OTB up for more than $100,000 not including attorney's fees in federal court.
The secret was not made available to the betting public and the money could have been used for other activities.
The officers of the corporation, directors et al were never held accountable.
Stick 'em up, lawyers, the modern version of the old fashioned sport of dueling?
Assembly Leader Admits Fault as Critics Assail Secret Payoff
Published: August 28, 2012
ALBANY — The latest scandal to hit the State Assembly has engulfed Speaker
Sheldon Silver, the Legislature’s most powerful Democrat, as Gov. Andrew M. Cuomo and other elected officials on Tuesday called for an investigation into the Assembly’s handling of sexual harassment claims against a prominent assemblyman, including a secret settlement payment of more than $100,000.
Ángel Franco/The New York Times
Assemblyman Vito J. Lopez of Brooklyn.
Mike Groll/Associated Press
Assembly Speaker Sheldon Silver.
Even as Assemblyman
Vito J. Lopez, the man at the center of the scandal, agreed to give up his power base as chairman of the Democratic Party in Brooklyn, it was Mr. Silver’s decision to make the payment and keep the allegations against Mr. Lopez secret that drew the most outrage. Public advocacy and women’s groups, and even some Democratic lawmakers, expressed shock that the state would pay so much without public disclosure. Governor Cuomo — who had previously called for Mr. Lopez’s resignation over a separate set of allegations — became the most prominent voice calling for an ethics investigation as well.
The growing scandal led Mr. Silver to say that he had been wrong to approve the settlement. He said that he had previously endorsed the view of his counsel’s office that if an employee bringing a harassment claim requested confidential mediation, then the Assembly would accede to that request and not refer the claim to the Assembly’s bipartisan ethics committee.
“I take full responsibility in not insisting that all cases go to the ethics committee,” he said in a statement. “While that opinion is both legally correct and ethical and can result in a resolution sought by complaining employees, I now believe it was the wrong one from the perspective of transparency.”
He added that, in the future, the Assembly “should not agree to a confidential settlement,” should always refer cases to the ethics committee and “should publicly announce the existence of any settlement, while protecting the identity of the victims.”
Late Tuesday night, Michael Whyland, Mr. Silver’s spokesman, said there had been no previous secret settlements.
“We scoured our records and this is the only settlement request from the Assembly,” he said.
The scandal first emerged on Friday when the Assembly censured Mr. Lopez after an internal investigation by the ethics committee unanimously substantiated allegations of harassment brought by two female employees. The New York Times reported over the weekend that the Assembly had also authorized a secret payment to settle prior allegations against Mr. Lopez — allegations that were never referred to the ethics committee.
Documents released by the Assembly on Monday showed that it paid $103,080 on June 13 to settle the earlier case, which is said to have involved claims brought by two other women.
Tuesday brought new revelations of broader involvement by state officials; the secret settlement was reviewed by a staff lawyer in the office of Eric T. Schneiderman, the attorney general, and the payment was approved by the office of Thomas P. DiNapoli, the state comptroller.
Mr. Silver’s office would not say on Monday specifically why this case was not referred to the ethics committee, but said that such a case would not be referred only if that is what the victim requested, suggesting that is what had occurred. But on Tuesday, Gloria Allred, the prominent Los Angeles lawyer who represented at least one woman involved in the secret settlement, offered a contradictory account, saying her office would never have discouraged a formal investigation by the State Assembly.
“We have never requested or insisted that a legislative committee or other body not proceed with an investigation,” Ms. Allred said in a statement. “To the contrary, we believe that it is in the interest of good government and working women that there is full accountability and transparency about workplace sex harassment and that there should be full investigations of accusations of workplace harassment.”
Mr. Lopez, 71, continued to insist he had done nothing wrong, and resisted calls to resign from his Assembly seat even as he said he would not seek another term as Brooklyn Party chairman next month — a decision that will rob him of the considerable power he has long wielded. Some close to Mr. Lopez said he had resisted stepping down as chairman until late Monday or early Tuesday, and only after several district leaders convinced him that he had lost support.
“The onslaught of character attacks has put enormous emotional pressures on my family and close friends,” Mr. Lopez said in a statement. “I cannot sit by and allow that to continue.”
“I have never sexually harassed any staff and I hope and intend to prove in the coming months the political nature of these accusations,” he added.
Those comments led to a sharp response from Kevin Mintzer, a lawyer representing the two female Assembly employees who brought the complaints against Mr. Lopez that led to the censure.
“Mr. Lopez’s partial resignation is wholly insufficient,” Mr. Mintzer said, adding, “The notion that Mr. Lopez will continue to be in a position to sexually harass other Assembly employees is intolerable.”
“No one should take seriously Mr. Lopez’s self-serving statements about the ‘emotional pressures’ he now faces as a result of his behavior,” he said. “Indeed, Mr. Lopez would do well to consider the considerable emotional distress he caused his victims.”
Mr. Cuomo said the state ethics commission “should do an investigation of the allegations that have been made,” adding, “If the facts are true about Mr. Lopez and the incidents of harassment, I think he should resign. That’s my opinion, but let’s get the facts.”
It was unclear where exactly the money had come from. While the Legislature has wide discretion over how it spends its own budget — the Assembly’s is about $102 million — rank-and-file lawmakers expressed befuddlement at the secretive nature of the settlement and how the funds were accounted for.
“My first reaction was, ‘Really? We can do that?’ ” said Senator Liz Krueger, a Manhattan Democrat. “I had never even heard of a mechanism for a secret private payout in a case” like this.
“I’m still very confused what line in the budget of the State of New York is available for private, nondisclosed civil case resolution,” Ms. Krueger added. “And at minimum, I think that all needs to be transparent, as other budget dollars should be.”
Senator Diane Savino, a Staten Island Democrat, asked why the settlement was not made public or referred to the ethics committee. She urged the Legislature to “come up with some hard and fast rules” on what should occur when a lawmaker is accused of abusive behavior. “There should have been one standard all the time, not secret decisions and settlements,” Ms. Savino said.
A lawyer in Mr. Schneiderman’s office did review the settlement document, an official in the office said, but only made one recommendation and had no formal role in approving the settlement, since a lawsuit was never filed.
Kate Gurnett, a spokeswoman for Mr. DiNapoli, said his office had received a request for payment from the Assembly for what it characterized as “legal services” and processed the payment on June 13. She added that the comptroller’s office does not evaluate the merits of legal settlements. “The settlement was negotiated by the Assembly with the claimants,” she said. “The comptroller’s office was not party to the negotiations.”
Questions surrounding the actions of Mr. Silver, one of New York’s most influential Democrats, were met predominantly with silence by many of the same city and state officials who had loudly called for Mr. Lopez’s resignation last week.
Several New York City mayoral candidates, including Christine C. Quinn, the City Council speaker; Bill de Blasio, the public advocate; and Scott M. Stringer, the Manhattan borough president, would not comment on Tuesday about the Assembly’s settlement; neither would Senator Charles E. Schumer nor Representative Jerrold Nadler.
But not all were silent.
“I don’t think it’s good leadership,” said Senator Bill Perkins, a Manhattan Democrat, adding, “It’s devastating in terms of our credibility.”
Mr. Perkins said he hoped the settlement would be formally investigated, possibly by the attorney general’s office. “It begs the question: how many more of these have happened in the past?” he said, adding, “For the government to be paying for what that money apparently was paid for, it’s a very dark, dark day for Albany.”
The National Organization for Women, which often relies on Assembly Democrats for support, also did not hesitate to criticize the Assembly speaker. “Sheldon Silver is now in the hot seat with Lopez and he has a lot of explaining to do,” said Sonia Ossorio, president of the group’s New York City chapter, adding, “this is a bombshell.”
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