do," Assembly Minority Leader Brian Kolb, a Republican from Canandaigua, N.Y., in the Finger Lakes region said in a statement.

On Dec. 29, The New York Times reported that federal authorities were investigating income Silver may have received from a law firm, Goldberg & Iryami, which specializes in real-estate tax reductions for properties in New York City. The income hasn't been listed on Silver's annual financial disclosure forms.

The firm is not named in the complaint, but it shows that Silver earned nearly $700,000 from a real-estate firm in referral fees since 2002. The complaint also alleges that Silver had an arrangement with a doctor who was an expert in asbestos-related diseases; he allegedly got the doctor state grants in exchange for referring cases to Weitz & Luxenberg.

Last year, Silver reported on disclosure forms earning between $650,000 and $750,000 in 2013 as of counsel at Weitz & Luxenberg.

Silver has faced numerous questions about his leadership, including sexual-harassment cases involving lawmakers under his watch. But he has survived as speaker through each controversy.

After the Moreland Commission ended, Bharara has been investigating the unfinished cases that had looked at lawmakers' outside incomes and campaign-finance reports. Bharara is also believed to be investigating the role of Cuomo's office in the panel's work and disbandment.

Bharara said his work isn't done. There was no immediate comment from Cuomo's office on Silver's arrest.

"We will keep at it because the men and women of the FBI and of my office still subscribe to the quaint view that no one is above the law — no matter who you are, who you know or how much money you have," he said. "And so our unfinished fight against public corruption continues. You should stay tuned."

Spector reports for the Gannett Albany (N.Y.) bureau. Contributing: Jon Campbell, Gannett Albany (N.Y.) bureau.