By Jared Chausow
By Katie Toth
By Elizabeth Flock
By Albert Samaha
By Anna Merlan
By Jon Campbell
By Jon Campbell
By Albert Samaha
The art museum balked, an outraged City Council Speaker Peter Vallone squawked, and strangely, an "anonymous donor" came up with the fee. The hubbub led to combustible City Council hearings that revealed that the Parks Department required sizable "donations" from 73 groups and corporations in 2000, diverting hundreds of thousands of dollars annually into the commissioner's preferred park uses.
The controversy was the media debut for this previously obscure organization that has spent a decade raising $6 millionwith another $5 million in the offingfor a museum that still doesn't exist. A board of Catholic prominenti led by Al Smith IV, the great-grandson of New York's first Catholic governor who hosts the annual archdiocesan dinner that even attracts presidents, and Ed Malloy, the president of the state's 200,000-member construction work- ers union, has helped make the museum a high-priced cause célèbre. Vallone, for one, rarely misses its events, which have also attracted the likes of Hillary and Bill Clinton.
The buzz about Stern's $20,000 demand helped generate a turnout of 700 guests and a gross of $1.2 million at the museum's fundraiser. And the anonymous donor shed his cover in a day. William Fugazy, the 77-year-old ex-limo company magnate whose lobbying firm once employed Vallone's brother-in-law, stepped forward. Mayor Giuliani had asked his old and tainted friend Fugazy to make the payment and settle the dispute. One of the museum's most active trustees for at least seven years, Fugazy has long attached himself to Catholic causes, though this one is quietly shunned by the archdiocese.
Attorneys for Cardinal O'Connor tried unsuccessfully to persuade state officials to take the word Catholic out of the title of the organizationwhich is not affiliated with the churchwhen it was granted a charter in 1995. And sources say that the archdiocese remains, under Cardinal Edward Egan, upset about the misperception that the church is connected with what has turned out to be a rather exotic entrepreneurial adventure.
Exposed in last week's Voice for gross financial irregularities and the sexual manipulation of several of its powerful patrons by executive director Christina Cox and ex-associate director Stephanie Parker ("Beauty and the Big Shots,"June 12), the museum has also been a magnet for the shadowy side of the church elite. It even operated out of Fugazy's Madison Avenue office for most of 1996, moving shortly before he pled guilty in 1997 to a federal felony (a day that's rarely mentioned by the gossip columnists on whose pages he frequently stars).
What the stories about his $20,000 "donation" also failed to note was that Fugazy, who had 122 judgments against him totaling $65 million and went bankrupt years ago, didn't pay it himself. He got a nonprofit that he chairsthe National Ethnic Coalition of Organizations (NECO)to pay the fee.
Christina Walker, a top museum official who was talking to Stern's aides at the time, said Fugazy insisted on making the payment "even though it was unnecessary" because she was negotiating it downward. Then a couple of months later, when the press went away, the museum quietly reimbursed NECO for $15,000. Fugazy, who told the Voice that he "always knew" he "was going to get the money back," let the remaining $5000 debt cover the cost of his group's table at the museum's fundraiser.
Grandstanding is hardly the only form of flimflam in Fugazy's history. Charged by the feds with "transferring assets" prior to filing bankruptcy, then lying under oath about the transfers, Fugazy pled to a perjury count, though he still claims he "committed no crime." Fugazy's recent pardon on the perjury conviction, according to the Daily News, was facilitated by a board member and major contributor to the Clinton presidential library. Prior to the bankruptcy, a federal judge in a civil lawsuit found that he'd done much the same thingcommitting "serious misconduct" by concealing an asset "in direct, willful contradiction" of the law. A federal jury in a civil racketeering case found him guilty of four separate acts of fraudwire, mail, bankruptcy, and securities.
The U.S. Attorney in New Jersey accused him of making $72,613 dollars in payments that were "plainly kickbacks," but did not indict him (he says he appeared with immunity in the grand jury on the case, which did result in the conviction of a Fugazy business associate). Perhaps most importantly, Al D'Arco, one of the government's top mob witnesses ever, testified in 1996 that he'd met Fugazy in the late '60s and that Fugazy was "an associate of the Genovese crime family." Fugazy denounces D'Arco, though an FBI supervisor said that "in thousands of hours of conversations with him, we have never caught him in a contradiction."
As peculiar a résumé as this might seem for a trustee of a Catholic museum, Fugazy actually fits right in. The museum is headquartered at the former Palma Boys Social Club on East 115th Street, where Fat Tony Salerno presided over the Genovese crime family, and federal bugs were planted that decimated the nation's most powerful criminal enterprise. "If it wasn't for me, there wouldn't be no mob left," Salerno was once heard to say from his lifelong clubhouse perch.
The art organization's 10-year lease and purchase option on the vacant school across the street from its officewhich a multi-million-dollar renovation is gradually turning into a museumis with Our Lady of Mount Carmel. That's the church where Salerno was buried in 1990, interrupting 100-year and 70-year sentences on separate federal racketeering convictions. Father Peter Rofranothe priest whose Salerno eulogy revealed that "God walked with him"brought the museum to East Harlem and sits on its board.
Fugazy first came to public prominence in 1960, when he and his partner, the legendary fixer Roy Cohn, bought out the boxing promoters Rosensohn Enterprises, which had produced the first heavyweight title fight between Ingemar Johansson and Floyd Patterson. The company was partially owned by Tony Salerno, and Fugazy and Cohn got the rights from it to promote the two multi-million-dollar return bouts. While Fugazy says he never knew Salerno, Cohn became Salerno's lawyer, representing him for decades in a host of criminal cases.
Salerno's Palma club lived on pasta from Rao's, the famous Italian restaurant just around the corner on 114th Street. Currently owned by the nephews of Vincent Rao, a convicted money launderer for the mob, the restaurant caters the museum's annual fundraiser (which is billed as "A Night at Rao's"), and sends a jar of Rao's famous sauce to every invitee. Rao, who ran the restaurant before turning it over to his nephews, was nailed in 1979 on charges that he laundered about $100,000 a week in loan-shark checks and cash through the restaurant books for heroin kingpin Ralph "the General" Tutino and Genovese underboss John "Buster" Ardito. "You'll wind up in the East River," Tutino said on a trial tape to one businessman who missed an interest payment.
A Rao nephew, Frank Pellegrino, who appeared in Goodfellas and The Sopranos, has given the 105-year-old restaurant its current mob chic aura, serving the likes of John Gotti and Paulie Castellano. Pellegrino appears on the cover of the museum's glossy journal and was the honoree at one of its biggest fundraisers. Though the small restaurant's exclusive 10 tables are literally "owned" by the powerbrokers and celebrities who regularly eat there, the restaurant gave one to the museum for weekly Tuesday use.
While the respected Pellegrino's only known connections to the mob are through lineage and celluloid, FBI documents allege that his partner, Ron Straci, who is a labor lawyer, split a $500,000 kickback with Tony Salerno's brother, Charles "Speed" Salerno,on the sale of a union building. The son of notorious mob capo Joseph "Joe Stretch" Straci, Ron Straci was also pictured in the museum's glossy magazine, with his full-page, loving account of his Uncle Vince and the restaurant. The museum's three journals have been filled with long-winded celebrations of the restaurantalso recounting the history of Italian East Harlem without ever mentioning the mob that once dominated the neighborhood or the Latino Catholics who actually live there now.
Another honoree was Ed Bergassi, who was also the chairman of its dinner committee and is one of its most involved board members. Bergassi was the bonding agent for Vincent Zollo, a construction contractor who was a business partner of John "Junior" Gotti, head of the Gambino crime family. Bergassi was overheard in 1996 on state organized crime wiretaps advising Zollo on how to beat probes of his company and Gotti ties, including attempts to get Zollo to donate to politicians who might prove helpful. Gotti Jr. listed himself as the controller of Zollo's firm. Zollo, who was eventually charged with extortion and selling cocaine, pled guilty to racketeering and was sentenced to 46 months in prison.
When the New York Post reported Bergassi's taped conversations in 1998, he stepped down as an unpaid commissioner on the State Insurance Fund. That's also when he stepped up at the museum, and was featured in full-page bios in the 1999 and 2000 journals and praised for "achieving excellent fundraising goals to help the construction of the new museum."
Another Bergassi client with problems, Frank Stubbolo, was also listed as a member of the museum board in its 2000 magazine and bought a $5000 table. Stubbolo and his brother, Ken, run a construction company that Newsday reports is the subject of an ongoing state-inspector-general probe. Though four insurance companies had already sued the Stubbolos for allegedly defrauding them, Bergassi managed to get them bonded to do a state university job. Major fundraisers for Governor Pataki and other Republicans, the Stubbolos won the $28 million contract over contractors with more experience and none of the bad debt, bankruptcy and misrepresentation history of the Stubbolos. In the end though, they were forced off the project by the state for shoddy work and unsafe conditions.
Charged with threatening someone to collect a $10,000 debt in the mid '80s, Ken Stubbolo pled guilty to criminal solicitation. The Manhattan and Nassau County district attorneys were reported last year to be probing the Stubbolos, whose records were subpoenaed.
The only honoree at the 1997 dinner (usually there are three) was Charles Uribe, a construction contractor who pled guilty on bribery charges in June 1998, and was celebrated again in a colorful, four-page tribute in the museum journal published that fall. The only reason Uribe wasn't in jail at the time of the 1998 party was that he was too sick to be incarcerated. Uribe was fined $3.3 million as part of his guilty plea, and politicians like Vallone and Pataki scampered to return some of his many political contributions. But the museum kept its donations.
Structure Tone, the largest interior construction company in the city, pled guilty to bribery in the same case as Uribe, paid a $10 million fine and kept on giving to the museum in 1998 and 1999, It was singled out for special acknowledgement by the museum in its journal.
John Bowers, the head of the International Longshoremen's Association, has also been a major donor to the museum, giving $20,600 to it and serving as an honoree at its 1994 Hilton dinner, long before the organization moved to East Harlem. Federal prosecutors named Bowers and 43 other union officials and mob figures, including Gotti and Salerno, in a 1990 civil racketeering suit.
While the suit attempted to connect Bowers to the planned murder of a union rival, it did not name as a defendant the international union he ran, instead focusing on several locals of the union that Bowers also directly oversaw.
The government ultimately settled the suit, apparently unable to prove its charges against Bowers, leaving him to run all but one of the New York locals originally named in the case. Other major leaders in the unionwhich has long been tied to the mobwere forced to resign.
Many of the labor and construction patrons of the museum were drawn to it by its influential board chair Ed Malloy, the president of the statewide Building & Construction Trades Council, the largest private sector union in New York. Malloy has also been able to convince contractors like Forest Electricwhose vendex forms with the city indicate that it is currently under investigationto contribute labor and materials to the renovation project.
Developers Donald Trump, Jack Rudin, and Jerry Speyerall of whom are major employers of Malloy's membersbecame the three biggest donors to the museum. Last week's Voice made the case that the married, 66-year-old Malloy had an affair with the single, 49-year-old Cox for yearsa charge he did not deny during an extended interview. The relationship was so widely known that many of the museum's benefactors may have given to it as a special favor to Malloy, aware of his alleged personal ties to Cox, who drew a $194,000 salary out of the museum in 1999, plus many personal perks. Cox came up with the idea of the museum in 1991 and spent years pursuing "angels," as she called them, who could raise the money to sustain her operation, discovering Malloy in 1994.
Malloy became so intertwined with the people around the museum that he is now one of four directors of Novex, a new concrete supply company run by Daniel Dowe, a museum trustee before Malloy, who once acted as its counsel. Novex's SEC filings indicate that the publicly traded company was already under investigation by the Securities & Exchange Commission in January 1998 when Malloy joined it, shortly after Dowe became CEO. Malloy was given stock options on 255,316 shares of the company, which is apparently still under SEC scrutiny. Noting that its concrete formulas were being sold to "construction managers, contractors," and others, Novex's disclosure statements said Malloy was brought on because of his "extensive level of contacts and industry experience," making this the first known suspect business relationship born at the museum.
Cox was so enthralled with her "angel" museum patrons, according to its longtime development director Christina Walker, that she decided to try to immortalize them. "She recently had a 10-foot portrait of the Last Supper painted by a Long Island artist," says Walker. "Everything was done except the faces of the apostles. She wanted the faces of the museum's top benefactors painted into the portrait, and then she wanted to put it in the museum. She wanted Trump and Malloy and Fugazy all depicted as apostles. I kept asking her who would be Judas."
Not only is Cox's museum tarred by this litany of tawdry associations, she and her mother and brothers got a $375,000 mortgage in 1999 for a new home in Mahwah, New Jersey, from PMCC, a small Long Island company, whose president was indicted by federal prosecutors. Cox rejected Voice requests for an interview, so it's unclear how she wound up using this firm.
With this gang at the helm, it's hardly surprising that the museum is awash in scandal. Last week's article detailed the galling use of museum money Cox has made to subsidize her personal lifeeverything from her cleaning lady to wigs and hairdressers. It also described a half-dozen alleged intimate relationships that Cox and associate director Stephanie Parker had with benefactors of the museum. Here's a sample of additional charges:
For at least two years, the museum has been soliciting small donors to give to the museum's Angel Wall of Honor. Among other benefits of the donation, each giver's one-page account of his/her own experience with angels would be recorded for posterity on a computer. "When you visit the museum," read one solicitation, "you will be able to view your name on the Angel Wall of Honor as well as look up your certificate, photograph, and angel story on the computer." Last year, around Christmas, the museum bought ads in Catholic newspapers for the wall. Not only is there no wall, there are no computers or Web sites.
Walker and another staff member went to Cox to complainone even reminding her of the mail fraud statutesbut Cox continued pursuing her angel fetish. Walker says the museum spent thousands on a painting of a look-alike blond angel that Cox personally commissioned. The wall idea was borrowed from the Ellis Island Wall of Honor, which Fugazy helped to create when he chaired the Statue of Liberty Bicentennial Committee in 1986. Fugazy met Cox then and introduced her to Lee Iacocca, the auto magnate who dubbed her the "Miss Liberty" queen without a pageant.
In an extended interview with the Voice, Malloy contended that the museum was audited by the IRS in 2000 and that no wrongdoing was uncovered. The IRS will not comment on an audit, but the museum's accountant, Barrie Abrams, wrote a letter to the agency on March 30, 2000, claiming that "all files, administrative and financial, were destroyed" in a May 8, 1999, fire at the museum's headquarters. Walker, who joined the museum right after the fire, disputes the claim: "I sure didn't see any files that were destroyed. The files smelled of smoke. I used the files for two years after the fire, and Christina never told me, 'Oh, that was lost in the fire.' The IRS was looking for documentation that was either not ever kept by the museum or that they were hiding."
The fire report indicates that it was "man-made fabric or fiber" that ignited the firenot paper, which is also a choice on the same formand that the damage was limited to between 16 percent to 49 percent of "the room or area of origin." At the time of the fire, museum officials told the Daily News how the museum had been miraculously saved from the worst of the fire, recounting that a double layer of Sheetrock was put up just days before. With the office then located in the church rectory, the museum was paid $126,886 on an insurance claim, though Walker, Angela Marmo, and other staffers at the time dispute that the damage to a few loose art works was that severe.
Abrams, who is also Malloy's union accountant, has cautioned in his financial statements that the museum "has a significant net deficiency that raises substantial doubts about its ability to continue as a going concern."
The museum's five-year provisional charter, granted by the State Education Department and the Board of Regents, expired in July 2000. Though the charter provides that the museum had to apply for either another five-year extension or an absolute charter before the date of expiration, it didn't get around to applying until August. Though the sole state requirement of a chartered museum is to file annual reports, the museum missed virtually every filing, turning them in retroactively to try to gain a renewal after the five years were up.
Though the museum promised by letter to respond in January to an already overdue detailed state questionnaire, it has yet to do so, dragging the renewal process out for almost a year.
David Palmquist, who runs the state's museum bureau, came to New York in the summer of 2000 and went looking for the museum. "I went to its old address at Rockefeller Center," says Palmquist, unaware that the museum had actually been forced to leave its store directly across the street from St. Patrick's way back in 1997. "Then I heard it was in a church in the West eighties or nineties and went there. Finally I found it in East Harlem. Part of the reason I went was because they hadn't filed for yearswhich is rare." Palmquist only saw the first and second stories of the museum office (it has two more floors in the old Salerno townhouse, where they moved after the rectory fire).
When the department approved the initial charter, it brushed aside objections from the archdiocese, ruling that the church "had no copyright" on the use of the word Catholic. Subsequent events have confirmed Cardinal O'Connor's worst fearsthe museum has used its name as false advertising, reaping millions from confusion about its connections to the church. For a while, its Rock Center store even directly competed with church sales of religious items. State officials will soon have a second shot at redressing that wrong.
Research: Dasun Allah, Greg Bensinger, Brian Bernbaum, Rebecca Center, Robbie Chaplick, Douglas Gillison, Jesse Goldstein, Mark Rendeiro, Theodore Ross
Related articles by Wayne Barrett:
Part I: Beauty and the Big Shots: The Sexcapades and Politics Behind New York's Bogus Catholic Museum
Were Malloys Marks Illegal?: Labor Leader and Museum Madonna Take Trump Freebies