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Andrew Cuomo’s revelations about State Senator Pedro Espada’s calculated looting of his publicly subsidized Bronx health care clinics have produced a wave of anger and disgust. As well they should.
There is the $20,000 in sushi delivered to the suburban home far from his Soundview district, the $9 million severance contract, the jobs for the convicted felons who covered for him during the last investigation, the vending machine and janitorial contracts that go directly into the Espada family pockets. All of it has rightly stoked public outrage.
But if it is worth getting angry about any of this, then it should be worth the trouble to aim some of that fury at Espada’s enablers. These are the deep-pocketed sponsors who have been all too happy to profit from this scoundrel regardless of his obvious taint.
Their campaign checks started rolling in early last year, days after Espada ended the first of his public hijackings of the Senate’s new Democratic majority. His first ransom payment was chairmanship of the Senate’s housing committee, a post that carries a guaranteed lifeline of donations. The names on the checks to New Yorkers for Espada are among real estate’s most prestigious. They came from the Rudin family, the respected builders, who gave some $4,000; from Leonard Litwin, the grand old man of luxury rentals, who gave another $5,000; from Donald Capoccia, the successful developer who depends on government subsidies, who gave thousands more.
All told, more than $300,000 poured in from landlords happy to celebrate Espada’s new leadership.
Last week, as the airwaves filled with tales of Espada’s gluttony, calls were placed to these benefactors in hopes of hearing at least some expression of buyer’s remorse. None could be found. These titans of property prefer not to discuss their dealings with the bad boy of the State Senate. Only Steve Spinola, president of the Real Estate Board of New York, who gets paid to take these hits for his team, was man enough to get on the phone. He offered no criticism: “I am not going to jump on him without seeing what happens,” said Spinola. “Do you believe everything you read in the papers?”
Yes, he had helped direct his members’ attention to Espada’s fundraising efforts. “He has been identified by me as somebody with the position and ability to deal with issues that affect us,” said Spinola.
And yes, Espada has responded to their concerns. “I know he has put forward a proposal about how to maintain affordable housing, which I think is a good proposal,” he said. “There are other bills that have not come forward that we are clearly happy about.”
The most recent example of such service came just days before Cuomo’s lawsuit and the FBI raid. A session of the Senate housing committee had been scheduled for April 19. The Friday before the session, chairman Espada had a sudden announcement: Meeting cancelled. His reason? Landlords needed more time to “weigh in” on legislation being considered.
What complex new bills were these? One of them has been kicking around for years. It would tighten a rule that currently lets owners empty buildings by claiming they need all the apartments for themselves. This happened not long ago right here on the Lower East Side when a landlord’s brilliant lawyer spotted the loophole and drove all residents of a five-story tenement right through it and out the door.
Bills to end this abuse have passed the Assembly repeatedly, but always died in the old Republican-controlled Senate. With the first Democratic majority in 40 years, the hope was that such simple measures of social equity might finally become law. They surely would have, except for the alliance quickly forged between the real estate lobby and Espada.
Spinola, a bona fide heavyweight in city and state political circles, acknowledged that Espada was asked to delay the meeting. “We clearly conveyed through our lobbyists our objections,” he said.
It wasn’t hard to deliver the message. One of the board’s lobbyists is an attorney named Stanley Schlein, who receives $4,000 monthly for his efforts. He gets another $4,000 a month from the other major landlord outfit, the Rent Stabilization Association. This is money well spent since Schlein clearly has the senator’s ear, having served as Espada’s attorney on political matters. In fact, when Espada first threatened to align himself with Senate Republicans last year, it was Schlein who represented him in negotiations and won the ex-boxer the housing chairmanship.
Schlein was also at his side last summer when Espada pulled his second shakedown, briefly crossing the aisle to sit with the Republicans. The ransom this time was even higher: Espada was made majority leader, a post that comes with bigger office, bigger payroll, and bigger clout.
One of the first things Espada did was double the salary of his part-time public relations director, a veteran flack named Steve Mangione, to $56,000 a year. As good a gig as this may be, Mangione did even better last year moonlighting for the Rent Stabilization Association. Lobbying records show the RSA paid him $90,000 to craft radio ads for their cause. Mangione, whose past clients include George Steinbrenner and the former mobbed-up leaders of the school bus drivers’ union, is an old hand at this. Back in 1997, when landlords carved a major hole in rent law protections, Mangione produced radio spots promoting that effort as well.
Such are the advisers who have the senator’s ear. Together, they have helped the real estate lobby run the table. Tenant groups are out in the cold, despite having provided many of the troops that helped Democrats win their majority. Their hoped-for reward was that bills that had languished under Republican rule would gain new life. Instead, they have been strangled in their cribs in Espada’s housing committee. Measures to curb the rent deregulation that landlords won during the Pataki years have been snuffed out. Ditto a plan that would—get this—let New York City decide its own rent rules.
Even Espada’s “affordable housing” proposal, as Spinola dubs it, is a landlord-rescue scheme. The script was devised in a panic after landlords were hit with the devastating appellate court ruling in the Stuyvesant Town rent overcharge case. Owners, judges ruled, had illegally collected tax breaks while charging market rates. The ruling means that landlords may have to do the unthinkable: Roll back rents on high-end apartments.
As a fallback plan, landlords suggested that upper-end rents remain as they are, in exchange for freezing charges for lower-income residents. All that need happen is that the city forgo billions in taxes.
Espada, aware that Cuomo’s investigation would soon surface, saw an excellent photo opportunity. He held “Freeze the Rent” rallies and papered them with his clinic employees. It was just for show. The proposal was already dead on arrival. When landlords pitched the plan to Vito Lopez, the powerful chairman of the Assembly housing committee, they struck out. “It’s not something I find acceptable,” Lopez said last week. “The numbers don’t match up. They’re not real.”
Just before Espada’s scandals exploded last week, veteran tenant advocate Michael McKee learned about the cancellation of the housing committee meeting. That’s the last straw, McKee wrote to Senate leader John Sampson. If Democrats want tenant support in the fall elections, McKee said, they must remove Espada from his housing post. It is one thing to tolerate a rogue senator’s own rapacious greed. It’s quite another to let him use his official clout to feed the greed of others far more powerful than himself.