Andrew Cuomo's $2 Million Man

How the Attorney General wannabe turned an accused slumlord into a sugar daddy

The settlement with Farkas has several loopholes, including one that says that Insignia's failure to disclose "a particular transaction" during its cooperation with the government "will not be grounds for breach of the agreement." It also "expressly reserves the right" of the government "to take appropriate civil or other action" regarding anything Insignia didn't disclose. Gilbert concedes that Insignia was involved in fee-splitting not specified in the Rozet complaint, insisting, however, that they disclosed all of it to the government as part of its cooperation. But these loopholes, as well as the fact that Insignia repaid almost 100 percent of the diverted funds, not half, leave open the possibility that it could have been affected by the proposal. Similarly, though the proposal could not protect Rozet from the already pending lawsuit, it could prove helpful if Rozet, or owners he transferred properties to, stepped forward and revealed other prior kickbacks.

Cuomo says he "got the industry's proposal" and just sent it over to Justice asking "what do you think," not proposing it himself. He says he wanted a "much broader" amnesty plan, like one for tax cheats, and that he doesn't remember "the dialogue with Justice." Even though Peabody's letter proposal was addressed to him in response to a conversation he had with Sussman, he says he didn't know Glaser, one of his closest associates who's also a donor to his campaigns, sent any such proposal to Justice.

Glaser takes a different tack altogether, saying he thinks that his staff sent a brief amnesty concept note to Justice before the Peabody proposal arrived and that it was a by-product of discussions he had with Justice.

Cuomo: His campaign for top cop is spearheaded by a fat cat he accused of kickbacks.
photo: Richard B. Levine
Cuomo: His campaign for top cop is spearheaded by a fat cat he accused of kickbacks.

The federal prosecutor involved with the Farkas/Rozet case remembered the proposal far better than Cuomo and thought it clearly would have damaged their position. "The backdrop to the entire prosecution from the beginning was the contention that HUD approved this arrangement," he said. "Insignia and Rozet told us that. HUD made life difficult for the Justice Department in terms of how it dealt with issues like this. If it made amnesty its official position, how would that have played with the trial judge? It would never be good for either a criminal or civil case."

Research assistance: Brian Colgan, Matt Foglino, Mordy Shinefield, and Gina Vasselli

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