2010-05-07 / Top Stories

Insiders: Challenges On Deck For Smith, Meeks

By Howard Schwach

The political sharks smell blood in the water and are circling Congressman Gregory Meeks and State Senator Malcolm Smith, insiders say.

Those insiders, who asked not to be identified because they fear retaliation from the two still-powerful local politicians, say that a number of Democratic operatives have met to discuss a palace coup that would overturn the two elected officials.

In addition, those insiders have reached out to several Queens politicians to see if they would be willing to challenge either Meeks or Smith, sources say.

The moves come in the wake of the failed Aqueduct Racetrack deal, in which both Meeks and Smith played a part, as well as subsequent allegations of ethical misconduct, conflict of interest allegations and charges of misusing taxpayer money on personal homes and travel.

Meeks and Smith each face grand jury investigations at both the federal and state levels.

Those issues have led the politicallysavvy group of insiders to begin moving to upend the two.

“The process is just starting,” one of the operatives told The Wave this week. “They have become vulnerable to challenge only because of all the questions about their personal behavior and their misuse of public money and political power.”

“Even their supporters are beginning to question their corruption,” the operative added. “If the charges are corroborated by the investigations, then it will be time to move against them.”

Late last month, a federal grand jury served Meeks, who represents the eastern end of the Rockaway peninsula, with a subpoena demanding records about his tax-exempt charities and what happened to the public money that went into those charities and reportedly never came out.

Law enforcement sources told The Wave that the subpoena, issued by a Manhattan grand jury serving the Southern District of New York, signals the expansion of a probe into a number of local politicians, including Meeks, Smith and former Representative Floyd Flake.

Meeks submitted a notice to House Speaker Nancy Pelosi that he had been served, as required by the rules of the House of Representatives.

The grand jury is reportedly seeking thousands of pages of documents dating back to 2000.

Those documents detail the founding of the New Direction Local Development Corporation, a non-profit founded by Meeks and Smith.

Public money was reportedly directed to New Directions by both Meeks and Smith, and an additional $250,000 went into the non-profit’s treasury thanks to a deal brokered by the politicians with a developer who wanted to build a massive warehouse complex on Rockaway Turnpike, across from John F. Kennedy Airport.

Little of that money has been accounted for, sources say.

In addition, the two politicians spun off a Hurricane Katrina charity, NOAH-F, which, reports show, took in more than $35,000 and expended less than $2,000.

The subpoenas also seek information on Meeks’ public funding for the Greater Jamaica Development Corporation.

Meeks reportedly helped steer $21 million in tax credits to the organization, as well as $9.2 million from the Federal Transit Administration to rehab the area around the transit hub.

Meeks also designated some of his member item money for the organization.

There is also a question of how Meeks funded and mortgaged his new Queens home.

Questions abound, as well, around two charter schools that Smith founded – the Peninsula Preparatory Academy in Arverne and the Merrick Academy in Jamaica.

Board members and officials of Victory Schools, which runs the two facilities, reportedly donated a heavy dose of campaign funds to Smith, as did the developers of Arverne By The Sea, where the Rockaway school is presently located.

Most recently, a published report in Sunday’s Daily News said that Smith ripped off an elderly couple, for whom he’s promised to build a dream house, in a land deal that is under the scrutiny of the Federal Bureau of Investigation.

The report said that the couple sued Smith in 1998 and he agreed to settle, but still owes the two more than $60,000.

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