Friday, February 13, 2015

Sheldon Silver, Martha Stark and Glenwood Management

2011 DOI report on Stark

On January 21, 2015 Sheldon Silver was arrested for fraud and conspiracy. In a description of the charges the name of the Glenwood Management Company surfaces in connection with a kickback scheme that Silver dreamed up to funnel fees from a legal firm to him.

NY Times

In one scheme described in court papers, he asked a pair of real estate developers to hire a small law firm, Goldberg & Iryami, which seeks reductions in New York City property taxes on behalf of its clients.

The firm was started by Jay Arthur Goldberg, who decades ago worked as a lawyer for the Assembly, according to state payroll records. Prosecutors said he was Mr. Silver’s counsel.

Mr. Silver received a slice of the legal fees paid to the firm, even though he did no work for the developers; prosecutors said he was paid about $700,000. He did not report the income on his annual financial disclosure forms submitted to the state.

One of the developers was Glenwood Management, according to people familiar with the matter. Glenwood develops luxury apartment buildings in Manhattan, has been an enormous contributor to state politicians and has a significant interest in matters before the Legislature, such as measures dealing with real estate taxation. While receiving fees from the real-estate law firm, Mr. Silver took actions that benefited the developers, prosecutors said.

Strangely enough, the Glenwood Management firm also surfaces on pages 10 to 33 of a June, 2011 NYC-DOI investigative report on allegations about Martha Stark that were pending at the time she was forced to resign in April, 2009.

Beginning in March, 2005 Stark was involved in lowering the tax assesments for Glenwood. Subsequently in January, 2007 she asked Glenwood for a apartment for her domestic partner (DOI never states which one) along with a break in the rent for the apartment. Read in light of Silver's recent arrest connected to Glenwood, the report has a much more powerful impact. Below is a quote from this section of the report.

The juxtaposition of Stark's request for assistance with an apartment for her domestic partner in a Glenwood owned building and the notice of reduction in assessed value of a Glenwood building for that tax year, and the erroneous further reduction that occurred in the following tax year raises, at a minimum, an appearance issue, and gives rise to the question of whether the reductions were some form of assistance related to the assistance given in the provision of an apartment at a modest reduction for the Finance Commissioner's domestic partner.

Attempts to answer that question were made difficult by Stark's repeated refusal to be interviewed by DOl in connection with this investigation. In addition, the explanations for the assessments were hindered by DOF's lack of oversight and recordkeeping related to the assessment process, as the investigation revealed.

Even after the arrest in 2002 of 18 tax assessors, the work of the DOI/DOF Joint Task Force and the representations by DOF that changes were made and that others would be made in the Joint Task Force Preliminary and Final Reports, there remains a lack of internal controls over assessments.

The costs to the City from this lack of oversight is unknown since no reviews were undertaken to determine if properties were undervalued, and no random audits performed and no regular reports even distributed of significant changes in assessed valuation during the period DOl examined. Finance Commissioner David Frankel reports that he has undertaken measures for reviews/audits of assessments, including assigning/hiring personnel to conduct such audits.

The spring of 2005 was also the time of the $1.74B purchase and alleged tax assessment issues in connection with with Met-Life building, NYCERS, TRS, and the Department of Finance.

It is interesting that in October, 2005 Stark, as the NYCERS Chairperson, was instrumental in hiring of Diane D'Alessandro as executive director of NYCERS. At the time D'Alessandro was a special assitant to Sheldon Silver. Prior to that D'Alessandro worked for DC-37 during the Charlie Hughes and Al Diop years.

1 comment:

Unknown said...

I tried to Email you and it comes back unrecognized. I'm having a big problem with NYCERS trying to rob me of thousands.