State Senator Malcolm A. Smith, a contractor and real estate developer who rose to become the first black president of the State Senate, and City Councilman Daniel J. Halloran III were arrested early Tuesday on charges of trying to fix this year’s mayoral race in New York City, according to federal prosecutors.
Mr. Smith, a 56-year-old Democrat, and Mr. Halloran, a Queens Republican, were among a half-dozen people arrested by F.B.I. agents in the federal corruption case. Others included Republican County leaders in Queens and the Bronx, the mayor of the Rockland County village of Spring Valley, Noramie F. Jasmin, and her deputy, Joseph A. Desmaret, according to a criminal complaint.
Mr. Smith was taken from his Queens home in handcuffs by F.B.I. agents before sunrise and Mr. Halloran, a lawyer, was arrested at about the same time, law enforcement authorities said.
Mr. Smith has said he was considering running for mayor of New York as a Republican, and the charges contend that he made payments to Mr. Halloran in exchange for the councilman’s assistance in setting up meetings with Republican leaders as part of an effort to get on the ballot, the complaint said.
The criminal complaint in the case was brought by federal prosecutors in Manhattan and was unsealed Tuesday morning. Mr. Smith, Mr. Halloran and the others were to appear on Tuesday before a United States magistrate judge in United States District Court in White Plains.
Mr. Smith, according to the complaint, agreed with a cooperating witness and an undercover F.B.I. agent, who was masquerading as a wealthy real estate developer, to pay off leaders of Republican Party county committees in New York’s five boroughs. The bribes were to be paid to obtain specific certificates authorizing him to run for New York City mayor as a Republican even though he was a registered Democrat.
The undercover agent and the cooperating witness served as intermediaries between the senator and Councilman Halloran, the complaint said.
“Public service is not supposed to be a shortcut to self-enrichment,'’ George Venizelos, assistant director of the Federal Bureau of Investigation, said in a statement. “At the very least, public officials should obey the law. As alleged, these defendants did not obey the law; they broke the law and the public trust. There is a price to pay for that kind of betrayal.”
Mr. Smith’s lawyer, Gerald L. Shargel, said his client denied wrongdoing. “Malcolm Smith is a dedicated and highly respected public servant and he steadfastly denies these charges,” Mr. Shargel said, adding he would have more to say after he had an opportunity to study the charges.
The complaint details a brazen scheme hatched in a series of clandestine meetings in hotels, parked cars, restaurants and Mr. Smith’s office in Albany. The meetings, recorded by the undercover agent or the cooperating witness, were primarily between Mr. Smith, the undercover agent and the witness, and Mr. Halloran and the two government operatives.
Most of those involved, according to the complaint, were looking for something – cash bribes were sought by the party officials and Mr. Halloran and Mr. Smith were seeking authorization to get on the ballot in the mayor’s race. Ms. Jasmin was seeking an ownership interest in a company she believed was involved in a real estate project.
The senator at one point became impatient, asking the undercover and the cooperating witness during a meeting in his office whether the committee leaders were delaying getting his certificates because they wanted more money.
Mr. Smith, according to the complaint, instructed the two men not to pay the committee leaders any more money until they had “close[d] … the deal.” He also said that before the leaders received “even a nickel more, [he’d] have to stand on the Empire State Building and drop every person [he] endorsed and hold Malcolm up and say he’s the best thing since sliced bread. Matter of fact, he’s better than sliced bread.”
According to the complaint, Mr. Halloran set up a meeting at which the undercover agent and the witness met Joseph J. Savino, the Bronx GOP chairman, and Vincent Tabone, vice chairman of the Queens Republican Party, and negotiated the amounts of the bribes for the documents. In exchange, Mr. Halloran sought and received more than $20,000 in cash for himself, prosecutors said.
Mr. Tabone and Mr. Savino were paid cash bribes of more than $40,000 and were promised $40,000 more, and they in turn, agreed to use their official capacities with Republican Party county committees to obtain the documents Mr. Smith would need to run for mayor as a Republican.
Mr. Smith, in exchange for help from Mr. Savnio and Mr. Tabone, agreed to use his senate office to help win state funds for a road project in Spring Valley that would benefit a real estate project that Sen. Smith believed was being built by a company belonging to the undercover agent.
The complaint said that on Nov. 16, Mr. Smith met the undercover agent and the cooperating witness at a hotel in White Plains and asked the witness to contact a Republican Party county chairman identified in the charges only as “County Chairman #1” to try to “change him” by persuading the chairman to support Mr. Smith rather than another mayoral candidate whom the chairman had publicly supported.
Later that day, the person said, Mr. Halloran met the undercover agent at a Queens restaurant in order to receive a bribe in exchange for taking what the charges refer to as some unspecified “unrelated official action.” During that meeting, the agent asked Mr. Halloran if he knew “County Chairman #1” and Mr. Halloran said that he did, and that he knew Mr. Savino. Mr. Halloran agreed to ask the county chairman and Mr. Savino what they would want in exchange for their support for a mayoral candidate, the complaint said.
And on that same day, the undercover agent met Mr. Smith at a hotel in Manhattan, and told him that the agent could arrange a meeting with “County Chairman #1” and Mr. Savino during which the agent would attempt to negotiate their support for the senator, the complaint said. Mr. Smith, the complaint said, told the undercover agent: “You pull this off, you can have the house. I’ll be a tenant.”
Several months later, Mr. Smith met the cooperating witness in Rockland County, the complaint said. As they sat in a parked car, the witness told Mr. Smith that getting the certificates from the Republican county committee leaders would cost “a pretty penny,” the complaint said. In response to the question, “it’s worth any price?” the senator, according to the complaint, responded: “Look, talk to me before you close it. But it’s worth it. Because you know how big a deal it is.”
Two weeks later, Mr. Halloran met the undercover agent and the witness at a Manhattan hotel and told them that Mr. Savino wanted $25,000 “in an envelope” in exchange for signing the certificate, the complaint said. Mr. Tabone, the person said, wanted $50,000 — half of the money before he signed and the balance afterward.
The arrests immediately reverberated through the mayor’s race. Mr. Tabone is a paid consultant to the Republican mayoral campaign of John Catsimatidis, the grocery store magnate. Records show Mr. Catsimatidis has paid Mr. Tabone $3,000 so far this year. Another Republican mayoral candidate, Joseph J. Lhota, recently welcomed the endorsement of Mr. Halloran, who was also arrested on Tuesday morning.
Late last year, Mr. Smith, who was elected Senate President in 2008 and ousted in 2010, joined a group of insurgent Democrats – the Independent Democratic Conference — and said around the same time that he was considering running for mayor of New York City as a Republican.
He was seen as a key recruit for the conference, a five-member faction that formed a leadership coalition with Republicans in the Senate. Before Mr. Smith joined the caucus, there was criticism that a faction of white Democrats was joining with the all-white Republican conference; the presence of Mr. Smith, an African-American and a last minute recruit to the Independent Democratic Conference, helped blunt those concerns.
The move came with some incentives — beyond his increased influence, a report in The New York Post said that his staff budget has increased by about two-thirds since he joined the conference.
Mr. Smith has been a subject of several criminal inquiries in recent years. One, which had apparently begun by early 2010 and was conducted by federal prosecutors from the same office that sought the indictment that led to Tuesday’s arrests, was focused on a nonprofit linked to Sen. Smith and United States Representative Gregory J. Meeks. In that case, the prosecutors subpoenaed records from Mr. Smith’s Senate office that detailed moneys he had directed to community groups for a decade. Mr. Meeks has not been accused of any wrongdoing.
The subpoena, written broadly, sought information on all of Mr. Smith’s so-called member items — grants to organizations in his Queens district — and any appropriations tied to him since at least 2000, a person with knowledge of the subpoena said at the time.
The person said that investigators made clear that they were seeking the records because of their interest in New Direction, a group set up in 2000 to encourage development in southeast Queens.
Mr. Smith, along with the then-Senate Democratic leader, John L. Sampson of Brooklyn, was also among those named in a scathing State Inspector General’s report in 2010 that said the Senate’s leaders had manipulated the choice of who would build New York City’s first casino.
The 308-page report, on the competition to install video slot machines at the Aqueduct racetrack in Queens, was referred to federal and state prosecutors and the Legislative Ethics Committee and said the senators had leaked information and shown favoritism to a troubled bidder that was donating to Democratic candidates and had ties to key political figures. No charges have been brought in relation to the casino contract.
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