Two starkly different narratives were put before a federal jury Tuesday during opening statements in the trial of former Assembly Speaker Sheldon Silver for an alleged kickback and bribery scheme that netted him almost $4 million in lawyer referral fees.
“Power. Greed. Corruption,” Assistant U.S. Attorney Carrie Cohen told the jury in Southern District Judge Valerie Caproni’s courtroom. “This is a case about a powerful politician who betrayed those he was supposed to serve in order to line his pockets.”
“That’s the charge that the prosecution has brought—that Sheldon Silver sold his office,” countered defense lawyer Steven Molo in his opening. “That did not happen. He is not guilty.”
Molo told the jury there was nothing wrong with Silver accepting some $3 million in referral fees from Weitz & Luxenberg, to whom he steered asbestos clients recommended by Dr. Robert Taub of Columbia University Medical Center, after Silver arranged for Taub to received a pair of $250,000 state research grants.
And Molo said there was nothing wrong with Silver collecting more than $700,000 in referral fees from the tax certiorari firm of Goldberg & Iryami for referring as clients two major real estate developers. The prosecution alleges that Silver delivered legislative favors for the developers.
“The prosecution has adopted a point of view through dirty windows,” he said. “They look at conduct that is legal, they look at conduct that is normal” and try to criminalize it.
Silver, 71, resigned as Assembly speaker, a post he held for 21 years, after being charged in January but kept his seat representing the Lower East Side while fighting charges of theft of honest services, mail fraud and wire fraud, Hobbs Act extortion under color of legal right and money laundering—the latter for putting some of the $4 million in referral fees into an investment vehicle not available to the general public.
Cohen told the jury that the evidence in United States v. Silver, 15-cr-00093, will show Silver, who was hired by Weitz & Luxenberg 10 years ago, sent the research grants to Taub, a respected doctor specializing in treating asbestos-related mesothelioma, and then the client referrals started flowing to Weitz & Luxenberg. The firm’s contingency fees were one-third of whatever recovery it netted for clients. Silver, in turn, received one-third of that amount in referral fees.
“And just as the defendant had planned, these patients turned into a gold mine,” Cohen said.
When the state grants stopped, Cohen said, Silver kept the referrals coming by doing other favors for Taub, using his “official position to help just about everyone in Taub’s family,” including sending money to Taub’s wife’s charity, which fights domestic violence; arranging with a state court judge to give Taub’s daughter a seven-week internship; and finding a job for Taub’s son at a Jewish charity.
The same pattern held in the “real estate” scheme, Cohen said, which involved “different names, different law firms” but “the same playbook.”
“He used his law license to take bribes and kickbacks,” Cohen told the jury, and, as with the asbestos scheme, “The defendant performed no work at all. Really. None.”
Defense Point of View
Molo, a partner with MoloLamken, portrayed the prosecution as naive as to how the world works with a citizen-legislature where outside income is expected.
“The prosecutors don’t like that system,” he said. “They don’t like the fact that a lawyer can actually work at a law firm and not work on a case. They don’t like that legislators have private meetings with lobbyist … they don’t like that friends do favors for friends.”
Molo, at the outset, told the jury that “Mr. Silver is as New York as New York gets,” a man who was raised in the Orthodox Jewish faith on the Lower East Side, who graduated from Yeshiva University and Brooklyn Law School and whose specialty is personal injury law.
He said the referral of cases is a “very, very common thing in the legal profession.”
Silver has been devoted in Albany to the issues of low-cost housing, health care, education and the environment, Molo said, and has made the “redevelopment of Lower Manhattan a priority.”
“Objection,” Cohen said.
“Overruled,” Caproni replied.
“You can throw a baseball into his district” from here, Molo continued.
Silver believes in state support for people with mesothelioma and has worked toward “obtaining justice for people who have suffered that cancer” at the hands of large corporations, Molo said.
He showed the jury photos of the Assembly chamber and the state house to drive home the point that New York’s Constitution has always required a legislature where outside income is expected.
“But there’s a trade-off,” he said, while the members bring their own outside experience to Albany, “they also bring inherent conflicts of interest.”
“It’s impossible for members of the Assembly to do [their] job…and not have some form of conflict of interest,” he said. “But that is the system New York has chosen and it’s not a crime. The prosecutors are trying to make that a crime.”
He said Silver was just doing his job as a “great, great champion of tenants’ rights” who has to make things work in Albany, a job that includes legislation on real estate taxes for developers.
He showed a pie chart indicating that Weitz & Luxenberg dominates the world of plaintiffs’ mesothelioma litigation, representing many of the families of the roughly 3,000 people who die every year from exposure to asbestos. And he read off a list of Silver referrals to the firm that averaged fewer than five per year.
Taub and Silver have been friends for a number of years, Molo told the jurors—not close, but still friends within the Orthodox community. The grants, which came from a state health care fund, went to research conducted by Columbia University’s Mesothelioma Center and Columbia-Presbyterian Hospital, in which Taub was involved.
“These allegations are insulting to the work, the fine work that Dr. Taub has done,” Molo said, adding, “they ignore the realities of relationships.”
Molo told the jurors he was confident that after they reviewed the evidence, “You will not find that Mr. Silver had a corrupt intent. You will not find there is a bribery scheme.”
“Mr. Silver did not sell his office. That did not happen.”
After openings, the trial went immediately to witnesses. The first was Assemblywoman Amy Paulin, who set the stage on the workings of the Assembly and the power of the speaker’s post. She said few Democrats would ever challenge Silver for the speaker’s position.
When Assistant U.S. Attorney Howard Master questioned Paulin on discretionary funding in the state budget, she said she did not know that “there was money going to Columbia” or that state money was being granted to a research center.
The second witness was Weitz & Luxenberg founder Perry Weitz, who described his firm, saying it had grown to about 100 lawyers and that in some years, asbestos litigation is a primary source of revenue.
Weitz said he and his co-partner, Arthur Luxenberg, hired Silver in 2002. He said Silver was not expected to do work for the firm or bring in asbestos cases, but was hired based on his prestige as Assembly speaker. “We thought it would help with the brand of the firm,” he said.
Under questioning from Cohen, Weitz said he learned during a firm lunch that Silver was getting referrals of asbestos cases. He said it would come up once in a while that Silver had gotten cases from Taub.
After Cohen asked Weitz if he was told that state money had been granted to Taub’s research center, Weitz said Silver never told him anything about any state grants, and added that he never met Taub.
Before Silver received referrals from Taub, a young attorney at his firm also had gotten one or two cases from Taub, Weitz said.
Weitz is expected to continue his testimony Wednesday morning, followed by Taub, before Southern District Judge Valerie Caproni.
In addition to Molo, Silver’s defense team includes Joel Cohen, of counsel to Stroock & Stroock & Lavan and MoloLamken partners Justin Shur and Robert Kry.
Cohen and Master are part of a team that includes Southern District Assistant U.S. Attorneys Andrew Goldstein and James McDonald.
BY Mark Hamblett, New York Law Journal