07
May

By: Rebecca Davis O’Brien and Erica Orden

Photo: Eduardo Munoz/Reuters

Wall Street Journal

New York state Senate Majority Leader Dean Skelos and his son were arrested and charged Monday in a wide-ranging criminal conspiracy to profit from the senator’s political power, marking the latest federal corruption allegations to buffet Albany and threatening another leadership shake-up in the Capitol.

The 43-page criminal complaint released by the U.S. attorney’s office in Manhattan charged Mr. Skelos, the state’s highest-ranking Republican, and his son, Adam Skelos, with two counts of conspiracy, two counts of extortion and two counts of solicitation of bribes and gratuities.

The complaint describes an alleged scheme to extort businesses for money to benefit the senator’s son, with the expectation that the payments would influence the senator’s official actions. It also alleges both men went to great lengths to conceal their activity, including using coded language and a so-called burner phone.

“I know that I will be found not only not guilty, but innocent,” the 67-year-old senator from Long Island said after he and his son emerged from court Monday afternoon. “I will be found innocent and my son will.”

Adam Skelos, 32, didn’t comment. His attorney said his client “is not guilty of these charges and looks forward to fighting them in the courtroom.”

The Skelos probe is part of a broad inquiry by federal investigators into alleged wrongdoing in Albany, and the latest charges come just months after Democrat Sheldon Silver, the former longtime Assembly Speaker, was arrested on corruption charges. Mr. Silver, who was forced from his leadership post, has pleaded not guilty.

Late Monday evening, the state’s Senate Republicans said Mr. Skelos will remain the majority leader as he fights the charges.

Following a roughly three-hour private meeting among Mr. Skelos and his members in Albany, Sen. Ken LaValle told news media around midnight that there is a “strong consensus” that Mr. Skelos should retain his leadership position. Mr. LaValle, a Long Island Republican, said the conference believes in “the presumption of innocence” and “wants to get back to work.” Other senators in the conference referred to Mr. LaValle’s remarks and did not comment further.

Mr. LaValle said there was no vote on the matter. He declined to say what Mr. Skelos said to his members during their conference on Monday.

Mr. Skelos had arrived at Albany’s Capitol building around 8:30 p.m., saying only that he planned to speak with his members. He did not address news media after Mr. LaValle spoke.

At a news conference, Manhattan U.S. Attorney Preet Bharara said Mr. Skelos “unlawfully used his power and influence as Senate majority leader, repeatedly, to illegally enrich his son, Adam, and indirectly, himself.”

According to the criminal complaint, Adam Skelos said in a recorded call to his father in March: “[Y]ou can’t talk normally because it’s like f— Preet Bharara is listening to every f— phone call. It’s just f— frustrating,” according to the complaint.

The senator replied: “It is.”

The complaint alleges a long-standing scheme by the senator and his son to secure income for Adam Skelos from businesses that had legislative and business interests with the state and those that made political contributions to the senator.

Using wiretaps, recorded conversations, cooperating witnesses and email correspondence, the complaint details an alleged scheme to extort an environmental technology firm and a real-estate firm for payments to Adam Skelos.

The environmental technology firm is AbTech Industries, and the real-estate developer is Glenwood Management, people familiar with the matter said. Neither company was named in the complaint, and neither has been accused of wrongdoing.

A spokeswoman for Glenwood declined to comment. A spokeswoman for AbTech said the company was cooperating with federal investigators.

Glenwood, a Manhattan-based firm, is among the largest contributors to state candidates and political parties. A senior executive at the firm cooperated with federal investigators on the case, according to the complaint. That executive is Charles Dorego, the firm’s general counsel, a person familiar with the matter said. Mr. Dorego declined to comment.

Beginning in late 2010, the senator asked executives at Glenwood to direct business to Adam Skelos, who was working in the title insurance business, according to the complaint. Glenwood arranged to conceal payments to Adam Skelos, including a one-time $20,000 payment, disguised as commission for title insurance work that Mr. Skelos didn’t perform, the complaint alleges.

The complaint says the executive also arranged for Adam Skelos to be hired as a consultant for AbTech. The senator’s son was hired at a rate of $4,000 a month, despite the fact that he told a firm executive, in a recorded conversation, that he “literally knew nothing about water or, you know, any of that stuff,” according to the complaint.

The senator kept tabs on his son’s employment at AbTech, and in 2013 threatened to block a multimillion-dollar contract Nassau County was considering awarding to the firm unless payments to Adam Skelos were increased, the complaint alleged.

As of February 2015, the company had paid the younger Mr. Skelos at least $198,000, according to the complaint.

Meanwhile, the senator took official actions to benefit Glenwood and AbTech, including promoting legislation favorable to the real-estate industry, working to secure hydrofracking regulations, and seeking changes to the state budget that would provide additional funding for storm water infrastructure projects, the complaint alleges.

In one call intercepted by authorities, through a wiretap on his cellphone, the senator described to his son his expansive powers as senate majority leader. “I’m going to control everything,” he said.

Soon after the charges became public, Democrats in the Senate began calling for Mr. Skelos to relinquish his leadership post, while Republicans mostly remained tight-lipped.

Sen. Rich Funke, an upstate Republican, said “it would be very difficult” for Mr. Skelos to remain the chamber’s leader. “We don’t need any distractions,” Mr. Funke said.

When Mr. Silver was first charged, he initially attempted to hang on to his leadership post, but within about a week was forced to step down by members of his conference. Mr. Skelos, however, until now has faced little dissent within the ranks of the GOP.

On Monday, the former speaker declined to say whether Mr. Skelos should step down. “The Senate should deal with their issues in the way they think is appropriate,” Mr. Silver said, “But I believe in the presumption of innocence.”