Developer testifies fees going to Sheldon Silver was ‘unseemly’
Former New York State Assembly Speaker Sheldon Silver exits federal court in Manhattan on May 3. Credit: Charles Eckert
Two developers were furious upon learning that then-Assembly Speaker Sheldon Silver was receiving some of the fees they were paying to a Manhattan law firm for handling tax challenges, according to testimony Monday.
But the developers didn’t fire the tax firm because they feared angering the powerful legislator, witnesses said in Silver’s retrial in Manhattan federal court.
Steven C. Witkoff, CEO of the Witkoff Group development company, said, “it felt unseemly” that the lawyer who was securing tax savings for Witkoff’s Manhattan buildings had also been sharing with Silver the legal payments made by the developer for about a decade.
“I didn’t know anything about it . . . I was pretty incensed” when told about the payments in June 2014, Witkoff testified. “It certainly didn’t feel right to me.”
Still, Witkoff didn’t stop using tax lawyer Jay Arthur Goldberg, who had once worked for Silver in the Assembly.
Witkoff said in 2004-05 he hired Goldberg, whom Silver had said was “struggling” and in need of cases, “as a very easy favor” to Silver, who at the time was one of the three most powerful individuals in state government.
Asked by federal prosecutor Tatiana Martins why he didn’t dump the Goldberg & Iryami law firm, Witkoff said, “I didn’t want the risk of alienating him for such an easy favor. He didn’t need to threaten me.”
Under cross examination by Silver attorney Michael S. Feldberg, Witkoff testified that he kept using Goldberg & Iryami after seeking advice from other attorneys. He also said the law firm’s handling of his tax challenges or certiorari cases was “competent.”
The prosecution alleges Silver improperly received $700,000 in referral fees from Goldberg & Iryami for steering cases to the firm from Witkoff and another real estate developer, both of whom were seeking Silver’s support for legislation before the Assembly.
The developers wanted Silver - who led the Assembly 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.
Later Monday, a lobbyist for mega-landlord Glenwood Management Corp. testified that its late owner Leonard Litwin was livid after learning about the payments to Silver from tax certiorari cases.
The Glenwood chief “was upset and angry,” said Glenwood lobbyist Richard N. Runes. He also testified that Litwin said, “I did not agree to pay Shelly Silver anything” when the Goldberg & Iryami firm was retained by Glenwood.
Litwin, who worked from Glenwood’s New Hyde Park headquarters, was concerned about “how Mr. Silver would view us if the relationship were terminated,” Runes said. “(Litwin) was concerned whether there would be repercussions legislatively.”
Silver, a Democrat from lower Manhattan, has been accused of exploiting his position as an Albany kingmaker 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 deadly 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. Silver also helped secure employment for Taub’s son and daughter, according to the indictment.
Silver was “of counsel” to Weitz & Luxenberg, earning a salary of $120,000 per year, but did little work there, prosecutors said.
The retrial so far has been largely a repeat of Silver’s corruption trial and conviction in 2015. The Second U.S. Circuit Court of Appeals granted Silver’s appeal request in 2017 but said there were grounds for another trial.
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.
The retrial’s first week featured testimony from 16 witnesses, including Taub and his nurse, Assemb. Amy Paulin (D-Scarsdale), Silver’s law partners Perry Weitz and Arthur Luxenberg, and Dennis Whalen, a former top official in the state Department of Health who now is a lobbyist for Northwell Health in New Hyde Park.
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.
