NEW YORK—After a successful attack on corruption in New York’s state government, the hard-charging federal prosecutor in Manhattan appears to have set his sights on New York City.
Over the past few weeks, a series of loosely related public
corruption investigations coordinated by U.S. Attorney Preet Bharara have
spilled into public view, with targets including high-ranking New York Police
Department officials, the union representing city jail guards, and the
political fundraising activities of several people with ties to New York City’s
mayor.
Already an embarrassment to the nation’s largest police
department, it remains unclear whether the widening probes could do damage to
City Hall.
So far, nine police officials, including four deputy chiefs,
have been transferred or stripped of their guns and badges as internal affairs
detectives and FBI agents examine whether officers accepted gifts and trips
from businessmen in exchange for police escorts, special parking privileges and
other favors.
And in recent weeks, the evolving probe has turned to
campaign financing practices that have long been scrutinized by good government
groups.
An animal welfare group that has been lobbying Mayor Bill de
Blasio to ban carriage horses from city streets confirmed Friday that it had
received a subpoena from federal prosecutors seeking documents related to its
fundraising efforts for a nonprofit group created to advance the mayor’s policy
agenda.
Other subpoenas have sought records related to hundreds of
thousands of dollars in donations solicited by the mayor’s campaign that were
rerouted to upstate Democrats running for the state Senate, The New York Times
has reported.
Separately, federal agents operated a wiretap that captured
the conversations of two businessmen, Jona Rechnitz and Jeremy Reichberg, who
were friends with two top police officials and served on de Blasio’s inaugural
committee in 2013 and contributed to his campaign, two law enforcement
officials said.
Investigators want to know whether they have been offered
any official favors in exchange for donations, according to the officials, who
spoke to The Associated Press on condition of anonymity because they weren’t
authorized to discuss an ongoing case.
De Blasio, a Democrat, has not been accused of any specific
wrongdoing and his campaign organization has said it operated within the laws.
But the developments have created the perception that a city that was thought
to have rid itself of everyday corruption might be slipping back into the bad
old days.
“If you can find a corrupt mayor of New York City, holy
moly, that’s a big prize,” said Jennifer Rodgers, a former federal prosecutor
who now heads the Center for the Advancement of Public Integrity at Columbia
Law School.
Several parts of the multifaceted probe had their origins in
an FBI investigation of suspicious financial transactions involving a Harlem
liquor store.
Campaign financing wasn’t on FBI agents’ minds in 2013 when
they were alerted to a series of large transfers and deposits in multiple bank
accounts held by a small wholesale liquor business in Harlem, the law
enforcement officials said.
Ultimately, investigators concluded that a Harlem restaurant
owner was using the accounts to run a $12 million Ponzi scheme, in which Rechnitz
and Reichberg were investors.
The investigators continued to scrutinize the finances of
the businessmen, who have donated tens of thousands of dollars to the mayor’s
campaign and advocacy efforts. Authorities also learned that the pair had
cultivated a relationship with Norman Seabrook, the powerful head of the
9,000-member jail guard union, and Phillip Banks III, formerly the top-ranking
uniformed officer at the police department. The men all visited Israel together
in 2014.
A federal subpoena issued to the union last year and
reviewed by the AP has sought records detailing the flow of funds from
Seabrook’s union into a company controlled by Rechnitz, JSR Capital, and into
other businesses.
A lawyer for Banks declined to comment. Seabrook and a
lawyer for Rechnitz didn’t return messages. Calls to numbers listed for
Reichberg rang unanswered.
Wiretaps in that probe led to a broader examination of the
cozy relationship between high-ranking police and the city’s Orthodox Jewish
community, the officials said.
In a related case, a member of a neighborhood patrol in an
Orthodox Jewish community in Brooklyn was caught in a wiretapped conversation
bragging that he had used connections in the NYPD to get over 150 gun licenses
for people without required background checks, according to court papers
charging him last week with bribery and conspiracy.
Bharara, the federal prosecutor, has been mum on the details
of the investigations, but vowed in a recent speech to continue his efforts, in
both state and city government.
“Executive offices in government,” he said, “are far from
immune from a creeping show-me-the-money culture that has been pervading New
York for some time now.”