- The Washington Times - Wednesday, April 21, 2010

ALBANY, N.Y. | The majority leader of New York’s Senate is accused of siphoning $14 million from his government-funded nonprofit organization in the Bronx for lavish restaurant meals, trips to Las Vegas and his own campaign, according to a civil lawsuit announced Tuesday by Attorney General Andrew Cuomo.

The suit against Democratic Sen. Pedro Espada Jr. covers five years of spending, the last two of which Mr. Espada spent as a senator representing the Bronx. The suit names 19 other current and former officials of Mr. Espada’s Comprehensive Community Development Corp., known locally as Soundview and operating on about $12 million annually, mostly from state and federal government funds.

Mr. Cuomo said Mr. Espada diverted charitable assets to himself, relatives, friends and his political operation.

There was no immediate comment from Mr. Espada, who had called Mr. Cuomo’s investigation a “witch hunt” to boost the attorney general’s political career. Mr. Cuomo is widely expected to run for governor this fall but has not announced his candidacy.

Mr. Cuomo said the dealing included a severance package for Mr. Espada worth $9 million that was guaranteed and would send the clinic into bankruptcy if it’s paid out. Mr. Cuomo said the CEO and the Soundview board, which he said is “packed” with Mr. Espada’s friends and relatives, approved the 2005 transaction.

“Siphoning money from a charity would be egregious under any circumstances, but the fact that this was orchestrated by the state Senate majority leader makes it especially reprehensible,” Mr. Cuomo said. “In New York, no one is above the law, and this suit should finally make that clear to Senator Espada.”

Mr. Espada is the freshman senator who was instrumental in the coup that gridlocked the chamber last summer. The impasse ended when he left the Republican-led coalition to return the majority to Democrats, each time extracting a lucrative leadership title.

Mr. Cuomo said the clinic spent about $80,000 in restaurant bills for 650 meals for Espada or his supporters - an average of about $120 per meal - including more than 200 meals worth $20,000 at two sushi restaurants where Mr. Espada frequently ordered takeout. Mr. Cuomo also asserts that funds were inappropriately used for trips by Mr. Espada, including to Las Vegas and Puerto Rico and to rent a residence required to establish residency in the district for his Senate race in 2008.

In response to a reporter’s question, Mr. Cuomo said nothing in the investigation shows misconduct by Mr. Espada in his role as a senator or in his direction of discretionary legislative grants known as “member items.”

Mr. Cuomo said the case is about Mr. Espada’s use of state and federal funds and whether he was truthful in applying for and spending the money. Mr. Cuomo said no action taken by the Senate, government agencies or oversight officials in the grant process is being questioned.

The lawsuit seeks restitution and removal of Mr. Espada and the board of directors from the nonprofit clinic.

There are no criminal charges. A felony conviction would cost Mr. Espada his Senate seat; the Democrats have a 32-30 majority in the Senate. Mr. Cuomo said the decision to go with a civil suit “at this time” was a legal strategy, not a political calculation involving Mr. Espada’s seat.

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