Thursday, March 10, 2011

Yes, Kruger corruption charges involve Atlantic Yards; unnamed "Developer #1" is FCR; Bender: "I don't mind fucking the Carlton Avenue Bridge"

I had questioned whether the corruption charges regarding Carl Kruger's involvement with a "Brooklyn developer" meant Atlantic Yards, but apparently they do.

However, they do not indicate that the developer initiated illegal payments (or knew about them) from FCR-paid lobbyist Richard Lipsky to Kruger.

Rather, they portray a chummy relationship between Kruger and FCR Executive VP Bruce Bender, who not only tried to get money for Atlantic Yards--for the Carlton Avenue Bridge the developer is supposed to fund-- but for the Lakeside Center project in Prospect Park.

(Bender's wife is on the Board of Directors of the Prospect Park Alliance and the Benders, like many others, have raised money for Prospect Park.)

Though the conversation between Kruger and Bender occurred last December, the charges cast in new light some of Kruger's over-the-top support for Atlantic Yards, including his serenade at a May 2009 Senate hearing, or his Brooklyn aria at an August 2006 environmental review hearing.

Also consider his accusation in May 2009 of Metropolitan Transportation Authority intransigence regarding a renegotiation of the Vanderbilt Yard deal and further comments in September 2009 on the eve of Jay Walder's confirmation as head of the MTA.

Kruger, who apparently got money funneled through Forest City Ratner lobbyist Richard Lipsky, was willing to help Bender on some requests, but not the $9 million Bender wanted for the repair and reconstruction of the Carlton Avenue Bridge.

The bridge, which went out of service in January 2008 supposedly for two years, is now expected to reopen in "summer 2012." Bender didn't seem to mind the delay in state money that much, saying, "I don't mind fucking the [Carlton Avenue] bridge." (Watch a video of Bender mouthing false claims about Atlantic Yards jobs here.)

Kruger does have a longstanding relationship with Bender, as they both come out of the Thomas Jefferson Democratic Club in southern Brooklyn.

A hasty, inaccurate summary

From the Daily News, which didn't get it quite right:
The complaint also points out Kruger's involvement in supporting mega-developer Bruce Ratner's planned $4 billion stadium project in downtown Brooklyn.

Kruger took elaborate steps to hide the payments, having checks funneled through a company called Adex Management Inc., then through a shell company, Olympian Strategic Development.

Olympian was controlled by Michael Turano, a son of Kruger's longtime friend and local community board director, Dorothy Turano. Michael Turano was also charged Thursday.

Update: Actually, as detailed below, while the complaint does cite Kruger's involvement in Atlantic Yards, it does not indicate payments for it.

Here's the FBI press release, and here's a statement from the agent in charge:
In return for bribes, Kruger took official action in the interests of Lipsky’s clients. For example:
  • Kruger introduced legislation to delay the start date of the law that required bottle deposits on bottled water.
  • Kruger issued a statement in support of a law to permit liquor stores to extend hours of operation.
  • Kruger opposed the opening of a retail superstore in Brooklyn, which was also opposed by a coalition of small-store retailers that hired Lipsky
Does Forest City Ratner have Teflon?

Kruger is accused of receiving at least $1 million in bribes, sharing lobbying fees paid to Lipsky, another defendant, and then taking the official acts in favor of which Lipsky had been paid to lobby.

There's no indication that he did anything for Forest City Ratner after the December conversation, though he did accede to Bender's request to get money for Prospect Park.

If Forest City Ratner, which is not named, is not a target, this might be a repeat of Ridge Hill, in which the developer benefits from apparent corruption but is not penalized.

Can the Empire State Development Corporation repeat its statement, in response to my queries about Ridge Hill, that they "remain confident in Forest City as a developer and as a good corporate citizen"?

From the complaint

The complaint (page 7) notes defendant Richard Lipksy's clients "include, among others, a significant real estate development firm ("Real Estate Developer #1") which is spearheading an over $4 billion, multi-year, mixed-use commercial and residential development project in Brooklyn, New York, as well as various unions and associations...."

On p. 14, it states that Kruger has taken a number of official actions to benefit Lipsky's clients, including "Developer #1." However, there's nothing in the document to indicate that Forest City Ratner directed Lipsky to share his lobbying fees with Kruger.

The case


On p. 21, the FBI outlines "Kruger's Disbursement of New York State Discretionary Funds To Benefit Lipsky's Clients."

The unnamed Developer #1 paid Lipsky from $2000 to $4000 a month for his lobbying services, according to the complaint. (Remember, a spokesman for the developer told the Daily News that Lipsky was hired strictly for youth sports programs.)

Intercepted phone calls reveal conversations Kruger had beginning 12/28/10 with the "Vice President of Governmental Affairs and Public Relations" for the developer. That would be Bruce Bender.

Kruger and his chief of staff discussed three real estate projects for which Bender had requested state funding, including a project at Mill Basin ($2 million), "Lakeside" (the Prospect Park renovation, for $4 million), and the Carlton Avenue Bridge ($9 million).

The city is paying $24 million of the $40 million bridge reconstruction costs; Forest City, according to an Empire State Development Corporation document from last June, was supposed to pay the remaining $16 million on its own.

By the way, Lakeside is supposed to cost $70 million, with more than 70%, or $49 million, already raised. Bender and his wife in 2007 were listed as among the seven couples or individuals serving as Vice Chairs for the Prospect Park Alliance's 20th Anniversary Gala in 2007; Forest City Ratner was a Corporate Vice Chair. Amy Bender remains on the Board.

According to the document, Kruger learned that "Senate Leader #1" had indicated there was only $4 million. "The Vice President said he needed a 'combo of two projects... the park and Carlton Avenue Bridge." Kruger said "the bridge is out," and asked Bender to choose:
The Vice President said that he did not know and that "this" was "bad." KRUGER said, "I guess the park, fuck the bridge." The Vice President said that "my dilemma is as you know, I don't mind fucking the bridge, I can't fuck it right now, I've got to leverage that bridge, what's my value?"
Kruger said he was only the middleman; Bender asked Kruger, as chair of the Finance Committee, to get more money from Senate Leader #1. Kruger apparently backed away, saying he could direct money to community organizations:
The Vice President said, "Carl, I love you, but this is what I used to do and I know...." KRUGER said that he had a call into the Senate Staff Member and that Kruger would call the Vice President back later.
Kruger later talked to a Senate Staff Member, learning that an additional $500,000 was available:
Kruger reiterated that the Senate Staff Member should allocate $500,000 to the Vice President's "Prospect Park" project."
Note that this does not appear to be directly related to Atlantic Yards, though it may coincide with Bender's or Forest City Ratner's charitable interests.

When Kruger reported back to Bender that the park project would be funded, Bender said "You're cute. You're good. You're good Carl," but complained it still wasn't enough. Then, according to the document:
Kruger and the Vice President discussed the major real estate project in Brooklyn, affordable housing and parking issues. The Vice President talked about getting more money. KRUGER said that the Prospect Park project would get funded, but not "anything to do to build bridges... let [Real Estate Developer #1's CEO] build his bridges." The Vice President laughed again and said, "I love you. I really do actually." KRUGER said, "I really don't know anything about this stuff. I told him, 'whatever.'... The couple of bucks that I had, I don't know what the hell to do with it anyway. Take it. Come Monday, I won't have it."
That was apparently a reference to the fact that the Republicans were about to become the Senate Majority in 2011 and Kruger would lose his influence.

Click on graphics to enlarge





kruger-carl-et-al-complaint

3 comments:

  1. Norman, this is great work, thanks so much! Now I am looking forward to seeing any direct and obvious links, if they exist, to Ratner. Lots of research to be done, I know.

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  2. The ironic thing about this is, that not only will Barclays Center get built (Courtesy of the assistance of the crooks Kruger & Lipsky), but with the troubles facing Lipsky, Willets Point, Columbia University, Walmart in NYC, and the East Harlem project, all have greater odds of completion.

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  3. Both Kruger and Boyland were ROR(released on their own recognition) = no bail at all. I don't understand why. I don't understand why this was an information and not an indictment(an information is sometimes used when there is a plea agreement). Normally the Feds use a grand jury to investigate and get an indictment before an arrest. An information is a statement made by a FBI agent under oath and subject to a preliminary hearing...its not the best way and normally has a lot of information that is not admissible...

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