Wednesday, February 29, 2012

What the Times put in the Metro section instead of covering the Yonkers corruption case involving Forest City Ratner's Ridge Hill project

Just in case you're wondering what articles New York Times editors decided to put in today's Metro section while continuing to avoid the Yonkers corruption trial involving Forest City Ratner's Ridge Hill project, consider the following.

The first weighty article, in fact, appeared on the section front, as indicated at right.

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Ridge Hill trial: Forest City execs pushed payment for no-show job despite internal resistance; prosecution's case complicated by Bender's agreement that developer convinced Annabi to switch vote

In the third and likely final day in which Forest City Ratner (ex-)employees testified in the Yonkers corruption case, a federal jury yesterday heard more evidence that the developer had behaved in a questionable manner.

After all, testimony yesterday indicated that Forest City executives had no problem with Zehy Jereis's seemingly no-show job and, even though he hadn't submitted required monthly reports and a lower-level employee had raised a red flag, two of the firm's top government relations executives, Bruce Bender and Scott Cantone, ordered that he be paid $15,000.

But the developer's not on trial, and the jury might now be wondering why Jereis and Sandy Annabi face corruption charges, while Forest City, the beneficiary of Annabi's changed vote to green-light the Ridge Hill project, is unscathed. (Jurors of course can be instructed to address only the culpability of the defendants, not any other parties.)

Helping prosecution or defense?

Also, though a prosecution witness, Bender, who recently left Forest City, at one point complicated the prosecution's theory of the case. He corroborated Annabi's defense that she changed her vote not because of a stream of payments she was receiving from Jereis but because she was convinced on the merits.

Jereis's defense is that he spent money--$174,000 over some years--on Annabi because he was infatuated with her. Annabi, who denies a romantic relationship, claims she changed her vote on Ridge Hill and the other project involved in the trial, Longfellow, because developers made concessions. However, Forest City's concessions on Ridge Hill were deemed minor.

Immunity? Or just rough and tumble

Neither Bender nor Cantone said they were testifying under immunity, or were described as doing so. Either that information has not yet emerged, or prosecutors were confident there was no inkling of illegal acts.

If so, perhaps defense lawyers have no reason to portray Forest City and its employees as criminal, rather than as people enmeshed in the rough and tumble of politics, which includes patronage spending.

With the Longfellow project, there appears to be a clear quid pro quo, with Jereis funneling money he got from the developers through an intermediary, Anthony Mangone, who has already pleaded guilty.

The Ridge Hill case is far more murky. The $15,000 Jereis got from Forest City came after the fact, and might be seen--from the perspective of prosecutors--as a replenishment of the funding stream he maintained with Annabi. That funding encompassed far more than the money Jereis got in connection with the two projects.

With the Longfellow aspect of the case, defense lawyers are challenging witnesses who are cooperating after pleading guilding, including developer Franco Milio, who testified yesterday, according to the Journal News.

Somewhat similarly, defense lawyers may suggest that, if Forest City did nothing illegal, neither did their clients. As I wrote 2/13/12, Jereis’s lawyer, Anthony Siano, stated in a memo: “In effect, the developers of Ridge Hill appear to form no part of the substantive violations against defendant Jereis. This appears to be so despite the recitations as to Ridge Hill in the conspiracy count... the Indictment does not allege who, if anyone, made corrupt payments to Jereis and does not even identify whether any such corrupt payments were bribes or extortion payments."

Political assistance?

After lengthy testimony by Cantone on Feb. 24 and both Cantone and Bender on Feb. 27, yesterday morning, what was mainly at issue was what work Jereis did when he was hired at a $5,000 a month consultant for one year not long after Annabi changed her vote.

Assistant U.S. Attorney Perry Carbone pointed to suggestions raised the previous day that, even after Annabi's vote, Jereis might have helped Forest City with Ridge Hill opponent Paul Feiner, Supervisor of nearby Greenburgh.

Bender said no, given that Jereis was a Yonkers Republican and Feiner a Greenburgh Democrat: "That just doesn't mix."

What Jereis did

Carbone, querying Bender in a style of studied calm, tried to clear up some lingering issues.

What had Bender told the grand jury in 2008 about how instrumental Jereis's role had been in getting Ridge Hill approved?

"I thought it was very helpful," Bender replied.

Who'd pay the fees?

Also at issue is whether Annabi knew Jereis ever asked for anything of value. According to previous testimony, Forest City executives said she had not been copied on emails in which he asked Forest City for a job.

In a 6/14/06 meeting, when Annabi learned she'd have to postpone a planned vacation to be present for the 7/11/06 Council vote, who, asked Carbone, raised the issue of whether Forest City might pay the late fee or penalty on her ticket?

Bender said he didn't know if it was Jereis or Annabi.

(Last week, Cantone testified that it was Jereis who asked, but that Forest City, citing "ethical and legal concerns," said no. This was communicated to Jereis who said "he'll figure it out, maybe he'll pay it himself," according to Cantone.)

"If it was Mr. Jereis, was she present?"

"I believe so," replied Bender.

"What did you say in response?"

"We could not do it."

Later, William Aronwald, Annabi's attorney, asked how much the cancellation fee was.

Bender said he didn't know.

"Certainly not in the tens of thousands of dollars," Aronwald followed up.

"I wouldn't know," Bender responded.

"Did Mr. Jereis or Ms. Annabi say, That's it, forget about it, you're not getting her vote?" Aronwald asked.

"No," responded Bender.

Aronwald then brought up another reported payment, which might be seen as a cleaner way to provide value to an elected official.

"Are you familiar with a company known as Westchester Invaders?" Aronwald asked. "Isn't it true Forest City Ratner made a contribution of $10,000 to Westchester Invaders at Council Member [Patricia] McDow's or [FCR lobbyist] Melvin Lowe's request?"

"I can't recall," Bender said.

Westchester Invaders is a drum and bugle corps that McDow has saluted, but I couldn't find corroborating evidence of a Forest City Ratner contribution. Then again, it would not be out of line with company practices in Brooklyn.

Why did Annabi flip?

Siano, Jereis's attorney, reminded Bender of his 2008 grand jury testimony that he believed that he, not any gift from Jereis, had persuaded Annabi to change her vote.

Bender said it was a combination: "It was a collective effort by a lot of people."

"Your team persuaded her?" Siano asked.


"You believe that as you sit in the witness box today?" Siano pressed on.

"Yes," replied Bender, in a subdued manner.

That complicated the prosecution's case.

Prosecutor Carbone popped back up to remind jurors of the prosecution's theory. What else, he asked Bender, had the witness said to the grand jury?

"That Mr. Jereis was advocating for the project at the same time," he said.

But "advocating for the project" is lobbying, and lobbying isn't out of bounds.

Swagerty enters

If Bender and Cantone came off as no strangers to rough and tumble politics, the next witness, former Forest City employee John Swagerty, was more of a Boy Scout, a 30something man with a chipper, straightforward manner and the internal peace of having tried to be something of an internal whistleblower.

Swagerty worked at Forest City about eight-and-a-half years, rising to VP in retail development, before leaving a year ago to work for Acadia Real Estate Trust.

On Ridge Hill, he oversaw the environmental review and worked on the zoning change sought, reporting to Executive VP Richard Pesin. Swagerty had no interaction with government officials, given that Bender and Cantone "wanted to make sure they were the only ones."

Swagerty was in charge of the budget, and the ensuring that consultants hired were placed under the appropriate budget lines.

Under questioning from Assistant U.S. Attorney Jason Halperin, Swagerty described the concessions granted Annabi and in the previous few months. The additional $10 million promised in taxes was about 1.5% of the total project cost.

As for changes regarding traffic or environmental issues sought previously by Annabi, in concert with other project opponents, there were none.

"Junior varsity" invoices

On 9/19/06, according to Cantone's testimony last week, Jereis was sent a one-year, $5,000-a-month consulting agreement, which--for reasons yet unexplained--he didn't return until 10/10/06. It was backdated to 8/1/06, for reasons yet unexplained.

On 10/13/06, shortly after Forest City Ratner formally hired Jereis and backdated the contract, Swagerty received and reviewed an invoice from Jereis's firm, ZJ Enterprises, purportedly covering work in August and September.

The invoice simply listed the months and fee per month, with no information about tasks Jereis accomplished. "It struck me as a little unprofessional," Swagerty testified. "I think I used the word JV: junior varsity."

Did he pass it on? "Actually, I kicked it back to Scott Cantone and told him I needed to see more information to send it to the accounting department," Swagerty replied.

Prosecutors did not ask what happened next.

Getting Jereis paid

Under questioning by defense attorney Siano, Swagerty agreed that revised invoices did come back, though he didn't know who revised them. (Their content was not described.) By December 2006, the total value of the invoice had reached $15,000, covering three months.

On 12/6/06, Swagerty received an email message from Debbie Venezia, then the administrative assistant for Bender and Cantone. It was sent with the notation "High Importance."

"We need to get Zehy Jereis paid ASAP," she wrote. "Can you please expedite? It is extremely important that we get a check."

Swagerty signed off and sent it to accounting.

Jereis's reports and an empty Exxon station

As part of his contract, Jereis was also supposed to send in reports on his work hunting for potential retail sites, but did not do so until March 2007, when news of the federal investigation surfaced.

Upon Forest City's receipt of Jereis's monthly reports, Swagerty spent three days, at the instruction of executives Pesin and Bender, visiting 13 of the 18 properties Jereis listed, taking pictures and compiling information. Perhaps five were residential properties, thus unsuited for Forest City's retail plans, he said.

Overall, Swagerty said, the sites on the list were not appropriate for Forest City. "We undertake big projects, like Ridge Hill," stated Swagerty, as if still in the developer's employ.

In the report, as shown to the jury, his boss Pesin had marked only one of the 13 properties with the word "pursue," indicating the company's potential interest.

Even that choice, to Swagerty, seemed out of line, since Forest City never developed sites like that empty Exxon station at 365 Kimball Avenue. (Image of 365 Kimball via Google Street View)

Is the site the size of a gas station typical for Forest City?

No, responded Swagerty.

Were any steps taken to pursue the site?

"I don't think any steps were taken," Swagerty responded.

The jury might have been left with the impression that Pesin, who didn't testify, was trying to indicate that Jereis had done some valid work on his consulting contract.

On cross-examination, Siano asked, "Did anyone tell you Mr. Jereis had been told to find supermarkets and empty lots?"

The question was dismissed as hearsay.

"Other than the contract, did you have any information as to the instructions given Mr. Jereis?" Siano asked.

"No," responded Swagerty.

FC Acquisitions

When Bender was on the stand, Siano asked him about the Forest City entity under which Jereis was hired: "Are you familier with FC Acquistion Associates LLC?"

"Not really," Bender replied.

(Screenshot from NYS Division of Corporations)

Had he ever seen that firm's name on any company document?

No, acknowledged Bender, after first saying it wasn't his function at the company.

On redirect, Carbone got Bender to explain that a large corporation often sets up sub-entities.

Swagerty, under questioning by Siano, agreed he contacted Cantone because he had never heard of FC Acquisition. "His response was, 'Put it in retail hunting,'" Siano related, drawing Swagerty's confirmation.

The rest of the testimony: Longfellow

After Swagerty left, the trial shifted to discussion of the Longfellow project, with developer Franco Milio on the stand, as reported by the Journal News:
A Yonkers businessman testified Tuesday that his lawyer persuaded him in 2006 to pay $30,000 so then-Councilman Sandy Annabi would stop opposing his land-swap deal and let his development of the Longfellow School property proceed.
Franco Milio told a federal jury that his father, Antonio, ended up paying the money to lawyer Anthony Mangone after Mangone introduced him to Annabi’s cousin, Zehy Jereis, and then told Milio the payment was “to get the approval done.”

Did Forest City Ratner get "bilked" by Yonkers defendant (as suggested in 2010 Times coverage)? Trial testimony indicates the opposite

You haven't read it in the New York Times, because the newspaper has chosen to avoid recent coverage of the Yonkers corruption trial (though not saturation coverage of the latest Pale Male twist).

But in the past few days, two Forest City Ratner witnesses demolished the sloppy, dishonest phrasing in the Times's 1/6/10 report, Ex-Official in Yonkers Faces Charges of Corruption.

Back then, the Times suggested that Zehy Jereis, the go-between accused of engineering Ex-Council Member Sandy Annabi's vote to green-light the Ridge Hill project, was "accused of bilking" Forest City.

Got "bilked"?

Any fair reading of the indictment and the term "bilk" should have let a sentient being conclude that Forest City did not get bilked.

Indeed, as Michael D.D. White pointed out in his Noticing New York blog, it strained credulity for the Times to report that "Forest City Ratner, a real estate firm whose specialty is collecting government subsidies through its relentless cultivation of public officials, was outsmarted" by the defendants.

It wasn't.

Jereis did persist in asking for a consulting gig after he had helped get Forest City a meeting with Annabi, and Forest City executives did string him along, neither saying yes or no before Annabi voted.

After Annabi came through, Forest City eventually signed Jereis to a $5000/month consulting contract. According to testimony yesterday, Jereis turned in invoices so thin in description that FCR executive John Swagerty refused to accept them.

Later, when the invoices were revised, but without the submission of the required accompanying reports, Bruce Bender and Scott Cantone, the developer's two top government relations officials, ordered Swagerty to sign off on it.

Getting Jereis paid

"We need to get Zehy Jereis paid ASAP," stated the message, sent by the administrative assistant assigned to Bender and Cantone.

That's curious, because, as Bender and Cantone both testified, Jereis did no work of value other than set up a meeting with Annabi.

They still paid him.

It wasn't a bribe, because there was no direct quid pro quo. But Cantone said that Jereis probably wouldn't have been hired had he not produced Annabi's vote.

So maybe it was closer to a reward.

What it was not, it seems crystal clear, was an exchange in which Forest City Ratner got "bilked."

Maybe the Times's snarky editor in charge of corrections should re-think this one.

Tuesday, February 28, 2012

NY Post: Forest City didn't conduct background check into Jereis, spokesman claims they had "no way of knowing" his criminal past

In We didn't know we hired a crook: Ratner firm, the New York Post has a mini-scoop regarding one of the two defendants in the ongoing Yonkers corruption trial, the go-between who helped get Council Member Sandy Annabi to change her vote to green-light Forest City Ratner's Ridge Hill project:
Forest City Ratner officials told The Post that they never conducted a background check in 2006 on then-Yonkers Republican Party Chairman Zehy Jereis before awarding him what amounted to a $5,000-a-month no-show job. This was after they learned of the political crony’s criminal record from a reporter.
...Shortly after testifying in Manhattan federal court Monday, Scott Cantone, FCR’s senior VP for government affairs, told the Post the company was unaware of Jereis’ shady past and never did a background check on him.
FCR spokesman Joe DePlasco said the firm had “no way of knowing” Jereis had a criminal record because “he was the leader of the Yonkers Republican Party.”
Um, being the Chairman of the Yonkers Republic Party doesn't exempt someone from a criminal past.

In some cases, it might be connected to it. Let's do a very quick literature search.

Past press coverage: NY Times, Journal News, NY Daily News

In the Post

Post reporter Rich Calder noted the marijuana arrest--which he wrote about while at the Journal News--and the election-fraud charge, though not the claims regarding Sanginiti (the resolution of which is unclear).

The implication: if Forest City Ratner, according to testimony, would not have hired Jereis if they knew he funneled gifts and cash to her, they should have exercised similar caution if they had known of his criminal past.

The dailies ignore the Yonkers corruption trial; what's wrong with the Times?

So Bruce Bender, long the top government relations official for Forest City Ratner and former Chief of Staff for Council Speaker Peter Vallone, testifies yesterday in federal court about the developer's nearly desperate search for the vote that green-lighted the Ridge Hill project in Yonkers--a process that led to corruption charges against two others--and what do the New York dailies do?

They ignore it. (The suburban Journal News has been covering the story.)

You can almost understand the New York Post, which did have a reporter there (and did cover the testimony last week of Bender's colleague Scott Cantone), and the New York Daily News, which didn't send a reporter.

The tabloids want juicy headlines, though, by my lights, Bender's memo to lobbyist Mike Spano, now the mayor of Yonkers, qualifies as juicy insight into how development and politics really work:
"No fucking around. Get Sandy on board. Tell your brother we need help now."
Sandy would be Council Member Sandy Annabi, now on trial, and the brother would be Yonkers powerbroker Nick Spano, a longtime state Senator turned legislator with his own recent legal troubles.

What happened to the Times?

The New York Times? Well, their federal courts reporter was in the room, diligently taking notes. I'm sure he was capable of delivering a solid report. Maybe he even wrote one.

Someone decided no, maybe the same someone who decided the MTA deal Forest City Ratner renegotiated in 2009 was worth just five short paragraphs in print, or an article on the Nets' efforts to woo fans was worth 18 paragraphs.

Even if the Times folds the trial coverage into a later round-up, the immediacy and focus will be lost. (Remember, the paper has unlimited space online.)

Yesterday, as I waited on line yesterday outside the Moynihan courthouse in Lower Manhattan, I exchanged a few pleasantries with a law professor bringing a class to the ceremonial courtroom.

"There's a big Yonkers corruption trial going on in 14C," I said. "Have you heard about it?"

The answer was no.

Blame the press, especially the Times.


I've always avoided saying that Forest City Ratner, which partnered with the Times on building the Times Tower, has an influence in the newsroom. (The editorial page is another story.)

More knowledgeable people than I have insisted that's not how it works, that however bad or inadequate the Times's coverage might be, it can be explained, if not excused, by inattention, other priorities, a shrinking newsroom, etc.

I'd like to hear their explanation for the latest circumstantial evidence.

The latest Atlantic Yards Construction Alert: efforts redoubled at rodent control; cover on dirt pile finally noted

Below are some excerpts from the latest two-week Atlantic Yards Construction Alert, dated 2/27/12 and released yesterday by Empire State Development after preparation by Forest City Ratner.

I've bolded the notable changes from the previous alert. Note the increased efforts at rodent control, a huge issue for the surrounding community, and belated efforts to cover a dirt pile, which was cited by Atlantic Yards Watch.

The same additional language in the section immediately below about rodent control was added to the sections regarding work on the new transit entrance and the rail yard.

From the alert

Rodent Control Measures Taken
• Hunt and FCRC continue to review and implement actions to supplement the site and adjacent neighborhood’s rodent protection activities. Hunt has more than 225 rodent bait stations within the arena work site and Block 1129 that are being monitored and maintained on a weekly basis. Across the site, additional measures are being instituted to redouble efforts related to food garbage control, including the provision of additional garbage containers. In addition, baiting stations have been or will be inspected to confirm operation and repaired or relocated as needed.

Backfill Storage
• In order to work more efficiently within the Yard, excess soil required for backfilling the site has been stockpiled in the lay down area adjacent to Pacific St \on block 1129. The pile has been completely covered with a tarp and additional measures , including the use of wood fiber blocks around the perimeter and gravel at the entrance rwill be used to prevent run off of soil into Pacific St. The stockpiled soil, which is non-hazardous, is expected to remain in place until mid-April.

Revisions to the perimeter construction fence are projected to begin this reporting period, in order to allow the site construction activity to ramp up.

The de-shoring of the primary roof trusses will be done during this reporting period. The de-shoring program has been reviewed with engineer of record and with DOB. The shoring towers should be transported from the site during this reporting period. Shoring towers will be required when the main entry canopy steel erection begins on or about March 26, 2012.

• The steel erector is expected to begin on the main entry canopy steel erection on or about March 26, 2012. [previously mid-March] Fabrication of this material has started.

Façade Installation
• The façade erector will complete the installation of erection clips and panels on the Flatbush Avenue elevation and along the west elevations lower and middle panels during this reporting period. The installation of curtain wall and curtain wall/lattice panels will resume on the Flatbush Avenue elevation following the canopy steel erection. In the interest of public safety, and as approved by the New York City Building Department, pedestrians using the east side sidewalk of Flatbush Avenue next to the arena may be temporarily diverted to across the street by Hunt flagmen during high level work. The façade erector will continue with installation of erection clips along the 6th Avenue elevation this reporting period, and turn the corner west on to the Atlantic Avenue, installing the high panels. Installation of the erection clips will continue on the Dean Street elevation during this reporting period.

• The boiler #2 has been fired and is providing temporary heat via permanent systems to the Event Level and Main Concourse.
• Temporary electric power is being provided at Event Level and Main Concourse as well, to provide temperate conditiond [sic] for applied finishes work to begin.

• The primary switchgear installation for the Network Protector Room and the ConEd vault wiring installation will continue this reporting period.
The transformers have been placed in the ConEd vault.

The piping for the storm/sanitary/water services from the street mains to the arena at 6th and Pacific has commenced. The underground work in the street bed is expected to be completed by the end of February. Permanent pavement restoration will follow.

The preparation for placement of the terrazzo flooring (shot blasting/scouring of the slab on metal deck) at the Upper Concourse will start this reporting period.

Transit Canopy
• The steel and concrete roof for the canopy is now complete along with the spray fireproofing. The contour slab is nearing completion and will then be followed by the roofing.
Tile work is underway. The steel stair nosings and stair tile work at the main entrance stair will follow the completion of the MEP work, painting and canopy ceiling installation. MEP work will progress over the next 2 months and will be followed by the canopy ceiling

Water Main replacement

Stormwater discharge at Flatbush Avenue is complete and approved. . Work on the discharge at 6th and Pacific Streets is in progress and will be completed by the end of February. The work includes a trench and associated sheeting or lagging approximately 17 to 20 feet deep to reach the bottom of the existing sewer main which the storm system will connect to. The work area is plated and traffic flow is restored every morning before 6 A.M.

Atlantic Yards Construction Alert Feb. 27, 2012

Monday, February 27, 2012

Forest City's Bender, Cantone testify in Ridge Hill trial; no quid pro quo in Jereis hiring, but they strung him along until Annabi voted; developer nearly desperate, ordered Spano to get his brother's help

Today was no red-letter day for developer Forest City Ratner. Though not charged in the Yonkers corruption case, two key Forest City executives involved in the $650 million Ridge Hill project--Scott Cantone and Bruce Bender--took the stand and had to explain the company's curious and even desperate behavior in ensuring the project's approval.

Surely the federal jury must have wondered why exactly the developer--the greatest beneficiary of the alleged bribes paid by defendant Zehy Jereis, a former Yonkers Republican chairman, to defendant Sandy Annabi, a former Yonkers Council Member--remains unscathed.

After all, they were concerned about Jereis's persistent requests for a consulting gig, which began before Annabi's vote, so they strung him along, and finally signed him up a few months after Annabi changed her vote in mid-2006 to green-light Ridge Hill.

Defense attorneys did get the Forest City government relations executives to acknowledge that Jereis never requested a quid pro quo. And the execs acknowledged that Annabi never knew anything about Jereis's requests. Nor did they know Jereis had funneled money to her.

(Jereis's defense is that he spent money--$174,000 over some years--on Annabi because he was infatuated with her.  Annabi, who denies a romantic relationship, claims she changed her vote on Ridge Hill and the other project involved in the trial, Longfellow, because developers made concessions. However, Forest City's concessions on Ridge Hill did not meet all those she'd requested, were not new, and were deemed minor by others.)

And prosecutors, gingerly managing their not-quite-squeaky-clean witnesses, got Bender and Cantone to affirm that no, they would never have hired Jereis for what was essentially a no-show job had they known he had been paying Annabi's bills. (Then again, Cantone testified last week that they wouldn't have hired Jereis if he hadn't helped get Annabi's vote.)

Ultimately, the testimony illuminated the urgent, nearly desperate posture of Forest City, which had committed at least $70 million on Ridge Hill, found factionalized Yonkers politics "crazy," found a unique situation given that Annabi wouldn't even meet with them, and didn't want to see their investment go sour.

After lobbyist Mike Spano, who's now the mayor of Yonkers, told Bender that he and others had been unable to budge Annabi, Bender replied pungently in an email: "No fucking around. Get Sandy on board. Tell your brother we need help now."

Spano's brother Nick, as Yonkers political watchers know, is a local political powerbroker, a state Senator-turned-lobbyist who just happened to plead guilty to tax charges earlier this month.

Sketchy behavior

But Forest City Ratner did hire Jereis--and paid him $15,000 for three months--as a kind of reward for helping win Annabi's support, and they didn't seem to care that his invoices were sketchy--at least not until news of a federal investigation surfaced and the payments stopped.

Beyond that, the trial illuminated some curious Forest City practices, in which meetings with Annabi and Jereis were inaccurately described internally as with "Friends of Yonkers" and with "consultants," neither of which were accurate.

Moreover, in two cases, Forest City agreed to concessions that were never delivered--an echo of promises made in the Atlantic Yards saga.

Also, both Bender and Cantone saw their credibility challenged when faced with grand jury testimony that they initially didn't remember.

If the jury had cause to wonder about Bender and Cantone, that wonder was compounded by learning, upon Bender's cross-examination, that he not only had recently left Forest City, but was starting a firm called Bender Cantone Consulting. That thus indicated that Cantone, who in testimony had been described only as a Forest City employee, was also leaving the powerful developer.

Who actually hired Jereis, Bender was asked at one point.

"The company is a collective," Bender said, prompting a query from Judge Colleen McMahon as to whether an individual offered him the job.

Bender's answer was oblique: "Ultimately, it's based on the approval of Mr. [Bruce] Ratner."

Bender will be back on the stand when the trial resumes at 9:30 a.m. in federal court. Cantone's testimony has concluded.

As with testimony Thursday, Forest City had executives David Berliner and Michael Rapfogel in the room, as well as outside public relations counsel Joe DePlasco.

Cantone: we strung Jereis along

The trial resumed with direct examination of Cantone, who wore a gray suit and a generally stoic expression.

Assistant U.S. Attorney Perry Carbone reminded him how Jereis, after a 6/2/06 initial meeting with Forest City executives at Marco Polo Ristorante in Brooklyn, was able to set up a meeting with Annabi, who had previously rebuffed the developer.

"How did you view this development?" Carbone asked.

"It was a very interesting development for us," responded Cantone, who said that the company had been told by various people--elected officials, unions--"that all roads to Sandy Annabi go through Zehy Jereis." Others, he noted, had warned them against going through Jereis.

But the 4-3 pro-project alignment on the City Council had become insufficient after a County of Westchester vote against the project necessitated a supermajority on Council and thus a fifth vote.

By the end of June 2006, how much money had Forest City spent on Ridge Hill?

"Approximately $70 million," responded Cantone.

Was Forest City aware that Jereis had paid $10,000 for Annabi's Mercedes, paid off loans, and otherwise rewarded Annabi financially?

"Absolutely not," Cantone replied. "If we had any inkling of any of the accusations or facts, we not only would not have been meeting with him, we certainly wouldn't have hired him."

Was Forest City concerned that, if they didn't hire Jereis, Annabi's vote would be lost?

"We certainly had a concern about that," Cantone responded, "which is why we did not tell Zehy Jereis we wouldn't hire him."

What relationship?

On cross-examination, Annabi's attorney, William Aronwald, asked if Jereis had ever discussed his relationship with Annabi.

Only in their last meeting, in March 2007, replied Cantone.

"Did he tell you the relationship was such it would cost him a divorce?" Aronwald asked.

Cantone said Jereis had reported that investigation had questioned him about his closeness with Annabi.

Did Jereis discuss how he had gone shopping with Annabi?

Cantone said that came up at a meeting at Starbucks, which may or may not have happened before Annabi voted on Ridge Hill. Jereis had bought Annabi shoes or a handbag, and Annabi was upset about it, "which we found very odd."

"In what way?"

"We didn't understand what the relationship was," Cantone replied, "why he was buying her things."

But did Forest City ask more about it?

"No, we did not," Cantone responded.

Agents of influence

Aronwald then asked if Forest City had ever bribed or benefited any legislator to win a vote--a question that drew prosecutors' objections, which were upheld by McMahon.

Aronwald asked how much Forest City had paid to lobbyists Al Pirro and Mike Spano, suggesting sums of $1 million and $175,000 respectively, figures Cantone could not confirm.

Under questioning from Aronwald, Cantone acknowledged that he and Bender had called Annabi at her job at St. Joseph's Hospital in Yonkers but said he had no knowledge that the developer was trying to pressure the Council Member. The issue would recur with Bender's testimony.

Cantone affirmed that it was unusual for an elected official to not even be willing to meet with a developer. Was it the first time in his experience?

"Yes," replied Cantone, with a tinge of wonderment.

Did Annabi explain why she wouldn't meet with Forest City?

"Initially, no," replied Cantone. But later she said, essentially, "You heard my objections to the project; there's really no reason to meet."

Responding to Aronwald, Cantone affirmed that Jereis had not guaranteed he could gain Annabi's vote.

He also affirmed that meetings with Jereis and Annabi at eateries were not in back rooms, with no attempt to hide or conceal anything.

A questionable expense report

Aronwald then probed an expense report Cantone filed regarding a Forest City meeting with Annabi and Jereis.

Is it important to make information on expense reports as accurate as possible, Aronwald asked.

"I guess," replied Cantone gingerly. "Yes."

Aronwald then pointed to a document, blown up on screen for the jury and other parties to the trial, which described a "lunch meeting with consultants, Ridge Hill." What did the term "consultants" mean?

"These were people we were consulting with," Cantone replied, noting that they were not paid consultants.

Kicking Bender under the table

The first meeting with Annabi, 6/9/06, Cantone acknowledged, as confrontational in portions. Apparently Annabi and Forest City retail executive Richard Pesin, who had overall responsibility for developing Ridge Hill, had gotten into a heated exchange.

"Did you ever say that the meeting ended badly?" Aronwald asked.

"No," responded Cantone.

Aronwald then brought up grand jury testimony from 2008, in which he said that the meeting had ended badly, but they agreed to talk.

Annabi was resistant to the project's impact on traffic, and thought the developer wasn't paying enough taxes. Pesin argued back. "I was kicking Bruce Bender under the table at this point to get rid of Richard Pesin," Cantone stated.

"Is that a routine practice?" Cantone was later asked, prompting the response, "I've kicked him a number of times."

Didn't Annabi and Pesin then leave?

"I think we all left together," Cantone said.

Aronwald then read back the grand jury testimony, in which Cantone and Bender were left with Jereis, who said he supported the project and advised it would be good politics for Annabi to extract more concessions.

Bender, said Cantone would go back and see if Forest City could be more flexible.

After that meeting, Jereis first asked Forest City for a job. Aronwald got Cantone to acknowledge that Forest City Ratner copied Jereis on emails to Annabi about her vote, but didn't copy Annabi on emails to Jereis about the job he requested.

Did Annabi ask for Jereis to be copied on emails to her?

"I don't recall," Cantone replied. (Fun fact: both Annabi and Jereis had AOL addresses.)

"You never told her Zehy Jereis was seeking a consulting agreement with Forest City Ratner?" Aronwald asked.

"No, responded Cantone, acknowledging that Annabi was never asked if her vote was dependent on Jereis's hiring.

"Did she ever say the road to her vote was financial benefits to Zehy Jereis?" Aronwald asked.

"No," responded to Cantone. The issue was concessions on taxes, which Forest City could meet, though it could not make concessions on project changes to reduce traffic.

Aronwald asked Cantone if Jereis was ever threatening, ever said it was a quid pro quo, or ever put the developer in the position of having to say yes or no to the consulting agreement.

Cantone confirmed the answer was no.

After Annabi agreed to change her vote, Forest City drafted a press release, which Annabi objected to because it didn't mention the $10.8 million in new taxes Forest City agreed to pay. "I need that in there, since that is the reason I agreed to come on board," Annabi wrote at 11:05 pm on 6/14/06.

Forest City, however, was unprepared to release the figure until Pesin "had discussions with City Hall," another nod to the factionalized nature of Yonkers politics.

Another job request

Jereis's attorney, Anthony Siano, asked Cantone about the first meeting that Forest City had with Jereis, which was organized by Forest City ally Assemblyman Joesph Lentol, via his Yonkers friend Joseph Galimi, who knew Jereis.

Galimi also asked Forest City for a job. Cantone took his resume and said they'd look at it.

Galimi never contacted them again, "so the issue went away," Cantone said.

While Cantone described Jereis as "persistent" in his request for a job, hadn't he found other job applicants to be persistent as well, asked Siano. The question was ruled out of order.

Hiring Jereis

Annabi's vote on Ridge Hill was 7/11/06. Forest City agreed to hire Jereis sometime later--in August or September--and backdated the contract to August 1.

The backdating wasn't really explained, but an 8/11/06 email from Cantone to a colleague, John Cournoyer, suggested some level of urgency: "What are we doing? I need to get Zehy something fast."

Jereis turned in invoices that Cantone, in testimony last week, described as almost comically inadequate.

"You saw nothing wrong with Mr. Jereis's invoices for August, September, October?" Siano asked.

"No," responded Cantone, who admitted he never had a conversation with Jereis about the parameters for his reports, which were delivered only in March 2007 after news of the federal investigation surfaced.

Jereis was hired for both "retail hunting"--finding possible properties--and advice on government relations. Siano pointed out that Paul Feiner, Supervisor of adjacent Greenburgh, was still an avowed opponent of the project.

"That was one of the things you talked to Mr. Jereis" about, Siano pressed.

"It's possible, sir," Cantone replied.

Bringing it back

On redirect examination, Carbone asked Cantone why Forest City hadn't reached out to Jereis before 6/2/06.

Well, said Cantone, Forest City had already been told not to do so by others, including paid lobbyists and other elected officials who supported the project. Given the "political climate, which was crazy"--with factions within parties--"we did not want to offend supporters," he said.

As to the concessions offered to Annabi, "is it fair to say the concessions had been made already, to other Council Members and the public?" asked Carbone.

"Yes," replied Cantone.

He also agreed that, while Annabi may not have asked him to copy Jereis on emails, she did so herself, thus ensuring Jereis was in the string.

Bender enters

After waiting in a witness room last Thursday without testifying, Bender arrived at the stand at about 12:35 pm. While he was mostly a responsive witness, with signs of the political savvy he built in city government and at Forest City, Bender also appeared somewhat uncomfortable--understandably--as if going through a medical procedure that was painful but necessary.

Until recently, he told Carbone, he was Executive VP for Government Affairs and Public Relations at Forest City, with responsibility for five to 20 people.

In meeting with Yonkers Council Member, Carbone asked, did Forest City agree to concessions?

Yes, said Bender, citing the realignment of a road and the calling of a town hall meeting in response to requests from Council Member Dee Barbato. He also met with John Murtagh, like Barbato, another opponents.

But he couldn't get a meeting with Annabi. He even "reached out" to her employer, speaking to a member of the board of directors to see if Annabi would meet with them.

Was this unusual?

"Unique," replied Bender, who noted that two lobbyists and other elected officials had been unable to wangle a meeting with Annabi.

On 6/2/06, after a morning meeting at Starbucks at the Atlantic Terminal mall with Council Member Diana Reyna, Bender went to Marco Polo for lunch to meet Jereis.

"I asked him why he was against the project," Bender recalled. Jereis said he wasn't: "He responded, Maybe you just hired the wrong people."

Jereis explained that he had helped elect Annabi and had a political relationship with her.

Moving toward concessions

A week later, on 6/9/06 at Jake's Steakhouse in Riverdale, Bender finally met Annabi, with Jereis and Cantone. Bender asked her why she wouldn't meet with them, he recalled, "we weren't bad people, we just wanted to get together to explain the project."

During the discussion, Pesin agreed to offer the additional tax payment of approximately $10 million.

"Did Forest City Ratner make any concessions that had not been previously offered?" asked Carbone.

"No," responded Bender.

Then, at a 6/14/06 meeting at Madison's Restaurant in Riverdale, they continued the discussions about the tax contribution and other concessions.

In the final agreement, not only would Forest City contribute more taxes but "we were going to create an education fund" that Annabi requested, said Bender.

"Did that ever come to pass?"

"No," responded Bender.

Did Annabi follow up?

"Not that I can recall," responded Bender.

Uncomfortable feeling

On 6/28/06, Bender, Cantone, and Pesin met with Jereis at a Dunkin Donuts. Bender acknowledged he felt "just an uncomfortable feeling."


"The whole dynamics of the situation. On the one hand, we finally got to meet Council Member Annabi. On the other, he was asking for a consulting contract," Bender said. He said he felt pressure, on a corporate level: it had taken months to get a meeting, but the person who organized it could take it away.

"We were caught between a rock and a hard place," he concluded.

When the meeting ended--before Annabi's vote the next month--had they promised Jereis a job?

"It was inconclusive," Bender replied, "but we certainly left the impression we were probably going to do it."


"We didn't know what tomorrow was going to be, the vote was coming up on July 11," Bender said. "We wanted to keep the discussions going."

Forest City, he confirmed, had invested between $70 and $80 million.

Under questioning by Carbone, Bender, like Cantone, affirmed that he knew nothing of Jereis's record of paying Annabi and would not have hired him if he did.

"Were you grateful he was able to get a meeting with Sandy Annabi?" Carbone asked.
"Yes, very much so," replied Bender.

Cross-examination: Bender's benefit

Under cross-examination by Aronwald, Bender acknowledged that he'd left Forest City earlier this month and was co-founder of a consulting firm.

"What is the name of your consulting firm?" asked Aronwald.

Prosecutors objected to the question, but were not upheld.

"Bender Cantone Consulting," Bender replied, with a slight croak in his voice. He clarified that Cantone would probably be leaving Forest City next month.

"You had a financial interest in Ridge Hill being done?" Aronwald asked.

"I guess so," responded Bender. (Cantone, when asked the same question, said no.)

Bender elaborated that there was "a complicated formula based on the assessed value after it [Ridge Hill] stabilized," and said he was unable to attach a dollar figure.

Frustration and anger

Aronwald asked Bender if the failure to gain access to Annabi in 2005 was a source of frustration and anger.

Bender copped to the former, not the latter.

Aronwald then pointed to the 9/25/05 email from Mike Spano, who stated, "I've taken every angle with this Sandy. I have Nick [Spano] involved, Zehy [Jereis], and Anthony [Mangone, who's already pleaded guilty regarding his role in the Longfellow project. She has not moved. We have union heads talking to her too. We are still working it."

"He doesn't refer to Zehy Jereis. He just uses Zehy," Aronwald pointing out, indicating that Jereis was known to Forest City and its consultants.

Bender responded with obvious anger. After indicating he'd just been to the emergency room for a family issue, he wrote, "No fucking around. Get Sandy on board. Tell your brother we need help now. I have to close this and take care of my family."

"You wanted Nick [Spano] to help?" Aronwald asked.

"Yes, that's correct," Bender said a bit resignedly.

Did Bender try to have Annabi's employer influence her?

No, he said, though he got her number from them.

He called up and mistakenly thought Annabi was expecting the call. "She hung up and on me and said don't ever call me at my place of work," Bender recalled.

Drawing the lines

Under questioning from Aronwald, Bender acknowledged that Jereis never promised he could obtain Annabi's support.

When they finally met 6/9/06, did the meeting start off badly?

"Yes and no," replied Bender. "Just sitting down with her was a success." But he acknowledged that Annabi and Pesin had clashed, and that he apologized for Pesin's tone.

Annabi, Bender agreed, never asked Forest City for anything of value.

After the 6/9/06 meeting, Bender wrote his boss Bruce Ratner: "We had a good meeting with Sandy. We offered 10 mil over 3 years in tax and we are 2 mil short to make the deal, or 700K short over 3 years. I think we have to make the deal."

Ratner responded positively, in a message that wasn't entered into the record, and Bender replied on 6/10/06, "Thank you for your confidence. Let's see if we can bring this home this month. We may have to put some funds away for [Council Member Chuck] Lesnick and traffic. There's a good chance that this money will never be drawn down."

Getting to yes

While other opponents on the Council wanted a 30% reduction in the project, which would have killed it, Annabi wasn't as hard line.

"As far as you were concerned, you persuaded Sandy Annabi on the merits to vote for the project, not Zehy Jereis," asked Aronwald.

"I wouldn't take the credit," Bender replied, shaking his head slightly.

Aronwald then showed Bender his grand jury testimony. "Does that refresh your mind, that you persuaded her?"

"Yes," replied Bender. "In that context, yes."

Aronwald pointed out that the 6/14/06 meeting at Madison's with Jereis and Annabi was listed in Bender's appointment log as "Friends of Yonkers."

Who, he asked Bender, " are the Friends of Yonkers"?

"I don't know why it was coded that way," Bender responded.

The Longfellow tangle

Aronwald asked Bender if he recalled asking Council Member Dennis Robertson, an ally, to take the Longfellow project off the Council's agenda at one point--apparently to give Annabi more time.

Annabi had to leave the 6/14/06 meeting before Bender wanted her to because she had Council business related to Longfellow, a project unrelated to Forest City

On cross-examination, Siano asked Bender why he sent an email to Annabi on 7/11/06, "What happened to Longfellow? Who did us wrong."

"This email was an effort to bond--a sort of collegial email," Siano asked.

"Yes," confirmed Bender.

Beyond Yonkers

Siano said Bender continued to talk to Jereis.

"Here and there," the witness responded.

Siano brought up the opposition to Ridge Hill from Greenburgh's Feiner.

Bender said it did continue but had been resolved at some point by a monetary settlement.

The Lentol connection

Siano brought up the role played by Lentol in arranging the initial meeting with Jereis. "You were in Pennsylvania" when Lentol called, the lawyer stated. "He was needling you about what he'd heard about the project. He was with someone and they were telling stories how you were never going to get Ridge Hill built."

When the meeting with Lentol was set up, "it was Mr. Galimi who brough Mr. Jereis," Siano asked.

"That I do not know," Bender said, though that's been confirmed by other witnesses.

Another consultant

Aronwald, noting the role of consultants Al Pirro and Mike Spano, pointed out that another consultant, Melvin Lowe, was tasked with getting Council Member Patricia McDow's support.

Updates from today's Ridge Hill trial testimony: go to @AYReport Twitter feed

Click here.

Assemblyman Joe Lentol, some curious connections, and the Ridge Hill/Yonkers corruption trial that resumes today

So, who knew Brooklyn Assemblyman Joe Lentol had played a key cameo in the machinations that led to passage of Forest City Ratner's Ridge Hill development in Yonkers? Not until testimony last Thursday in a federal corruption trial did that surface, and only glancingly so.

The upshot: Lentol, an Atlantic Yards supporter, seems closer to Forest City than most people knew.

The reasons? Unclear, but Lentol's close relationship with Assembly Speaker Sheldon Silver, himself a key Forest City ally, probably doesn't hurt. (Lentol chairs the Brooklyn delegation and the Codes Committee, both key positions.)

The linkage? The go-between who connected Lentol, Forest City, and defendant Zehy Jereis--charged with bribing Council Member Sandy Annabi to change her vote--said he knew the Assemblyman from the very mainstream Lions Club.

But both the go-between, Joseph Galimi, and Lentol also have been reported to have connections, however indirect, with organized crime figures, factoids that should be filed away in case more information surfaces.

Trial resumes; grant of immunity?

The trial resumes today with Forest City Ratner executive Scott Cantone on the stand and his former boss Bruce Bender--so close they're starting a lobbying firm together--waiting in the wings.

It will be interesting to learn whether, for example, the witnesses are testifying under a grant of immunity from prosecution. Forest City of course has not been charged, and it is not a target or subject of the probe.

But if there were even ambiguous evidence against Forest City regarding criminal (rather than ethical) wrongdoing, it's possible that attorneys for the developer's witnesses early on negotiated a grant of immunity, just in case.

Also see coverage in today's Journal News, Trial highlights Jereis-Annabi ties, which highlights the curiously close relationship between Democrat Annabi and Republican Jereis, despite their surface party differences:
[Jereis] pleaded guilty to a misdemeanor after he and two other Yonkers political figures were accused of forging signatures on Conservative Party nominating petitions in 1996. That didn’t stop him from being hired a few years later for a top job at the Westchester Board of Elections.
He later worked on Nicholas Spano’s Senate staff for three years, although in 2006 he left after Mangone told him he had become too controversial.
The year before, Jereis had been accused by a gangster-turned-government-informant of taking payoffs to pass along information about investigations by the Westchester County District Attorney’s Office.
Jereis landed on his feet, with a $100,000 job at the Yonkers Chamber of Commerce, arranged by Spano.
Lentol's role, and a question mark

During brief but tantalizing testimony last week, we learned how Forest City relied on a skein of connections to meet Jereis, but not exactly how it was set in motion.

Lentol was an old friend of Joseph Galimi, described in court as a former Department of Public Works in Yonkers but also, as noted by the Journal News, a figure who's been investigated for organized crime ties. Galimi said he'd worked for Lentol in the 1980s, part-time for seven years and full-time for six months.

And Galimi knew Jereis well, from Yonkers political activities, talking regularly, "a couple of times a week," about "general things, politics."

In a meeting at Tiro A Segno, a private club in Manhattan, Lentol brought up Ridge Hill to Jereis and Galimi, and Jereis agreed to meet with Forest City.

But how did that meeting come about? We didn't quite learn. Assistant U.S. Attorney Jason Halperin asked Galimi if, in April 2006, "did Assemblyman Lentol raise an issue about Ridge Hill?"

The answer was yes. Galimi was at Tiro A Segno with Lentol, Jereis (who'd driven the car from Yonkers), and another friend, Victor Gartenstein. (A search suggests Gartenstein lives either in Brooklyn or Manhattan, but no identifying information, not even a clear spelling, was offered.)

But we weren't told who set up the meeting, or whether it was an accidental encounter with Lentol, who presumably was coming from Brooklyn.

(In a 2/24/12 Journal News article Forest City known for tough political skills around region, Lentol praised Forest City because they "definitely have a good track record as developers as far as efficiency and getting things done”--a statement that leaves a lot hanging out there--but would not comment on his role in the Galimi meeting.)

Galimi then set up a lunch at Marco Polo Ristorante in Carroll Gardens, with Jereis, Lentol, Bender, and Cantone, whose name he didn't remember.

At the lunch, Jereis said he could probably arrange for a meeting between Forest City and Annabi. And that set in motion actions that led to federal charges against Jereis and Annabi.

Mob ties suggested

Marco Polo is a nice place to eat. It also has a reputation, as the Daily News reported 12/5/08, in Mob-tied Brooklyn restaurateur avoids jail with help from Marty Markowitz:
Reputed Gambino crime family soldier Joseph Chirico won't serve a single day in prison: He was sentenced to six months' house arrest - and can spend 10 hours a day at his Marco Polo restaurant in Carroll Gardens - without even wearing an ankle bracelet.

Assistant U.S. Attorney Dan Brownell said Chirico passed $1,500 in tribute money from a mob associate to another Gambino soldier. "Organized crime has been a curse, especially in counties like Brooklyn and Queens," Brownell argued.

Federal Judge Jack Weinstein gave Chirico a tongue-lashing for swearing an oath to the Mafia - but let him off after Chirico's lawyer read glowing letters from [Borough President Marty] Markowitz and former Brooklyn beep Howard Golden.
Lentol, it turns out, has sent his own letters on behalf of some accused of mob ties. In an 8/6/04 article headlined B'klyn Pol Goes To Bat For Mob Slay Suspect, the Daily News reported:
A TOP STATE lawmaker asked a federal judge to free a reputed Bonanno crime family associate charged with two gangland slayings, the Daily News has learned.

Assemblyman Joseph Lentol (D-Brooklyn) is defending the letter he wrote last May in praise of Patrick (Patty Muscles) Romanello and his application for bail.

Lentol, who chairs the Assembly committee that evaluates all criminal justice legislation, said he knew Romanello was facing racketeering charges, but was unaware of the murder raps...

"It's pretty tough to walk away from somebody when they're not asking you to do something wrong," Lentol said. "He hasn't been tried and convicted. You don't turn your back on a friend."
Lentol told the newspaper he had long known Romanello's family, as they operated an auto body shop in Greenpoint, within his district. "He has a very good reputation throughout my community for doing quality and honest auto body repair work," Lentol wrote to the judge.

What happened to Romanello? In the sidebar to a 10/29/10 New York Times article about a mafia turncoat, Salvatore Vitale, we learned that Romanello had gotten a ten-year sentence related to murder.

A Department of Justice document describes Vitale's cooperation, and on p. 85 (or the 91st page in the overall document), Romanello's crimes are described: racketeering conspiracy, and "predicate acts concerning the 1983 conspiracy to murder, and murder of, Enrico Mazzeo and the 1990 conspiracy to murder, and murder of, Louis Tuzzio... Romaello served as a backup shooter on Mazzeo's murder and fired at Mazzeo after Mazzeo was first shot by another participant in the murder."

Next Atlantic Yards District Service Cabinet meeting: March 15, not March 1 (and ESD's Ken Adams will be there); Transportation Focus Group to meet March 8

The Atlantic Yards District Service Cabinet meetings, held about every two months, are usually interesting, since they provide an opportunity for involved agencies interact, and for Forest City Ratner to undergo questioning by the few elected officials (and their designated staffers) who care.

And some news--such as plans for Transportation Demand Management, or affordable housing--tends to surface.

At the last meeting, held 1/26/12, it was announced that the next meeting would be Thursday, March 1. That date, less than two months away, has now been pushed back to Thursday, March 15, from 9:30 to 11 am at Brooklyn Borough Hall.

Why? To accommodate the schedule of Kenneth Adams, the CEO of Empire State Development (ESD), the state agency in charge of the project. Adams has offered genial support for the project and thus no particular change in policy, but as a Brooklynite has pledged to be more responsive.

The meetings are chaired by Arana Hankin, Director, Atlantic Yards Project, for ESD, and Carlo Scissura, Borough President Marty Markowitz's Special Advisor (and former Chief of Staff, having stepped down to run for BP in 2013).

The meeting is open to the public for observation but not comment. Nor are photos and videos permitted. For members of the public with questions and concerns, your best bet is to contact your community board--the CBs usually send representatives--or the officials of Council Members Letitia James and Steven Levin, and state Senator Velmanette Montgomery.

Transportation Focus Group meets March 8

One key issue is transportation, and the next meeting of the Atlantic Yards Transportation Focus Group--which incorporates community members in an advisory role, with representatives of ESD and the Borough President's Office present--will be held March 8 at 6 pm at Brooklyn Borough Hall.

The meeting is open to the press and public, but the only participants in the round-table discussion are designees from invited community groups.

Sunday, February 26, 2012

Why so few larger apartments in first planned tower? Maybe it has to do with not gambling on the market-rate units

Remember how Forest City Ratner said last month that the "goal"--actually a promise--of ensuring half the subsidized apartments (in square footage) would be larger units wouldn't be met in the first tower?

FCR executive said it had to do with the way city subsidies work. Perhaps, but consider that the 175 subsidized units would be the same configuration (mostly studios and one-bedrooms) as the market-rate units. And it's a lot less risky to rent smaller market-rate units than larger ones.

As the Wall Street Journal reported in a 2/13/12 article on market-rate condo units, Brooklyn Feels a Pinch: Few Family-Size Apartments in Borough:
Developers are often loath to gamble on larger units, especially in neighborhoods that are considered up-and-coming. A $1 million three-bedroom unit that doesn't sell is a much greater liability than a smaller unit.
After all, who's going to want to pay market-rate rents to live next to an arena? Likely those who value the location--the proximity to transit and nightlife. That suggests singles and couples, not families.

A house ad in the Times and a question mark about coverage of Forest City Ratner's role in the Yonkers corruption case

It was curious that, after a Forest City Ratner executive testified last Thursday about the developer's questionable behavior connected to its Ridge Hill project, a key part of the corruption case against two Yonkers figures, no article appeared in the New York Times.

(The New York Post covered it, alone among the mainstream city media, while the suburban Journal News has steadily examined Yonkers corruption issues. Consultant/activist Gary Tilzer, in his True News blog, has steadily criticized the local media for ignoring the case.)

After all, the Times had two reporters in the courtroom and, by any objective standards, the goings-on were more newsworthy than, say, coverage of promotional efforts by the Nets. After all, also taking the stand was the current mayor of Yonkers, Mike Spano, a former lobbyist for Forest City.

And the Times, presumably, has unfettered space online in its CityRoom blog.

Space unused in print

It seemed even more curious after a look at the print paper Friday. There, at the bottom of A22, a page devoted to metropolitan coverage, was a house ad (right) for the Times. Such house ads are typically used to fill space when there's no paying ad or article to take precedence.

Had the Metro desk prepared another news article for print, it could have fit in that space. But it didn't.

While the Times has not offered daily coverage of the Yonkers trial, it has published two articles.

So presumably coverage will resume at some point this week. One question is how much the testimony by Scott Cantone and Bruce Bender, key executives for the developer in both the Ridge Hill and Atlantic Yards cases, will be described.

The Times's obligation

I don't say that the Times, by virtue of the parent company's partnership with Forest City Ratner in building the Times Tower, is in the developer's pocket. But I do think that business relationship obligates the Times to be exacting in its coverage, and the newspaper regularly falls short. This week will be another test.

Saturday, February 25, 2012

Betsy Gotbaum's birthday present for Bruce Ratner: a letter to the Times

Remember how former Public Advocate Betsy Gotbaum wrote that fawning letter to the New York Times last month defending Bruce Ratner from the slings and arrows of columnist Michael Powell?

Well, it was published on Wednesday, 1/18/12, and thus made a nice--if unintended as such--birthday present for Ratner. I just noticed that the New York Post reported 1/20/12 on its Page Six gossip column:
We hear...
That Bruce Ratner, developer of Brooklyn’s Barclays Center for the Nets, had a surprise birthday party at Stand Up New York on West 78th Street on Wednesday. Marty Markowitz and wife Jamie, Betsy Gotbaum, journo Lizzy Ratner (Bruce’s daughter) and Fox News’ Ellen Ratner (his sister) were among a group of 30.
So, Markowitz and his wife made the top 30?

Ex-Yonkers Council Member: "Forest City Ratner games the system and does not play by the rules"

Well, the New York City press was surprisingly quiet on Friday regarding the Yonkers corruption trial--only one mainstream article, from the Post, though the Times had two reporters in the audience--but the Journal News, which covers Yonkers and the region, at least has been giving the issue, and the trial, steady coverage.

Today the Journal News offers an overview article on the developer, Forest City known for tough political skills around region. The toughest critic is a local:
Forest City Ratner has “little or no regard for public opinion,” said John Murtagh, a former Yonkers councilman and opponent of the Ridge Hill project who recently testified in the trial. “Their entire business model is to exploit every tax loophole and taxpayer-funded subsidy that they can. Promise the world and deliver far less, and do it all by manipulation.”
Among those praising the company is Assemblyman Joseph Lentol, D-Brooklyn, who helped arrange the developer's meeting with Zehy Jereis, who's charged with bribing Council Member Sandy Annabi to get Ridge Hill passed, and soon got a no-show job with the developer: “The company is a good one as far as I’m concerned. They definitely have a good track record as developers as far as efficiency and getting things done.”

But efficiency and getting things done also have to do with tactics, and I'm quoted in the article as saying, “Forest City Ratner, however community-friendly it aims to appear, plays hardball when it counts.”

Support for AY?

The article allowed a paid flack to claim public support for Atlantic Yards:
“I think there’s been tremendous support for Atlantic Yards,” said Joseph DePlasco, a Forest City spokesman. “There was a vocal opposition that was opposed to part of the project. There are many who support it.”
Many of the most vocal supporters are financially dependent on the developer, and the last poll, by Crain's New York Business in 2006, contained leading questions--about benefits that we now know have been long delayed. Nevertheless, it was embraced by the company.

If not criminal, unethical?

DePlaso told the newspaper, understandably, that Forest City is not accused of wrongdoing in either the Yonkers or the Carl Kruger/Richard Lipsky corruption case, nor is a target or subject of the investigations.

But that doesn't make them clean:
But Murtagh sees many parallels between Atlantic Yards and Ridge Hill, including the silencing of community groups and backroom deals. Years after his first encounter with Forest City, and with the most recent allegations, Murtagh said he feels vindicated in his opposition to the project.
“Unfortunately, what’s coming out in this case now vindicates what we ... were saying about this company and this project five years ago,” Murtagh said. “In the court of public opinion it should be obvious to anyone that Forest City Ratner games the system and does not play by the rules.”
Similarly, I told the Journal News, in an unpublished comment:
Until Thursday's testimony, Forest City Ratner had never explained or justified the no-show job given to Zehy Jereis. The developer was content to fall back on the statement that it had not been prosecuted. Well, the absence of criminal charges does not, however, mean that the developer behaved ethically; a Forest City representative in court acknowledged that Jereis provided nothing of value beyond helping with Annabi's vote.

Friday, February 24, 2012

FCR's Cantone testifies: defendant Jereis probably wouldn't have gained no-show job had he not gotten defendant Annabi's vote switch on Ridge Hill; also, Brooklyn Assemblyman Lentol played key cameo

Yesterday, in a Lower Manhattan federal courtroom, developer Forest City Ratner was for the first time forced to publicly explain its dubious role in the machinations that provoked the ongoing corruption trial centered around Yonkers.

Forest City has not been charged, but the developer was arguably a bigger beneficiary than the two defendants: ex-Council Member Sandy Annabi, charged with taking bribes to approve two projects, one of them FCR's Ridge Hill, or her distant cousin Zehy Jereis, charged with funneling her some $174,000 in cash and gifts, essentially keeping her on retainer.

Forest City hired Jereis in 2006 for a virtual no-show job not long after Annabi had switched her stance to approve Ridge Hill, an 81-acre, $650 million development with 1.3 million square feet of retail, plus residential and office space.

Jereis, Annabi's political mentor, after organizing a meetings between her and the developer and then getting her on board, then pestered Forest City Ratner for a job.

Yes, it "was certainly a concern" for him that Annabi might not change her vote in the absence of an immediate job for Jereis, Ratner executive Scott Cantone testified yesterday.

But FCR wouldn't agree to it. "We thought, optically, it would look bad," Cantone said, noting that "we had really just met Zehy Jereis."

At the end of the day's questioning, Assistant U.S. Attorney Perry Carbone asked a pointed question: "If Zehy Jereis had not produced Sandy Annabi's vote, would he have been hired by Forest City Ratner?"

"It's hard to say, but probably not," responded Cantone, Senior VP for Government and Political Affairs, in the matter-of-fact tones that marked his testimony.

The result, a seeming reward for Jereis, skates close to a violation of parent Forest City Enterprises' Code of Legal and Ethical Conduct:
2. No bribe, kickback or other improper payment or promise of same shall be authorized, approved or made, directly or indirectly, by or on behalf of FCE in connection with any of its business.
The term "improper payment" is ambiguous, but it can't be too proper to hire someone to do nothing. "Between June 2006 and the present, what of any value did [Jereis] bring to Forest City Ratner," Carbone asked.

"Besides providing access to Council Member Annabi, nothing at all," Cantone replied, raising the question, yet unanswered, of why Forest City kept paying him.

Pending questions, Bender in the wings

Unclear from yesterday's testimony was whether Forest City knew its own lobbyist Al Pirro had--in what one witness called a boast-- in 2005 claimed that Annabi's vote could be bought by hiring Jereis.

But it did seem that Forest City had no qualms about paying Jereis $5000 a month for three months, even though he'd done no work of value, until federal investigators began sniffing into things.

And, in a detail that had previously not emerged in the Ridge Hill saga, Assemblyman Joseph Lentol was named as a key go between.

Cantone's direct examination will continue when the trial resumes 9:30 a.m. Monday. Defense lawyers later will have a chance to cross-examine him.

Waiting in the wings to testify Monday is Cantone's close associate, former boss at Forest City, and future partner, Bruce Bender, who was ensconced yesterday in a witness room.

Both executives, who've also worked prominently on Atlantic Yards, recently announced they were leaving Forest City to become lobbyists--perhaps because their place at Forest City grew less comfortable.

In testimony yesterday, Cantone indicated that he was still employed by Forest City, but the phrasing of a prosecutor's question suggested that Bender has already departed from his post as Executive VP. (New government relations exec Ashley Cotton starts Monday.)

Forest City Ratner must be concerned about potential fallout. In the audience were not only designated lurker Michael Rapfogel, who's been tracking the trial daily, but also General Counsel David Berliner and outside public relations counsel Joe DePlasco.

And the trial looms large for Yonkers itself; while Cantone may have been the biggest witness for Forest City watchers, testifying yesterday, not all that comfortably, was current Yonkers Mayor Mike Spano, who as a lobbyist worked for Forest City.

(Here's coverage in the Journal News and also in the New York Post, which leaves the impression that Jereis was hired before the vote. The New York Times had two reporters there, but no story today.)

FCR payment "kind of peanuts"

In seeking a rezoning and tax breaks, Ridge Hill proponents had four votes on the seven-member Yonkers City Council. However, because the county of Westchester objected, a super-majority of five votes was needed.

Project opponents John Murtagh and Dee Barbato, testified earlier this week. Yesterday's testimony led off with former Council Member Dennis Robertson, a project supporter, who noted that opponents were concerned about environmental impacts like traffic and noise, as well as the financial benefits of the project.

Of Annabi, Robertson said, "She was opposed to it and wouldn't vote for it unless Dee Barbato voted for it."

But Annabi changed her vote, citing Forest City's willingness to give the city another $10 million or so over three years. It made no other concessions.

How significant was the $10 million, asked Assistant U.S. Attorney Jason Halperin.

"In the grand scheme of things, it was kind of peanuts," Robertson replied.

Could Jereis control Annabi?

Robertson testified he met in early 2005 with "political powerbroker" Al Pirro--an attorney, lobbyist, husband of the county District Attorney, and convicted felon--regarding a potential run for City Council President. Pirro might be able to deliver the Independence Party line.

Pirro brought up Ridge Hill. "He said he's not worried about Sandy Annabi," Robertson recalled. "All's he has to do is give Zehy Jereis a consulting contract and we [FCR] can get her vote."

Robertson said he was upset, and reminded Pirro he was not there to discuss Ridge Hill. He later met with Annabi and related his dismay at Pirro's account.

"She didn't really respond," Robertson related, perhaps leaving the impression that Annabi implicitly agreed with Pirro. "She just stared."

He also expressed concern that Annabi, a Democrat, relied so much on Jereis, Chairman of the Yonkers Republican Party.

"She told me Zehy taught her everything she knew about politics," Robertson said.

Jereis, Annabi told Robertson, was not a cousin--though they are distant cousins. She also told him that she and Jereis did not have a personal relationship, though Jereis had been pursuing her. Jereis's defense is that he conveyed the money because of his infatuation with her.

In 2007, Robertson said, Annabi reflected that "Zehy got her in a lot of trouble" and "she said she shouldn't have listened to him."

Cross-examination: a "boast"

On cross-examination, Annabi's lawyer, William Aronwald, got Robertson to admit he reported Pirro's claim only to the majority leader and to Annabi.

"I didn't believe it," said Robertson, who had, in previous interviews with investigators, called it a boast.

Upon meeting with Forest City's Bender, Jereis's lawyer Anthony Siano asked, "you never specifically told [him] of Mr. Pirro's boast?"

Robertson said he didn't recall. "I did mention to Mr. Bender that, if Mr. Pirro was charging him for his time with me don't pay him because I wasn't there to discuss Ridge Hill," he said.

(Pirro declined to comment when asked by the Times, and Forest City disavowed knowledge of his claim. Pirro is not expected to testify.)

Aronwald got Robertson to acknowledge that Annabi, unlike the other two opponents, was more concerned about tax revenues than environmental impacts.

Similarly, Siano reminded Robertson that he'd told the FBI that Annabi's vote switch was "sudden but not that sudden," given that Chuck Lesnick, who took office in 2005, had given her political cover.

Mayor on the stand

Mayor Mike Spano, who took office this year and comes from a powerful local family, took the stand a bit gingerly. In the run-up to the trial, his brother Nick Spano, a lobbyist and former state Senator, pleaded guilty to tax evasion.

After he left his Assembly seat at the end of 2004, Spano went to work for Patricia Lynch Associates, the powerful lobbying firm run by a former top aide to Assembly Speaker Sheldon Silver.

His job, Spano, said was to try to get a Council Member to vote for Ridge Hill, and Annabi was the most likely candidate. But she was resistant, saying that the demands of Barbato and Murtagh would have to be met.

Spano related an episode that suggested Jereis was manipulating the situation. While driving to Annabi's house together, Jereis had a friendly attitude regarding the recruitment of Annabi, but inside, Jereis took Annabi's side and resisted the project.

"What was that all about?" Spano said he later asked Jereis. "He indicated that 'Sandy needs to trust me.'"

Jereis at one point complained about the lack of Ridge Hill jobs "for the Republican leadership," a term that could include himself as well as several associates. Defense attorneys later suggested this could have been simple political patronage.

Spano said that he later reported to FCR's Bender that those trying to nudge Annabi included Jereis, his brother Nick, as well as Anthony Mangone, Nick Spano's counsel. (Mangone has already pleaded guilty to funneling bribes to Annabi via Jereis regarding the Longfellow project. It had not previously emerged--as far as I know--that Mangone had a role in Ridge Hill.)

"I've taken every angle with this Sandy," Spano wrote to Bender.

The FCR executive, Spano related, "was really being pushy. He was really being persistent: 'What are you doing to get a positive outcome for this project?'"

Defense attorney Aronwald got Spano to acknowledge that he'd never ruled out the possibility that changes in the project could influence Annabi to change her vote.

No, responded Spano, who recalled that demands made by opponents Barbato and Murtagh, such as reducing the amount of retail by 30%, could have killed the project.

A Brooklyn lunch and an Assembly intervention

Brooklyn Assemblyman Joseph Lentol, it turns out, played a key role in getting Forest City Ratner a meeting with Annabi, thanks to his indirect connection to Jereis. (Lentol, though this was not aired in court, is close to Assembly Speaker Sheldon Silver, a Forest City ally.)

Unlike most elected officials, Cantone explained, Annabi had been unwilling to  meet with the developer, even though he approached her personally at a Council meeting.

So Forest City relied on a skein of connections. Lentol was an old friend of Joseph Galimi, described yesterday as a former Department of Public Works in Yonkers but, as noted by the Journal News, who's also been investigated for organized crime ties. And Galimi knew Jereis well.

In a meeting at Tiro A Segno, a private club in Manhattan, Lentol brought up Ridge Hill to Jereis and Galimi, and Jereis agreed to meet with Forest City.

Galimi then organized a meeting in Brooklyn with Jereis, Lentol, Bender, and another "Forest Ratner" executive--who turned out to be Cantone. The early June 2006 lunch was held at Marco Polo Ristorante in Carroll Gardens, not without its own whiff of made men. (The bill was $227 plus a $50 tip. )

At the lunch, Jereis said he could probably arrange for a meeting with Annabi.

When Annabi voted for the project, Galimi, at Jereis's request, called a Teamster he knew to generate support for Annabi at the Council meeting.

When reports of the federal investigation surfaced in 2007, Galimi asked Jereis about his relationship with the developer: "He said he didn't receive a job, he didn't receive a penny."

FCR's gets through

When Cantone took the stand, prosecutor Carbone walked him though documents including internal FCR emails messages, restaurant receipts, and even an organizational chart.

Neither lobbyist--Pirro or Spano--had been able to get Annbi to sit down for a meeting with Forest City, let alone change her vote.

At the Marco Polo lunch, Cantone recalled, Jereis said "he'd talk to her and try to arrange a meeting."

FCR then held two meetings with Annabi in Yonkers, convincing her to change her vote. (I don't think he specifically mentioned the $10 million pledge, though his testimony is not over.)

"Did Sandy Annabi or Zehy Jereis ask Forest City Ratner for anything of value," Carbone asked.

Yes, Cantone said. The vote was scheduled for July 11, 2006, when Annabi had planned to be out of the country. "Mr. Jereis asked if Forest City Ratner would pay the cost for changing her flight," Cantone recalled.

"We said we did not think it was possible," Cantone said, citing "ethical and legal concerns." This was communicated to Jereis who said "he'll figure it out, maybe he'll pay it himself."

Annabi was concerned, Cantone related, of how her switch would look. Cantone drafted a press release for her, then had it tweaked by in-house pros.

Annabi was concerned there was no mention of the $10 million--actually $10.8 million--pledged. And she wanted language that indicated that she and Forest City were continuing to discuss traffic issues.

Cantone balked, citing a "problem we have mentioning $10.8 million right off the bat"--which wasn't quite explained--as well as "EIS [environmental impact statement] concerns" about reopening issues of traffic. His view prevailed.

Jereis presses for job

After Annabi agreed to change her vote, Jereis persistently, aggressively pursued a job. He sent his resume less than 24 hours after Annabi's public announcement in mid-June.

Cantone tried to put him off, as Annabi's vote was not until July 11. At a meeting with Jereis and two other Forest City executives at a Dunkin Donuts in Yonkers, "we asked if he was a valid business," Cantone recalled, indicating the need for a federal ID, a list of officers, and an identification of services.

"Did you tell him you'd hire him?" Carbone asked.

"No," responded Cantone. "We told him we would consider and think about it, but not make a decision at this time."

Jereis soon sent his Social Security number and the business name ZJ Enterprises.

Cantone acknowledged FCR was putting Jereis off, given the optics.

On September 19, Jereis was sent a consulting agreement, which--for reasons yet unexplained--he didn't send back until October 10. He had never been to Forest City's offices in Brooklyn, and he never visited afterward.

The agreement was backdated to August 1, 2006, lasting one year, with potential extensions. It was thus worth $60,000.

"Was the format unusual to Forest City Ratner?" Carbone asked.

Yes, Cantone replied, since Jereis would be assisting both the government relations office as well as the retail office.

He was not asked, however, why they agreed to backdate the agreement.

Payments without production

Jereis was required to provide monthly reports on his work, but did not do so. Nor, apparently, did Forest City request them.

Jereis met with Cantone only about two times between August 1, 2006 and March 2007, and talked on the phone only once or twice.

"How long after the contract was signed did you receive an invoice?"

"It was immediate," Cantone replied.

Only when news of the federal investigation surfaced in Marc 2007 did Jereis start sending in backdated reports, less than half a page, that were clearly inadequate: the described potential land acquisitions that were far too small for a developer like FCR, or indicated time-sensitive meetings that were long concluded.

In one case, Forest City asked Jereis for follow-up information about a potential project he'd suggested. Jereis didn't respond. Forest City paid his monthly fee anyway.

While Cantone said payment stopped in March 2007 after Forest City learned of the investigation, he also said that Jereis had only been paid for three months: August, September, and October.

That suggests that, for some reason, Forest City had stopped the payments earlier, so perhaps that will be resolved when the trial resumes.