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What You Need to Know About the Corruption Scandals Consuming New York City

Diamonds, sex with prostitutes dressed as flight attendants, helicopter rides—the allegations are wild.
June 10, 2016, 5:30pm
Norman Seabrook, center, president of the New York City Correction Officers' Benevolent Association, leaves court, Wednesday June 8, 2016, in New York. (AP Photo/Mary Altaffer)

April was not a good month for New York City Mayor Bill de Blasio. Already facing a mini scandal over the removal of a deed restriction on a Lower East Side nursing home to make way for luxury condos, by month's end, he was up against at least five investigations by six different agencies—four of which were looking into possible criminal allegations involving money. It's not uncommon for people holding the top spot in a big city's government to be scrutinized or outright accused of corruption—as anyone who's watched The Wire can attest. But the sheer number of local, state, and federal agencies prodding de Blasio right now might make him unique among the 109 men who've held his position.

"To be the focus of so many investigations at once is unprecedented, I believe," says Michael Johnston, a retired political science professor at Colgate University in New York who studied corruption. "Does that mean corruption is on the rise, or that the standards we apply are becoming more strict? Quite probably both."

To his second point: Some of de Blasio's trouble has to do with Preet Bhahara, the United States Attorney for the Southern District of New York. He made his name as the "top cop" of Wall Street and by carrying out enormous gang takedowns, including the largest in the city's history. Over the past year, Bharara put both the former majority leader of the New York State Senate and speaker of the New York State Assembly in prison. Now that he's conducted a purge at the state level, it seems like the most powerful prosecutor in America has turned his sights to cleaning up the country's largest city.

Meanwhile, like plenty of NYC politicians before him, Mayor de Blasio has long been accused of cozying up with the Orthodox Jewish community, whose various sects represent powerful voting blocs. And as it happens, two Orthodox businessmen named Jeremy Reichberg and Jona S. Rechnitz are at the center of his current woes. They were both players on the mayor's inaugural committee, alongside celebs like Sarah Jessica Parker and Steve Buscemi, but investigators believe the duo's big-time donations came with a set of expectations from city officials. For instance, sources told the Daily News that Reichberg, who is currently being investigated by the FBI, got NYPD helicopters to fly him over the Hudson River as an impressive party trick. Rechnitz, for his part, was also enamored with the idea of having NYPD top brass at his finger tips. The LA-born real estate developer loved posing with high-ranking cops, and once arranged to have police bagpipes played at a party.

Also in early April, NYC Police Commissioner Bill Bratton had to discipline four high-ranking officers. Anonymous sources told the Post that Deputy Inspector James Grant and Detective Michael Milici had sex with a prostitute dressed as a flight attendant on a 2014 trip to Vegas paid for by Rechnitz. They also said Grant accepted diamonds as payment for escorting Reichberg home from the airport. The cop allegedly gave the jewels to his wife, an attorney who starred in the Oprah Winfrey Network show Staten Island Law in 2013.

Milici has been fired, and Grant stripped of his gun and badge, although no one has been charged with a crime yet. Worth noting is that all of them, at one point or another, were connected to former NYPD Chief Phillip Banks, who left the department in 2014 after the FBI may have found an inordinate amount of cash in his accounts, according to the Post. Banks subsequently took a job at a legal weed distribution firm. To make everything even more tangled and complicated, Banks is being investigated for possibly accepting gifts, like a trip to Israel from Reichberg, the consultant who donated to de Blasio.

Adding to the fun is that a since-shuttered group de Blasio created is also under investigation for basically being a low-key lobbying shop. Campaign For One New York pursued progressive policy goals like universal pre-K and affordable housing by taking money from powerful people and funneling it through the nonprofit to allegedly grant moneymen influence while skirting the law. New York state has very strict campaign contribution rules, but nonprofits can accept unlimited donations.

Perhaps the most serious charge against de Blasio is that his own campaign activities circumvented official limits. The New York State Board of Elections found evidence that he funneled money for Democratic candidates in 2014 State Senate races through county and statewide campaign committees. That way, each individual donor would be allowed to give almost ten times what they normally would to any individual campaign. Manhattan District Attorney Cy Vance is currently looking into the election board's findings, although no charges have been filed against de Blasio as of yet.

Still, the arrests have begun. On Wednesday, the union leader representing New York City's correction officers was indicted on federal corruption charges. Norman Seabrook was accused of taking $20 million worth of pension money and putting it into a hedge fund for his own personal benefit. In return, the Rikers Island boss got kickbacks and expensive vacations, according to the indictment.

What ties that arrest back to de Blasio? One of the kickbacks Seabrook's accused of taking was $60,000 in cash delivered inside a $820 Ferragamo bag. According to the feds, the angry union boss complained it wasn't enough. They also say the deliveryman was Rechnitz, the real estate big under investigation for his relationship with city power players.

And because it's New York, there's still one more moving part to add to the mix: The FBI is investigating whether or not de Blasio donors funneled campaign contributions through an animal rights group. The feds found that a number of donations were given to NYCLASS—which advocated for an end to horse-carriage rides in the city—and that dough was subsequently given to a group opposing the mayor's 2013 election rival Christine Quinn. At the time, de Blasio promised to ban horse-drawn carriages on his first day in office, but failed to get a bill through the city council earlier this year.

For their part, the mayor and his team have steadfastly denied wrongdoing on all fronts. "When all the facts come out, I'm confident that it will confirm things were done the right way," de Blasio said last week.

If all of this seems complicated and convoluted, that's because it is. Johnston, the corruption expert, says governing the city has always been about dealing with shifting coalitions and party committees and fundraisers and a slew of other competing interests. That balancing act isn't unique to the de Blasio administration, but bungling it could lead to his downfall, or at least a rocky re-election fight next year.

"It's just that anyone who hopes to govern the city just by using the official levers and pushing the official buttons is going to have a very hard time––and probably wouldn't ever be elected to begin with," Johnston told me. "New York City and New York State are not unique in any of that, but because of economic and social diversity and the glacial pace of changes in party balance, it might be that the need to play the inside game is all the more pressing."

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