Manhattan U.S. Attorney And FBI Assistant Director-In-Charge Announce Federal Corruption Charges Against New York State Senator Malcolm Smith And New York City Council Member Daniel Halloran
Two New York City Party Leaders And Two Elected Officials In The Village Of Spring Valley Also Charged In Bribery Schemes
Charges Include Cash Bribes of More Than $100,000 Changing Hands in Connection With Republican Mayoral Ballot, City Council Discretionary Funds, and Spring Valley Development Project
Preet Bharara, United States Attorney for the Southern District of New York, and GEORGE VENIZELOS, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a Complaint charging New York State Senator MALCOLM SMITH, New York City Council Member DANIEL HALLORAN, and four others with bribery, extortion, and fraud charges. The charges against the defendants arise from an undercover investigation of three distinct but related bribery schemes involving public corruption. In the first scheme, SMITH allegedly arranged for cash bribes totaling $40,000 to be paid to VINCENT TABONE and JOSEPH SAVINO, two New York City Republican county leaders, as part of an effort by SMITH, who is a Democrat, to appear on the Republican primary ballot as a mayoral candidate in the 2013 election. HALLORAN is alleged to have received approximately $20,500 in cash bribes to act as an intermediary with TABONE and SAVINO on SMITH’s behalf. In the second scheme, HALLORAN allegedly received approximately $18,300 in cash bribes and $6,500 in straw donor campaign contribution checks in exchange for agreeing to steer up to $80,000 of New York City Council discretionary funding to a company he believed was controlled by those who paid him the bribes. The final scheme involved NORAMIE JASMIN and JOSEPH DESMARET, the Mayor and Deputy Mayor of the Village of Spring Valley in Rockland County, and their alleged receipt of financial benefits, including JASMIN’s receipt of a hidden interest in a real estate project and DESMARET’s receipt of approximately $10,500 in cash bribes, in exchange for official acts. All six defendants were arrested this morning and will be presented later today in White Plains federal court before U.S. Magistrate Judge Lisa Margaret Smith.
Manhattan U.S. Attorney Preet Bharara said: “Today’s charges demonstrate, once again, that a show-me-the-money culture seems to pervade every level of New York government. The 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. As alleged, Senator Malcolm Smith tried to bribe his way to a shot at Gracie Mansion – Smith drew up the game plan and Councilman Halloran essentially quarterbacked that drive by finding party chairmen who were wide open to receiving bribes. After the string of public corruption scandals that we have brought to light, many may rightly resign themselves to the sad truth that perhaps the most powerful special interest in politics is self-interest. We will continue pursuing and punishing every corrupt official we find, but the public corruption crisis in New York is more than a prosecutor’s problem.”
FBI Assistant Director-in-Charge George Venizelos said: “Elected officials are called public servants because they are supposed to serve the people. Public service is not supposed to be a shortcut to self-enrichment. People in New York, in Spring Valley -- in any city or town in this country -- rightly expect their elected or appointed representatives to hold themselves to a higher standard. 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.”
According to the allegations in the Complaint unsealed today in White Plains federal court:
Scheme to Bribe New York City Republican Party Committee Leaders
Under New York State law, a person seeking to run for a citywide position in New York City may not have his or her name listed as a candidate on the ballot if he or she is not a registered member of the party having the primary contest unless he or she receives the approval of at least three of the five chairmen of the county committees for that party. The approval is given in the form of what are known as Wilson Pakula certificates, which are signed by the approving chairmen.
SMITH, a Democrat, was first elected to the New York State Senate in March 2000, and represents the 14th Senatorial District in Queens, New York. He is chairman of the Independent Democratic Conference of the State Senate and, among other positions, has served as the State Senate’s minority and majority leader. SMITH has spoken publicly about his desire to run for Mayor of New York City in 2013.
HALLORAN, a Republican, was elected to the New York City Council in 2009, and represents the City Council’s 19th District in Queens, New York. HALLORAN ran unsuccessfully for the United States Congress in 2012. TABONE and SAVINO are New York City Republican Party officials. SAVINO is the Chairman of the Bronx County Republican Party and TABONE is the Vice Chairman of the Queens County Republican Party. Their duties include endorsing candidates for public office and voting on Wilson Pakula certificates.
In November 2012, SMITH agreed with HALLORAN, an undercover FBI agent posing as a wealthy real estate developer (the “UC”), and a cooperating witness (“CW”) to bribe New York City Republican Party county leaders in exchange for their issuance of Wilson Pakula certificates that would enable SMITH to run as a Republican candidate for New York City Mayor in 2013. When asked by the UC what he wanted in exchange for his help securing the certificates, HALLORAN said that he wanted to get his “mortgage situation resolved,” and that if SMITH was elected mayor, he would expect to be named Deputy Police Commissioner if he asked for the job. He also solicited and received from the UC and the CW approximately $20,500 in cash for himself.
In furtherance of the scheme, HALLORAN arranged for the UC and the CW to meet TABONE and SAVINO, and negotiated the amounts of the cash bribes to be paid by the UC and the CW to TABONE and SAVINO on SMITH’s behalf. HALLORAN told the UC and the CW that, “you gotta get [SAVINO] business but put twenty-five in an envelope….TABONE is twenty-five up front, twenty-five when the Wilson Pakula is delivered.” After his meeting with the UC and the CW, SAVINO accepted $15,000 in cash and agreed to accept another $15,000 after he formally approved Smith’s appearance on the 2013 Republican ballot for New York City Mayor. After meeting with the UC and the CW, TABONE accepted $25,000 in cash and agreed to accept another $25,000 after his committee approved Smith’s appearance on the 2013 Republican ballot for New York City Mayor.
In exchange for the payment of bribes to TABONE and SAVINO by the UC and CW, in his capacity as a New York State Senator, SMITH agreed to help obtain $500,000 in New York State funds for road work that would benefit a real estate project in Spring Valley that SMITH understood was being developed by a company controlled by the UC and CW (“the Company”).
Bribery of HALLORAN to Steer City Council Discretionary Funding
Since August 2012 to the present, HALLORAN accepted approximately $18,300 in cash bribes and approximately $6,500 in straw donor campaign contribution checks from the UC and the CW in exchange for agreeing to steer up to $80,000 in New York City Council discretionary funding to the Company.
For example, at a meeting on September 7, 2012, at which HALLORAN and the UC discussed HALLORAN’s need to raise money for his congressional campaign, HALLORAN agreed to hire someone of the CW’s choosing for a congressional staff or some equivalent position, and to help him raise money for his campaign. During the discussion, HALLORAN said: “That’s politics, that’s politics, it’s all about how much. Not whether or will, it’s about how much, and that’s our politicians in New York, they’re all like that…And they get like that because of the drive that the money does for everything else. You can’t do anything without the f***ing money.” During the meeting, the CW paid HALLORAN $7,500. And near the end of the meeting, HALLORAN remarked: “Money is what greases the wheels – good bad, or indifferent.”
In furtherance of this scheme, HALLORAN wrote two letters on New York City Council letterhead about this funding, one to civic organizations and the other to the Company. Despite suggesting in these letters that work would be done by the Company to support the allotment of up to $80,000, HALLORAN agreed with the UC and the CW that the Company would provide no services.
Bribery of the Spring Valley Mayor and Deputy Mayor
NORAMIE JASMIN and JOSEPH DESMARET were sworn in as Mayor and Deputy Mayor of the Village of Spring Valley, New York in December 2009. From September 2011 through the date of the Complaint, JASMIN and DESMARET accepted financial benefits from the UC and the CW in exchange for official acts. DESMARET accepted approximately $10,500 worth of cash bribes from the UC and the CW in exchange for, among other things, his vote in favor of a sale of land owned by Spring Valley to the Company a company he believed was controlled by the UC and that would be used to build a community center (the “Real Estate Project”).
In exchange for her vote awarding the Real Estate Project to the Company, JASMIN demanded a partnership interest in the Company, stating: “So for me, it’s better for us to partner, that’s what I said to you before; a partnership will be best.” When the CW later suggested that JASMIN have a 20% stake in the project, she replied: “Partnership is fifty fifty, right?”
In support of the scheme, JASMIN coached the UC on how to make his presentation to the Spring Valley Village Board of Trustees about why the board should award the Real Estate Project to his company. She also coached two other individuals, whom she understood were associates of the UC and who would pose as competing developers, but who were actually undercover FBI agents, on how to make their presentation to the Village Board. In addition, both JASMIN and DESMARET agreed to steer to the UC’s company the New York State funding for road work that SMITH agreed to help the CW and the UC obtain.
Charts containing the names, ages, residences, charges, and maximum penalties for the defendants are attached.
Mr. Bharara praised the investigative work of the FBI. He also thanked the Rockland County District Attorney’s Office and the Spring Valley Police Department for their invaluable assistance to the investigation.
This case is being handled by the Office’s White Plains Division and Public Corruption Unit. Assistant U.S. Attorneys Douglas B. Bloom and Alvin Bragg are in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.