Overstated allegation that Yonkers pol was indicted for "accepting a bribe from Ratner" subject of heated exchange among lawyers in remaining AY case

Forest City Ratner's murky role in the controversial Ridge Hill corruption case--mentioned indirectly but not implicated--has become the subject of some heated exchanges between lawyers on opposite sides of the only Atlantic Yards case that remains to face an initial hearing.

Williams vs. New York State Urban Development Corporation (aka Empire State Development Corporation, or ESDC) goes to court Monday.

It's not likely that Ridge Hill will come up--the larger issue is whether the Development Agreement, not unveiled until January, should trigger new Determination & Findings (D&F) needed to pursue eminent domain.

But Ridge Hill hangs like a cloud over the developer, even though a lawyer for property owners challenging the state overstates what has been alleged.

"Accepting a bribe from Ratner"?

The 2/2/10 Memorandum of Law on behalf of property owners challenging the state suggested, by way of example, that if Forest City Ratner had been indicted for bribing public officials and then became insolvent, the ESDC's 2006 D&F would be illegitimate, even if it has previously survived legal challenge.

A footnote led to this observation:

This is, of course, not a stretch given the recent federal indictments of former Yonkers City Council Member Sandy Annabi and her associates for, inter alia, accepting a bribe from Ratner in exchange for changing her vote from no to yes, in favor of a Ratner development project in Yonkers.

Note that inter alia means "among other things." (Underlining throughout has been added)

ESDC response

The ESDC's 2/10/10 Motion to Dismiss responded:

Finally, Petitioners make an erroneous assertion pertaining to the indictment of Yonkers City Council Member Sandy Annabi and two co-conspirators for alleged crimes over a six-year period from 2004 through 2009. Petitioners assert that the indictment charges Annabi with having accepted a bribe from FCRC in connection with its Ridge Hill Development Project in Yonkers, but the indictment… makes no such allegation.

Petitioners' response

In a 2/22/10 memorandum of law in opposition to the ESDC's motion to dismiss, the petitioners countered:

Respondent takes issue with a prior assertion by Petitioner’s counsel that former Yonkers City Council Member Sandy Annabi was indicted and charged “with having accepted a bribe from FCRC in connection with the Ridge Hill Development in Yonkers,” claiming that “the indictment makes no such allegation.” Karmel Aff. ¶ 36. Attorneys for FCRC went even further charging that the statement was “false.” See Letter from Jeffrey L. Braun, dated February 12, 2010, and resulting correspondence attached as Ex. B to Brinck. Aff. Rather than quibbling over the meaning of the indictment, Petitioner is content to rely on the indictment itself.
[Indictment is embedded below; the Ridge Hill case starts on p. 10]
…The indictment speaks for itself. Presumably, Respondent’s board of unelected stewards of the public fisc, and their partners in New York City government, long ago, when the investigation was first revealed, thoroughly investigated the facts set forth in the indictment, and independently and affirmatively concluded that FCRC’s alleged conduct posed no concern over its status as a “responsible” government partner, nor obstacle to FCRC continuing to receive hundreds of millions of taxpayer dollars. See generally Hellenic American Neighborhood Action Committee v. City of New York, 101 F.3d 877 (2d Cir. 1996) (rejecting challenge to City’s decision to automatically cease all contracting with entity under investigation by U.S. Attorney’s office in order to protect public fisc).

What actually happened is murky, but the indictment does not charge Annabi with "accepting a bribe from Ratner." It lays out a sequence in which Annabi is charged with accepting corrupt payments from Zehy Jereis, who got a no-show job from Forest City Ratner.

As I wrote, the role of the developer is questionable, making it dubious that the ESDC considers the developer a "good corporate citizen." It's unclear why the developer was not considered a target by prosecutors, or why Forest City thinks it has a clean bill of health.

Letters attached to the legal papers further detail the exchange.

From FCR's attorney

Forest City Ratner attorney Jeffrey Braun wrote:

Upon announcement of the indictment, moreover, FCRC issued a public statement that said that it had "cooperated fully with the U.S. attorney's office during the course of its investigation and would continue to do so. In addition, Forest City has been advised by the U.S. attorney's office that neither the company nor any of its employees is a target of the investigation" (emphasis added). This statement was quoted by The New York Times in its news report of the indictment published on January 5, 2010, one day after the indictment's announcement. A copy of the Times article is enclosed.

We believe that the statement about the Annabi indictment in the Williams memorandum was not only untrue, but was deliberately intended to smear FCRC and Mr. Ratner and went beyond the bounds of zealous advocacy. FCRC and Mr. Ratner are proud of the integrity with which they have consistently conducted their business affairs over the years and place a high value on their reputation for integrity. They are not prepared to sit by passively if their reputations continue to be besmirched by false assertions like the one in the Williams memorandum.

From petitioners' attorney

Attorney Matthew Brinckerhoff responded:

You charge that I made a “false” statement in a court filing, and strongly suggest that my “false” statement violated 22 NYCRR 1200.25(a)(1), and/or the prohibition against engaging “in conduct involving dishonesty, fraud, deceit or misrepresentation” as set forth in 22 NYCRR 1200.58(c)(1), and/or is “frivolous” and “sanctionable” under the Rules of the Chief Administrator of the Courts, and/or is “libelous per se.”

...As you note, the brief references “recent federal indictments of former Yonkers City Council Member Sandy Annabi and her associates for, inter alia, accepting a bribe from Ratner in exchange for changing her vote from no to yes, in favor of a Ratner development project in Yonkers.” As you also note, “Ratner” is defined as “the Project developer, Bruce Ratner, and various entities, he owns or controls.” As I understand it, FCRC, which has long been identified as the developer of the Atlantic Yards Project and the Ridge Hill Project in Yonkers, is owned or controlled by Bruce Ratner (its President and Chief Executive Officer) – hence my use of the term.
The statement that Ms. Annabi and her associates (actually, it would have been more accurate to say Ms. Annabi and her cousin) were indicted for accepting a bribe from FCRC is fully consistent with the indictment. Insofar as you believe that the allegations in the indictment are false, your quarrel is with U.S. Attorney’s Office for the Southern District of New York, not with me.
Your retort – that the indictment “does not charge FCRC or ‘Ratner’ with bribing any public official” – while true, is obviously beside the point. I never claimed it did. Had I done so, that would have been false.
...As you know, during his news conference announcing the indictments, Mr. Bahara “declined to comment on whether Forest City Ratner had broken the law by hiring Jereis or whether they were a target of the continuing investigation,” and would not discount the possibility of more indictments. And, the Daily News reported that at “no time during these meetings and agreements with Jereis did Ratner go to the FBI, according to two sources familiar with the investigation.” See N.Y. DAILY NEWS, Yonkers Pol Sandy Annabi Took Bribe to OK Ratner Deal, Feds Say, Jan. 7, 2010.
As of January 6, 2010, the U.S. Attorney’s Office had no doubt concluded either (i) that there was insufficient evidence to prove beyond a reasonable doubt that FCRC, or one or more of its representatives, had bribed a public official, or (ii) had chosen not to pursue such a charge based on other considerations.

From FCR's attorney

Braun responded:

I believe, moreover, that you letter's lengthy effort to parse the Annabi indictment, coupled with your letter's unfounded speculation as to why the indictment does not contain any charge against Mr. Ratner or any of his companies or employees, demonstrates that you understand perfectly well what was false about your statement. However, just so we are clear, your memorandum in the Williams case stated that the Annabi indictment accuses Ms. Annabi and "her associates" of "accepting a bribe from Ratner" (at p. 2 n. 3). That statement is false insofar as it characterizes the indictment as alleging that Ms. Annabi -- or anyone else--accepted a "bribe from Ratner," regardless of whether "Ratner" is understood to mean Bruce Ratner individually or any entity that he owns or controls, or previously owned or controlled. You can parse the indictment all you want, and you can speculate all you want about what may have happened, but the indictment is devoid of any allegation that "Ratner," however defined, bribed anyone or knew that Ms. Annabi was being bribed.

On my reading, Braun's correct. There's no "bribe from Ratner" in the indictment.

Then again, Braun's claims about the company's integrity are questionable, given that Forest City Ratner has not only escaped sanction for some questionable behavior, it has never explained nor justified the no-show contract given to the man indicted for paying bribes, nor why it didn't go to the FBI.
Ridge Hill Indictment