Prosecution witness: Ex-NY speaker hid legal-fee income

AP News
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Posted: Nov 17, 2015 4:02 PM
Prosecution witness: Ex-NY speaker hid legal-fee income

NEW YORK (AP) — A prominent real estate developer testified Tuesday that former New York Assembly Speaker Sheldon Silver asked him to hire a friend's small law firm to handle tax litigation, but never disclosed that he was splitting lucrative legal fees with the friend.

Developer Steve Witkoff told jurors at Silver's corruption trial in Manhattan that he first learned about the arrangement when the friend, Jay Arthur Goldberg, urgently called him in 2014 to tell him that Silver's finances were under investigation. Witkoff said he blew up at Goldberg after the lawyer suggested that the developer knew all along that Silver was getting a cut.

"I was incensed and belligerent," Witkoff said. "Mr. Goldberg was asking me to remember something that wasn't true."

Prosecutors allege that the 2005 hiring of Goldberg by both Witkoff's company — which manages the Woolworth Building and other high-end commercial properties in Manhattan and elsewhere — and another developer allowed Silver to collect $700,000 in kickbacks. During the same period, Silver was being lobbied to back tax-abatement and rent-control legislation that favored developers — part of a pattern of corruption that prosecutors say netted the lawmaker $5 million in illicit income during his reign as speaker.

Silver, 71, has pleaded not guilty to bribery and extortion charges. His lawyers have accused the government of trying to criminalize behavior that's politics as usual in Albany with a series of high-profile public corruption prosecutions.

Witkoff testified that Silver approached him in 2004 about hiring Goldberg, using the Yiddish word "haimish" to describe his friend as a good person. He said he agreed to hire Goldberg in hopes of generating good will with the powerful Democrat, adding, "I didn't want to alienate Mr. Silver because I thought I might need access to him in the general course of business."

Asked whether Silver indicated that he would personally benefit from the legal work, the witness responded, "He didn't say anything about that." Once he found out, Witkoff testified, he became "very, very concerned" about the conflict of interest.

Last week, jurors heard how another law firm that hired Silver more than 10 years ago to raise its profile ended up paying him nearly $3.4 million for asbestos cancer cases on which he never worked. The government was expected to conclude its case as early as Wednesday.

Opening statements were made at an adjacent courthouse Tuesday in a separate corruption case against New York Sen. Dean Skelos and his son. Both have pleaded not guilty.