Skelos Surrenders On Corruption Charges

May 4, 2015

New York Senate Majority Leader Dean Skelos, left, and his son Adam arrive at FBI offices, Monday, May 4, 2015, in New York. The pair surrendered to face charges including extortion and soliciting bribes amid a federal investigation into the awarding of a $12 million contract to a company that hired his son.
Credit (AP Photo/Mark Lennihan)

New York State Senate Majority Leader Dean Skelos (R) surrendered to federal authorities Monday morning, and was charged with six counts of corruption, including bribery and extortion, in connection with an alleged scheme that used his political position to enrich himself and his son.

The complaint, by U.S. Attorney Preet Bharara, alleges Skelos used his influence in Albany to extort hundreds of thousands of dollars in payments to his son from a real estate developer and a related environmental company. In exchange, Skelos protected the companies’ business interests at the Capitol, including renewal of the New York City rent regulations and related property tax breaks for large developers.

Bharara painted Adam Skelos as a man financially dependent on his father, and he says the two Skeloses “worked as a team” to “illegally monetize” the senators’ power to take care of Adam’s “financial needs.”

He said, as a result, Skelos’ decisions were “often based not on what was good for his constituents, or good for New York.”

“Rather, [they were based] on what was good for his son’s bank accounts,” said Bahrara.

The charges state that, as early as 2010, an unnamed real estate developer, who is also a cooperating witness in the case, made a one-time, $20,000 payment to Adam Skelos for work that federal investigators say he did not do. The payments then continued, at $4,000 per month, disguised through a company that the developer had a financial  interest in. The company, an environmental services firm, makes storm sewer cleaners and was seeking a lucrative contract with Nassau County on Long Island, where Skelos lives, to help with clean up after Superstorm Sandy. Adam Skelos shepherded the company through the process, even though he admitted that he “literally knew nothing about water.”

At one point, it is charged, Skelos threatened to block the contract unless payments to his son were increased to $10,000 a month.

The complaint alleges that Adam Skelos was also paid tens of thousands of dollars from companies that had business before the state and had contributed to Skelos' campaign. Some of those firms were title insurance companies that Skelos steered to his son from the Senate leader’s work at a private law firm.

Bharara also charged that Skelos was paid $2.6 million dollars by the law firm, of which he was “of counsel,” but did not perform any actual work for. Skelos was allegedly paid for referring clients to the firm who had business before the state, and meeting with law firm clients “including about legislative matters.”

The complaint says Skelos also pressed to get hydraulic fracturing made legal in New York, which the environmental company was interested in, to treat fracking waste water. But ultimately Skelos failed in that when Governor Andrew Cuomo banned fracking in New York.

The complaint says Skelos and his son attempted to cover up their actions as it became clear that the federal authorities were onto corruption at the Capitol, doctoring documents to hide the true nature of the $20,000 payment from the developer to Adam Skelos.

The complaint also alleges that  they used coded language and, at one point, Adam Skelos purchased a one-time cell phone, known as burner phone, erroneously thinking that the calls could not be traced by any law enforcement surveillance, according to Bharara.

“Adam also expressed frustration to his father that it was becoming too dangerous and difficult to talk on the pone like they used to,” said Bharara.

Bharara said Senator Skelos instructed his son to cancel key meetings with other State Senators that would promote the environmental company’s interest.

“‘Right now we are in dangerous times’,” Bharara said Skelos told his son.

But even then, he said, the Skeloses “did not entirely abandon their corrupt scheme.”

They still tried to get favorable legislation and funds secured for the environmental company in the recently enacted state budget. In early March, they were recorded complaining that Governor Cuomo’s push for an ethics reform deal was getting in the way of their alleged scheming.

Skelos’ calls were wiretapped and, according to the complaint, he at one point bragged to his son, after he was elected the sole leader of the Senate in January, that he was “...going to control everything...what legislation goes to the floor...the budget, everything.”

Adam Skelos was recorded on his burner phone, complaining “You can’t talk normally because it’s like f---ing Preet Bharara is listening to every f---ing phone call.”

Skelos is the fifth Senate leader in a row to be accused or convicted of corruption. His arrest comes just more than three months after the former Assembly Speaker, Sheldon Silver, was arrested and charged with running a multimillion dollar corruption scheme. Silver resigned from his post and was replaced.

“Public corruption is a deep-seated problem in New York state,” said Bharara, who said it is going on in both chambers of the legislature, and in both major political parties. “We are deadly serious about tackling that problem."

It’s uncertain whether Skelos will have to step down. So far, he has said he intends to stay, and members of his Republican conference have not said publicly that they’d like to see him gone.

The leader of the minority party Senate Democrats, Andrea Stewart Cousins, says she finds the charges against Skelos “deeply disturbing” and says she can’t see how he can continue as Majority Leader.

Skelos issued a statement in response to his arrest, in which he said he’s “innocent of the charges leveled against him ”and that he fully expects “to be exonerated by a public jury trial.”