Many people are starting to notice that, no matter how much politicians overspend the people's money and how corrupt they are, it seems to be just about impossible to vote them out and get a new bunch that is meaningfully different. Why? A big part of the answer is the use of public moneys in the corrupt processes of government expansion and entrenchment.
There is little systematic reporting on these processes in the media. But here in New York, a series of corruption cases has exposed a widely-used M.O. that seems to represent the current state of the art. The latest case has revealed corruption at a whole new level and brought it to the doorstep of the kingpin of New York State politics, Speaker of the Assembly Sheldon Silver.
Here's the basic New York M.O.: Start a non-profit organization ostensibly dedicated to alleviating "poverty" among your constituents. The public is bamboozled by fake federal statistics into thinking there are lots of people in physical-deprivation poverty, and generally supports public spending to alleviate the poverty. The State Legislature and City Council spend public money, purportedly to alleviate poverty, by handing out large grants to dozens of non-profits in the scam "anti-poverty" biz, many of them closely associated with various state legislators and city councilpeople. So you get your non-profit on the list. Not one of these non-profits has ever actually removed a single person from "poverty" as measured by the federal statistics, because the services they provide are all in-kind and therefore don't count toward the official federal poverty measure. But these non-profits are political gold. At the minimum you have lots of employees who can be your campaign workers when that season rolls around, but that's only the beginning. Next, you can put on the payroll your wife, girlfriend, and/or lots of relatives, not to mention yourself -- remember, state legislature and city council are part-time jobs. Best of all, you can divert a good piece of your state or city funding back into political contributions to your campaign to ensure that no competition against you can ever get traction. And finally, you have no concern that your non-profit might actually cure the "poverty" and put itself out of business because none of its efforts count in the fraudulent official measure of "poverty." Get a bigger appropriation next year! You are fixed for life!
And if you start following this stuff, you realize that one after the other the Feds (rarely the state AG or DAs) arrest the state pols and time after time it's some variation of the same story. To take some that have been in the news within the past year or so:
Pedro Espada was a State Senator from the Bronx, even serving briefly as Majority Leader. He had a non-profit called Soundview Health Clinic that was the subject of repeated allegations of corruption. According to this Wikipedia article, in 2000 he was tried, but acquitted, for diverting taxpayer funds from Soundview to fund his political campaigns; although he was acquitted, four other employees were convicted. Subsequently, multiple state and federal investigations dogged him. In 2010, Andrew Cuomo, then state AG, accused Espada in a civil suit of allegedly diverting some $14 million from Soundview for personal expenses. A 2010 private civil lawsuit accused him of diverting $1.35 million from Soundview to hire "Espada Management Company" to provide janitorial services to the Soundview facilities. Ultimately Espada was convicted 2012 on a 2010 federal indictment for embezzling money from Soundview (yes, Soundview also got Federal money).
In July 2012 Larry Seabrook, a Bronx City Councilman (and formerly State Assemblyman and State Senator) was convicted after being charged with diverting more than $2 million of public funds between 2002 and 2009 for personal purposes through non-profits. According to the New York Post, the non-profits included a "job training program and a group aimed at bringing diversity to the FDNY."
In early 2013 State Senator Shirley Huntley of Queens pleaded guilty to diverting $85,000 to herself from a taxpayer-funded non-profit called the Young Leaders Institute in Laurelton. I know what you're thinking -- Small time! Yes, but don't assume that was the extent of the corruption. At Huntley's sentencing in May where she got a very light sentence of a year and a day from Eastern District Judge Jack Weinstein, it emerged that she had been wearing a wire for some time to assist the FBI. So more indictments may well be coming!
Then there's the case of long-time State Assemblyman Vito Lopez of Brooklyn. Lopez's non-profit power base was something called Ridgewood Bushwick Senior Citizens Council, recipient of over $13 million of government money in 2011. According to this article from the Daily News in August 2012, "with Lopez, there was always talk of one investigation or another, [u]sually [having] to do with the Ridgewood Bushwick Senior Citizens Council." Among the more obvious eyebrow-raising aspects of RBSCC was that Lopez's "girlfriend, Angela Battaglia, was earning $343,000" a year working there, while his campaign treasurer was paid $782,000. However, before any of the investigations actually caught up with Lopez, he found himself accused in a sexual harassment scandal, lost the support of powerful speaker Sheldon Silver (who stripped him of his chairmanships), and resigned from the Assembly in May. And then he immediately ran for a City Council seat from the same area of Brooklyn, which he lost in a primary in September. Hard to say if the investigations will continue with him gone from the political scene.
But all this is just the prelude to the Big One. On September 24 one William Rapfogel was arrested on corruption charges, this time by state (AG) prosecutors (!). Rapfogel had been head of something called the Metropolitan Council on Jewish Poverty -- yes, it's precisely one of those completely cynical so-called "anti-poverty" agencies that provides in kind services and therefore never actually gets anyone out of officially-measured "poverty." (Don't believe me? Check out their list of programs on their website here.) But this is no small-time operation. According to the New York Post today, it has recently been the recipient of some $90 million annually of taxpayer funding. Oh, and did I mention that Rapfogel's wife Judy is long-time chief of staff to Assembly Speaker Sheldon Silver? So it comes as no surprise that the "Met Council" was one of Silver's favorite non-profits for the direction of state funds. (From the Speaker's perspective, what's not to like about being able to claim that he is spending a lot of money to "help" people in "poverty" without any risk that the number of people in official poverty might go down and undermine the spending machine?) According to this article at Newsday (unfortunately behind pay wall), none other than Judy Rapfogel was the regular representative of the Speaker at the legislative meetings where state "anti-poverty" funds were whacked up among the various competing non-profits. But don't worry, when the Met Council came up, she didn't speak, although it was known that the Met Council was one of Silver's favorite non-profits. (And, of course, Silver has the power to strip Assemblymen of committee chairmanships that carry extra pay.)
Some great alleged details of the Rapfogel story are in the allegations of the Criminal Complaint. The basic idea is the the Met Council paid inflated insurance premiums (with taxpayer money), and then the insurance companies kicked the money back to Rapfogel, much of it as cash in envelopes. The Complaint alleges that some $400,000 in cash was recovered by prosecutors from the Rapfogel's homes, and that the total amount stolen was "in excess of $5,000,000."
But the best part is the allegations about how Rapfogel then turned the kickbacks into political donations in small amounts from so-called straw donors. According to unnamed confidential sources cited in the Complaint, Rapfogel would divert money from the kickbacks to reimburse individuals who made small political contributions, particularly to candidates for city office. Why in small amounts? For those who don't know, New York City matches donations up to $175 per candidate per election on a 6-1 ratio. And thus, if divided into pieces of $175 and under, can $1 million of taxpayer funding for an "anti-poverty" program turn into $6 million of political contributions to keep your friends in power.
Well, how exactly are challengers supposed to compete effectively with an incumbent-entrenchment system at that level of uber-corruption? But don't worry -- so far at least, Judy Rapfogel is saying that she knew nothing about this. I guess that means that Silver didn't either. Yup. It's just how it works in New York.