Wednesday, March 21, 2012

Rashomon at Ridge Hill: divergent conclusions drawn by opposing sides in Yonkers corruption trial; also, the "sugar daddy" excuse and questions about Forest City's ethics

Call it Rashomon at Ridge Hill--and beyond.

After a month of testimony, closing arguments capped  the Yonkers corruption trial yesterday, with a prosecutor and a defense attorney weaving dramatically different  conclusions from the same sets of facts, notably a seven-year stream of payments from Yonkers political operative Zehy Jereis to his "political creation," friend, and purported object of desire, Council Member Sandy Annabi.

"He got paid, and she got paid, and nobody was supposed to know," contended Assistant U.S. Attorney Perry Carbone, arguing that Jereis's payments were made to reward Annabi, and influence her, as opportunities arose, even if not tied to specific votes. Thus the public was deprived of her "honest services.

That, Carbone suggested, led to her changed votes to support Forest City Ratner's Ridge Hill project and Milio Management's Longfellow project. Jereis later got a no-show job from Forest City Ratner and (they say) got a bribe from Milio.

While Carbone called the circumstantial evidence "overwhelming," Annabi's attorney, William Aronwald, contended there was no evidence that the payments to her were "a result of an understanding that, in exchange, she would perform official acts, at Zehy Jereis's behest, as opportunities arose." Nor did she ever ask for anything of value.

And she changed her vote, he said, because of the developers' concessions. So the evidence is that Annabi "faithfully and honestly represented the best interests of Yonkers," he asserted.

After nearly five hours of closing arguments in the Lower Manhattan courtroom, the jury got to go home. In the morning, Jereis's attorney, Anthony Siano, will offer his closing arguments, surely slashing at prosecution witness Anthony Mangone, an admitted liar and felon who said he delivered a bribe from the Longfellow developers to Jereis and was already slammed by Aronwald as "morally bankrupt."

Prosecutors will then get a short rebuttal. And U.S. District Judge Colleen McMahon will then offer jury instructions.

(Here's coverage in the Journal News.)

The "love defense" and the "sugar daddy" excuse

Carbone and Aronwald tangled on the meaning of the "love defense," the claims by the married Jereis that he transferred some $194,000--including a $60,000 loan he was quickly repaid, down payments on real estate, a car lease, utility and cable bills, student loan payments, and cash--to Annabi to win her love and take care of her,

"Corrupt payments cannot be justified on the basis of friendship," declared Carbone, who had earlier noted, "The only thing she could give Jereis was influence."

He urged jurors to listen closely to McMahon's instructions: "Even if you find that part of the reason [for Jereis's payments] was out of some unrequited infatuation, there's no question they were at least in part to influence conduct."

Aronwald, who had an explanation or refutation for every charge thrown at his client in the indictment, including tax and mortgage fraud, paused to clear up a lingering question unanswered by witnesses nor  Annabi, who did not testify: why did she take the money, especially if she had no romantic interest?

"You may decide Sandy Annabi was taking unfair advantage of Zehy Jereis," Aronwald declared. "She was allowing him to be a sugar daddy. You can say to yourself that was reprehensible. That's not what she's charged with. That's not a crime."

And if Jereis merely wanted to control Annabi's vote, why did he lose 150 pounds, get his teeth fixed, and give himself a makeover, Aronwald later asked.

Prosecutor Carbone scoffed at the explanation for Jereis's payments. He pointed to a chart showing significant spikes in phone/text communication between Annabi and Jereis: "What does it say about the nature of the relationship when Election Day and bribe days are the days they talk the most?"

Carbone, who has a methodical, low-key style, nevertheless provided a jolt of energy--and reality--by screening snippets of Yonkers City Council meetings where Annabi, in populist style, railed against the Ridge Hill and Longfellow projects she later voted to support.

With a romance, he proposed, a man might buy flowers or chocolate, or propose a romantic vacation: "Their idea of a romantic time is a double date with Forest City Ratner executives at Jake's Steakhouse. That's not romance, it's corruption."

Jereis's romantic emails introduced into evidence, he suggested "are about as authentic as Mr. Jereis's testimony." While a prosecution expert testified that there was something fishy about the part of Annabi's computer holding the emails, Aronwald reminded the jury the expert could not opine on whether the emails were fabricated.

Trying to make sense of it

After watching much of the trial and trying to reconcile the meaning of the testimony, I'm reminded of the difficulty of teasing out private interests and public interests in eminent domain cases.

Aronwald pointed out that, as of 12/12/05, after an FBI agent contacted her office--and six months before meeting with Forest City--Annabi knew there was a potential investigation into Ridge Hill. "Does it make any sense, knowing that the FBI wants to speak to her, that she is going to be so stupid and engage in a corrupt scheme to change her vote?"

What if it was not as simple as prosecutors portray nor as clean as defense attorneys allege? If Jereis could simply deliver Annabi's vote, why did it require a tense meeting where Annabi clashed with Forest City executive Richard Pesin?

But if Annabi simply wanted to get concessions from Forest City Ratner on Ridge Hill, why did she refuse to meet with them in the first place?

Jereis, at the least, delivered Annabi to a meeting with Forest City Ratner, a meeting they were unable to otherwise arrange, despite having some of the area's most powerful lobbyists.

Did Annabi agree to that meeting out of friendship? Or trusting his political judgment? Or obligation created by his gifts? Maybe it was some kind of combination of the three.

Moral equivalence: Forest City and the bribers?

In the trial, while Forest City's reputation took some hits, given the company's desperate efforts to get Annabi on board and Ridge Hill passed, no one suggested the company's behavior was criminal.

But Carbone, in his summation, suggested a moral equivalence between Forest City and the Milios. Jereis, according to Mangone, had suggested the latter should have asked for more from the Milios, just as he was seeking a job from Forest City.

"It just happens that Forest City Ratner, a $12 billion company, does things a little more formally," Carbone suggested. "They gave him the contract because he asked for it. Anthony Mangone and the Milios gave him the cash because he asked for it."

Crucially, of course, Forest City acted after, not before Annabi's vote.

Later, Aronwald criticized the developer's ethics. "Mr. Carbone suggested that, had they known Zehy Jereis had been making payments [to Annabi], they would not have moved forward," Aronwald later contended.

"Do you think it would've made a difference to [Forest City executives] Bruce Bender or Scott Cantone if they'd known Zehy Jereis was paying Sandy Annabi?" he asked. "They'd say, Oops, we're walking away? For the government to suggest otherwise is just silly."

Actually, Cantone testified, "If we had any inkling of any of the accusations or facts [regarding Jereis], we not only would not have been meeting with him, we certainly wouldn't have hired him."

Carbone pointed out that Aronwald had claimed, in his opening statement, that Forest City executives would say they hired Jereis via an arm's length relationship, but Forest City executives said they were uncomfortable with Jereis's request while Annabi's vote was pending.

"Does that sound like an arm's length negotiation?" he asked. "Absolutely not."

Transparency and concealment

Carbone pointed to Annabi's financial disclosure form filed with Yonkers officials. "She lied about receiving the money year after year," he said. But she did declare a fruit basket and a bottle of wine.

Later, Aronwald offered a strained explanation for Annabi's failure to disclose payments from Jereis. Gifts from relatives, he said, need not be declared, and "you heard testimony that they were cousins."

Distant cousins who barely knew each other before Annabi's 2001 campaign, however.

Carbone pointed out that, when interviewed by the FBI about the Rolex she bought for some $3800 in cash, Annabi claimed not to remember how she paid and later admitted Jereis "may have helped."

Annabi spent some $7500 in cash on the watch and an airline ticket, but, according to FBI testimony, had never withdrawn such cash from her account, even as she had two mortgages and a Mercedes lease to pay.

The money, Carbone argued, turning from the jury to point at the defendants, "came from Zehy Jereis and it went right across the table to Sandy Annabi.

Yonkers City Council President Chuck Lesnick, Carbone noted, testified that he'd asked Annabi if she'd gotten any benefits from Jereis or others doing business with the city, and said no.

Similarly, when Council Member Dennis Robertson told Annabi that Forest City lobbyist Al Pirro had said that her vote was guaranteed by hiring Jereis, she didn't respond, Carbone noted.

Aronwald later suggested that Robertson's account was not credible and noted that Pirro never hired Jereis, though he could have done so.

As for concealment, Aronwald said, Jereis signed checks with his name on them. He also pointed out that Jereis's payments worked out to little more than a thousand dollars a month over seven years--if the $60,000 loan was subtracted, as well as the $20,000 in the claimed bribe. (He noted that a government "wheel of fortune" failed to mention the loan repayment.)

"You don't have to find the defendants made any money," Carbone said at one point, aiming to rebut the common-sense conclusion that the money Jereis got from the Milios and Forest City--$35,000--was far less than he'd passed on to Annabi. "No one is claiming Mr. Jereis is a smart crook." Had Jereis been paid for a full year by Forest City, rather than for three months, he would have earned $60,000.

Jereis, he noted, had told Forest City's Bender, "You're hiring the wrong people," leaving the suggestion that he was the path to Annabi's vote.

The projects and the changes

Both sides clashed on the meaning of the changes Annabi secured.

"It's also totally irrelevant that the projects in some way benefited the public," Carbone contended. "The question is: what was in their minds when the money passed."

"The details of these projects are just not that important," he insisted. "Whether Ridge Hill or Longfellow are good projects, or whether they changed, is not relevant."

Aronwald, however, took aim at the claim, made by prosecutor Jason Halperin, that the $10.8 million Annabi got from Forest City Ratner for Yonkers was "peanuts." He noted that Council Member Dee Barbato considered it significant. Unmentioned: the "peanuts" characterization came from another Council Member, Dennis Robertson.

Barbato and fellow Ridge Hill opponent Council Member John Murtagh both testified that Annabi had said she wouldn't change her vote until all their concerns were met.

Carbone's use of the Yonkers City Council video--apparently repeated from an earlier trial moment that I missed--showed Annabi in full form, arguing that Forest City Ratner was "robbing the city blind." He later showed Annabi opposing Longfellow, with similar verve, claiming--inaccurately, it turned out--that the project would be sold for $1, less than the cost of the soda bottle she was holding.

Aronwald cautioned the jury to look at the full tapes, which, he said, would show that Annabi had aired her objections early on, leaving room for reforms.

"If the corrupt agreement existed, why did Sandy have to fight for [nearly] $11 million" from Forest City, Aronwald asked. (It may have been "good cop, bad cop" on Forest City's end.)

He later suggested that, due to a change in the supermajority requirement on City Council, Annabi's vote would not have been needed as of August 1, a few weeks after her July 11 vote. (Forest City executives sure didn't act that way.

Aronwald noted he'd asked the Forest City executives if they'd asked Annabi if her support was contingent on a job for Jereis, but they had never done so. If they were concerned, he contended, they would've taken up the issue: "Obviously, the two were totally unrelated." (Well, her support was not related to it, but the Forest City execs were nervous.)

Carbone pointed to circumstantial evidence regarding the Longfellow discussions, suggesting that Jereis was deeply involved. At the same time Mangone was calling Jereis, the lawyer was also writing an email to developer Franco Milio, conveying the conditions that Jereis had discussed.

Carbone pointed to a statement by Forest City's Cantone that Jereis had said he was shepherding the Longfellow project. "This is a witness that has nothing to do with Longfellow," he pointed out.

The questioned bribe and a questionable witness

The only testimony about a bribe to Jereis came from the flawed witness Mangone who, noted Carbone, had said Jereis was complaining that Annabi was "hounding" him for money. Mangone, however, acknowledged he had no idea what Jereis did with the money.

Jereis denied meeting Mangone at Trotters restaurant, where the latter claimed the bribe was delivered, and Jereis denied driving a white Mercedes Benz, which was Annabi's color, not his. Carbone, however, pointed to some circumstantial evidence, including Mangone's receipt from the restaurant and phone call from Mangone to Jereis that occurred just before the two allegedly met.

"Now look at what happens three minutes later," Carbone continued. "Who is the very first person Zehy Jereis calls? Sandy Annabi."

Carbone, who put up on the screen a photo of Annabi and Mangone looking festive, as if at a party, acknowledged that Mangone had lied in the past. "The government doesn't get to pick its witnesses."

"If Anthony Mangone was going to fabricate testimony, wouldn't he do a better job?" Carbone asked. Still, when faced with explaining how Mangone claimed that he got money from the Milios when the latter were out of the country, and how the Milios and Mangone offered other different accounts of the cash delivery, Carbone was forced to suggest that such differences in recollections "are the hallmark of truth."

Aronwald suggested that Mangone, once he decided to plead guilty and cooperate with the government in hopes of getting a lighter sentence, invented the bribe to Jereis to bolster his cause. "The only way he could get the benefit of the deal was telling a story."

"Mr. Carbone told you the government takes witnesses where they find them," Aronwald stated. "Well, in the case of Anthony Mangone, they should've looked the other way."

The tax returns and mortgage statements

Prosecutors slammed Annabi for not declaring the money she got from Jereis on her tax returns. The defense: you don't have to declare gifts or loans

As for an improperly claimed "casualty loss," based on a unpaid loan Annabi gave to her father, that, according to Aronwald, could be blamed on the untrained accountant who prepared the returns: "Walid Farhat seemed like a nice enough guy, but he is to accounting what Anthony Mangone is to telling the truth.".

What about the loan applications for Annabi's property purchases that exaggerated her salary, her monthly rent, and claimed falsely that she planned to use both as primary residences? "She made numerous false statements," Carbone said. "The testimony and evidence is clear, straightforward, and overwhelming."

However, Aronwald suggested that no one had the original documents, and pointed out that the loan officer who prepared them--who had incentives to move as many loans as possible--was not called as a witness.

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