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NY’s top ethics officer accused of ethical breach
The fallout from Eliot Spitzer’s short but contentious reign as governor of New York state continues.
This week, Joseph Fisch, the state’s inspector general, charged the state’s top ethics watchdog, Herbert Teitelbaum, with acting unethically.
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MAP HINTS: Boxes with + signs can be expanded by doubleclicking. Solid lines are current relations. Dotted lines are former relations. For more options, right-click on a box or click on the map tools to the left. (Requires Flash)Teitelbaum, the executive director of the Commission on Public Integrity, should be fired, Fisch concluded.
The charges came in a 174-page report (not counting appendices) that gives a detailed sense of the power of personal, professional and political connections in Albany.
The report also recalls a scandal that erupted just a few months after Spitzer took office in January 2007.
At first, the controversy focused on Republican Joseph L. Bruno, the then leader of the state Senate and a Spitzer opponent.
Allegedly, Bruno had been using state aircraft to fly to political events, a violation of law.
Rather quickly, the scandal did an about-face when it was reported that members of Spitzer’s staff had used state police to gather the damaging information on Bruno.
The use of the police for political purposes violated the law and the scandal got a label, Troopergate.
The Commission on Public Integrity launched an investigation, an investigation that posed a threat, if not to Spitzer, then to members of his inner circle.
Fisch, the inspector general, claimed in a report issued Wednesday that Teitelbaum compromised the investigation by leaking confidential information to Robert Hermann, then the director of Spitzer’s Officer of Governmental Reform and a member of Spitzer’s cabinet.
Hermann then passed information to Lloyd Constantine of Spitzer’s staff on several occasions, the report alleges. Hermann had once been Constantine’s supervisor in the state attorney general’s office.
Hermann also supposedly talked once about the investigation with Peter Pope, Spitzer’s director of policy.
Fisch also charges that the commission did not act properly when it was told of Teitelbaum’s conversations with Hermann.
Both Teitelbaum and Hermann have denied that they did anything wrong, and Teitelbaum has resisted the calls for his resignation.
Gov. David A. Paterson, Spitzer’s successor, has asked his seven appointees to the 13-member commission to resign. They, so far, have refused to step aside, just as they have refused to fire Teitelbaum.
Teitelbaum and Hermann, both Spitzer appointees and Spitzer supporters, had known early for years before they came to be officials in Albany.
As Fisch’s report explains, they first met when Hermann was at the law firm, Skadden, Arps, Slate, Meagher & Flom LLP.
Hermann interviewed Teitelbaum for an associate’s position with the firm, a position that he took.
However, Hermann had left the firm by the time Teitelbaum began work. (Eliot Spitzer would later be a lawyer with Skadden, Arps.)
Later in their careers, Teitelbaum and Hermann worked together at Teitelbaum, Hiller, Rodman, Paden & Hibsher, P.C., another law firm.
They had also served at different times as the legal counsel for the Puerto Rican Legal Defense and Education Fund.
Paterson was Spitzer’s lieutenant governor at the time of the Troopergate episode, and he was not swept up in the investigation.
However, he has a link to the latest news. In naming Fish inspector general last year, Paterson had returned a favor.
In 1982, Fisch, the chief assistant district attorney in Queens, hired Paterson, who was fresh out of law school.
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‘Hillaryland’ is reborn at the State DepartmentMay 18, 2009 at 6:58am
Hillary Rodham Clinton may have reinvented herself (again) as Secretary of State, but she hasn’t exactly started with a blank slate.
Craigslist ends ‘erotic services’ postings
Law enforcement wins and charity loses in Wednesday’s announcement that Craigslist is taking the “erotic services” section of its online classified ads out of service, ending what lawmakers and attorneys general of several states have characterized as one of the largest sex-for-hire operations in the world.
In an almost petulant statement issued by the wildly popular, and mostly free, internet advertising marketplace, Craigslist said it will immediately stop accepting new ads for “erotic services” and eliminate the category in seven days.
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MAP HINTS: Boxes with + signs can be expanded by doubleclicking. Solid lines are current relations. Dotted lines are former relations. For more options, right-click on a box or click on the map tools to the left. (Requires Flash)“Also effective today for all U.S. sites,” the statement continued, “a new category entitled ‘adult services’ will be opened for postings by legal adult service providers. Each posting to this new category will be manually reviewed before appearing on the site, to ensure compliance with Craigslist posting guidelines and terms of use. New postings will cost $10, but once approved, will be eligible for reposting at $5.”
Craig NewmarkThe statement did not include a definition of “legal adult service providers,” but did note that with the closing of its “erotic services” category, charities will lose:
“Our announced intention to contribute 100 percent of net revenues for the ‘erotic services’ category to charity has been fulfilled, and will continue to be fulfilled, notwithstanding criticism questioning our good faith in this regard. However, in light of today’s changes, and to avoid any future misunderstanding, we are making no representation regarding how revenue from the ‘adult services’ category will be used.”
The months-long controversy over sex-for-hire ads on Craigslist got hotter when it was reported that medical student Philip Markoff allegedly murdered one Boston-area woman and robbed two others after hooking up with them through Craigslist classifieds. He was immediately dubbed “The Craigslist Killer” in media coverage.
Cook County (IL) Sheriff Tom Dart filed a lawsuit several weeks ago, charging that Craigslist knowingly accepted sex-for-pay ads, making it the “largest source of prostitution in America.”
Attorneys general Lisa Madigan of Illinois, Richard Blumenthal of Connecticut, and Chris Koster of Missouri sat down with Craigslist officials last week to discuss their objections to the sex-services ads.
In issuing its statement, the company thanked them for providing “valuable constructive criticism.”
For his part, Blumenthal said, “We’re very encouraged that Craigslist is doing the right thing in eliminating its online red-light district with prostitution and pornography in plain sight.
“We’ll be watching and investigating critically to make sure this measure is more than just a name change.”
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GOP Gov. Jon Huntsman Jr. nominated as China ambassadorMay 16, 2009 at 3:04pm
President Obama seems to have pulled off a slick three-fer today in announcing his nomination of Republican Utah Gov. Jon M. Huntsman Jr. as U.S. ambassador to China.
GM considers move from Detroit’s Renaissance Center
The most visible and commanding element of Detroit’s riverfront skyline is a tubular 73-story hotel girded by four squarish 39-story office towers, all gleaming with mirrored glass. It’s called the Renaissance Center, or RenCen, but the logo at the top of the complex is “GM” – identifying it as home and world headquarters to the immensely troubled General Motors Corp.
So when GM CEO Fritz Henderson raised the possibility Monday that the giant automaker could vacate the structure and move to the suburbs, joining Ford and Chrysler as absentee figureheads of the Motor City, it raised the threat of both real and symbolic devastation for Detroit.
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MAP HINTS: Boxes with + signs can be expanded by doubleclicking. Solid lines are current relations. Dotted lines are former relations. For more options, right-click on a box or click on the map tools to the left. (Requires Flash)Henderson, who made his comments during a press teleconference, took pains to stress that GM doesn’t “have any such plans,” at least as he spoke. Then he added the hook: “But if we did, it would be motivated by business rationale, which would be cost, efficiency and speed.
Renaissance Center“We’re looking at, frankly, everything within our business, but it’s not like we have that queued up at the top of our list. But as we look at the structure, look at the business, we’re looking at everything.”
Having posted yet another astronomical quarterly loss – $6 billion for the first three months of 2009 – and already operating on more than $15 billion in federal loans, GM has until June 1 to come up with a restructuring plan that meets the approval of the Obama administration.
If that includes a move out of the RenCen as part of those cost-cutting measures, it will take some 4,300 white-collar workers off Detroit income tax rolls and potentially leave yet another vacant office structure in the city’s downtown, which already has a reported vacancy rate of 30 percent. GM also pays the city about $6 million in property taxes.
Mayor Jim Fouts of the blue-collar suburb Warren – Michigan’s third largest city, which borders Detroit on the north and has been home to GM’s one-square-mile Tech Center since 1955 – raised civic hackles last week when he suggested relocating the corporate headquarters to his city as a cost-cutting move. He pointedly dangled a carrot of no city income taxes, “unlike our sister city to the south.”
Fouts told the Detroit Free Press that he brought it up during a private meeting with Ed Montgomery, Obama’s point man in recovery assistance for autoworkers and their communities, and Michigan Gov. Jennifer Granholm.
Detroit’s brand-new mayor, Dave Bing – who is already tasked with finding solutions for his city’s 20-plus percent unemployment, vast residential ruin and commercial blight, multimillion-dollar deficits, epidemic crime, and enough municipal corruption to keep the FBI scurrying in an ongoing investigation – called the possibility of a GM decampment “absolutely horrendous.”
The RenCen had been shopped unsuccessfully for two years when GM bought it for $73 million in 1996, later borrowing $500 million to reconfigure the maze-like interior design that had always frustrated visitors, and to remove massive concrete berms outside the structure that effectively cut off its entrance from the rest of downtown and gave it the feel of a well-defended citadel.
When the complex opened in 1977, it was at an announced cost of $340 million and was the largest private construction project in Michigan history, financed by an alliance between 51 local companies, led by Henry Ford II.
A public contest was held to give it a fitting name, and the winner was Renaissance Center, symbolizing a rebirth that, in more than 30 years since, has never come to Detroit.
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GOP Gov. Jon Huntsman Jr. nominated as China ambassadorMay 16, 2009 at 3:04pm
President Obama seems to have pulled off a slick three-fer today in announcing his nomination of Republican Utah Gov. Jon M. Huntsman Jr. as U.S. ambassador to China.
Ex-Surgeon General Antonia Novello pleads not guilty
New York politicians and political appointees are falling faster than bank stocks these days.
The latest to be criminally charged is former U.S. Surgeon General Antonia Novello, who pleaded not guilty Tuesday to forcing state employees to work overtime to handle her personal chores when she was New York’s health commissioner from 1999 to 2006.
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MAP HINTS: Boxes with + signs can be expanded by doubleclicking. Solid lines are current relations. Dotted lines are former relations. For more options, right-click on a box or click on the map tools to the left. (Requires Flash)In a case reminiscent of the one that ended the career of former state Comptroller Alan Hevesi, who pleaded guilty in 2006 to using state workers to chauffeur his wife, Novello faces a 20-count indictment charging her with theft of government services, defrauding the government and filing a false instrument.
Now an executive with Disney Children’s Hospital at Florida Hospital in Orlando, Novello, 64, could face up to 12 years in prison if convicted of all charges.
It is a huge fall from grace for the politically connected physician and public health administrator. When George H.W. Bush appointed her Surgeon General in 1990, she was the first Puerto Rican and the first woman to serve in that job.
Novello has long been a darling of the Republican Party, as well as a star in the public health world. During her tenure as Surgeon General, which continued until 1993, Novello focused on the health of women, children and minorities, as well as on underage drinking, smoking, and AIDS.
But she was controversial among abortion rights advocates for supporting a policy prohibiting family planning program workers who received federal aid from discussing abortion with their patients.
When former New York Gov. George Pataki, a Republican, appointed her health commissioner in 1999, she was considered a catch for New York.
But almost from the start, there were complaints from those who worked with her. A scathing, January, 2009 report by state Inspector General Joseph Fisch found that she habitually abused the services of four state health department employees, requiring them to serve as her personal chauffeurs for shopping trips, driving around visiting relatives, buying her groceries, moving furniture and even watering the plans in her apartment when she was out of town.
Medicaid fraud investigator Noreen Schifini, told state investigators that she was too busy driving the commissioner to Macy’s and Saks Fifth Avenue, among other destinations in New York City, to carry a portfolio of investigations.
On numerous occasions, the report found that Novello had state workers drive her or her mother from the Albany area to Newark Liberty International Airport, roughly 300 miles round trip, to fly to Puerto Rico for personal business.
On one occasion, she purchased a heavy statue of Buddha during a shopping excursion in Troy, N.Y., then required a Health Department security guard to move it into her apartment, and then a few days later move it to another spot in her home because she didn’t like how it looked, according t the report.
Security guards who acted as her drivers said in interviews with state investigators that she would embarrass and yell at them if they did not do things the way she wanted and expected them to be at her beck and call at all hours.
Fisch referred the case to Albany County District Attorney David Soares’ office, which brought the case to a grand jury.
Novello’s attorney, E. Stewart Jones, said the charges were politically motivated and should have been addressed in a lawsuit, not a criminal case.
“She is here because she has a bull’s-eye on her back,” he told the Asssociated Press. “Because politics is a contact sport. Because there are people who are vindictive and who wanted to get her ever since she left the state.”
The investigation against Novello started in July 2007 under former Inspector General Kristine Hamann, an appointee of Democratic former Gov. Eliot Spitzer. Soares, Albany County’s district attorney, is also a Democrat.
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This post is tagged with: Antonia Novello, Crime, David Soares, Disney Children’s Hospital, E. Stewart Jones, George H.W. Bush, George Pataki, Joseph Fisch, New York state health department, Noreen Schifini, Surgeon GeneralRead related stories: Crime · Recent Stories0 Comments
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Characters in Lost would be lost without JacobMay 15, 2009 at 10:26am
In NBC’s hit drama Lost, connections count. And the season finale this week introduced viewers to the most connected character of all: Jacob.
Can Warren Hellman save the San Francisco Chronicle?
Billionaire financier F. Warren Hellman is already beloved in his native San Francisco for underwriting an eccentric music festival called Hardlly Strictly Bluegrass.
But if the California mogul can figure out how to save another bit of endangered Americana, the community newspaper, he will surely be regarded as a national, as well as a local treasure.
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MAP HINTS: Boxes with + signs can be expanded by doubleclicking. Solid lines are current relations. Dotted lines are former relations. For more options, right-click on a box or click on the map tools to the left. (Requires Flash)Hellman announced last Friday that he and a team of business and media experts are working on a plan for a new, sustainable model for community journalism in the Bay Area.
While his immediate focus is on his hometown, where the Hearst Co.-owned San Francisco Chronicle has been hemorrhaging staff and money, Hellman has his eye on a model that might be adopted across the country where intense financial pressures are driving many papers into bankruptcy.
“If we can conceptualize a model and bring it to life here, the world will take notice,” he said. “It is that simple.”
A spokesman for Hellman told the the San Francisco Business Times that the team includes Andrew Woeber, managing director of investment bank Greenhill and Co.’s San Francisco office, consultant Susan Hirsch and representatives of the Media Workers Guild. Other participants in the regular meetings Hellman has convened include San Francisco Mayor Gavin Newsom, former Chronicle Publisher and San Francisco Chamber of Commerce President Steve Falk and executives of several local investment funds.
He said the group has adopted a two-month timeline for reporting back to the community.
Hellman said he began thinking about the newspaper conundrum in late February when the Hearst Corp. announced plans to sell or shutter the 144-year-old Chronicle “within weeks” unless it could win significant concessions from two major unions, the Media Workers Guild and the International Brotherhood of Teamsters.
The unions agreed to concessions that cut dozens of jobs for yet another downsizing, but the paper is by no means out of the woods.
Hellman, now in his 70s, has a decades-long reputation as a financial whiz.
The youngest person (at age 28) ever to have been named a partner at now-defunct Lehman Brothers, he has been a director of more than a dozen corporations and serves as a member of the University of California Walter A. Haas School of Business Advisory Board.
After deciding to return to San Francisco, he co-founded Hellman & Friedman, LLC, the San Francisco-based private equity investment firm, in 1984 and has been a successful investor and philanthropist ever since. He has chaired the board of The Magnes Museum, and his wife, Chris, has chaired the San Francisco Ballet. The couple also funds the San Francisco Free Clinic, an organization that provides free health care to the needy and is run by one of their children.
But even he admits that saving newspaper is a tougher challenge than it first looked.
“In the beginning, this may have looked like addition and subtraction,” he admitted, “but in reality we’re doing advanced trigonometry here. The one thing I am certain about is that this region deserves the best journalism, and that a way must be found to ensure that we continue to get it for decades to come.”
He said his group is looking around the world to see if there are viable models that can be emulated and, if not, “how do we develop one?”
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This post is tagged with: Andrew Woeber, Chris Hellman, Hardly Strictly Bluegrass, Hellman & Friedman LLC, Newspapers, San Francisco Chronicle, Susan Hirsch, Warren HellmanRead related stories: Newspapers · Recent Stories1 Comments
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He said his group is looking around the world to see if there are viable models that can be emulated and, if not, “how do we develop one?”
Indeed his business methodology will be his first notion(look to see if some elses idea provides solution). However, what we see here is that the politics (yes indeed), business models and the overall national press markets economic implementaion is the very “ROOT” cause of this predicament that Hellman perpetuates. The solution must be counteractive to this model. As a result I think you will see degraded quality, information control and increased complexity for the paper instead of a simple solution sadly. He hasn’t the solution but actually the reason for its demise….
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GM considers move from Detroit’s Renaissance CenterMay 14, 2009 at 8:08am
When GM CEO Fritz Henderson raised the possibility that the automaker could vacate the Renaissance Center, it raised the threat of both real and symbolic devastation for Detroit.
Lawyer Marc S. Dreier awaits sentencing after plea
But for Bernard L. Madoff, Marc S. Dreier might be a household name.
Accused of money laundering, wire fraud, securities fraud and other charges, Dreier pleaded guilty Monday in federal court in Manhattan. He had been charged with selling nearly $700 million in fake promissory notes. Investors may have lost as much as $400 million.
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MAP HINTS: Boxes with + signs can be expanded by doubleclicking. Solid lines are current relations. Dotted lines are former relations. For more options, right-click on a box or click on the map tools to the left. (Requires Flash)He faces a sentence of 20 years to life on each of the most serious charges against him.
“I understand that everything I was doing was illegal,” Dreier told U.S. District Judge Jed Rakoff on the day before his 59th birthday, Bloomberg news reported.
Rakoff allowed Dreier to remain under house arrest until his July 13 sentencing.
By a purely monetary standard, Dreier’s offenses did not match those of Madoff, who took investors for as much as $68 billion.
However, Dreier beats Madoff on style points, according to Robert Kolker of New York Magazine.
“Dreier took a starring role in his own financial drama,” Kolker wrote. “Where Madoff was outwardly quiet and self-effacing, Dreier was openly egotistical, even smug. He seemed to think he could lie to his victims’ faces and get away with it, to thrill, even, in the art of deceiving people.
A graduate of Harvard Law School, Dreier was the founder of Dreier LLP, a 250-member firm that had offices in New York City and Los Angeles before it fell apart after Dreier’s arrest.
Seemingly successful, Dreier lived the high life before his troubles became public. He collected cars, art, celebrity friends. He gave to charities; dated beautiful women.
He also created a financial house of cards that began to tumble last year as some investors asked for their money back.
Scrambling for funds, Dreier flew to Toronto in December. While there, he represented himself to a hedge fund executive as an official with the Ontario Teachers’ Pension Plan.
Something seemed wrong to the hedge fund guy; the police were tipped off. Dreier was arrested for impersonation. He spent a few days in jail and then was released on $100,000 bail.
Unshaven, looking like someone coming up for air after a binge, Dreier headed back to the U.S. Authorities welcomed him a LaGuardia Airport with an arrest warrant.
He stayed in jail until February when he was released on a $10 million bond.
Under the terms of his bail, Dreier, who is represented by defense attorney Gerald L. Shargel, can’t leave his Upper East Side apartment without court permission.
He has to pay for security guards and can’t have a cell phone. (The apartment is now for sale for $10 million.)
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GM considers move from Detroit’s Renaissance CenterMay 14, 2009 at 8:08am
When GM CEO Fritz Henderson raised the possibility that the automaker could vacate the Renaissance Center, it raised the threat of both real and symbolic devastation for Detroit.
Dave Bing, political neophyte, will be Detroit’s oldest mayor
When pro basketball hall-of-famer Dave Bing was elected May 5 as Detroit’s third mayor in less than a year, a voter turnout of just 14 percent showed they’d prefer a duke to an emperor, and age to outrage.
Duke, as Bing was known in his youth, narrowly beat interim Mayor Kenneth V. Cockrel Jr. in a special election to choose who would serve the remaining term of the city’s disgraced chief executive, Kwame M. Kilpatrick.
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MAP HINTS: Boxes with + signs can be expanded by doubleclicking. Solid lines are current relations. Dotted lines are former relations. For more options, right-click on a box or click on the map tools to the left. (Requires Flash)Elected Detroit’s youngest mayor at 31, Kilpatrick’s first and abortive second terms were marked by his penchant for high living, big cars, entourages, luxury junkets and marital infidelity. When a police whistleblower lawsuit threatened to disclose thousands of sexually explicit text messages between Kilpatrick and his chief of staff, former high school classmate Christine Beatty, the two lied about their relationship in court and settled the lawsuit for $8.4 million in taxpayer money.
Dave BingBoth resigned their positions, admitted their perjury in separate plea deals and spent several months in jail. In addition, Kilpatrick confessed to obstructing justice and assaulting two county investigators who went to his home to serve a subpoena on businessman Bobby Ferguson, another childhood friend and convicted felon who was awarded some $170 million in city contracts during Kilpatrick’s tenure.
Bing, at 65, will be sworn in as Detroit’s oldest mayor, and the first political neophyte to hold the job in nearly 120 years. While he will hold the office through the end of the year, he faces an August primary and November general election to claim his own full 4-year term.
A native of Washington, D.C., and high school dropout who dreamed of professional sports greatness while playing basketball with childhood friend – and later Motown musical legend – Marvin Gaye, Bing moved to Detroit as the 1966 NBA draft’s No. 2 pick, and was a Piston for nine seasons.
After moonlighting as a bank manager trainee and in a steel company PR job, he started his own business in 1980, first as Bing Steel and later expanded as the Bing Group, an auto parts manufacturer with reported annual revenues of as much as $300 million. He also has interests in money management and construction.
Although long active in Detroit civic affairs, Bing resisted calls for a mayoral candidacy until his successful run this year. Attacked as an outsider – he moved into the city from his suburban home to run for office – and forced to admit that he falsely claimed to hold a master’s in business administration from Syracuse University, Bing edged out Cockrel, who as city council president had assumed the mayor’s office after Kilpatrick’s resignation.
He’s pledged to take a businessman’s approach to governing one of the country’s most impoverished, crime-ridden, and corrupt cities, and has just three months to prove his effectiveness before having once again to face the voters, however few, in August.
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Can Warren Hellman save the San Francisco Chronicle?May 12, 2009 at 11:04am
Billionaire financier F. Warren Hellman is already beloved in his native San Francisco for underwriting an eccentric annual music festival called Hardlly Strictly Bluegrass.
But if the California mogul can figure out how to save another bit of endangered Americana, the community newspaper, he will surely be regarded as a national, as well as a local […]
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