A complicated corruption case involving two real estate development projects in Yonkers goes to trial in federal court in Manhattan tomorrow, February 14, and could last a month.
(Update: tomorrow is a pre-trial conference; jury selection should begin Wednesday, February 15.)
The results should illuminate the dubiously ethical behavior of Forest City Ratner, which gained a huge benefit for its still-in-process Ridge Hill project, but emerged officially unscathed.
One of the three defendants, Anthony Mangone, has already pleaded guilty to giving bribes, resolving some but not all questions about a different real estate project, known as Longfellow.
However, numerous questions linger, mostly about Ridge Hill, an 81-acre project east of the New York State Thruway that includes a giant mall and condos, plus perhaps office space and a hotel.
The largest development in Yonkers history, the cost is estimated at nearly $700 million, a vast change from the site's previous use as a center for drug treatment and defense contracting R&D.
Ridge Hill was enormously controversial, given Forest City Ratner’s request for special zoning and other benefits, the creation of a shadowy (slammed by the Times and now defunct) development corporation, and traffic concerns.
photo from Yonkers Tribune), not long after she said the developer was “robbing the city blind,” changed her vote in 2006 to approve the project.
Annabi, who according to charges had a taste for luxury goods and apparently lived well beyond her means, was charged in early 2010 with accepting bribes regarding Ridge Hill and Longfellow.
Her cousin, Zehy Jereis, then chairman of the Yonkers Republican Committee, was charged for giving the bribes regarding Ridge Hill and, regarding Longfellow, with connecting Annabi to Mangone.
The Forest City connection
FCR, which shortly after Annabi’s vote hired Jereis (image from Yonkers Republican Journal) for an apparent no-show job as a “real estate consultant,” was not indicted and issued a statement that federal prosecutors said that neither it nor its employees was a "target" of the investigation.
FCR has never explained or justified that no-show contract, but it benefited significantly. Given the developer’s apparent cooperation with federal investigators, it will be interesting to see who will say what on the stand.
As I wrote, the developer's actions, if true, seem to violate the corporate Code of Conduct.
And if Forest City got immunity from prosecution, how will it look for an executive--say, Bruce Bender, FCR's Ridge Hill point man, now departing in somewhat curious timing--explaining in court exactly how business gets done. (There's also a question of whether consultant Melvin Lowe, who worked for the developer and has close ties to Senate Democratic leader John Sampson, will be mentioned.)
Even a mostly positive Westchester Magazine profile of FCR executive MaryAnne Gilmartin last November had to acknowledge, of Ridge Hill, "Less easy to shrug off is the bribery scandal that tainted the project last year." But Gilmartin wasn't asked to explain that no-show job.
Ripples in Yonkers
The case likely will have ripples in Yonkers, the state’s fourth-largest city, a place of byzantine politics that’s no stranger to corruption.
Former FCR lobbyist (and longtime Assemblyman) Mike Spano was elected mayor last year, despite his opponent John Murtagh’s efforts to tie him to the unresolved charges regarding Ridge Hill.
Spano connected Jereis to Forest City Ratner, specifically introducing him to Bender--the same executive involved in some unsavory (but not charged) deal-making with now-convicted state Senator Carl Kruger.
And Spano's brother Nick, a former state senator with longtime ties to Jereis, last week pleaded guilty to tax evasion, which may or may not be connected to his potential testimony in the Ridge Hill case.
Murtagh has further said that Bender was with Zereis when the latter pressured him to change his vote on Ridge Hill, given that Annabi had turned.
(New York Times columnist Michael Powell, who wrote last month about Forest City’s role in the Kruger and Ridge Hill cases, nonetheless didn’t mention Bender’s role in Ridge Hill.)
The charges and the trial
Annabi, the former Democratic Majority Leader of the Yonkers City Council, is charged with conspiracy, bribery, extortion, false statements, and tax crimes. Jereis is charged with conspiracy, bribery, and extortion. A superseding indictment added a charge of conspiracy by Annabi and Jereis to deprive city of Annabi’s honest services.
image from Yonkers Tribune) pleaded guilty. “I told my client that he would have to pay this cash to Councilwoman Annabi to get her to change her vote on the project,” he stated in court, according to a transcript.
“I gave tens of thousands of dollars in cash to Zehy Jereis, who said he would take care of Annabi so Annabi would switch her vote in favor of the Longfellow project,” he said.
“I made these payments to Jereis with the understanding that he would pass the money on to Councilwoman Annabi to influence or reward her for official action.” (Mangone was once Nick Spano's chief of staff and campaign manager, according to the Journal News.)
The stream of payments regarding Ridge Hill, apparently, will not be so simple. According to a 12/03/11 article in the Journal News, it could take up to a month for the prosecution to put on some 50 planned witnesses, for both the Longfellow and Ridge Hill aspects of the cases against Annabi and Jereis.
What’s the defense? “Ms. Annabi never directly or indirectly sought or received any money or other thing of value, to influence her vote on any matter before the Yonkers City Council including the Ridge Hill and Longfellow Projects,” her lawyer, William Aronwald, stated in a legal filing.
“The case against Sandy Annabi is as weak a case as I’ve ever seen the government bring,” Aronwald told the 5/28/11 Journal-News, a comment that prosecutors considered inflammatory and led them to (unsuccessfully) seek a gag order, as they contended he was prejudicing the potential jury pool.
Aronwald stated that “the prosecution recognizes that they cannot tie any of the alleged “payments” specified in the Indictment to Ms. Annabi’s allegedly changed votes in favor of the Longfellow and Ridge Hill projects.”
“Both projects had been substantially revised in significant respects,” he stated, offering an explanation for Annabi’s changed votes.
However, as the New York Times reported 5/5/08:
In a news release at the time of her vote switch, Ms. Annabi cited 11th-hour negotiations with Ratner over property taxes, in which she said she was able to wring out millions of additional dollars. Later, it became clear that some of the promised riches had little chance of being paid because of fine print in contracts that Ms. Annabi said she never saw.For Jereis’s part, his lawyer said in legal papers that the defendant and his cousin had a social relationship since at least 2001, and he often gave her money and loaned her funds.
A personal “friendship,” responded prosecutors in legal papers, does not excuse such conduct.
The "stream-of-payments" theory
Was there a specific bribe for a specific action, a quid pro quo? Not necessarily. Prosecutors describe “an overarching stream-of-payments bribery scheme engaged in by these defendants and not two separate and discrete bribe transactions.”
In other words, “the Government contends that Jereis made these secret payments to Annabi to keep her on retainer, allowing him to call in favors when the opportunities presented themselves.”
Thus, one online commenter--and there are many in the Yonkers political world, mostly anonymous--suggested that Forest City’s hiring of Jereis might be termed a “success bonus.”
One December 2010 blog post in Yonkers suggested that Jereis was cooperating with the FBI, and that a plea deal had been offered to Annabi. Well, that led to an indignant denial from Aronwald, and there has been no plea.
No cooperation from FCR
Last year, Annabi’s lawyer Aronwald sought additional discovery, asking for identification of individuals not named in the indictment, such as “representatives of Developer No. 2” who met with Annabi at various times, drafted a press release for her, and met with Jereis. (That could mean staffers, or lobbyists.)
Aronwald stated that “it is unreasonable to expect that we will be able to prepare a defense to allegations concerning meetings and discussions with, and payments made by unnamed ‘representatives’ of the two developers.”
“I have been unsuccessful in my efforts to speak to either Developer No. 1 or No. 2 concerning this case,” he added, in a legal filing.
Aronwald further asked the Court to “direct that the government disclose any statements or materials from Forest City Ratner agents, principals or employees that Sandy Annabi never solicited, accepted or agreed to accept any money or financial benefits from, or on behalf of, Forest City Ratner, and that there were no discussions with Sandy Annabi concerning payment of money or financial benefits with respect to the Ridge Hill development project.”
He noted that the developer of the Longfellow project, Milio Management, denied giving cash payments to any public official.
Will we hear from Forest City?
“[I]t is unclear whether the Government intends to call either Developer at trial,” Aronwald wrote in a legal filing last year. We’ll learn soon enough.
Seeking additional safeguards to block public disclosure of discovery materials, prosecutors cited, among other things, documents produced by FCR.
Those included phone logs, calendars, expensive reports, consulting contracts, and emails,, which contain “sensitive business information” and information about “business strategy.”
The judge, however, deemed existing rules sufficient to prevent pre-trial disclosure of sensitive materials. Again, we’ll see soon.
Jereis defense raises questions about FCR
According to a memorandum from Jereis’s lawyer, Anthony Siano, the omission of Forest City is curious: “In effect, the developers of Ridge Hill appear to form no part of the substantive violations against defendant Jereis. This appears to be so despite the recitations as to Ridge Hill in the conspiracy count.”
He suggested that Forest City Ratner case is quizzical: “In regard to the Ridge Hill development, the Indictment does not allege who, if anyone, made corrupt payments to Jereis and does not even identify whether any such corrupt payments were bribes or extortion payments."
"The defendant is entitled to any information the government has that negates the allegation that there was a ‘bribe giver’ or an ‘extortion victim’ of any kind in connection with the approval of the Ridge Hill project," he added. "Likewise, if the government is not alleging that the developer was a bribe giver or an extortion victim, such information is clearly material and exculpatory of Jereis.”
What if prosecutors argue that Jereis bribed Annabi not on behalf of Forest City but on his own behalf? If so, Siano stated, "the defendant is entitled to rebut that allegation by placing before the jury such information that the government has which establishes that the developer was neither solicited for a bribe nor extorted.”
“The grand jury chose to omit any allegation that the developer of Ridge Hill was neither a briber nor an extortion victim," he noted. "If the grand jury did so because the developer refuted the bribery or extortion allegations, the defendant Jereis is entitled to obtain such information well in advance of trial."
The jousting in court continues. According to a 1/26/12 scheduling order issued by Judge Colleeen McMahon, “From the 404(b) [criminal] disclosure that was made last week, it appears to be the Government’s intention to try to broaden the scope of the present trial well beyond the parameters of the Indictment. I am serving notice that we will be trying the charges outlined in the Indictment--which are, frankly, not overly broad in scope--and not matters not indicted or persons not indicted. I intend to run a tight trial.”
Help from a disbarred lawyer?
One sideshow--which got significant discussion in Yonkers--was the assistance offered by disbarred attorney Samuel Abady. The government charged Abady was improperly practicing law. Aronwald said he offered voluntary assistance, and his public comments--that Annabi was being persecuted because of gender and (Arab) ethnicity--came in his capacity as a journalist.
For example, Abady commented 9/3/10 that Annabi “never received funds from Jereis to change her vote on the Ridge Hill development project. The feds have not produced a single intercepted E-mail, voice recording or telephone call to or from her about a bribe of any kind.”
Yonkers politics and FCR lobbyists
One pseudonymous commenter, “Yonkers Confidential,” has suggested that the feds “sorely want Annabi’s testimony against other, more ‘high-value’ targets” in other cases.
As noted last week, “Yonkers Confidential” described ties between former Assemblyman Mike Spano, an FCR lobbyist, his brother Nick Spano, and the developer.
The mayoral race
Last year, mayoral candidate John Murtagh challenged Assemblyman Mike Spano, the frontrunner:
During a live debate on News 12 Westchester last night, I asked Spano to explain his role as a highly paid lobbyist for a major developer -- who was caught bribing Spano’s Assembly Counsel Anthony Mangone -- as well as offering long time Spano confidant Zehy Jereis a $60,000 no-show job in exchange for his delivering the deciding vote for the approval of the Ridge Hill project.Note: this is not correct. Forest City had nothing to do with Mangone, since the latter was involved in Longfello, not Ridge Hill. But Spano did connect Jereis to Forest City Ratner's Bender.
A Lipsky sideshow?
Well after the 2006 vote at issue in this trial, Forest City Ratner’s former lobbyist, Richard Lipsky, was paid $23,000 in 2008 to lobby the Yonkers City Council and then-mayor Phil Amicone regarding Ridge Hill.
In 2009 and 2010, Lipsky was paid $10,000 a year to lobby on behalf of Ridge Hill, but only in the first of 12 disclosure reports filed with the state did he state a lobbying subject: “GRASS ROOTS SUPPORT FOR RIDGE HILL VILLAGE.”
Lipsky, of course, pleaded guilty in January to other corruption charges linked to state Senator Carl Kruger. Ridge Hill was not part of the case, so it's unlikely his name will come up in the case beginning tomorrow.
Questionable dealings have long surrounded Ridge Hill. The New York Times reported 3/21/05:
Some of the [Ridge Hill Development] corporation's directors are allies of Mayor Philip A. Amicone and former Mayor John R. Spencer, and sit on the boards of at least two other local development corporations in Yonkers. Tax documents show that in 2003, Mr. Spencer's brother-in-law, Chris Spring, had a $100,000-a-year job with the corporation, but a storm of protest followed and by 2004 he was on the developer's payroll instead.