Daily News columnist Ben Smith, in a 11/19/06 column headlined Revealed: How top state Dem built his power base, connects some dots between State Senator Malcolm Smith, the new Senate minority leader, and the Darman Group, the company that's been coordinating minority contracting for the Atlantic Yards project.The Senate is currently dominated by the Republicans, but, as Ben Smith points out, Malcolm Smith, a Democrat from Southeast Queens, could become one of "three men in a room"--who have overwhelming weight in state politics--if the Democrats take the Senate after redistricting or a new political wind. The Senator is a real estate developer by profession.
Ben Smith writes of the new minority leader's questionable history:
Smith was sued in 2003 by the court-appointed trustee of his bankrupt real estate development company, who charged that Smith had engaged in "self-dealing," made "fraudulent" transactions, and set up two "sham" companies to keep creditors at bay, according to court documents.
In 2004, Smith applied to create a charter school, and listed one of the allegedly sham companies as the planned construction contractor.In an interview, Smith questioned why these documents emerged days before the vote for majority leader. He said he had left the construction business when he was elected, and denied he created any sham companies.
(At right, Malcolm Smith)
Smith was an aide to former Rep. Floyd Flake and others, and now serves as a trustee of Flake's powerful Greater Allen AME Cathedral in Jamaica. He also founded Smith Development Corp., set up to help minorities get jobs for which minority contracting was required.
Company troubles
Ben Smith picks up the story:
By the late 1990s, however, Smith said, the company had bitten off "more than we could chew." He was sued by creditors and found to owe back taxes and more than $60,000 in unpaid workers' compensation. As his business declined, Smith's political fortunes rose. He was walked into an open state Senate seat in 2000, running on Democratic, Republican and Conservative lines.
The next fall, Smith Development filed for bankruptcy.
In the 2003 lawsuit, company trustee Robert Geltzer accused Smith of hiding money from creditors by using two "sham business entities" to complete construction contracts. The firms had the same address in Far Rockaway, Queens, as Smith Development.
Malcolm Smith said that setting up the companies was not out of the ordinary, and the suit had been settled; Geltzer told the newspaper that the company didn't have many assets, and wrongdoing was not established.
Darman Group emerges
Ben Smith writes:
One of the companies he had called a sham reemerged in 2004. That's when Smith applied to open the Peninsula Preparatory Academy Charter School. The Darman Group was identified as the developer that would "renovate and retrofit" a vacant building for the school.
The Darman Group was incorporated in 1999 as Smith Darman Inc. Smith took his name off the company and says he cut his ties with it in 2000, when he took office. He said he left it to his partner, Darryl Greene, a major player in the minority contracting world who pleaded guilty in 1999 to defrauding city agencies, including the School Construction Authority.
Smith said he was surprised to hear the Darman Group's name.
"I've got nothing to do with this company," he said. "I didn't even know they were listed on the application."
In any case, the school found a home in an existing school building, and Darman was never involved in actual construction or contracts there.
"They did nothing at all. Zero," Smith said.
While the Darman Group may have been incorporated seven years ago, on its web site the company claims "more than 25 years experience serving the metro NY area" and "excellence since 1976." (Its predecessor was referred to as the Smith Darmon group in an earlier listing regarding Smith.)
In the relatively small world of minority contracting, the participants often know each other. In May, Malcolm Smith and other advocates called for reform of the state's Minority and Women-owned Business Enterprise program. Among them was Timothy Marshall, president and CEO of the Jamaica Business Resource Center, which assists minority- and women-owned small businesses. Marshall more recently offered a statement in support of the Atlantic Yards Draft Environmental Impact Statement.
Darman-related contributions
Smith may have cut his ties to Darman, but Darman's Greene has made at least one contribution to Smith's campaigns, likely two. (There are two listed in 2004 from a Darryl Greene in Far Rockaway, but from different addresses.) He also contributed $500 in March to the unsuccessful Congressional campaign of Atlantic Yards supporter (and Brooklyn machine candidate) Carl Andrews and nearly $6000 in the past six years to the candidacies of local Congressman Gregory Meeks.
Closer to Brooklyn, as I reported in September, Hallene Condon of the Darman Group contributed $500 to the Congressional campaign of Atlantic Yards supporter Roger Green. (Her affiliation is listed as the Darmon Group.) She's from Cambria Heights, Queens, among several Green contributors outside the Brooklyn Congressional district.
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