Silver never explicitly asked for referral fees, witness testifies
Former New York State Assembly Speaker Sheldon Silver exits a federal courthouse on Monday in lower Manhattan. Credit: Charles Eckert
Then-Assembly Speaker Sheldon Silver never explicitly asked for referral fees from a law firm hired by two developers to secure tax savings for their Manhattan buildings, the firm’s founding attorney testified Tuesday.
Jay Arthur Goldberg, one of two lawyers in the Manhattan firm of Goldberg & Iryami, said the subject of referral fees did not come up when Silver spoke with him briefly on two occasions about seeking tax challenge cases from the real estate companies.
Under questioning from federal prosecutor Tatiana Martins, Goldberg said he understood that Silver, a fellow lawyer, was entitled to a fee for referring clients to Goldberg & Iryami, like any other lawyer.
Goldberg, 78, also said Silver received 15 percent to 25 percent of the fee paid to the law firm upon successfully reducing a building’s taxes through the tax certiorari process.
“Did Sheldon Silver speak about a referral fee?” the prosecutor asked on the sixth day of Silver’s retrial on federal corruption charges in Manhattan federal court.
Goldberg responded, “He never said to stop sending the referral fees. He also never called to ask for them.”
Goldberg testified against Silver, his friend of more than 65 years, after being granted immunity from federal prosecution on Tuesday.
The prosecution alleges Silver improperly received $700,000 in referral fees from Goldberg & Iryami for steering cases to the firm from developers Glenwood Management Corp. and the Witkoff Group, both of which were seeking Silver’s support for legislation before the Assembly.
The developers wanted Silver — who was Assembly speaker for nearly 21 years — to extend a state law giving tax breaks to developers of apartment buildings that include affordable units alongside luxury units. They also wanted to limit any expansion of rent control in New York City, according to the federal indictment.
Silver, 74, has denied wrongdoing and pleaded not guilty to the charges. He stepped down as speaker because of the charges.
Later Tuesday, Goldberg said he believed the developers knew all along that Silver was receiving referral fees for encouraging them to hire the tax firm.
“I believed always that the clients knew,” Goldberg testified. “My gut reaction was they knew at all times.”
On Monday, developer Steven C. Witkoff and representatives of Glenwood Management testified they did not know that Silver had been receiving referral fees for about 10 years. They said they were upset when they found out, but didn’t fire the Goldberg & Iryami firm because they feared alienating one of state government’s most powerful figures.
On Tuesday, however, Glenwood lobbyist Richard N. Runes said Silver helped pass legislation that was important to the New Hyde Park-based developer in 2011 before the developer knew about Silver’s referral fees.
“Did Glenwood hire Goldberg & Iryami to get official actions from Mr. Silver?” Michael S. Feldberg, one of Silver’s attorneys, asked during cross examination.
Runes responded, “No, sir.”
Silver, a Democrat from lower Manhattan, has been accused of exploiting his position as an Albany power broker to extort nearly $4 million in bribes over about 10 years. He allegedly invested the money, making an additional $1 million, according to the indictment.
Last week, jurors heard about another alleged quid pro quo scheme centered on cancer patients being referred by Silver to a second Manhattan law firm.
The Weitz & Luxenberg firm paid Silver more than $3 million in referral fees from legal settlements and verdicts won on behalf of patients suffering from mesothelioma, a cancer caused by exposure to asbestos.
Silver received names and contact information for people diagnosed with mesothelioma from Dr. Robert Taub, a then-Columbia University physician. Taub in turn received $500,000 in state research grants at Silver’s direction, according to the indictment.
Silver was “of counsel” to Weitz & Luxenberg, earning a salary of $120,000 a year, but did little work there, prosecutors said.
Silver’s retrial so far has been largely a repeat of his corruption trial and conviction in 2015. The Second U.S. Circuit Court of Appeals granted his appeal in 2017. The appeals court said Judge Valerie E. Caproni’s instructions to jurors in 2015 did not comply with a later U.S. Supreme Court decision that narrowed the acts required to convict public officials in a quid pro quo bribery scheme to formal exercises of government power, not just meetings or telephone calls.
Late Tuesday, Silver’s attorneys said they hadn’t decided whether to put him in the witness chair. He did not testify in his 2015 trial.
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
