2010-04-02 / Top Stories

Smith Hires Defense Attorney

News Says He Profited From Yet Another Charter
By Howard Schwach

Malcolm Smith Malcolm Smith Investigators and the media are taking an ever-closer look at the dealings of New York State Senate President Pro Tempore Malcolm Smith even as the beleaguered legislator has hired a top Albany criminal defense attorney to represent his interests.

Published reports say that Smith has hired Gerald Shargel, whose website says that he takes only criminal cases, to help him deal with the myriad of investigations and charges that are being leveled against him.

Reports say that the U.S. Attorney is looking into the non-profit started by Smith and Representative Gregory Meeks, New Direction Local Development Corporation, and its spin-off, NOAH-F, which took contributions to assist those devastated by Hurricane Katrina.

In addition, state probers are looking into the roll that Smith played along with Governor David Paterson in choosing the Aqueduct Entertainment Group to run the planned Aqueduct Racino, a deal that fell apart two weeks ago.

While Smith and other Senate leaders tried to squash the subpoenas, a state Supreme Court judge ruled on wednesday that the Democrats had to lay their cards on the table and come up with the information demanded by both state and federal legislators relating to the probes against Smithand other from their involvement in the Aqueduct Racino selection process and the non-profits.

An investigation by the New York Daily News I-Team, published two weeks ago, has sparked more questions about Smith’s connection to the Peninsula Preparatory Academy and the developers of Arverne By The Sea, the developers that have provided a free home for the school and have pledged millions of dollars for the school, which was founded by Smith.

Two years ago, the publically-funded charter school moved from Intermediate School 53 in Far Rockaway to a group of double-wide trailers on Beach 67 Street, smack dab in the middle of the Arverne By The Sea (ABTS) development.

The Daily News writers questioned PPA officials on why the school would move from a place where it had a cafeteria, school yard, gymnasium and state-of-the art science lab to a site that had none of the above and was surrounded by streets and a chain-link fence.

The News argues that the school was moved to the ABTS complex for political and financial reasons.

While the official reason provided by the school was that “increased enrollment” forced the move, the Daily News reporters say that the move was a political favor to Benjamin-Beechwood, the ABTS developers who are also the favored developers of the Reverend Floyd Flake, a former congressman for whom Smith worked for many years.

“Queens developer Benjamin Companies is in a partnership building homes near the school – and started using [PPA] as a selling point to hawk the seaside residences,” the News story says.

The story adds that Benjamin Companies employees and affiliates have contributed $144,500 to Smith’s campaigns and political action committee, Build New York PAC.

And, the paper says, the relationship does not end there. A member of the school’s board in 2004, the story says, is a real estate broker whose clients include the ABTS developers.

This week, the same Daily News writers reported that Smith is involved with a second charter school, the Merrick Academy Charter School in Jamaica.

As with the Rockaway school, the paper charges, Smith was a founder of the school and received campaign funds from officials at the school and those associated with its operation, including some from Victory Schools, the for-profit corporation that partners with the charter school and provides educational services to its board of directors. The Daily News story said that the original redesign plans to turn the building from a bowling alley to a school was farmed out to an architect who was also working on one of Smith’s personal properties, adding that the same architect designed a new, controversial home for Congressman Gregory Meeks, a close friend of Smith. The funding for that home and the mortgage has now come into question, as has the original cost. Experts say that the home cost Meeks much less than it was really worth.

While calls to Smith’s local office for comment were unreturned, Shargel did comment for reporters. “I think that the senator is blameless,” Shargel told reporters. “He has acted in an entirely professional, competent and ethical way. He’s done absolutely nothing wrong.”

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