2010-12-09 / Front Page

Culture of Corruption

How federal investigators caught Vincent Leibell in the act
Staff Reports

Vincent Leibell gets into his car after leaving the courthouse Monday. Joe Lindsley Jr. Vincent Leibell gets into his car after leaving the courthouse Monday. Joe Lindsley Jr. Vincent Leibell, the once proud state senator, lawyer, and captain in the Naval Reserve, was reduced to standing obediently silent Monday as the prosecution read the charges against him in front of a full courtroom. Void of the emotion often associated with public confessions, Leibell was composed as he told Chief U.S. Magistrate Judge George Yanthis at the federal courthouse in White Plains that he was indeed guilty of the charges against him.

The former Republican National Legislator of the year took a deal, accepting a felony conviction on one count of obstruction of justice and one count of tax evasion. Leibell, who resigned from his senate seat December 3, was elected in November as Putnam County Executive. However, as first reported by the Courier, he announced last week he would not be taking office.

Paying a Debt to Society

Judge Yanthis accepted the prosecution’s recommendation, setting the bail at a $100,000 unsecured bond. Leibell is out on personal recognizance, having met the requirements of an unsecured bond, which is based on credit, assets, and the reputation of the issuer.

The former senator is scheduled for sentencing on the morning of March 7, 2011. On the obstruction charge, Leibell faces a maximum ten years in prison and $350,000 fine. For tax evasion, he is looking at a maximum of three years and a fine of $250,000, or twice the amount owed to the IRS.

Leibell has already surrendered his passport, and was ordered to give up his firearms at some point within the next seven days. Between Monday and March 7, Leibell will be restricted to New York and Connecticut (where he is moving his family), as well as forced to undergo court substance abuse supervision. Assistant U.S. Attorney Perry Carbone, when asked by the Courier if such supervision is standard for a convicted felon, ambiguously replied, “It can be.”

Although Leibell took the plea deal, he did disagree with some of the details in the prosecution’s case. “I think the defendant would agree that the government can prove elements [of the charges], but I think there are errors with some of the facts,” said David Lewis, Leibell’s attorney. Neither Leibell nor Lewis formally contested any of the facts with which the defense took issue.

Lewis is no stranger to high profile cases. He has reportedly represented former military dictator of Panama, Manuel Noriega. He also served as defense counsel for a high profile murder case in the early 1990s, which drew comparisons to the movie Fatal Attraction.

“I deeply regret these actions,” Leibell said to the court. “I want to apologize to my family, friends, and constituents.”

Despite pleading guilty to tax evasion and obstruction of justice, Leibell will still receive his government pension in accordance with the laws of New York State as a result of his 28-year career as an assemblyman and senator in Albany.

The Investigation

Sources told the Courier that the crimes to which Leibell admitted are just the tip of the iceberg of a major investigation in Putnam County. Some say that the government originally had 15 more counts on various charges against Leibell, leaving many to question what, and who, the former senator gave up in order to get such a deal.

The Courier has not been able to corroborate these claims. At a press conference following the court proceeding, U.S. Attorney Preet Bharara did not disclose how many initial charges there were before the deal was struck. When asked by the Courier, he paused before declining to comment on whether there are any ongoing investigations involving Leibell.

Carbone explained to the court that Leibell had knowingly impeded a federal investigation, instructing people to lie to federal agents and to a grand jury in order to protect himself from indictment. That investigation centered on corruption inside what Carbone said was a nonprofit that received millions of tax dollars in grants meant to provide for senior housing. Carbone did not name the organization, but Leibell’s 501(c)(3) nonprofit Putnam Community Foundation, a recipient of large sums of state tax dollars, is well known for providing senior housing in Putnam.

Saying he was unable to comment, Joseph DiVestea, president of the Putnam Community Foundation, referred the Courier to the foundation’s attorney, William Aronwald.

“I can verify the not-for-profit referred to is the Putnam Community Foundation,” Aronwald said. “During the course of the investigation of Sen. Leibell, the grand jury filed a subpoena of the Putnam Community Foundation. We were fully cooperative.”

“We produced our records [related to business transactions] back in August,” Aronwald said. “We have had no contact since.”

“Whatever Leibell did he was doing on his own,” he added. “He was doing it without the knowledge, consent, or participation by any board member or director of the Putnam Community Foundation.”

Offering some details on this summer’s investigation, Bharara said that the authorities had been trying to determine if Leibell had extorted money from an unnamed attorney who provided services for Leibell’s foundation. Bharara explained that the FBI recorded Leibell threatening not to pay invoices sent to the nonprofit by the attorney unless the attorney paid half of the invoice amount back to Leibell in cash. It is now clear that the attorney was being questioned by a federal grand jury investigating the Putnam Community Foundation.

“As soon as Senator Leibell got wind of the investigation, he made the fateful decision that brings us here today,” Bharara said. “He decided to engage in a criminal coverup.”

The prosecution said that they had video and audio recordings of a meeting that Leibell had on a sidewalk in Carmel June 6, during which he advised the same attorney to fabricate reasons for withdrawing large sums of cash, which were transferred to Leibell. “All I know is, as long as you and I are consistent, I’m fine, you’re fine,” Leibell told the attorney. “There was never any cash between you and I, ok?” Leibell was specific in his plan, telling the attorney to say that he kept the cash for his ailing mother and for emergency use in the case of a terrorist attack.

The June 6 conversation came three days after the Courier broke a story about an unspecified FBI probe in Putnam County. The Courier also learned that a grand jury had been formed to pursue an unspecified investigation, involving, in part, “how the county procured outside legal counsel.”

Leibell acknowledged that he did not report the money received from the unnamed attorney on his tax returns. The former senator also received money from a second unnamed attorney, as the result of providing him with a lucrative consulting position. There is speculation that the second attorney is Anthony Mangone, of Westchester, who pleaded guilty to corruption charges last week. Leibell admitted to taking $43,000 in cash from the two lawyers between 2003 and 2006, all of which went unreported.

Roger Gross, president of the Hudson Valley Trust—another one of Leibell’s 501(c)(3) nonprofits—said that his organization was not under investigation, as far as he knew. “I’m very sad for [Leibell] and his family,” Gross said. “This is a dark time for Putnam County.”

Both the Putnam Community Foundation and the Hudson Valley Trust have received grants from the Dormitory Authority of the State of New York. Leibell’s foundations have funded senior housing in Carmel and Brewster and the construction of a small, secluded foot bridge in Patterson, among other projects. The $230,000 bridge, publicly dubbed the “bridge to nowhere,” was defended this summer by Leibell as a cost saving measure after the Courier began investigating. In June, the Courier discovered that the taxpayer-funded bridge was curiously built with a housing grant from the Dormitory Authority of the State of New York.

An Embattled Politician

Over the course of his three decades in the state legislature, Leibell became one of the most powerful statesmen in New York. His influence was far-reaching, with the 40th state senate district covering all of Putnam, most of Westchester, and almost half of Dutchess counties.

Leibell’s years of wheeling and dealing created a divide throughout the county. On one side, there were loyal friends believing that he could do no wrong, as well as grateful recipients of taxpayer grant money. On the other, there were skeptics who saw a conviction coming from a mile away.

Over the course of the 2010 county executive race, Leibell would make a case for himself as an unfortunate victim, proclaiming that all of the Republican leadership in the county was against him. It became fairly common to see Leibell engaged in headline-worthy battles with prominent party members.

Perhaps most noteworthy was the fight with county Sheriff Don Smith. When Leibell appeared in a video interview with the Journal News in September, he answered a question regarding the future of the Sheriff’s Department, which prompted Smith to respond forcefully and publicly. Leibell suggested that all options should be explored, including the possibility of bringing the currently independent department under county executive control. Referring to Leibell’s answer in the Journal News as “vintage, vindictive, Vinnie,” Smith promised, “[Leibell] will never control the Putnam County Sheriff’s Office … so help me God.”

Smith told the Courier Monday that the closure of the Leibell case should be viewed as just the beginning of the battle against political corruption. “People are referring to this as a dark day in Putnam County,” he said. “I think the real dark days were the days in the past when nefarious acts were done in secret. Now that the sun is shining we have a tremendous opportunity to continue to make Putnam County a model for honest, fair, and good government.”

Although, the battle between the sheriff and the former senator received the most attention, Leibell saw Greg Ball, the young anti-establishment and outspoken Republican, as possibly the most dangerous threat to his power. On June 30, news broke that the FBI had requested documents relating to the construction of Leibell’s Cushman Road home from the town of Patterson. The senator denied any wrongdoing and took aim at Ball. “In terms of Greg Ball, he’s had a pattern, anytime he doesn’t like somebody he calls the FBI,” he said. “I think it’s a bizarre way to approach politics.”

“Any insinuation that I have control over the FBI borders on insanity,” Ball said in response at the time.

On November 2, when Leibell was elected county executive, Ball was elected to fill the state senate seat Leibell held for 16 years. One of the major platforms of Ball’s campaign was attacking the corruption of career politicians, and how the institution of term limits at all levels would help stop the backroom, under the table nonsense that has become synonymous with New York politics.

Legislator Richard Othmer said that the Putnam County Legislature will be voting on term limits this month, and the Leibell saga demonstrates why they are necessary. “It’s a shame because in the past he’s done great things. I feel bad for his family,” he told the Courier. “This is a classic example of why we need term limits … after being in office too long, [politicians] get like Boss Tweed.”

Ironically, Leibell used to live on Tammany Hall Road, named after the political machine run by Boss Tweed in mid-19th century New York.

Legislator Mary Ellen Odell, Leibell’s opponent in the county executive race, agrees with Othmer. “I’m all for term limits, they’re the reason for corruption in government on every level,” she told the Courier.

Odell fought a tough, volatile race against the seasoned Leibell, narrowly losing in the Republican primary. However, experience won out, as Leibell coasted to victory in the general election against Odell, who was running on another party line.

Putnam residents are now forced to wonder why Leibell, who was fully aware of an FBI investigation since April, would continue to run for a seat he might never have the opportunity to sit in, knowing that he had instructed an attorney to lie to a federal grand jury. “The arrogance is unbelievable,” said one Cold Spring merchant who wished to remain anonymous.

Despite the harsh war of words throughout election season, Leibell’s troubles don’t bring a smile to Odell’s face. “I found no personal joy in it. I adored him when I first met him,” she told the Courier. “He worked hard and I thought he was a terrific lawmaker. It wasn’t until two and a half years ago that I was disappointed with him.”

Although Board of Elections co-commissioner Anthony Scannapieco is another fierce political rival of Leibell, his excitement was also limited—but for different reasons. “I think he got off easy,” he told the Courier. “Now the Republican Party needs to purge all of his stooges out so we can get back to business.”

The former senator has made a practice of pointing fingers at his enemies, but Bharara, the U.S. attorney, said that the fault was Leibell’s and Leibell’s alone. “Vincent Leibell betrayed the trust of his constituents,” he said at the press conference Monday. “He has only himself to blame for the fact that, after 28 years in public office, this conviction will be the capstone to that career.”

While addressing the press, Bharara promised the people of New York that his office will be vigilant in its pursuit of corrupt officials. “Along with our law enforcement partners, we will fight corruption wherever we find it and prosecute those who abuse the public trust wherever we find them.”

—with Carli-Rae Panny

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‘No winter lasts forever; no spring skips its turn.’ ~Hal Borland