New York’s Jewish Mafia Shakes Down The Taxpayers For Two Over Decades

Sheldon Silver’s gang: How longtime friends of the disgraced Assemblyman got power positions

BY WAYNE BARRETTwww.nydailynews.com

Influence, seen and unseenSPENCER PLATT/GETTY IMAGES  “Influence, seen and unseen”

Rudy Giuliani used to tell a story about a mob hit-man who blessed himself before each murder.

It could be a metaphor for Assembly Speaker Sheldon Silver, who for two decades presented himself as the personally devout, politically principled leader of the most progressive slice of New York political life. Even if he eludes jail, as have previous indicted Albany kingpins, the criminal complaint filed against Silver marks the end of his era.

Silver has been the face of possibly the most diverse legislative caucus in American history, but his life is as dark and parochial as his fedora. The universe he truly cares about covers a few blocks on the Lower East Side, where he was born and still lives, and where a mountain of ambitions was hidden on a tiny stretch of Grand Street.

Even as he ruled a vast state, it was always Grand Street that was his capital. And it was the clan he met there whose code he embodies.

The federal complaint tells one narrative from that tightly entangled life It introduces a circle of lifelong Silver connections that engulf and explain him, an extended family with him always at the head of the table.

When Shelly Silver met the man that the government says became his meal ticket, Dr. Robert Taub, in November of 2003, he was already looking for a new hook. Taub, who ran a Columbia University center for asbestos victims, would prove to be the perfect partner for Silver, whose personal injury law firm, Weitz & Luxenberg, was the biggest asbestos litigator in New York.

Silver needed a new partner because his brother, Dr. Joseph Silver, the orthopedic chief at Brooklyn’s Methodist Hospital who’d been steering patients (albeit ones less lucrative than asbestos victims) to him, got cancer in 2003. After Joseph died in August 2004, the speaker began hosting a lecture in his brother’s name at the hospital.

By 2005, Taub had replaced the Silver family funnel, releasing a river of prized referrals, with the speaker getting a cut on every one. And so, supplementing the $120,000 salary Silver drew since joining the law firm in late 2002, he got $328,348 in 2005 fees from the Taub referrals.

Over the years, that grew; his referral fees now total $3.2 million atop his annual base. Without ever practicing law, Silver made far more, from this firm and another, than any actual working attorney in the Legislature.

Incredibly, neither doctors’ patients ever even met Silver. The deal that the state’s most powerful legislator cut with Taub was all the more brazen because Manhattan prosecutors were at that very moment convicting a half-dozen lawyers for paying under-the-table fees to a so-called “runner” to get injury cases. The “runner” was prying medical records on car-accident victims out of emergency-room workers and selling them to the lawyers.

The judge hearing the cases was Jim Yates, who is now Silver’s chief counsel, as he was to Mel Miller, the last assembly speaker to face federal charges.

The lawyers pled guilty before Judge Yates of filing false statements that omitted the payments to the runner with the Office of Court Administration, a state agency then run by Jonathan Lippman, Silver’s lifelong friend whose OCA elevation was arranged in a deal between the speaker and Gov. George Pataki.

The complaint against Silver does not make clear if the referral fees it reveals were ever reported to OCA, where Lippman remained ensconced through 2007. When Democrats met to consider how to respond immediately after his arrest, however, Yates was allowed to join the supposedly members-only conference, which, predictably, resulted in an initial “overwhelming” vote of confidence in the speaker.

According to the complaint, for his part in the Taub arrangement, Silver simultaneously sent a half-million dollars in state support to Taub’s clinic, another grant to a nonprofit associated with Taub’s wife, and helped Taub’s son get a job at OHEL Children’s Home & Family Services.

With the OHEL job, Taub was tapping into that matrix of kindred allies that reaches back to Silver’s boyhood decades ago on the Lower East Side, where he’s long owned a modest apartment in the 4,000-unit Grand Street coops.

New York Court of Appeals Chief Justice Jonathan Lippman is a longtime friend and neighbor of Silver's.                      BRYAN SMITH / NEW YORK DAILY NEWS  
NYC PAPERS OUT. Social media use restricted to low res file max 184 x 128 pixels and 72 dpi                     MARCUS SANTOS / NEW YORK DAILY NEWS   

From chief justice to chief crook: Jonathan Lippman (left), head of the state’s highest court, and convicted embezzler William Rapfogel are close friends of Silver.

OHEL is so tied to Silver it bought a camp in upstate Wurtsboro, just a few miles from his vacation house, located on what OHEL called the Dr. Joe Silver Campus. The advisory board chair for the camp is Martin “Elly” Kleinman, whose home health-care company, Americare, was fined $15 million for bogus Medicaid claims by two attorney generals, including Andrew Cuomo.

Silver, who worked with Kleinman on the camp and attends an annual Silver Day there, has delivered millions in state subsidies to OHEL, which gave him its leadership award last year. An OHEL spokesman said the organization did nothing wrong when it hired Taub’s son and is cooperating with the feds.

OHEL’s co-president, introduced with great fanfare by Silver at a 2012 gala, is another Lower East Side buddy, Mel Zachter, a board member for the camp who owns a summer home in the same upstate village as Silver and remained a member of Silver’s synagogue after moving to Staten Island.

Until recently, Zachter was also the chief financial officer at a scandal-consumed Silver affiliate, the Metropolitan Council on Jewish Poverty, which has become a headline hog all its own.

It was the Met Council that caused these layers of insular overlap to blow up even before the Silver bust. The council’s longtime CEO, Willie Rapfogel, took his fall in 2013, having squeezed $9 million out of his state subsidies for the poor, pocketing $3 million of it himself.

Rapfogel and his wife Judy, who remains Silver’s chief of staff and joined Yates at the recent members-only conference, live in the same building as Silver. Willie and Silver had seats next to each other in the neighborhood synagogue, with Lippman’s family long nearby.

Incredibly, Shelly and Judy insist that they did not know anything about Rapfogel’s nest-egg — which included $420,000 in cash that investigators found in his homes and $350,000 he gave his son to help finance a new house. Sentenced to three-and-a-third to 10 years in July, Rapfogel raised $3 million from undisclosed “friends” to pay court-mandated restitution.

The council’s board was another who’s who of Friends of Shelly.

It included Richard Runes, the chief lobbyist for 100-year-old billionaire Leonard Litwin, whose Glenwood Management real estate empire is also at the center of U.S. Attorney Preet Bharara’s charges against Silver.

As the criminal complaint tells the story, Silver prevailed on Glenwood to hire a small law firm headed by Jay Arthur Goldberg, who was Silver’s counsel for his first 10 years in the assembly. Goldberg then began representing Glenwood in tax-reduction cases involving its massive Manhattan real estate properties.

Echoing the scheme Silver is alleged to have contrived with Taub, the Goldberg firm then gave Silver a piece of the fees generated by Glenwood and another developer referred by Silver, totaling $700,000.

Runes represents Litwin — the state’s single largest political contributor, who’s dropped $10 million in various campaign kitties since 2005 — in negotiations over state laws affecting rent regulations and tax subsidies.

The complaint alleges that unidentified Glenwood lobbyists met Silver to discuss pivotal real-estate legislation in 2011, when the Goldberg firm’s payments to Silver soon soared from a mere $800 one year to $240,994. Silver then suddenly became “considerably more favorable” to real-estate interests on the bill “than expected,” according to the Bharara complaint.

(Runes was listed on Cuomo’s schedule as one of the two Glenwood lobbyists that met with him to talk about the same legislation at that time.)

Exported.;                   ANDREW THEODORAKIS / NEW YORK DAILY NEWS    
Merryl Tisch was nominated to the Board of Regents by Silver, then was elevated to chancellor in 2009.                          SUSAN WATTS/NEW YORK DAILY NEWS

Martin (Elly) Kleinman, head of a home health care company appointed to the advisory board of a health care nonprofit, and Merryl Tisch, chancellor of the state Board of Regents first appointed to the body by Silver, both have long relations with the disgraced Assembly speaker.

The Met Council board is chaired by Merryl Hiat Tisch, another product of Grand Street. She says it was Silver who nominated her for the Board of Regents in 1996, shortly after he became speaker. The 16-member board, most of them selected by Silver and the assembly majority, made her chancellor in 2009, though she knows of no role that Silver played in that decision.

Tisch’s sister was a friend of Judy Rapfogel and Judy’s grandmother and Tisch’s grandmother were close friends. But Tisch, who has been a remarkably independent chancellor, insists she didn’t actually meet Silver until later, when she joined the council’s board. “I was 10 years younger,” Tisch explains.

Growing up on or near Grand Street, the Rapfogels, Goldberg, Zachter, Lippman, and Silver were virtual Little Rascals, with Silver playing the ringleader in “Our Gang” then and as its members made their way in the world. .

Silver magically moved Lippman from chief administrative judge, where he merely managed court operations, to the top judicial post atop the Court of Appeals in 2009.

Along the way, Silver induced all five of the state’s parties to give Lippman their ballot line to “elect” him to supreme court, then fixed his overnight rise to presiding justice of the Manhattan appellate division and finally chief judge — though Lippman, like Silver, had never so much as practiced law. In his varied posts, Lippman has long overseen the very courts hearing the asbestos and other cases brought by Silver’s firm.

Lippman’s father Ralph, known as the mayor of Grand Street, ran the coops when the federal courts found that they’d discriminated against blacks and Latino applicants.

Silver also blocked affordable housing on a barren, city-owned, 20-acre development site close to the coops for nearly 40 years, preferring, as one critic put it, rats to minorities. Silver and Rapfogel wound up favoring a Costco on the site after the developer hired Rapfogel’s son, gave a million to Met Council and picked the council as its community partner.

Goldberg’s law firm represents the coops, as well as a commercial building opposite them that houses Silver’s political headquarters.

No one knows whether Silver’s “Our Gang” network helped finance the secret defense fund that saved Willie Rapfogel from the 4-to-12-year sentence the judge said he’d give him if he didn’t pay the restitution before the sentencing date.

Rapfogel rushed to raise the $3 million, but wasn’t required to make the donors public. That example might now inspire Silver, who will be in a much better position to fundraise for his own defense so long as he remains in the Assembly.

He can’t tap his secret stockpile. Bharara froze the nearly $4 million Silver had in eight bank accounts. Despite what had been piles of available cash, the famously frugal speaker has been paying his criminal lawyers from his campaign committee account, which has a $3.4 million balance. He can continue to finance his defense from campaign funds or, if he prefers to set aside as much of that for his future personal use, he can set up a Rapfogel-like fund.

Imagine what a field day he would have had if he was allowed to remain speaker while raising millions to defend himself without any disclosure. Imagine the secret donations he will collect if he is perceived as the power behind a successor. Bharara better stay tuned.

Barrett covered Silver for decades, primarily at the Village Voice.

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