By Steve Weinstein
By Devon Maloney
By Tessa Stuart
By Alison Flowers
By Albert Samaha
By Jesse Jarnow
By Eric Tsetsi
By Raillan Brooks
Good luck trying to get Gifford Miller, the former City Council Speaker, to talk about the budget scandal now ravaging the organization he headed for four years.
This hide-the-money scheme, in which millions of dollars were stashed in the name of bogus nonprofit groups, rapidly expanded soon after Miller took over the council in 2002, records show. By 2005, when term limits forced Miller from office, his team had concocted 21 phony-baloney organizations over four years, directing $9.8 million their way. This was the best kind of money to have, since it was available for creative redistribution at the Speaker's unfettered discretion.
This may have been one of the innovations that Miller had in mind when he campaigned for mayor in 2005 as an upstart who got things done. He spent the most of the four Democratic candidates, including $800,000 for a TV ad in which he looked into the camera and said: "People may think I look young, but as head of the City Council I got results."
Unfortunately, he finished dead last in the primary with just 10 percent of the vote. He promptly dropped out of sight, which is apparently the way he likes it.
These days, Miller works hardest at not answering the telephone when reporters call. This is less-than-gallant behavior, since his successor, Christine Quinn, has been forced to take all of the incoming fire on the scandal. Quinn has ducked many tough questions about the budget scheme, saying she can't comment given the ongoing criminal probe, which has already resulted in the indictment of two council staff members. But at least Quinn has stood up and been present. Miller simply hides.
He doesn't answer the phone at the desk he holds down at the Liberty Title Agency, the big real-estate insurance firm that donated $39,000 to his 2005 mayoral campaign. And he doesn't answer it at the office he keeps on East 42nd Street in the old Daily News building, where he works as some kind of consultant alongside his friend, real-estate tycoon Steven Witkoff, another big campaign giver.
Here, Miller has made a lucky marriage every bit as useful as his hide-the-money scheme at the council. In recent years, developer Witkoff has made a name for himself by buying major city properties, including the Woolworth Building, the old News building, and the sleekly refashioned condo tower at 55 Wall Street that he developed with his friends at the Cipriani restaurant company. The condo sales slogan is: "Own the good life."
Witkoff is also renowned for his great generosity in spreading the good life around. For instance, when former police commissioner Bernie Kerik was indicted in November for federal tax fraud and conspiracy, one of the charges against him was that he had failed to disclose two years of rent payments for a luxury Upper East Side apartment that were made by a mysterious benefactor referred to as "John Doe #5."
The rent wasn't cheap: The apartment went for $9,650 per month. This meant that someone shelled out $236,000 on Kerik's behalf. News accounts of the indictment revealed that John Doe #5 was none other than Witkoff, who happens to have extensive property holdings on the Upper East Side. Witkoff wasn't charged with any wrongdoing, but he declined to discuss the matter then as well as now.
The developer is equally silent on another bit of generosity that also attracted attention from prosecutors, this time at the office of Manhattan District Attorney Robert Morgenthau. Investigators there were examining activities of the Cipriani group, which, together with Witkoff, had submitted a winning proposal to turn Pier 57 on the Hudson River into a gala catering and banquet hall.
The investigation led to guilty pleas on tax-evasion charges last year by Arrigo and Giuseppe Cipriani, the father-son team that runs the fabulously expensive restaurant chain. The probe also led to a separate tax-evasion plea by James Ortenzio, a wealthy businessman and Republican Party leader who formerly served as chairman of the Hudson River Park Trust—the city-state entity that later approved the Cipriani/Witkoff proposal.
Investigators learned that, two years after Ortenzio left the trust—but while still a vocal advocate of Witkoff and Cipriani's proposal—he received a $150,000 loan from Witkoff. Ortenzio is one of the area's biggest meat marketers and didn't appear to need the money. Investigators determined that there were no loan documents, no repayment schedule, and no interest charged. Moreover, the loan had been made within weeks of the board's vote approving the Witkoff/Cipriani proposal.
And there was more: Around the same time, Witkoff also gave Ortenzio a $63,000 Mercedes.
According to Witkoff, both the car and the loan were simply his way of being generous to someone he liked. Again, no charges were leveled and Witkoff declined to discuss the matter, as did Ortenzio's attorney.
But unquestionably, this is a good man to know. It's not clear when Miller wisely hitched his wagon to Witkoff, but campaign records show that the developer's company was good for $22,400 in donations to Miller's ill-fated 2005 campaign. At the time, Miller ran the council with an iron hand and Witkoff had several real-estate matters before the city that required council approvals.