ALBANY WATCH

Real-estate developer played role in Skelos, Silver case

Jon Campbell
jcampbell1@gannett.com
Former Republican Senate Majority Leader Dean Skelos, who has been found guilty on federal corruption charges.

A LBANY – The criminal complaints filed against Senate Majority Leader Dean Skelos and now-former Assembly Speaker Sheldon Silver share a common tie: a major New York City real-estate developer that ranks among the state's top political donors.

Though never mentioned by name in either complaint, Nassau County-based Glenwood Management played a role in the cases against Skelos and Silver, who have separately been charged of corruption by federal prosecutors.

Glenwood, which owns and operates apartment buildings in New York City, has not been accused of any wrongdoing, and an executive with the company is believed to be cooperating with U.S. Attorney Preet Bharara's office.

Now, two major state laws affecting Glenwood and the real-estate industry are set to expire in mid-June: rent control regulations for New York City and its suburbs, and a tax break for new housing developments on vacant properties. And with Skelos, R-Nassau County, trying desperately to maintain his grasp on power, he could be in a position to negotiate their extension or reform over the next five weeks.

"All those issues are something that are going to be negotiated -- rent control, mayoral control," Skelos told reporters Tuesday. "Everything is going to be negotiated, and that's the way it goes."

Glenwood Management was founded by Leonard Litwin, a 100-year-old developer known for his prodigious political spending in New York. An attorney for the company declined comment on Skelos' case.

Former New York state Assembly Speaker Sheldon Silver leaves court in New York. A November 2 trial date has been set for a jury to hear the corruption case brought against Silver.

The six-count criminal complaint against Skelos, 67, accuses the Nassau County Republican of pressuring a real-estate developer -- unnamed in the complaint but matching a description of Glenwood -- to pay his son $20,000 in 2010 for title-insurance work he never performed.

The developer arranged for $4,000-a-month payments to Adam Skelos, 32, from an Arizona-based environmental company that shared investors with Glenwood. When the environmental firm was on the verge of getting a $12 million contract from Nassau County, Skelos threatened to block it unless the company increased the payments to $10,000 a month, according to the complaint.

In exchange, Bharara's office alleges Skelos pushed for rent-regulation laws and property-tax breaks that were favorable to the developer -- the same laws that are due to expire in June.

"In obtaining these and other financial benefits, Dean Skelos and Adam Skelos, the defendants, made explicit and implicit representations that Dean Skelos would use his official position on behalf of the entities paying his son," the complaint alleges.

In Silver's case, the Manhattan Democrat is accused of pressuring an unnamed developer -- which matches the description of Glenwood -- of directing work regarding assessment challenges to a small law firm, which in turned kicked back about $700,000 in fees to Silver.

Both Silver and Skelos have maintained their innocence, and Glenwood hasn't been accused of wrongdoing.

"At the conclusion of this process, I know that I will be found not only not guilty, but innocent," Skelos said Monday.

From 2005 through 2014, Glenwood -- through various limited liability companies it operates -- sent $12.8 million to candidates and political committees in the state, according to an analysis by Common Cause/NY, a good-government group.

The Senate Republicans' central political committees, when combined, were the top recipients of Glenwood's campaign cash, with donations totaling $1.5 million over that period. Gov. Andrew Cuomo's campaign account came in second with $1.2 million, the analysis found.

The company has made prolific use of what's known as the "LLC loophole," which allows companies to avoid corporate restrictions on political donations in New York by contributing through multiple limited liability companies, which can donate more than corporations.

It's up to Gov. Andrew Cuomo, here addressing a Rotary luncheon in Rochester last March, whether to sign two bills that would strengthen New York's "freedom of information" law.

Susan Lerner, executive director of Common Cause/NY, said Glenwood's appearance in both the Skelos and Silver case raises questions about its political contributions.

"At a minimum, it makes it too easy for cynics to believe that public policy is set on campaign contributions and not on public good," Lerner said.

The complaint against Skelos makes clear that an executive who controlled the developer's political contributions is cooperating with prosecutors. On Monday, Bharara said the cooperating witness -- who was not named but who matches the description of Glenwood senior vice president Charles Dorego -- has a non-prosecution agreement.

When asked Wednesday about his connection to Glenwood, Cuomo downplayed the relationship, saying the company is a supporter of his campaign. Cuomo's public schedules show he met three times with Glenwood executives -- twice among groups of real-estate interests -- as the rent laws were being debated in 2011, but not since.

"They are a donor of mine," Cuomo said. "They are a donor of many elected officials across the state, and that is basically the interaction."

Now, Cuomo and the Legislature have to sit down and negotiate whether to extend or strengthen the law that limits rent increases for certain apartments in New York City and its suburbs, as well as a property-tax break for developers who build housing complexes in New York City.

It's the same two laws at the center of the complaint against Skelos, who has struggled to remain majority leader in the wake of the charges.

Cuomo said Wednesday that he will negotiate with whomever the Senate chooses to lead them. The rent-control laws have also been tied to the state's property-tax cap, which expires next year.

"As I said, I don't pick who the conference leader is for the Republicans in the Senate. I don't pick who the leader is who comes from the Assembly," Cuomo said. "My job is to work with whoever they send me and to try to get to yes to try and make the relationship work and get something done."

The New York City property-tax credit, which is known as "421-a," is available for housing projects on vacant or "non-conforming" land, with projects in certain parts of Manhattan required to include a certain percentage of affordable units.

The credit has long been criticized by some tenant advocates, who say it is an ineffective way to promote affordable housing. But supporters say incentive is needed for private developers to build low-cost housing options in high-cost New York City.

"421-a is completely at odds with ethics reform and any effort to restore confidence and faith in state government," said Delsenia Glover, campaign manager for the Alliance for Tenant Power, which supports ending the tax break and bolstering rent-control laws.

JCAMPBELL1@gannett.com

Twitter.com/JonCampbellGAN

What's at stake

- Rent-control laws: State law allows for annual rent increases to be limited for qualified apartments in New York City and its suburbs, including some municipalities in Westchester and Rockland counties. The law expires in June, with tenant advocates pushing for a stronger one.

- "421-a" abatement: Section 421-a of the state's real property law provides a property-tax break for new New York City housing complexes, with projects in certain parts of Manhattan required to include affordable units. Like the rent-control law, it's due to expire in June.

- Property-tax cap: The cap limits the growth in property taxes to about 2 percent a year for schools and local governments. It has been tied to rent-control laws to make it more palatable to Assembly Democrats, and the cap expires next year.