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Tuesday, April 20, 2010

Cuomo Sues Espada on Charges of "Looting" His Non-Profit

It's only Tuesday, but it's been a bad week so far for Pedro Espada, Jr. A number of news outlets over the last few days reported that two consulting firms linked to the senate majority leader are being investigated for money laundering and tax fraud.

Today, Attorney General Andrew Cuomo's office announced a lawsuit against Espada and 19 other people associated with his Soundview Healthcare Network, a non-profit for which the senator serves as founder and CEO.

According to a press release, the lawsuit alleges that Espada diverted $14 million from the charity--which gets a lot of its funding from the state and federal governments via taxpayer monies--which he used to line his own pockets, pay family and friends and help fund his political campaign.

“Siphoning money from a charity would be egregious under any circumstances, but the fact that this was orchestrated by the State Senate Majority Leader makes it especially reprehensible," Cuomo said in a statement.

According to the lawsuit, Soundview supposedly footed the bill for about $80,000 on restaurant meals for Espada ($20,000 of which was spent on sushi, frequently delivered to the senator's Westchester home), 14 weeks of annual leave a year, trips for Espada and his family to Miami, Las Vegas, and Puerto Rico, as well as a $90,000 severance clause.

The AG's office says it found ample "improper funding of his political operations" including $100,000 in campaign literature, campaign expenses charged to an American Express card, and $2,500 monthly "housing allowance" for rent on a Bronx co-op where Espada supposedly resides--all paid for by the charity.

The lawsuit alleges that Espada stocked the non-profit's board with a number of family members, close friends and political allies, many of whom were also used to aide his campaign efforts.

Read the AG's summons here.  More coverage of the case here.

The Daily News' Celeste Katz liveblogged some of what went on in a conference call with Cuomo this afternoon.


  1. Mr. Espada is an embarrassment to all of us who, unlike him, live in the 33rd. It needs to be said that many of us have been clamoring about his criminality for many years. (Yes, I know there is currently no criminal indictment. Regardless -- the actions outlined in the complaint deserve this name.) I am grateful that AG Cuomo finally took some action, but it should have happened a long time ago. The entire political establishment bears some responsibility. The Bronx Democratic machine refused to do anything about the criminal whom Mr. Espada defeated in the 2008 primary. Had they simply withdrew support from Sen. Gonzalez and put forward an honest alternative -- Espada would not have had a chance of winning. He only won because many honest voters saw no real choice. Again, in this 2010 election cycle --the Bronx Democratic machine seemed prepared to let Espada get re-elected! It took an insurgent, grass-roots, community-based campaign to get an authentic alternative. Part of me thanks the machine cutting a deal with Espada. The machine's inaction was the impetus for the community to act. We now have a great candidate in Desiree Pilgrim-Hunter. Beyond the Bronx, the fact that the Democrats in Albany welcomed Espada back, bought him off, and made him one of their leaders is forever to their discredit.

    Something I've noted -- in much of the online commentary on this story, is the slander of the people of the Bronx. We are portrayed as unengaged, stupid, lazy, willing to have our vote bought, etc. We all know these things are not true. I think Pilgrim-Hunter's campaign has already helped to dispel many of these myths. The vile comments about Latinos in particular are very disturbing -- see the comment section in this NY Post piece, for example:


    Mr. Espada, of course, held himself out as a Latino success story, a role model -- all the while he must have known on some level the very real disgrace he was bringing on himself and his community.
    Finally, the complaint's reference to Soundview paying for his apartment -- I assume his monthly mortgage-- made me think of some great Bronx heroes, women who actually live in the building Espada claims to live in. There is a video of them confronting Esapda in the lobby of the building. At one point, he arrogantly asks if one of these great Bronx heroes pays for his apartment. Now we know the truth -- he didn't pay either.
    Youtube link below to a video of the encounter:


  2. Apparently the women who live in Espada's building were paying for his apartment.

    He was using the money he took from Soundview, which was government-funded, so the money that paid for his apartment came from the taxpayers!


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