Wednesday, December 21, 2011

State Senator Kruger pleads guilty, resigns; no mention of "Real Estate Developer #1," but plea includes admission that legislator helped Forest City Ratner executive

Sixteen-year Southern Brooklyn state Senator Carl Kruger pleaded guilty yesterday to accepting at least $1 million in bribes--thus supporting his over-the-top residence in Mill Basin and a Bentley--and resigned from the Senate.

The news coverage (Times, Daily News, Post), the more entertaining editorials (Daily News, Post)  and Michael Powell's Times column,  emphasized Kruger's self-pitying, pathetic, tearful apology, while the Daily News (as did the Observer) pointed to a culture of corruption in Albany. Indeed, Kruger gets to keep his pension.

Neither Kruger's brief allocution nor any of the news coverage mentioned Kruger's interaction with "Real Estate Developer #1" (as detailed beginning on p. 21 of the the 3/9/11 complaint), aka Forest City Ratner.

However, Kruger's guilty plea apparently included admitting that he helped deliver state funds to a cause championed by Forest City Ratner executive Bruce Bender, part of the legislator's work for clients of lobbyist Richard Lipsky, who was also indicted but has yet to go to trial.

What Kruger pled

According a press release from the U.S. Attorney's Office,

At today’s plea proceeding, KRUGER admitted that from 2007 through March 2011, he agreed to undertake action, in connection with his official position as a member of the New York State Senate, to benefit the individuals and entities named in Counts One through Four of the Indictment, in exchange for payments that he directed to Olympian, Bassett, Adex, and the individuals who have an interest in those entities.  

 A  4/7/11 indictment (superseding a 3/9/11 complaint) states, as part of Count One:
On or about December 28, 2010, CARL KRUGER, the defendant, directed a Senate staff member to allocate to a client of RICHARD LIPSKY, the defendant, approximately $500,000 in state funds that KRUGER controlled.
Neither Bender nor Forest City Ratner were named.

Let's see what Lipsky says, if anything. It's clear that Kruger helped Lipsky's client, though it's not clear that Lipsky was lobbying for that specific cause.

What happened at 4:47 pm?

Kruger, an operatic Atlantic Yards booster, was talking with Forest City Ratner executive Bruce Bender, as indicated in the complaint, and directing $500,000 to "the Vice President's 'Prospect Park' Project."

That was a personal request (Bender's wife is on the board of the Prospect Park Alliance), rather than the two other requests Bender made: to assist Forest City Ratner's efforts to reconstruct the Carlton Avenue Bridge, part of the Atlantic Yards project, and for the developer's Mill Basin project.

The complaint, though not the indictment, describes this interaction:

Deferring to Bender in Albany

As I noted in 3/14/11 coverage, the complaint pointed to the Senate leadership's willingness to let Bender allocate state funds. As the complaint related:
Kruger then instructed the Senate Staff Member to put that $500,000 toward the Vice President's Park project, which would make the total state funds allocated to the park project $4,500,000.
The Senate Staff Member said he understood that they made a commitment to the Vice President, and it was important to put a "down payment" on the Vice President's projects, so the Senate Staff member's "recommendation" was to give the $4 million to the Vice President for him to allocate as he saw fit.
That didn't happen.

As the call continued, Kruger himself directed the money to the park project, telling the staff member that it was his recommendation to do so.

Getting the public to pay for the Carlton Avenue Bridge

Why was Forest City Ratner, as of December 2010, trying to get $9 million in state subsidies for the Carlton Avenue Bridge out of Kruger?

Because the developer still needed to pay for reconstruction of the bridge, even though the state said FCR would pay the remaining $14 million in cost, as I noted 3/10/11.

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