Friday, April 05, 2013

If dominos fall in corruption case, could they reach Atlantic Yards? Forest City has one degree of separation from Malcolm Smith

No, developer Forest City Ratner is not now "between legal clouds," as New York Times columnist Michael Powell put it in January 2012, after the developer received significant mention (though no legal exposure) in two separate federal corruption cases, one involving the Ridge Hill project in Yonkers, the other involving then-state Sen. Carl Kruger.

But the charges this week against state Sen. Malcolm Smith, a powerbroker in southeast Queens, set up some speculation that surely crossed the mind of some at MetroTech: what does he know, and could any dominos fall?

After all, there's just one degree of separation between Smith and Forest City, as his ethically questionable former business partner--to whom CEO Bruce Ratner has steadfast loyalty--has long worked for Forest City on minority contracting. Another close associate has worked for Forest City as a lobbyist.

First, of course, Smith is presumed innocent, and professes innocence. Then again, the evidence, on first blush, seems pretty stark. Now, as the Daily News put it yesterday, Political World Watches To See If NY's Malcolm Smith Will Flip On Friends And Colleagues.

Smith's connections

So if Smith made a deal, his most obvious targets could be those closest to him are in southeast Queens, including former Rep. Floyd Flake, Rep. Gregory Meeks, and that former business partner, consultant Darryl Greene.

That's not to say Smith has dirt to deliver, just that such associates are the most obvious targets. As the
Daily News put it:
Top among them, sources say, is Democrat Gregory Meeks, the Queens congressman who is said to be under FBI investigation.
A charity tied to Smith and Meeks, New Direction, reportedly misused thousands of dollars raised for Hurricane Katrina victims.
The feds have also been looking into a secret $40,000 personal loan Meeks received from Queens businessman Ed Ahmad in 2007 to help pay off his $830,000 home.
Or, as noted by the Daily News, Smith could have information regarding some of the (mostly) Brooklyn politicians who participated in the ill-fated effort to award a "racino" to Aqueduct Entertainment Group (AEG), as cited in a state Inspector General's report. They include Senators John Sampson and Eric Adams (the likely next Brooklyn Borough President), as well as AEG lobbyist (and former Senator) Carl Andrews.

Also, Flake was involved in the Aqueduct plan, and Smith recently hired his son.

The Darryl Green connection

Greene offers a direct line to Forest City. Smith and Greene were once business partners in the company Greene now runs, The Darman Group, who helps manage minority contracting and hiring for Forest City Ratner.

Greene, who pleaded guilty in 1999 to a misdemeanor for participating in a mail fraud scheme, was such a hot potato that he had to be dropped from the AEG bid group.

As I wrote in December 2006, Smith may have cut his ties to Darman by the time, but Darman's Greene had made at least one contribution to Smith's campaigns, likely two. Since then, according to state records, Smith gained continued support: Greene gave more than $4500 to Smith's campaigns between April 2007 and April 2010.

Greene, as of 2006, had also contributed $500 to Andrews' unsuccessful Congressional campaign and nearly $6000 in the previous six years to the Meeks's candidacies. Since then, he's also given $675 to Adams's campaigns.

Greene & Ratner = loyalty

Greene has close ties to Bruce Ratner. As the Daily News reported 12/5/02:
A Queens lawyer who billed clients $500,000 for work he never did has been hired to bring contractors from minority groups to downtown Brooklyn's new cultural district. In 1999, Darryl Greene was sentenced in Brooklyn Federal Court to three years' probation and 240 hours of community service after pleading guilty to stealing public funds. He admitted charging clients - including government agencies - for work he and his employees did not perform and billing multiple clients for the same time periods. Greene was forced to pay restitution of $100,000 to the agencies he illegally billed from 1988 to 1994. The nonprofit Brooklyn Academy of Music Local Development Corp., which is overseeing development of the cultural district, has agreed to pay Greene $60,000 to lobby women, members of minority groups and local businesses to bid for contracting jobs at a new facility at 80 Hanson Place... 
Bruce Ratner, president and CEO of the real estate group Forest City Ratner, said he has worked with Greene for 15 years. "We stood by Darryl Greene during that time for a reason," Ratner said of Greene's trial days. "He is one of the finest, most honest people I know, and he just got tangled up in somebody's politics."
Ratner said he'll continue to do business with Greene "forever."
Indeed, Ratner has done so, and Greene is surely reciprocally loyal. But if he had to make a deal--and again, this is a couple of steps down the line of speculation--would he have anything to say about Forest City?

And, by the way, how does fraudulent billing equal "just got tangled up in somebody's politics"?

The Andrews connection

Andrews worked for Forest City as a lobbyist for several years, earning $24,000 in 2009, $36,000 in 2010, and $15,000 in 2011, according to state records.

Family ties, and other Forest City connections

Greene's daughter Yvette Dennis works for The Darman Group on Atlantic Yards.

Meeks's sister Janella Meeks works as  Deputy Director, Government & Public Affairs for Brooklyn Sports & Entertainment. She has a history in Brooklyn politics, working as chief of staff for Council Member Letitia James (until she left in April 2006), and previously for Assemblyman Roger Green (for whom James worked).

As for Green, his son Khalid works as a scout for the Nets, thanks in part on an introduction from the Assemblyman (who was succeeded in 2006 by Hakeem Jeffries).

Darryl Greene contributions



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