CITY HALL ARCHIVES

Koch’s Clan: The Way We Were

“In Ed Koch's city, Stanley Friedman and Donald Manes were the twin towers of insider trading, the most powerful of the mayor's men. The just­-completed trial record of their crimes is in a sense Ed Koch's third book — a can­did account, at last, of his government”

by

NEW HAVEN — It is worth remembering what might have been. If Ed Koch had been elected governor in 1982, Stanley Friedman would not merely be the boss of the Bronx. Governor Koch would have made him head of the state Democratic Party in early 1983. Later that year the governor and his party chief would have moved to elect Donald Manes mayor. Then Manes, as the Queens boss once promised his bagman Geoff Lindenauer, “would’ve really showed” Lindy “how to make money.” In Ed Koch’s city, Stanley Friedman and Donald Manes were the twin towers of insider trading, the most powerful of the mayor’s men. The just­-completed trial record of their crimes is in a sense Ed Koch’s third book — a can­did account, at last, of his government.

It is also worth remembering what was. Twenty years ago, Donald Manes and Friedman’s codefendant Michael Lazar first assumed public office. In January 1966, they were sworn in as newly elected members of the City Council. At precise­ly the same moment, an unknown club­house lawyer from the Bronx, Stanley Friedman, got his first City Hall job as associate counsel to the City Council majority leader. A few months later, Ed Koch won the Village council seat in a special election and joined the other three in City Hall. The four became gi­ants in this city on virtually the same calendar — until Manes decided to cele­brate their mutual 20th anniversary of public prominence by slashing his wrist on January 10. Lazar was by then king of the clubhouse developers, cut in even on Times Square, while Friedman and Ma­nes owned entire counties. Koch, who be­came mayor in 1977 by running against an administration then dominated by Deputy Mayor Friedman, Transportation administrator Lazar, and Borough Presi­dent Manes, wound up giving pieces of his own government to these same per­manent pols, in exchange for a recurrent position on Manes and Friedman’s Elec­tion Day palmcards. Koch would now have us believe he was naïve. He says he didn’t know who he was dealing with.

Finally, it’s worth noting what’s to come. The Times‘s Josh Barbanel recent­ly reported that the city’s former taxi chief Jay Turoff, slated for trial in Febru­ary on federal bribery charges, may soon be reindicted, adding new charges. His trial will lift the curtain on the operations of another Koch agency ceded to the clubhouse: the Taxi and Limousine Com­mission. In addition, U.S. Attorney Rudy Giuliani told Gabe Pressman on a Sunday talk show that Friedman’s conviction is hardly the climax of the city scandal, that there are more cases to come. Giu­liani says that he has “concrete reasons” to expect the convictions to loosen other tongues. The most likely new government witnesses are two longstanding Friedman allies who, unlike most Friedman friends, never made a supportive appearance in New Haven: Bronx party secretary Mur­ray Lewinter and former city planning commissioner Ted Teah. Bronx beep Stanley Simon has been publicly volun­teering to go into a Giuliani grand jury. The brewing Giuliani cases revolve around cable, towing, and water tunnel contracts, as well as city economic devel­opment projects.

Former city transportation chief Tony Ameruso has just been indicted, and fed­eral prosecutors in Brooklyn are closing in on the borough’s former Democratic boss Meade Esposito and Bronx con­gressman Mario Biaggi. The new U.S. at­torney in Brooklyn, Andrew Maloney, is still considering the long dormant case against Staten Island beep Ralph Lam­berti. Federal and state probers are also refocusing on the Brooklyn and Queens projects of developer Joshua Muss, whose special relationship with the city’s Public Development Corporation led to his des­ignation for two prime public sites.

There may also be more direct reper­cussions of the Friedman case. Manhat­tan District Attorney Robert Morgen­thau still has his own version of a Friedman case ready for trial. In addition to Friedman and his businessman code­fendant Marvin Kaplan, the state case involves three more principals of Citi­source, the Friedman computer firm whose city contract was the centerpiece of Giuliani’s case. Two of the state defen­dants, Martin Solomon and Kaplan’s brother Albert, regularly attended the trial in New Haven. Since Morgenthau is presently probing a state Citisource deal that involved the Biaggi law firm, this federal conviction may give the D.A. new leverage to cut a deal with the Kaplans that could protect the state defendants not nailed in New Haven.

While there is no indication that either Kaplan would be willing to cooperate, an­other defendant in the Friedman case, Michael Lazar, went to a lawyer close to Giuliani and tried to negotiate a deal be­fore the trial began. He may well seek to lessen his time in federal prison by reap­proaching Giuliani before Judge Whit­man Knapp sentences him in March. A close friend of Manes’s, Lazar had exten­sive dealings with PDC, the department of Housing Preservation and Develop­ment, and other city and state agencies. Lazar’s trial strategy seemed to concede conviction on the two cash bribe counts and concentrate instead on undermining the two other, more arcane racketeering charges (involving Lazar’s alleged bribe of former PVB director Lester Shafran by offering him an investment opportunity in a mid-Manhattan real estate ven­ture and Lazar’s promise of an equity interest for Lindy and Manes in a collec­tion company, Miller & Rothman, that never got off the ground).

Had Lazar been convicted only on the cash bribes, he could have tried to get the whole case thrown out on appeal by argu­ing that the cash bribes should have been a single count and were arbitrarily split into two counts (under federal racketeer­ing statutes, a defendant must be nailed on at least two racketeering acts). But his conviction on the Miller & Rothman charges, as well as the cash bribes, leaves him with little to appeal (though he is reportedly considering using high-priced appellate attorney Alan Dershowitz). In­deed, the only defendant convicted in New Haven with appealable legal issues is Marvin Kaplan, who was convicted on only two racketeering charges that argu­ably might be regarded as the same act. But Kaplan was also found guilty on per­jury and mail fraud charges.

Friedman was convicted on every rack­eteering and mail fraud count. The jury apparently had little difficulty making up its mind about Friedman since only one of their notes to the judge asked a question about his case (most of the jury notes required the readback of testimony related to Shafran and Lazar). The one note about Friedman had nothing to do with the allegations involving the Citi­source stock scam, which the jury accepted without question. Clearly the jury did not believe that Friedman, whose two days of testimony constituted virtually the entire defense case, was telling the truth.

So far the Friedman appeal discussions have focused on Judge Knapp’s decision to bar the testimony of an assistant dis­trict attorney who interviewed Manes im­mediately after the first suicide attempt and would presumably have testified that Manes initially lied about trying to kill himself. Friedman attorney Tom Puccio was going to use this testimony, together with a videotape of Manes in his hospital bed admitting he lied, to suggest that Manes had deceived Lindenauer about Friedman’s role in the Citisource scam. Such are the slim pickin’s of a Friedman appeal. ❖

Research assistance: Leslie Conner and Kathy Silberger 

This article from the Village Voice Archive was posted on October 3, 2020

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