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Long Island Senator's Arrest Highlights Corruption in Real Estate Lobbying

Long Island Senator's Arrest Highlights Corruption in Real Estate Lobbying

New York's real estate world was rocked by recent corruption charges against a powerful Long Island politician. On May 4, the United States Attorney's office in Manhattan announced the arrest of Dean G. Skelos, the majority leader of the New York State Senate, together with his son, Adam Skelos. Sen. Skelos is accused, in part, of illegally extorting money from a real estate developer in exchange for supporting certain tax benefits and other legislation favorable to New York's real estate industry.

United States v. Skelos

Skelos has represented the Rockville Centre area of Nassau County in the Senate since 1985 and served as majority leader since 2008. Traditionally, the Senate majority leader and the speaker of the New York State Assembly are the two most powerful politicians in the state after the governor. Indeed, Skelos' arrest comes on the heels of the January arrest of Sheldon Silver, the Assembly speaker forced to resign after the Manhattan U.S. Attorney charged him with illegally receiving payments from a law firm that represents clients seeking real estate tax abatements. Unlike Silver, Skelos has yet to resign his leadership, insisting he is innocent. On May 4, Senate Republicans voted to keep Skelos in his position over the objections of the chamber's Democratic minority. (Skelos has, however, taken a leave of absence from his private law practice.)

According to the U.S. Attorney's criminal complaint, Skelos and his son “pressured an individual cooperating with the [federal] Government” who is a “senior executive of a major real estate development firm” to pay Adam Skelos “hundreds of thousands of dollars in order to influence official actions by Dean Skelos.” Sen. Skelos allegedly extorted these payments to his son at a time when the developer was “lobbying Skelos concerning legislation that was crucial to its business success.”

Specifically, the developer told prosecutors Skelos agreed to support changes to New York's rent control laws as well as renewal of the controversial New York City property tax abatement program, which was renewed with Skelos' support in 2011 and which has come up for renewal again during the current legislative session. Altogether, the developer said he paid Adam Skelos $200,000 to secure his father's political support.

The Wider Impact on New York's Real Estate

Of course, Sen. Skelos and his son are presumed innocent of all criminal charges unless and until convicted in a court of law. But the arrests of both Skelos and Silver highlight the politically charged nature of New York's real estate laws. The present scandals will no doubt affect how the legislature addresses rent control and tax abatements in the near future. This will impact everyone who deals in New York real estate, not just large developers who contribute money to political campaigns.

If you need help in understanding how changes to New York's rent control, property tax and other related laws may affect your interests, you should consult with an experienced New York real estate attorney. Contact our office today to speak with a qualified attorney who can answer your questions and help you deal with any legal problem facing your real estate endeavor.

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