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Long Island

D'Amato, Melius, Schlesinger charities get subpoenas in state AG's charity probe

The state attorney general's office has issued subpoenas

The state attorney general's office has issued subpoenas to charities run by former Sen. Alfonse D'Amato, left, political power broker Gary Melius, center, and prominent Democratic attorney Steve Schlesinger. Photo Credit: Howard Schnapp / J. Conrad Williams Jr. / Joseph D. Sullivan

The state attorney general's office has issued subpoenas to charities run by former Sen. Alfonse D'Amato, political power broker Gary Melius and prominent Democratic attorney Steve Schlesinger as it tries to determine whether Schlesinger broke state law when he gave away millions of dollars meant for Jewish charities.

Two of Long Island's large health care networks, North Shore-LIJ Health System and Nassau Healthcare Corp., also received subpoenas as part of the attorney general's investigation.

The subpoenas stem from Schlesinger's management of the Garden City-based Kermit Gitenstein Foundation, an $11 million private trust a judge picked Schlesinger to run in 2007. The attorney general issued the subpoenas starting in August after a Newsday investigation found Schlesinger made questionable disbursements from the foundation, including $250,000 to a charity controlled by Melius, owner of Gold Coast mansion Oheka Castle.

Schlesinger asked a judge to approve the donation to Melius two days before he held his wedding at Melius' estate, one of Long Island's most lavish wedding venues. Records show that Schlesinger didn't pay for the wedding until five months after it occurred.

Schlesinger did not respond to an email and a phone call seeking comment.

Melius declined to answer questions about the subpoenas. "You guys print lies," he said. "Quote me on that."

A spokeswoman for Attorney General Eric T. Schneiderman said the office would not comment on its ongoing investigation.

Dana Sanneman, a spokeswoman for D'Amato, said his foundation provided the attorney general's office with the requested information.

Both D'Amato and Schlesinger are longtime friends of Melius and frequent visitors to Oheka Castle for poker games. D'Amato's family foundation received $50,000 from Schlesinger's charity for construction of a children's splash park in the Village of Island Park, where D'Amato's late mother lived.

The attorney general's office said it would investigate Schlesinger's management of the Gitenstein Foundation after Newsday contacted the office in July seeking comment. The attorney general's Charities Bureau enforces laws that govern charities, including laws that took effect last year requiring not-for-profit leaders to disclose conflicts of interest.

North Shore-LIJ spokesman Terry Lynam said the subpoena his organization received sought records concerning financial transactions between the North Shore-LIJ Health System, the Kermit Gitenstein Foundation and Schlesinger, who once served as an associate board member at North Shore-LIJ. Schlesinger directed $4.2 million from the Gitenstein Foundation to North Shore-LIJ in 2011 to fund a medical school started with Hofstra University, court records show.

The Nassau Healthcare Corp., the public benefit corporation that runs Nassau University Medical Center under the control of Nassau County, also received a subpoena from the attorney general. In 2009, then-hospital president and CEO Arthur A. Gianelli announced that the Gitenstein Foundation had given the hospital a $1.2 million grant to buy three digital mammography units.

Hospital spokeswoman Shelley Lotenberg said, "We do not comment on pending investigations."

A Nassau County Surrogate's Court judge in 2007 appointed Schlesinger, who at the time was the Nassau County Democratic Party's attorney, to oversee the Gitenstein Foundation. The court picked Schlesinger from a list of hundreds of qualified attorneys after the death of Shirley Gitenstein, the last surviving Gitenstein sibling and administrator of the family's foundation. She died with no heir.

The court tasked Schlesinger with distributing the foundation's money in accordance with the charity's mission -- funding Jewish organizations and health care.

Schlesinger did make donations to well-known Jewish charities but also sent money to other charities and institutions on Long Island where he had personal ties, court records show. Schlesinger steered the foundation's money to Hofstra University Law School, his alma mater, and Touro Law School, where Schlesinger is a member of the school's board of governors. A children's camp where Nassau County Democratic Party boss Jay Jacobs is a board member also received a $100,000 donation.

Schlesinger's $250,000 donation to Melius' foundation the same week he held his wedding at Melius' estate should have triggered an investigation by the attorney general's office because of the appearance that Schlesinger may have received a personal benefit in exchange for the foundation's money, nonprofit experts interviewed by Newsday said. Melius' charity had just $7,245 at the time.

Schlesinger said he paid $75,000 for his wedding after he returned from his honeymoon and that he donated the foundation's money to Melius' charity to help its "good work" continue.

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