The rules of the trust for the multimillion-dollar Kermit Gitenstein Foundation were clear when it was created in 1969. It was to make donations to Jewish organizations and temples, as well as health-related groups. And the trust, based in Garden City, donated generously and exclusively to Jewish hospitals in the United States and Israel until the last family member died in 2007.
Since then, the $11.5 million trust has been sucked into Long Island's patronage machine, becoming another example of how power brokers use local government -- including, most troublingly, the judiciary -- to extend their influence, sometimes to their own financial advantage.
Newsday reporter Keith Herbert earlier this month exposed questionable management of the trust by Steven Schlesinger. A partner in one of the Island's biggest law firms and the longtime counsel to the Nassau County Democratic Party, Schlesinger played a sizable role in who got coveted party judicial nominations. He resigned from that job in January after an earlier Newsday series reported on Suffolk County judges giving questionable business receivership positions to Schlesinger and Gary Melius, the political insider and owner of Oheka Castle.
In 2007, then-Surrogate Court Judge John Riordan, a Democrat who lost in 2010, chose Schlesinger, who screens judges for party nominations, from a list of qualified attorneys. While there are many qualified to get plum Surrogate's Court assignments, they traditionally go to those on an insiders list blessed by the party. The trust was one of the juiciest plums up for grabs. There were no fighting heirs, lots of cash and generally loose restrictions on eligible charities. The administrative and legal fees Schlesinger earned over the years are unknown.
Attorney General Eric T. Schneiderman is reviewing gifts made by Schlesinger. Some fit trust guidelines, including $4.2 million to the North Shore-Long Island Jewish Health System, where he is an associate member of the board of trustees.
Schlesinger also gave $1 million to the law school at Touro College, where he is a member of the board of governors, and several million dollars to Hofstra University Law School, of which he is an alum, for the Gitenstein Institute for Health Law and Policy. However, some donations might not square with guidelines the state court system has established to prevent conflicts of interest.
Schlesinger sent $250,000 from the estate he administered to Melius' nonprofit foundation. Schlesinger asked the Nassau County Surrogate's Court to approve the donation in February 2014, four days after Melius was shot in the face outside the catering venue and two days before Schlesinger's own wedding there. The records showed Melius' foundation had $7,245 on hand less than two months earlier. Schlesinger denies any connection between the donation and his personal business, and says he paid "fair consideration" for the wedding. He provided Newsday with a photo of a $75,000 check to Oheka, dated Aug. 14, 2014, five months after the event and drawn on the account of his Garden City law firm, Jaspan Schlesinger.
On behalf of the trust, he also donated $50,000 to the Armand and Antoinette D'Amato Family Foundation, which is headed by former Sen. Alfonse D'Amato, a close friend of Melius. The men were frequent poker partners at Oheka along with other political operatives, elected officials and law enforcement chiefs.
Now Schneiderman, whose office regulates charities, is conducting a criminal inquiry into the handling of the estate, and the state Office of Court Administration is checking whether there was proper oversight by the Surrogate's Court under Riordan and the current surrogate, Edward McCarty, a Republican.
Whether the law was violated, what happened here was morally and ethically wrong. The Gitenstein trust provides yet another window into how insiders work the judicial system. In this case, Democrats feasted on the spoils of the Surrogate's Court, taking a rare turn at what has historically been a Republican Party private preserve.
This fall there will be an election for a new surrogate judge with a 10-year term. By then, Schneiderman's investigation should be ready to tell us how much trust the public will need to have in the next judge -- one who must finally sever this network of cronyism.