Clever entrepreneurs made fortunes from the homeless crisis of the 1980s, renting run-down hotel rooms at top dollar to a city desperate to keep its families off the streets. The late Morris Horn was one of these, presiding over an empire that included some of the worst hotels, such as the rancid and long since demolished Brooklyn Arms in downtown Brooklyn near the Brooklyn Academy of Music.
Horn later branched out into privately run prisons, a business not so different from that of packing homeless families into small, barren rooms. Along with partner James Slattery, who had helped him oversee the old welfare hotels, Horn established a company called Esmor Correctional Services that set up halfway houses for federal prisoners in the city, and, eventually, multiple facilities in several other states.
This month, both the corrections firm and business practices at the former welfare hotels have stirred controversy.
The prison firmrenamed simply Correctional Services Corporation after a nasty riot at a New Jersey prison it operated brought the name Esmor unwanted bad publicityis at the center of an Albany influence-peddling scandal. The scandal was sparked after veteran Bronx assemblywoman Gloria Davis pled guilty this month to taking free transportation from the company in exchange for help with state contracts. A series of reports by the Post's Fred Dicker revealed that several other politiciansall of them Democrats from New York Cityalso received freebie rides, and that the company may have also exceeded state limits on political contributions. Both allegations are under investigation by state officials and Manhattan District Attorney Robert Morgenthau.
Morris Horn died in 1994, and his interest in the corrections firm is now held by his widow, Esther, and son, Shimmie, who is a director of the company. Shimmie Horn, 29, also inherited from his father several Manhattan hotels which he now operates. The homeless are gone from them, replaced by upscale tourists. The hotels, which deteriorated badly during the homeless era, are now known in the hospitality industry as "luxury boutique" establishments. One is LeMarquis on East 31st Street in Murray Hill. The hotel was a welfare residence of last resort until the late 1980s, when the cityacting in response to years of lawsuits and criticism from housing advocatesshut off the supply of homeless families. LeMarquis was then operated as a halfway house for federal prisoners. Former Bronx political boss Stanley Friedman was sent there in 1992, as was hotel queen Leona Helmsley when she was released from prison in 1993.
Another Horn-owned building is the Washington Jefferson on West 51st Street, a former SRO hotel that now advertises itself chicly as "the W-J." While the correctional company courts liberal Democrats for their help, Shimmie Horn has been locked in a bitter battle with his hotel workers at the W-J, who have accused him of paying low wages and benefits and harassing pro-union employees.
All through last week's arctic weather, the Washington Jefferson workers walked a picket line, hurling angry chants at managers and urging guests to look elsewhere for lodging. The strike, now in its sixth week, began December 20, after managers fired several workers who were trying to form a union, employees said. "We decided that was enough," said Rafael Diaz, a bellman for nine years at the hotel. Diaz said he decided a union was necessary after his lack of adequate medical benefits forced him and his family into debt.
Juana Figueroa, a housekeeper, said cleaners were given set blocks of rooms to clean with no provisions for overtime when the work took them longer than a standard eight-hour shift. Another worker, a hotel housekeeper originally from Poland, said her last straw came after managers ordered her and other Polish-speaking employees to speak only English on the job, even to each other.
Those conditions led many workers to sign membership cards with Local 6 of the Hotel and Restaurant Employees Union. After the union signed up a majority of the employees, officials approached Horn, saying they wanted to negotiate a contract. According to the union, Horn began talks but then abruptly broke them off. "He said, 'We'll talk to you after the holidays,' " said Local 6 president Peter Ward. "I said, 'Fine, but we're walking out now.' " Ward's union bought the workers warm winter coats and set up a picket line complete with a small propane gas heater and a large inflated rubber rat.
Managers at the hotel refused to comment on the strike, and neither Horn nor his attorney returned calls.
Throughout the strike, the hotel's most loyal customer has been El Al, the Israeli airline that lodges its crews at the Washington Jefferson and the Belleclaire, another Horn-owned hotel. Union officials urged the airline to stop using the hotel during the strike but were rebuffed. El Al regional manager Michael Mayer did not return calls from the Voice.
Hotel workers said an organizing drive at LeMarquis short-circuited last year after an independent union with a reputation for making sweetheart contracts with employers suddenly surfaced claiming to represent the employees.
Finding helpful friends at opportune moments has long been a hallmark of the correctional services firm as well. When the company, then known as Esmor, sought to open its first halfway house for prisoners on Myrtle Avenue in a residential section of Bedford Stuyvesant in 1990, neighbors vigorously protested. Leading the charge initially was Congressman Edolphus Towns, who represented the area. Towns asked a House subcommittee to investigate the firm but then, after meeting with principals of the firm, backed off his opposition. Shortly afterward, the firm hired Towns's former campaign manager and close ally, Bill Banks.
Securities and Exchange Commission records show that Banks, a key Brooklyn political operative, was paid $222,000 by the corrections company in 1993even more than the firm's president. After his indictment on state charges for taking monies from charities (he was later acquitted), Banks became a consultant to the firm, in chargeas described in SEC recordsof "developing and implementing community relations." His compensationpegged to the amount of business the firm did in New York Statecontinued to soar. SEC documents show that he hauled in $296,000 in 1996, $239,000 in '97, and $300,000 in '98.
During those years, the corrections company expanded its network of allies in Brooklyn and the Bronx, where it operated another halfway house. Frank Chris Jackson, a former Democratic district leader in Brooklyn's Fort Greene and ex-chairman of the local school board, served as the firm's liaison to Albany. Jackson was a constant presence in Albany, according to legislators, focusing his attention on assembly members Davis and Roger Green of Brooklyn, as well as former state senator and current City Council member Larry Seabrook. Jackson vanished from the scene, however, after his arrest on sex charges in the Dominican Republiccharges that were later dismissed.
Workers on the picket line at the Washington Jefferson have been closely following the breaking news on their employer's prison company. "It doesn't surprise us that he is big in prisons," said Mauro Arcos, a worker who was fired after trying to form the union. "It's how they treat their workers, too."
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