Attention! Inspector General on Deck

By: Rockland County Legislator Charles Falciglia – August 28, 2016

We all remember the two scenes from the movie, A Few Good Men, where Lance Corporal Harold Dawson refused to salute Lieutenant Daniel Kaffee, his attorney, as protocol requires when an officer enters or leaves an area – generally referred to as an Officer on Deck. The loud and clear message was he did not respect him. By the end of the movie the situation was reversed conveying the opposite message.

Fraud, waste, mismanagement, organized economic crime schemes, disorganized economic crime schemes, willful blindness and just good old fashioned corruption; fueled by partisan politics, a lack of business acumen, stupidity, unabashed laziness, personal economic survival, interlocking family relationships and just some miserable human beings, have been commonplace throughout the history of the world. Over the last decade Rockland County descended into a microcosm of all of the above.

The 2015 Corruption Perception Index (CPI), a ranking of 174 countries by Transparency International, which assesses how the public and private sectors view corruption in their own country, ranks the United States 17th. Denmark ranks first with Somalia last. The Fragile State Index, a broader assessment of a country by the organization Fund for Peace, which includes such categories as human rights violations, public services, oppression, security and economics, shows the United States ranking 20th out of the 178 countries assessed. Finland is first with Somalia again bringing up the rear.

Considering that our financial system is the financial life blood of the world, plus the voluminous number of transactions we process daily; all under an expansive volume of regulations and laws to prevent financial improprieties, the CPI ranking is probably decent. This, however, is the United States of America and we should be at or near the top. We should strive every day to stamp out all forms of corruption and misbehavior, with the ultimate goal of achieving nirvana.

The ranking by the Fragile State Index is actually more troubling in my opinion.

Now the word corruption is a catch-all for all sorts of bad behavior that for the most part involve money, but are far removed from simply sliding an envelope with cash across a red and white tablecloth in a restaurant. For years former Rockland Republican Chairman, Vinnie Reda, and chief henchman, Mike Dolan, never met an election they wanted to win, allowing them to continue doling out patronage jobs; good government being subordinate in importance to economically controlling a handful of committee members.

No matter how many white collar offenders Preet Bharara locks up there will continue to be a never ending supply of replacements. More regulations simply challenge the imagination of those who seek to manipulate the system. There are also only so many resources you can throw at the problem and it certainly doesn’t help when like the line from the old Elvis Pressley song: People just turn their heads and look the other way. But why are we waiting for Preet Bharara?

Rockland needs more firepower; a different form of firepower; a more aggressive approach. An Inspector General may be the direction to move towards.

Like all counties we have a District Attorney. We also have a County Auditor; one charged with criminal prosecution and the other charged with auditing county records for fraud and waste. Under certain circumstances the two can overlap.

The public, however, is often reluctant to go to the District Attorney for a variety of reasons. They range from little faith in the system to a concern of some form of backlash, political or otherwise. The difficulty of determining exactly what crime has been committed also feeds this reluctance since it is in our nature not to be accusatorial.

The entire concept of the District Attorney, Sherriff and Highway Superintendent being elected offices should be re-visited.

As for the County Auditor, it is just that – the County Auditor, who acts in the best interest of the public but has no interaction with the public. In Rockland it is a part time job and the effectiveness is hard to quantify.

The functional job of an Inspector General is to act as an advocate for the public to investigate fraud, waste and mismanagement in the government. That’s the short answer. The position can be as far-reaching as imagination, initiative, support of the public, administration and legislature allow. We need someone who will seek to obtain final validation.

Family Caught:

The continuing pall hanging over Rockland Family Court Judge, Sherri Eisenpress, and the difficulty for the public in obtaining the final truth; plus the nagging perception that those charged with uncovering the truth are passing the buck, haunts the public and shakes the very confidence of this county to its core.

Despite the determined reporting by Lee Higgins of LoHud, we still seem to be no closer to the truth. Moses Stern, who was a client of Eisenpress, says he bankrolled her campaign scheme – with her money. Her campaign treasurer says pure nonsense. The District Attorney says there is no evidence of wrongdoing, even though multiple individuals donated $4,000.00 by credit card, many having never donated in their life. Rabbi Zalman Beck, who it is alleged helped recruit straw-donors for imprisoned former State Senator Malcolm Smith, worked as a special assistant to the District Attorney who claims ignorance of Beck’s moonlighting; even though there is a mutual cooperation agreement in place with the U.S. Attorney. Was Rabbi Beck getting paid? Did Moses Stern perjure himself? In the meantime, Eisenpress continues to sit on the bench. The 1985 Aretha Franklin song, “Who’s Zoomin Who,” comes to mind.

While I will not totally rule out the theory that Eisenpress just turned over about one-hundred grand to Stern and/or others to facilitate the alleged straw-donor scheme, there are certainly some holes. First of all, would you trust him? Second, many of the donations were by credit card? The genesis of the scheme, to show support by members of the Hasidic and Ultra-Orthodox community through a huge financial commitment in my opinion is weak.

Everything we know about bloc voting is that the rank and file is orchestrated to vote a certain way by community leaders. It’s candidate A or candidate B, no questions asked. How a $4,000.00 donation by certain individuals would significantly strengthen or alter a decision to vote a certain way, or change someone’s mind, is questionable.

Most people have no idea about a candidate’s campaign finances. If you ask a neighbor who they are supporting would the fact they even donated to that candidate come up in the conversation. If it did it would be ancillary to the reason, which would underscore the donation. On top of that people are not stupid. The question of why a neighbor, possibly in the same socio-economic class as you, would cough up four grand is the more intriguing question.

A much cheaper and efficient way of gaining support would be to flood the landscape with lawn signs.

There is also a theory that Eisenpress was the victim of a confidence scheme, led to believe the donations would enhance her chance of victory, with some quid pro quo given in return to the small group of architects who sold her camp on the idea. Remember, testimony in the Halloran trial noted that an elected official was bribed not to support an Eisenpress opponent. Being fooled doesn’t alleviate her culpability.

One of my own theories is that Stern owed Eisenpress legal fees for her representation regarding his Citibank matter. Stern couldn’t donate more than four thousand directly, irrespective of the fact of why any candidate would want any connection to him. So he executed, either alone or in concert with others, the conduit contributions.

Sound plausible? In essence, this was still Eisenpress money, but how convenient because another cause and effect of this theory is the tax ramifications. A campaign contribution is non-taxable as opposed to a payment for legal fees. This would have avoided a large tax liability.

There is also the theory that the funds were from the FBI as part of a sting to see who would bite. That raises the question of why Eisenpress would be approached to begin with and why she would get involved in such a sting.

One of the more ridiculous comments in the July 6th Lohud article by Lee Higgins (Rockland judge tied to FBI sting) was the emphatic rebuke by her campaign treasurer that it was not her money. So this well educated guy didn’t wonder for a moment where all these folks with credit cards came from to donate $4,000.00?

On a side note, the way Judge Eisenpress closed out her campaign account is rather peculiar. Her July 2012 periodic disclosure reflects $7,500.00 of In-Kind contributions. An In-Kind contribution is a contribution of goods and/or services as opposed to a monetary donation. The contributions were for legal services by a Westchester County attorney. An In-Kind contribution simultaneously becomes a campaign expense and automatically washes out through the software of the state’s electronic filing system on the summary page of the candidate’s disclosure. Several questions come to mind.

What is additionally peculiar is that the transactions resemble an installment arrangement, with three payments of $1,000.00 and three payments of $1,500.00 spread out over an approximate three month span, February through April of 2012.

All this boils down to one question. If all the donors donated their own legitimate funds then there is no crime. If not, there is a crime and someone was the mastermind.

Judge Eisenpress has never denied these allegations or spoken out against them. New York State Attorney General Schneiderman returned campaign donations when it was discovered they may have been straw-donations from a Mr. and Mrs. Markowitz, two of the largest contributors to the Eisenpress campaign. So the top law enforcement official in the state failed to recognize a potential crime that hit him in the face?

I would call for Judge Eisenpress to be transferred out of Rockland, or have a monitor appointed; but that is the easy way out.

Climbing the Matterhorn:

The 30 plus acres, previously known as the Matterhorn Nursery in New Hempstead, was purchased in August of 2014 by Summit Hempstead LLC through a foreclosure sale for 5.1 million dollars. Once again the mysterious LLC is involved in a real estate purchase. These true owners, whether it is real estate or campaign finance related, are generally not doing anything illegal. Their goal is to obfuscate their identity making it frustrating for the public to pierce their anonymity; frustrating enough to eventually throw in the towel. This prevents questions from being raised and interlocking relationships from being exposed until well into the process; maybe too late.

There is pending legislation in Albany to unmask the beneficial owners of LLC’s.

While hidden LLC ownership is a problem, it can eventually be broken down. What is more concerning is the source of funds, particularly in real estate purchases. Not the source that is tendered at the closing in the form of a cashier’s check or wire transfer, but the original source which was deposited to the account those funds were drawn on. I believe the source of funding for the Matterhorn Nursery purchase is a company based out of Lakewood, New Jersey.

In January of this year the United States Treasury Department issued a Geographic Targeting Order (GTO) specifically directed at Title Insurance Companies in Manhattan and Miami. A GTO directs the entities targeted to perform additional record-keeping. The U.S. Government had become concerned about the purchase of high end real estate, specifically luxury condominiums, by foreign investors where no mortgage financing was involved (commonly referred to as an all cash sale). The idea behind it, which has recently been expanded, was to force title insurers to record the names of the beneficial owners and their addresses so that a roadmap could exist to trace the source of funds; which can be proceeds from illegal activities.

In that respect, much has been made about donations that supported George Hoehmann’s 2015 campaign for Clarkstown Supervisor that originated through an LLC; The Institute for Municipal Safety Research. While it may not fit the prescription of the reform we are seeking, and in many ways stinks, on the surface there appears to be nothing illegal about it. The same type of donations, albeit much smaller, were made to Eisenpress and have been made to countless other candidates across the country. Those types of donations are not the ones at the center of the Eisenpress issue, simply because a donation through an LLC speaks to no legal requirement that prevents it from being made in the name of another.

The amount of an extremely large donation through an LLC does raise the question of the source of funds, plus the follow-up question of whether the source has been promised something in return; different from expecting something in return. To be clear, people are free to spend their money as wisely or foolishly as they see fit. Proving a large donation has a quid pro quo attached, despite the strength of any circumstantial evidence, is extremely difficult if near impossible in lieu of a confession. To speculate can go on for hours and it could be as simple as someone consumed with just wanting to see the other guy lose.

My own view is somewhat ambivalent at this time since Mr. Gromack raised one million dollars for his own campaign and you can probably conjure up a conspiracy theory or two about some of those contributions.

Anyone can form an LLC, and it is currently the perfect vehicle to circumvent campaign contribution limits. The easiest way to close the loop-hole is to just eliminate it. A more realistic approach would be to require an LLC to be an on-going business concern and have a defined purpose for its formation; with revenues and expenses directly tied to that type of business. This would force the donation to be in the normal course of business from the profits. Stiff sentences and hefty fines for violations are also necessary.

Now the Matterhorn purchase also produces an interesting sub-plot. The managing partner of Summit Hempstead LLC, the man who signed the deed on their behalf, appears to be mixed-up with Chris St. Lawrence. In August of 2015, this gentleman, who has no record of donating in New York State to any local candidate, elected official or political action committee in the last 15 years; but has donated on the federal level, wrote three consecutively numbered checks for $3,000.00, $5,000.00 and $5,000.00. The checks were to Friends of Christopher St. Lawrence, the Ramapo Democratic Committee and Leadership that’s Working, respectively. All three accounts are under the control of Chris St. Lawrence. The $13,000.00 is more than his entire federal total over more than a decade. So once again, like Eisenpress and others, we have someone waking up one morning and acting out of character in a very generous manner.

Staying on the subject of generosity, Ruzhin Corp. of Monroe contributed $5,000.00 apiece to Friends of Christopher St. Lawrence and Leadership that’s Working around the same time, July 30th of 2015 to be exact. This followed a $5,000.00 donation to the same Leadership account in September of 2014, presumably to help fund the opposition to the Ramapo Ward referendum. Not surprisingly, they are the only three contributions on record since the formation of the company in August of 2007.

Ramapo Triumvirate:

Caesar, Crassus and Pompey they are not. The Fire Inspector, the former Police Chief and the Director of Building, Planning and Zoning are the three latest Ramapo Town Hall employees to come under scrutiny. Is there any investigation on-going? The investigation by the Town of Ramapo regarding Fire Inspector, Adam Peltz, can be summarily dismissed for lack of credibility.

The need for someone to file a complaint should not preclude an investigation from commencing. A newspaper article or a social media thread is all that law enforcement needs to begin an investigation on their own.

More, More, More

Remember the race baiting flyer from those who opposed the Ramapo Ward Referendum. Was there an investigation into who was behind it? While not a hate crime, the morons behind this scheme of racial manipulation need to be exposed to the court of public opinion. Not one person on the Ramapo Town Board spoke out against it.

What about all the cost overruns at Sewer District One? What about consultants hired by the Town of Ramapo who can’t explain what they are being paid for?

It was recently rumored that Vinnie Reda, former Chairman of the Rockland County Republican Party, may be trying to make some kind of comeback. Why Reda would want to replicate the political career of Richard Mentor Johnson, who went from Vice President of the United States in 1836 to a Kentucky State Legislator in 1850 is odd, but whatever happened to the allegations that Reda was running two sets of republican books?

And let us not forget Ramapo Town Councilman Samuel Tress. Is this the same Samuel Tress who is an officer of East Morgan Holdings Inc., a Lakewood New Jersey company that provides remediation and prevention of contaminated soil and air? If so, was this disclosed in his financial filing with the Town of Ramapo?

I envision an Inspector General’s Office that combines elements of the District Attorney and County Auditor, an office replete with independence and transparency, unchained from politics and interlocking relationships; the sole mission to obtain the truth. This can be achieved by hiring the right person(s) and having the right oversight.

I envision an office that is user friendly to the Rockland public, an office that operates with broad sweeping powers across county jurisdictions that will leave no stone unturned once commencing an investigation. An office with a proactive agenda; that has the full authority to conduct depositions and issue subpoenas.

An office that can mobilize a voluntary workforce to pursue major initiatives; simultaneously proposing laws to close loop-holes that are contrary and offensive to society as a whole.

An office that can also provide services to municipalities at a lower cost than outside vendors, such as audits and top to bottom reviews, whether that service is voluntarily requested or involuntarily ordered.

Over the last five years over one-hundred individuals ranging from candidates and campaign treasurers, to mostly rank and file citizens, appear to have all the hallmarks of participating in straw-donor campaign contribution schemes. Not one person has been arrested. Why is that? I do not know, but I would like to see their bank and credit card statements.

What we really need is the Untouchables. An Inspector General, however, can be a strong foundation. Rockland residents can handle the truth. The people responsible for providing it are often the challenge.