You would think that Democratic leaders would distance themselves from a member of Congress who has been identified with Ponzi swindler Allen Stanford, not to mention a charity that is now under federal investigation for fraudulently raising money for Hurricane Katrina victims. Nope.
New York Post columnist Maureen Callahan today asks what New York state political scandals have in common:
It’s the one question that’s not really been addressed during this dubious week for New York legislators: How is it that so many — from Pedro Espada to Larry Seabrook to Malcolm Smith to Hiram Monserrate — have been able to so blatantly funnel taxpayer money to their own interests? The answer is both shocking and not: Because they can.
“New York has its own brand of mischief that’s more lethal than other states,” says Ken Boehm of the National Legal and Policy Center. “When millions of dollars are being sent to non-existent organizations, clearly there’s a problem.”
Unlike every other state, New York allows legislators to set up their own non-profits and then steer taxpayer money to those same organizations. So, as will happen, many state and city lawmakers have done just that. “Like DC,” Boehm says, “New York allows earmarks cloaked in secrecy.”
No one knows anything. As NLPC exposed last Sunday, a charity with which Rep. Gregory Meeks (D-NY) is deeply involved, can’t account for funds raised for Hurricane Katrina victims. According to a front-page New York Post story today, Meeks claims the money was used “to help displaced evacuees,” but neither he nor anyone else involved with group can or will say how.
The contoversy over Meeks’ group, called New Direction Local Development Corporation, is fuel for the firestorm surrounding the awarding by New York Governor David Paterson of a lucrative gambling franchise to Aqueduct Entertainment Group (AEG) in which former Rep. Floyd Flake is an “investor.” Days later, Paterson met with Flake to discuss his support for Paterson’s re-election campaign. According to the Post:
Floyd Flake is extremely valuable to AEG because of his political clout in both Queens and New York state," said Ken Boehm, chairman of National Legal and Policy Center, a government watchdog group. "Now he appears to be dangling his support for the governor until AEG's bid is fully approved."
Well, it didn’t take long. Danny Hakim of the New York Timesreports today:
Three days after awarding a lucrative state contract to a company connected to the Rev. Floyd H. Flake, one of New York’s most influential black pastors, Gov. David A. Paterson summoned Mr. Flake to his Harlem office Monday morning and sounded him out about his political support.
On Friday, New York state awarded a franchise for video gaming machines at Aqueduct racetrack to something called the Aqueduct Entertainment Group (AEG), which will pay the state hundreds of millions for the opportunity. Making the pitch for AEG was Flake, who while a member of Congress in the nineties, faced serious ethics charges.
Two of Flake’s close associates and protégés are Rep. Gregory Meeks and state Senator Malcolm Smith. As we exposed on Sunday, Meeks and Smith are deeply involved in a nonprofit called the New Direction Local Development Corporation that appears to function as their slush fund.
Rep. Gregory Meeks (D-NY), already under scrutiny for his relationship with Ponzi billionaire Allen Stanford, is deeply involved with a nonprofit group in Queens, New York called New Direction Local Development Corporation. Our review of IRS tax returns, New York state budget records, and other documents suggests that New Direction does little development. Instead, it appears to operate to the benefit of Meeks and a state Senator named Malcolm Smith, and much of the money it has raised is simply unaccounted for.
New Direction has received at least $56,500 in New York state taxpayer funds since 2001, at the direction of Smith in the form of “member items,” the state equivalent of an earmark. The group’s largest donation of $250,000 came in 2004 from a company called International Airport Centers, which successfully sought permission to build an airport cargo facility near JFK airport in their districts. New Direction also collected thousands of dollars for Hurricane Katrina victims.
The Justice Department has confirmed that it has ended its investigation of Rep. Alan Mollohan (D-WV). The probe began after NLPC filed a Complaint with the U.S. Attorney for D.C. in February of 2006 alleging that Mollohan failed to report millions in assets on his Financial Disclosure Form (FDR) in order to conceal cozy financial relationships with recipients of earmarks he had arranged.
The closing of the four-year probe by the Justice Department comes after Mollohan voted for Barack Obama’s unpopular health care plan. Has Attorney General Eric Holder now made it legal for members of Congress to earmark money to their business partners? This is a horrible precedent.
In the uproar that followed our original allegations, Mollohan “temporarily” resigned as ranking Democrat on the Ethics Committee. I doubt that Nancy Pelosi will now try to put him back. Even she realizes that Mollohan represents everything the public loathes about Congress. Holder's letting him off the hook is sure to further inflame anti-incumbent resentment.
In 2002, Rep. Gary Ackerman (D-NY) claims he got a $14,000 loan to “buy” stock in an Israeli company called Xenonics from the company’s biggest shareholder, a man named Selig Zises. In 2005 and 2006, he says he “sold” the stock for more than $100,000 after Xenonics went public. He then paid back the loan and even threw in 6% interest.
The windfall was first reported Sunday by New York Daily News reporters Benjamin Lesser and Greg B. Smith.
Who would have thought that a member of Congress could be such a savvy investor? After all, holding office involves long hours and little chance of real wealth. Isn’t it nice to see an underpaid public servant find a way to make ends meet?
Sen. Max Baucus' office Monday denounced a widely viewed Internet video that suggested Baucus was drunk on the Senate floor last week, calling it an "untrue, personal smear" designed to attack Democrats’ health-care reform legislation.
"This is beyond the pale, and this type of gutter politics has no place in the public sphere," said Baucus spokesman Ty Matsdorf.
How can unedited CSPAN footage of Senate proceedings posted on YouTube comprise a “smear?” Any reasonable person viewing the clip would conclude that Baucus was drunk or had something else wrong with him. Baucus' office did not assert that he was experiencing some other problem, like fatigue or a medical condition.
We have already complained about the media double standard in the coverage of Senator Max Baucus' (D-MT) recent ethical problems. Now comes the clearest evidence yet in the form of this video. It already has 176,000 views on YouTube but it has so far been ignored by the major TV networks and newspapers. Let's remember that Baucus is the architect of the Senate-passed health care plan.
Senator Max Baucus (D-MT), under fire for recommending his “girlfriend” for a U.S. Attorney post, was accused in 1999 by his former chief of staff Christine Niedermeier of making repeated sexual advances. She claimed that Baucus implored her to take weekend trips with him to destinations like Disney World.
Baucus was married to his second wife at the time so he would not have been able to invoke his current “shacking up” defense of his relationship with former staffer Melodee Hanes. Both Baucus and Hanes were still married at the time Baucus claims the relationship started, but separated from their spouses. Baucus statement last week twice said that the two were living together, as if it such a fact was exculpatory of the impropriety of a U.S. Senator having a romantic relationship with a staff member, and recommending her for high appointive office.