Thursday, January 05, 2012

In Lipsky guilty plea, no mention of Forest City Ratner connection

In lobbyist Richard Lipsky's guilty plea yesterday, there was no mention of Atlantic Yards or the unnamed developer, Forest City Ratner, that was among his clients.

It was about paying referral fees to now-disgraced Sen. Carl Kruger for clients Kruger directed his way, and then expecting Kruger to help him in Albany.

Though the indictment and legal complaint indicated that Kruger allocated $500,000 to a client of Lipsky--actually the allocation was at the request of Forest City Ratner executive Bruce Bender, but to his wife's charitable cause--there was no evidence of whether Kruger did so at Lipsky's request.

Lipsky, whose Neighborhood Retail Alliance blog was frozen after he was charged last March, pled guilty to one count of conspiracy to commit bribery and one count of bribery.

Though he faced a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense, Crain's reported that Lipsky made a deal with prosecutors to serve 57 to 71 months, or slightly less than five years, at best. He will be sentenced by Judge Jed Rakoff on May 4, 2012.

Remorse

Crain's reported:
“I acknowledge that my actions were in violation of the law, and I knew that they crossed the line,” Mr. Lipsky said in court Wednesday. “I accept responsibility for my conduct and incredibly poor judgment and I am truly sorry for the serious consequences to my family, my clients, the government, the court and the people of the state of New York.”

By way of explanation, he said he “felt obliged to keep Mr. Kruger happy.”
The Wall Street Journal reported:
In a statement, his attorney Gerald Lefcourt said: "Mr. Lipsky fully accepts responsibility for his actions. He hopes to able to get back to fighting for the underrepresented, which has been the cornerstone of his professional like for the past 30 years."
The official story

According to the U.S. Attorney's press release:
LIPSKY is a professional lobbyist and has been the principal of Richard Lipsky Associates, Inc. since approximately 1981. LIPSKY’s clients include various unions and associations, food retail businesses, supermarkets, and beverage distributors. Between 2007 and 2011, LIPSKY paid over $250,000 to Olympian Strategic Development Corp. (“Olympian”) and Bassett Brokerage (“Bassett”), two consulting companies controlled by Michael Turano, a Manhattan-based gynecologist. Kruger had a close relationship with Turano and was effectively a member of Turano’s family. In exchange for the payments that LIPSKY made to Olympian and Bassett, Kruger undertook official action to benefit LIPSKY and his lobbying clients.

According to statements made by LIPSKY during today’s plea proceeding, in the Fall of 2007, Senator Kruger asked LIPSKY to retain Olympian, Michael Turano, and his brother Gerard Turano, to work with him on a project in Brooklyn. Over the course of one year, Olympian and the Turanos did little in the way of documented work. Subsequently, in 2008, Senator Kruger referred a number of clients to LIPSKY and asked that he pay Olympian, Bassett, and/or Michael Turano a referral fee from the money received from the referred clients. LIPSKY admitted that he agreed to make these payments knowing that, in return, Kruger would take official action as a member of the New York State Senate to benefit LIPSKY, his family, and his business. The Government’s plea agreement with LIPSKY provides that the value of the actual bribes and/or a reasonable estimate of the benefits received in exchange for the bribes is between $120,000 and $200,000.
Emphasis added, but it's not clear what "a project in Brooklyn" represents. It might have been the Four Sparrows project at Mill Basis, with which Forest City was involved.

Found with the cash

Crain's reported:
The plea came less than a year after federal agents swept through his apartment on Riverside Drive and found $102,000 in cash in a safe and another $4,000 in crisp, high-denomination bills in a suit pocket.

A federal complaint, replete with damning details of wiretapped phone conversations between Mr. Lipsky and disgraced former state Sen. Carl Kruger, charged the lobbyist with exchanging cash for political favors on matters including an expansion of nickel deposits to non-carbonated beverages, collection of taxes on sales of cigarettes on Indian reservations and a Brooklyn “superstore”—apparently a prospective Walmart.

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