February 01, 2015 By LOUIS FLORES
Lawrence Schwartz, the former secretary to Governor Andrew Cuomo (D-New York), has basically disappeared after he was replaced over two weeks ago by Wall Street banker William Mulrow.
A look back at three of the biggest Albany political scandals over the last 30 years, one finds twin constants : Mr. Schwartz’s presence and a persistent lack of reform.
A top-level overview of Mr. Schwartz’s career places him at three controversies : the 1987 indictments of several state officials, including former State Senator Manfred Ohrenstein (D-Manhattan), Mr. Schwartz’s former boss ; the bungled bidding process involvingAqueduct Entertainment Group, LLC, or AEG, to operate a racino atAqueduct Racetrack in South Ozone Park, Queens ; and the reported interference by the administration of Governor Andrew Cuomo (D-New York) in the corruption-fighting work of the Moreland Commission, before its premature demise.
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THE 1987 INDICTMENTS
For several years, Mr. Schwartz worked for former State Senator Ohrenstein on or about the time State Senator Ohrenstein was charged in 1987 with hundreds of counts of corruption by former District Attorney Robert Morgenthau (D-Manhattan) for essentially using state legislative employees as campaign workers.
At the time, one of State Senator Ohrenstein’s aides, Frank Sanzillo, was also indicted. In the years since, Mr. Sanzillo has worked as a lobbyist.
The Hon. Mr. Ohrenstein, now an attorney in private practise, did not answer a request for an interview for this article.
Nearly 28 years ago, with former State Senator Ohrenstein’s arrest on a 564-count indictment, Albany Democrats promised reforms. Another State Senator, Howard Babbush (D-Brooklyn), was also indicted as part of the federal corruption investigation.
Their indictments were followed a few months later by the indictments of two additional legislatorsRalph Quattrociocchi (D-Rochester) and former State Senator Joseph Montalto (D-Brooklyn). Another state legislator, Assemblymember Gerdi Lipschutz (D-Queens), had resigned following a controversy about creating no-show jobs in her office at the request of "a powerful Queens politician," according to a report.
As these controversies were engulfing the state legislature, then Governor Mario Cuomo (D-New York) refused to comment, other than to say cases, such as those of Assemblymember Lipschutz, were for the state legislature to deal with, according to The New York Times report.
The 1987 indictments were supposed to force Albany legislators to adopt "fundamental changes," said then State Senator Franz Leichter (D-Manhattan). However, State Senator Leichter retired the following year, and he was replaced in the State Senate by Eric Schneiderman, who is now the state’s attorney general.
After the indictments of each of State Senators Ohrenstein and Babbush and State Senator Ohrenstein’s aide, Mr. Sanzillo, then State Senator Leichter complained to the The New York Times about the $200 million legislative budget, which was tightly controlled by then Senate Majority Leader Warren Anderson (R-Binghamton) and by then State Assembly Speaker Mel Miller (D-Brooklyn), saying, in part, "Nobody knows where that money goes, except Anderson and Miller."
Speaker Miller was the predecessor of Speaker Sheldon Silver (D-Lower East Side) as the Assembly’s leader, and Speaker Silver rose in leadership after former Speaker Miller was befallen in his own corruption investigation after the 1987 indictments.
A response to the 1980’s political corruption crisis sweeping across New York State was the creation of a Moreland Act commission named theNew York . The creation of the Moreland panel came at the behest of another panel, the State-City Commission on Integrity in Government. Whilst the state-city commission was a toothless panel, since it was given no subpoena power, state legislators feared an investigation by the Moreland panel. Consequently, state legislators brokered a deal with Governor Mario Cuomo, providing that the Moreland panel would receive $5 million in funding on the condition that the Moreland panel would not investigate the state legislature, according to a report published by The New York Times. Furthermore, the Moreland panel was denied prosecutorial powers and would only serve in a fact-finding function.
In New York, oversight and accountability get undermined even before they even get rolled out.
The 1987 indictments came in the final year that Mr. Schwartz worked as Director of Conference Operations for State Senator Ohrenstein. In the time since, Mr. Schwartz has worked as a campaign manager for U.S. Senator Charles Schumer (D-New York) and other posts before finally being appointed to the position of secretary to the governor, a position he held for the latter part of the partial term of the administration of Governor David Patterson (D-New York) through the end of the first term of Governor Andrew Cuomo.
THE AEG BID FOR A RACINO AT AQUEDUCT RACETRACK
Under Governor Paterson, Mr. Schwartz was tasked, along with another Patterson administration official, with reviewing bids submitted by companies seeking to operate a racino at Aqueduct Racetrack. Because of Mr. Sanzillo’s former relationship with Mr. Schwartz, Mr. Sanzillo was briefly engaged as a lobbyist on behalf of the Aqueduct Entertainment Group, LLC, or AEG, to lobby Mr. Schwartz, according to an inspector general’s investigatory report of the Aqueduct racino bidding process. (Mr. Schwartz and Mr. Sanzillo had both worked for the indicted former State Senator Ohrenstein.)
Ultimately, the bid submitted by AEG was selected as the winning bid by Governor Patterson, Speaker Silver, and Senate Majority Leader John Sampson (D-Brooklyn), but not until after the AEG bid had been rejected by Patterson administration officials. The consortium of investors involved in the AEG bid was politically-connected, and consortium included influential the former U.S. Representative, the Rev.Floyd Flake, of Queens.
Even though Mr. Schwartz told investigators that he had promised to make sure the Aqueduct Racetrack racino bidding process did not result in mistakes, as had taken place during a prior round of bidding, and in spite of the fact that Mr. Schwartz had each asserted that he considered his position of secretary to the governor to be equivalent to "chief operating officer" of state government and that he served as a policy advisor to Governor Paterson, Mr. Schwartz sought to downplay his involvement in the bid review process.
As such, Mr. Schwartz either denied, claimed to have limited recollection of, or sought to minimise his role in each of the following actions :
having an August 2009 conversation with AEG lobbyist, Hank Sheinkopf ;convening an August 18, 2009, multi-agency meeting regarding the bids for Aqueduct Racetrack ;Aqueduct Committeeconvening a September 8, 2009, meeting to review Aqueduct bids ; receiving or reading a draft September 17, 2009, memorandum in which AEG had been rejected ; and, amongst other things, speaking with State Senator Joseph Addabbo (D-Queens) regarding constituents’ frustration with the process.
The controversy over the selection of AEG after AEG’s bid had been rejected triggered an investigation by the state’s Office of the Inspector General, which issued a report that was referred to federal and state prosecutors, but no prosecution for the violations noted in the Inspector General’s report was ever undertaken.
The inspector general’s report noted that each of Governor Paterson and then Attorney General Andrew Cuomo were angling for political support amongst Black leaders, including the Rev. Flake, for their expected and respective 2010 gubernatorial races.
After Governor Paterson was forced to bow out of the 2010 race, Attorney General Cuomo ran with no serious Democratic challenger, won the election, and, kept Mr. Schwartz as a senior advisor for a term was that called temporary before Governor Andrew reappointed Mr. Schwartz to the position of secretary to the governor.
A more detailed map of Mr. Schwartz’s interactions with other officials and lobbyist in respect of the Aqueduct racino process follows :
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THE MORELAND COMMISSION
Under Governor Andrew Cuomo, Mr. Schwartz would play a crucial role, according to published reports, in the Cuomo administration’s alleged obstruction of the corruption-fighting work by the Moreland Commission.
When Moreland Commissioners issued a subpoena to a media firm that was a vendor of Governor Cuomo’s campaign committee, for example, Mr. Schwartz reportedly ordered one of the co-chairs of the Moreland Commission to, "Pull it back," according to a bombshell report published by The New York Times.
For his role and for his knowledge of the Cuomo administration’s interactions with the Moreland Commission, Mr. Schwartz voluntarily agreed to a meeting with federal prosecutors, according to a reportpublished by The Wall Street Journal. After published reports showed that Cuomo administration officials were allegedly trying to influence how Moreland Commissioners described their interactions with the Cuomo administration, U.S. Attorney Preet Bharara, the federal prosecutor investigating the legal issues surrounding the Moreland Commission, issued a warning letter to Governor Andrew Cuomo, suggesting that Cuomo administration officials may have engaged in witness tampering.
Ironically, Governor Cuomo was influenced to make cleaning up ethics in Albany a campaign issue in the 2010 gubernatorial election, in part, by the AEG controversy, only to see the actions by Governor Cuomo’s own administration scrutinised by federal prosecutors for reportedly interfering with corruption investigations.
When state legislators were confronted for hiring legislative employees to double as campaign workers, Mr. Schwartz was a top aide to one of the indicted state senators. When Governor Paterson’s selected AEG to operate the racino at Aqueduct Racetrack, Mr. Schwartz was the Governor’s top aide. And when the administration of Governor Andrew Cuomo was portrayed as having reportedly interfered with the Moreland Commission, Mr. Schwartz figured centrally in the Cuomo administration’s actions.
With some of New York State’s top officials, including Speaker Silver and Temporary President of the State Senate, State Senator Dean Skelos, presently under reported investigation by U.S. Attorney Bharara, once again New York State faces a public corruption crisis reminiscent of the one that swept the state in the mid-1980’s.
LOOKING TO THE PAST FOR GUIDANCE ON RESTORING FAITH IN GOVERNMENT ETHICS
The focus on Mr. Schwartz has dissipated, due to his relative disappearance from public view.
Progress Queens has made three requests over the last five weeks to Governor Andrew Cuomo’s press office for information about Mr. Schwartz. The governor’s press office declined to answer all three requests. If any response is ever received, then that information will appear in a subsequent update.
Mr. Schwartz’s pattern of apparent serially escaping corruption investigations are converging with the corruption-fighting prosecutorial work of U.S. Attorney Bharara. However, both men share a past with a powerful politician : Senator Schumer. Mr. Schwartz managed one of Senator Schumer’s reëlection campaigns, and Mr. Bharara once worked for Senator Schumer and was recommended for the position of U.S. Attorney by Senator Schumer.
As voters look to U.S. Attorney Bharara to fight corruption in government, the U.S. Attorney has repeatedly asserted that his office holds officials accountable "without fear of favour." That independence is going to be tested as federal prosecutors determine if Mr. Schwartz can be truly investigated without regard to the connection that both Mr. Schwartz and U.S. Attorney Bharara share.
Under Governor Andrew Cuomo, the work of state employees was blurred with that of political campaigns when Governor Cuomo announced that his gubernatorial campaign committee wouldindemnify the legal costs of criminal defense representation for some state employees ensnared in the federal investigation over allegations that the Cuomo administration may have obstructed work of the Moreland Commission.
Governor Cuomo’s decision wasn’t the same as the use of state legislative employees as campaign workers, but it had the effect of subverting the attorney privilege not to state employees, but to individuals as campaign workers, raising serious questions amongst some government reform activists about how the Cuomo administration viewed the work of state employees.
Separately, the indemnification was met by skepticism by some good government groups.
“It’s a strange use of campaign contributions, even by New York standards,” Blair Horner, of the New York Public Interest Research Group, told The New York Daily News at the time that the announcement of the indemnification was made.
RELATED : LARRY SCHWARTZ AT GOV. CUOMO’S SIDE
In the face of so many questions and little transparency to voters, activists have questioned Mr. Schwartz’s limited visibility before he stepped down from his post as secretary to the governor. That search for answers has only escalated now that Mr. Schwartz has essentially disappeared from public view, with no transparency from the Cuomo administration about where Mr. Schwartz is now employed. Voters have a stake in knowing where Mr. Schwartz is now employed, including because state rules restrict lobbying work by former high ranking state officials.
On social media, there is a growing corner on Twitter, where critics of Governor Cuomo intersect with government reform activists, leading to a loud and boisterous call for change in Albany.
On January 16, some activists re-launched on Twitter the on-again, off-again use of the hashtag campaign, #WhereIsLarrySchwartz, for a day-long social media effort to draw attention to Mr. Schwartz’s disappearance. On that day, that campaign was initiated by the Twitter account, @CuomoWatch.
Contacted by Progress Queens, the activist behind the @CuomoWatch Twitter account said, "The disappearance of Larry Schwartz tells you everything you need to know about the investigation into the Moreland Commission. Larry Schwartz was Andrew Cuomo’s right and left arms. Now Cuomo wants nothing to do with him. It begs the question, why ? The public deserves to know."
The Moreland Act panel created by Governor Mario Cuomo as a response to the 1980’s political corruption crisis sweeping across New York State, the Commission on Government Integrity, was chaired byJohn Feerick, a dean, at the time, of Fordham University School of Law. Dean Feerick wrote a monograph about his experiences chairing the panel, in which he ominously wrote, in part, "In its final report to Governor Cuomo, dated September, 1990, the Commission made a number of overall findings, two of which were that the laws of New York State fall woefully short in guarding against political abuses in an alarming number of areas ; and that New York has not demonstrated a real commitment to government ethics reforms. The report concluded with the Commission urging the leaders of the State to act before the emergence of new scandals and to give ethics reforms the emphasis which they deserve."
Another response, which came about as a result of local, New York City political corruption investigations at the time of the 1987 indictments, was the initiation of partial, municipal-based, public campaign financing with the creation of the New York City Campaign Finance Board, proving that reforms can be had, if, at least, locally. However, a constant and rigorous oversight of political corruption is in order, because, over time, gains in reform can be weakened. Witness the violations by some Super PAC’s and by some campaign consulting firms of rules baring coördination with official campaign committees during the 2013 municipal elections.
Notwithstanding some advances in local reforms, there have been no transformational government ethics reforms on a state-wide level.
Near the conclusion of Dean Feerick’s monograph, he wrote, in part, "Leadership from elected officials alone will not be sufficient to move New York in the direction it ought to go," adding that, "Existing citizen groups need to increase their commendable efforts to communicate to state-wide officials the importance of ethics reforms. New groups need to be formed. Only if widespread interest is manifested can we realistically expect elected officials to change the status quo from which they reap so many practical advantages."
Dean Feerick’s reflections, published nearly 25 years ago, were recently echoed in the remarks delivered by U.S. Attorney Bharara at New York Law School, when he spoke of the corrupt, modern-day Romantriumvirate — the proverbial "three men in a room," who rule the state government — saying, in part, "You don’t tolerate dissent, because you don’t have to. You don’t allow debate, because you don’t have to. You don’t favour change or foster reform, because you don’t have to, and because the status quo always benefits you."
As government reform activists rise to answer Dean Feerick’s 25-year-old call to challenge the status quo, reform must be met with accountability, in order to establish a new culture of ethics in city and state government.
For elected officials to be held accountable, first voters need to know : where is Lawrence Schwartz ?