Scandal Cash

Adult-Home Barons Purchased Pataki Inside Track

In the summer of 1994—when one-term state Senator George Pataki was challenging three-term Governor Mario Cuomo—33 owners, operators, and lobbyists tied to the little-known Empire State Association of Adult Homes (ESA) quietly dropped $35,187 into the Pataki campaign committee. In fact, as early as June 15, 1993, when the Pataki candidacy was little more than a gleam in his own eye, the association itself gave the nascent committee a $250 donation.

Eleven days after Pataki was elected, on November 17, the owners of 30 or more large, downstate adult homes left the approximately 250-member Empire State Association to incorporate the Greater New York Long Term Care Providers Association. Led by Slomo Silvian, the founder and longtime chair of Empire State, this splinter group began during the campaign to align themselves with Bart Lawson, the heavyweight head of the most politically wired nursing home organization in the state, the Greater New York Health Care Facilities Association. With the split, two competing lobbying groups, representing homes that "serve" 28,000 elderly and mentally ill residents statewide, were suddenly poised to influence a new administration already predisposed to help.

An early Pataki backer, Lawson, who quickly became a pivotal player on the governor-to-be's transition committee, put together a major fundraising dinner that December, designed to introduce Pataki to the nursing and adult-home Medicaid fat cats already salivating over an administration that loved to talk about deregulation. The glatt-kosher "debt-retirement" dinner at Lou G. Siegel's famous restaurant in the Garment District raised an estimated $200,000, most of it from the nursing home industry, with the biggest donors and the governor closeted away for a private schmoozing session.

But Silvian, who owned the King David and Ambassador adult homes in Long Beach, became the honorary president of Lawson's new association, and donated $10,000 to Pataki (plus $10,000 to the State Republican Committee in June 1995), was the largest individual donor. Other adult-home owners allied with the new Lawson association, like Alfred and Jacob Schoenberger, kicked in $4000. Israel Lefkowitz, an adult- and nursing home owner convicted of bilking Medicaid, contributed $5000. Albert and Harris Schwartzberg, who also once had nursing and adult-home interests, combined for $9000.

Robert Lichtschein, the owner of Surf Manor, gave $5000, while Steve Zakheim, whose King Solomon adult home was only one of his Medicaid-dependent businesses, added $6000. The Bayview, New Whitman Home for Adults, New Fordham Arms, New Broadview, New Gloria, Rockaway, Scharf, Seaview, Wavecrest, South Shore, and Queens Manor kicked in a combined $10,250 in their own names. Even the Seaport Manor, which would become synonymous with scandal during the Pataki era, contributed $1000.

Ben Tenenbaum, a onetime Democratic leader in Long Beach who also owns an adult home there, contributed $1000, objecting years later in a Voice interview that Lawson was steering the owners into the Pataki camp. "He was too partisan," Tenenbaum says now. "He was always telling us how close he was to the governor." Lawson and his nursing home association have given $63,500 to Pataki and the state GOP since 1994, and the association eventually retained Al Pirro, the longtime Pataki friend convicted of tax evasion in 2000, and Jeff Buley, the counsel to the state party, as part of its Albany lobbying team.

But it wasn't just the new Lawson group that offered the promise of adult-home industry clout with the incoming administration. By February 9, 1995, a month into the Pataki reign, Robert Balachandran was working in the governor's office as an assistant counsel. Balachandran, his law partner Jim Ryan, and his firm, Coppola & Ryan, each contributed $1000 to Pataki on July 7, 1994, the same day that many of their Empire State Association lobbying clients gave. Fresh from a firm whose biggest lobbying client was the association, Balachandran nonetheless took on the assignment of advising the new governor on adult-home policy.

On February 6, Veronica Coppola, the senior partner in a lobbying firm usually listed among the top five in Albany, wrote a letter to Empire State confirming the terms of their new contract, which more than doubled the annual retainer from $72,000 to $150,000. The letterhead still contained Balachandran's name. Communicating by letter was a formality, since the association's small staff had just closed its own office and moved into the law firm's, another sign of their closely intertwined interests.

The Coppola letter said the firm had "chosen to register" the contract for $125,000 with the state lobbying commission, artificially lowering the fee "for our own public relations purposes." Had the fee been accurately reported, it would have appeared in the commission's public listings as one of the 10 largest lobbying contracts in New York, a dubious distinction that draws the attention of reporters. Misfiling it was an apparent violation of lobbying laws, subject to a $50,000 fine.

On January 30, Marti McHugh, the wife of another associate in the Coppola firm, Patrick McHugh, was appointed to a temporary stenographer title in the governor's office, rising by August to the governor's director of scheduling. After her husband became a named partner in Coppola, Ryan & McHugh in 1996, she wound up an assistant commissioner at the State Department of Health, where her intergovernmental concerns included adult homes.

This combination of contributions and connections had, from the very start of the administration, given a besieged, for-profit industry new hope. With Pataki facing deficits and demanding tax cuts, larger subsidies were unlikely. It's long been virtually impossible to raise the $28-a-day SSI payments that adult homes get per resident, because many elderly outside the homes are affected by the same limit. To operators like Tenenbaum, increasing the $28 per diem was the only issue that mattered. But others had a broader agenda, and the Pataki administration would come through on much of that.

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