Louis Proyect: The Unrepentant Marxist

January 23, 2015

Sheldon Silver, caught with his hands in the cookie jar

Filed under: crime,real estate — louisproyect @ 7:48 pm

Sheldon Silver leaving the United States Court House in Lower Manhattan after being arraigned on corruption charges on Thursday. Credit: Sam Hodgson for The New York Times

Today’s NY Times has extensive coverage on the arrest of Sheldon Silver, a powerful Democratic Party politician who like so many of his ilk going back to the days of Tammany Hall exchanged political favors for big cash bribes. Of particular interest to me was his crooked deals with figures at Columbia University and Bard College, my long time employer and alma mater respectively, two places that like to preen themselves as paragons of democracy, freedom and the American way. Of course, the American way has always been about corruption rather than democracy and freedom.

Basically Silver made millions of dollars for making connections between those in the business world and politics. In other words, he was a high-class pimp. The NY Times put it this way:

Sheldon Silver, the speaker of the New York Assembly, exploited his position as one of the most powerful politicians in the state to obtain millions of dollars in bribes and kickbacks, federal authorities said on Thursday as they announced his arrest on a sweeping series of corruption charges.

For years, Mr. Silver has earned a lucrative income outside government, asserting that he was a simple personal injury lawyer who represented ordinary people. But federal prosecutors said his purported law practice was a fiction, one he created to mask about $4 million in payoffs that he carefully and stealthily engineered for over a decade.

Mr. Silver, a Democrat from the Lower East Side of Manhattan, was accused of steering real estate developers to a law firm that paid him kickbacks. He was also accused of funneling state grants to a doctor who referred asbestos claims to a second law firm that employed Mr. Silver and paid him fees for referring clients.

“For many years, New Yorkers have asked the question: How could Speaker Silver, one of the most powerful men in all of New York, earn millions of dollars in outside income without deeply compromising his ability to honestly serve his constituents?” Preet Bharara, the United States attorney for the Southern District of New York, asked at a news conference with F.B.I. officials. “Today, we provide the answer: He didn’t.”

The Times identified Robert N. Taub, the director of the Columbia University Mesothelioma Center, as having a mutually beneficial and certainly illegal relationship with Silver.

It seems that Silver was on the payroll of Weitz & Luxenberg, a law firm that advertises its ability to win claims on behalf of mesothelioma victims so many times per hour on cable TV stations that you are practically driven to stick knitting needles into your eardrum for relief.

With his finely honed knack for making ill-gotten gains, Silver racked up $3.9 million in referral fees for cases he steered to Weitz & Luxenberg on behalf of Taub who got $500,000 in state funds in exchange. The Times reports:

Mr. Silver also got the Legislature to issue a resolution honoring the doctor, the complaint says, and helped the doctor’s son Jonathan find a job at a Brooklyn-based social services group that has received state funding with Mr. Silver’s help.

The group, OHEL Children’s Home and Family Services, issued a statement confirming that it had hired Jonathan Taub in 2012, and saying it had “cooperated fully” with prosecutors and been assured that it was “not under investigation and did nothing wrong.”

In another instance, the complaint says, Mr. Silver directed $25,000 in state funding to a nonprofit on which a relative of Dr. Taub’s served on the board of directors. Dr. Taub’s wife, Susan, serves on the board of Shalom Task Force, which promotes healthy marriages. The group received the funding in 2008, records indicate.

Although the Times does not mention Bard College board of trustee Bruce Ratner, the developer responsible for forcing his white elephant Atlantic Yards megaproject down the throats of Brooklynites, it would not surprise me that he ends up under the same kind of spotlight as Dr. Taub and hopefully in the same jail cell.

Silver worked out a deal with another shady law firm run by Jay Arthur Goldberg. Silver steered real estate developers to Goldberg in exchange for a cut of the fees. The Times names Glenwood Management as one of two real estate firms buying Silver’s favors and I’ll bet that Ratner’s Forest City Enterprises will be revealed as the other.

Last March the NY Times reported on the tangled favoritism that connected Ratner to Silver. It seems that an orthodox Jewish charity, just like Mrs. Taub’s Shalom Task Force, was key to greasing the wheels. Silver had a protégé named William Rapfogel who ran the Metropolitan Council on Jewish Poverty, a publicly financed charity whose insurance broker provided $7 million in kickbacks to Rapfogel over the years. Silver funneled millions of dollars to the Met Council and employed Mrs. Rapfogel.

In a move that reeked of Zionist ethnic cleansing of Palestinians, Silver and Rapfogel worked together to keep Puerto Ricans out of an area on the Lower East Side that had undergone “urban removal” in 1967. More than 1,800 mostly Puerto Rican low-income families had been forced to leave their buildings with the understanding that they would be able to return once new public housing had been erected.

Nearly 50 years after the forced removal, the vacant lots remained. It was Silver and Rapfogel’s intention that any new projects would preserve what they called the areas “Jewish identity”, acting through the United Jewish Council of the East Side.

In 1994, Silver and Rapfogel finally figured out the best use for the land. Housing would not even enter the picture. Instead it would be best to house a “big box” store there, like Costco. And who would be brought it in as developer? Bruce Ratner, that’s who.

Once the three men connected over the site’s future commercial possibilities, their bonds strengthened. As was the case with Taub, family favors were the norm. Rapfogel’s eldest son, Michael, a lawyer, went to work for Ratner. The Times summed up the happy coincidence of interests:

In 2006, the Public Authorities Control Board, over which Mr. Silver has significant control, approved Mr. Ratner’s Atlantic Yards project in Brooklyn. Intervention by Mr. Silver and others enabled the project to retain a lucrative tax break, even as that break was actually being phased out.

In 2008, Forest City Ratner, which compared to other developers makes few political contributions, gave $58,420 to the Democratic Assembly Housekeeping Committee, which is controlled by Mr. Silver.

That same year, Mr. Ratner helped raise $1 million for Met Council and was honored at a luncheon given by Mr. Rapfogel and Mr. Silver. “Bruce is responsible for much of the development and growth that’s gone on in Brooklyn and in Manhattan,” Mr. Silver said at the event. “He is a major force in New York City for the good.”

When I read about these corrupt bastards, I can’t help but be reminded of how criminality is embedded in the capitalist system. They keep saying that a true recovery in the USA hinges on a revitalized real estate sector. But it is exactly that sector that led to the 2008 meltdown, just as it did in Spain.

Back in 2011 I read a book titled “Sins of South Beach” that was a memoir written by a former mayor of Miami Beach who went to prison for the same kinds of charges now being made against Sheldon Silver. It was a fascinating account of how an idealistic young politician gets tempted by the devil, in this case not Mephistopheles but real estate developers looking for favors from City Hall.

I had thoughts about writing a book at the time looking at the history of corruption after the fashion of David Graeber’s book on debt. Corruption, like debt, seems to be a permanent feature of class society based on commodity exchange. When the FSLN lost power in Nicaragua, the first thing the formerly dedicated and selfless leaders did was figure out a way to game the system on their way out—the so called Sandinista piñata.

If you want to eliminate corruption, you have to eliminate money. To eliminate money, you have to produce on the basis of use values rather than exchange values. Of course, all of this seems rather utopian at this point, if not trivial in comparison to the other threats to our existence including climate change.

In any case, speaking from a purely reformist perspective, I am tickled pink at the prospects of Sheldon Silver, Dr. Robert Taub and Bruce Ratner going to prison. I hope they put them in cells next to Bernie Madoff as a reminder that connections made through a Jewish old boy’s network are okay just as long as they don’t victimize people who don’t belong to the club, especially Puerto Ricans on the Lower East Side.

3 Comments »

  1. He seen his opportunities and he took ’em.

    Comment by Pete Glosser — January 23, 2015 @ 8:30 pm

  2. Nouriel Roubini has made some remarks recently that are germane to this post:

    “Tom Keene, Bloomberg: How big is the plutocracy effect in 2015?

    Nouriel Roubini: It’s significant because we are in a democracy where it supposedly has to be one man, one vote, but the reality is that those who are billionaires, those that have economic and financial power can affect legislation on taxation of capital gains, of carried interest by having that political power.

    In the US we have a system of legalized corruption if you think about it. K Street and the lobbying affect legislation with the money they give the politician and therefore those who have financial resources have a greater impact on the political system than those who have less. So it’s not a true democracy, it’s a plutocracy.”

    I have also found it humorous over the years when the IMF or some other global financial institution contends that an economy in the lesser developed world has problems because of corruption. We’ve heard it about Mexico, Indonesia, China, Turkey . . just about all of them.

    Leaving aside that the corruption is actively promoted by the US and other global economic powers, corruption is a lubricant of capitalism It is an essential feature of the development of all capitalist countries as demonstrated by the UK since before the Industrial Revolution, the US in the 19th and early 20th Century, Japan in the postwar era, just to name a few. Fassbinder made a film that touches upon this in a personal way: Lola. There is also an emotionally joyous aspect to it as well, which he also brilliantly highlighted in the film.

    Comment by Richard Estes — January 23, 2015 @ 8:43 pm

  3. The ratners have purchased politicians and nonprofit organizations in Cleveland for decades. To finance new York projects they want Cleveland taxpayers to redo our beautiful public square to benifit their exit from Cleveland.
    Roldo Bartimole has chronicled this in Cleveland for decades.
    His’ point of view’ newsletter will help you understand the cabal of ratner, nonprofits and purchased politicians.
    Even more bizarre is the connection of the newhouses who own our only daily newspaper the plain dealer with senator metzenbaum who owned the sun papers a chain of suburban weekly paper which were sold to new house for mor than just money.
    Carrying metzenbaum’s torch is the cocaine addict Lee Fisher…. Running the local democratic party.

    Comment by Mitchell Paul — January 24, 2015 @ 12:47 am


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