Sheldon Silver trial shifts to developers' roles

The chief financial officer of the New Hyde Park developer accused of being part of a bribery scheme with former Assembly Speaker Sheldon Silver testified Thursday he was kept in the dark about a side deal to let Silver share in the company's legal fees.

Michael Hoenig of Glenwood Management said he was never told the company secretly signed a 2012 letter agreeing to let Silver receive a portion of the lucrative fees paid to the law firm Goldberg & Iryami for getting property tax reductions at the company's string of Manhattan residential high rises.

"That letter is new to me," testified Hoenig, who said he generally kept all the files on agreements with law firms handling tax work, but never knew about Silver or the disclosure he had "joint responsibility" for Glenwood's cases at the law firm.

Silver, 71, is charged in federal court in Manhattan with doing favors on rent and real estate legislation for Glenwood and another developer in return for them taking their tax work to Goldberg & Iryami, which gave a quarter of its fee on tax reductions to Silver in return for his referrals.

Prosecutors say the ex-speaker made nearly $700,000 in that scheme without doing any actual legal work, and he is also accused of making more than $3 million in a similar scheme by giving state research grants to an asbestos-disease doctor who referred patients to Silver's personal-injury law firm.

After five days of testimony on the alleged asbestos scheme, Hoenig was the first witness called by prosecutors on the real estate scheme, setting the stage by describing the countless checks he wrote for Glenwood's $10 million New York campaign contributions and $800,000 a year in annual lobbying expenses.

He said his marching orders on the smallest details came without explanations from Glenwood's multimillionaire owner Leonard Litwin, now 101, until he retired for health reasons in 2013 and left the running of the business to his daughter and other executives.

"He was hands-on all the way," Hoenig said.

Prosecutors said Glenwood was heavily dependent on the state for tax and rent laws, and low-interest financing, and that allowed Silver to use his leverage to get the firm to move legal work to the Goldberg firm from other, larger firms.

Hoenig said the firm had been one of several doing tax work, handling two buildings in 1997 and seven in 2007, but the number suddenly jumped to 16 in 2008 at Litwin's orders and rose to 22 in 2012. "I can't tell you why we switched," he said. "I don't know."

Dara Iryami, a partner at the Goldberg firm testifying under a grant of immunity, followed Hoenig. She testified Silver was a lifelong friend of senior partner Jay Arthur Goldberg and had referred both Glenwood and another big developer, Witkoff Group.

She said that in 2009, a new lawyer ethics rule required disclosure to clients of fee-sharing arrangements, but she and Goldberg didn't get around to including a paragraph in the retainer agreement with Glenwood, saying it "consented" to the fee-sharing with Silver until 2012.

Iryami testified that Glenwood refused to sign it -- prosecutors allege company officials were troubled to learn its legal fees were going to Silver under a retainer at the same time it was lobbying him on legislation -- but agreed to sign a retainer that didn't mention Silver, and the side letter acknowledging he was getting fees.

She said she didn't know about any legislative business involving Silver, and a reason for two agreements was never explained to her. "I don't have any knowledge," she testified.

On cross-examination, defense lawyer Steve Molo suggested Iryami's law firm got more business from Glenwood because it did good work, and asked in a series of questions whether Silver's referral fees were unusual, or there was anything "nefarious" or "evil" about the events.

"No," she answered.

Glenwood general counsel Charles Dorego and lobbyists Richard Runes and Brian Meara are expected to testify about the events and legislative negotiations with Silver after the trial resumes Friday. Prosecutors said they expect to rest their case early next week.