A $20K Donation to Brooklyn DA Candidate Gonzalez Highlights Concern Over Prosecutors As Politicians
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Brooklyn Acting District Attorney Eric Gonzalez.[/caption] A $20,000 donation to Acting Brooklyn DA Eric Gonzalez from the owner of a medical laboratory connected to a widespread fraud and bribery case has brought scrutiny to his first-time campaign. It’s a situation ethics observers worry about: In the midst of a sweeping investigation a person potentially involved, even peripherally, makes a generous donation to a prosecutor involved in the investigation and is later not charged. Simply the air of impropriety does damage to the credibility of a prosecutor's office, while leading to second guessing of the decisions prosecutors do and don’t make. The scrutiny faced by Gonzalez is only the latest for a local New York City prosecutor. Manhattan DA Cyrus Vance Jr. came under withering criticism last month after news reports revealed campaign donations from attorneys representing high-profile clients such as Hollywood producer Harvey Weinstein, who never faced charges over allegations of sexual harassment and assault. “Public officials have to be held to a higher standard. They have to be,” said Fox Rothschild partner Robert Tintner. “They’re responsible. They’re on the hook. They have to be extremely mindful of these kinds of things.” When the specifics of Gonzalez's situation are laid out, it’s also apparent that there are a number of dynamic issues occurring all at the same time—from concerns over compromising an investigation, to the interconnected network of donors, political officials and prosecutor's office. Ultimately, Gonzalez returned the $20,000 donation. More than anything, the episode is yet another example of the tricky reality of making prosecutors elected officials who raise money from the community they have jurisdiction over. In 2013, the U.S. Drug Enforcement Administration and the Office of the Special Narcotics Prosecutor for the City of New York began an investigation into a doctor’s group in Brooklyn they suspected of improperly writing prescriptions for opioids such as OxyContin. Numerous federal, state and city law enforcement agencies would ultimately be involved, including the Brooklyn DA’s office. Beginning in 2016, special narcotics sought a wiretap on a number of targets in the alleged scheme, according to SNP spokeswoman Kati Cornell. As part of the special narcotic prosecutor’s statutory obligations, the office must bring the wiretap request to the local borough prosecutor for review and presentation to a judge on the SNP’s behalf. By that time, Gonzalez was effectively running the Brooklyn DA office's day-to-day operations, because of then-DA Ken Thompson’s failing health. He would become the acting DA after Thompson’s death the next month. According to Cornell, the office returned to re-up the 30-day applications for both October and November. Beyond this the only other role the Brooklyn DA office had was in providing expert legal advice regarding Medicaid fraud. “Our office made all of the charging decisions in this case, and did not consult with the Brooklyn District Attorney’s Office in making those decisions,” Cornell said. The wiretaps were not continued after the 30-day application expired in November. On April 7, SNP announced charges against 13 individuals in two separate indictments. The defendants are alleged to have schemed to defraud Medicaid and Medicare of millions of dollars, by, in part, inducing patients to submit to unnecessary tests in exchange for pain medication prescriptions. Among those charged was former state Assemblyman Alec Brook-Krasny. In 2015, Brook-Krasny resigned from elected office to become the CFO of a company called Quality Laboratory Services, based in Sheepshead Bay. The president of Quality Labs is Greg Roman. According to prosecutors, “the lion’s share” of drug urinalyses for one of the chief architects of the alleged scheme was being handled by Quality Labs. Brook-Krasny allegedly had unnecessary testing done that was reimbursed by Medicaid and Medicare. He also personally altered results of tests, such as removing indications of alcohol use, to keep flags from being raised for doctors, prosecutors charged in their indictment. Two months later, Brook-Krasny was hit with another indictment, this time for alleged commercial bribery. Prosecutors say he directed payments for a no-show job to an office manager at one of the medical services companies at the center of the initial bust. The office manager, Konstantin Zeva, was paid nearly $15,000 from Quality Labs’ accounts, according to prosecutors. Zeva was charged by SNP prosecutors in the initial April indictment as a co-conspirator in the Medicaid and Medicare fraud and opioid prescription schemes. According to the indictment, Brook-Krasny is alleged to have made four payments. The first one, allegedly occurred on Aug. 12. Payments were made regularly, each month, between the 10th and the 16th, through November. The indictment does not mention a payment in December, or any time after. On Dec. 8, Brook-Krasny’s boss, Roman, donated $20,000 to Gonzalez’s budding DA campaign. Roman has not been charged in any of the alleged schemes. Brook-Krasny and Zeva have pleaded not guilty to all the allegations against him. According to a Gonzalez campaign spokeswoman Lis Smith, the donation had nothing to do with Gonzalez’s role in assisting in the investigations conducted by SNP, or the prosecution of Brook-Krasny or any of the other defendants connected to the alleged fraud and opioid schemes, which is being prosecuted by SNP. As soon as Gonzalez became aware that Brook-Krasny was a business associate of Roman’s, the acting DA made the decision to return the contribution, according to Smith. The timing of the return—months after being received and four days after the initial arrests were announced by SNP in April—was intentional. Gonzalez made the decision to hold the donation until charges were brought so as not to tip off any of the targets of that investigation, namely Brook-Krasny, Smith said. "The Gonzalez campaign returned the contribution in question after SNP charged a business associate of the contributor,” Smith said in a statement. “While DA Gonzalez was not involved in charging any suspects in the case and the contributor was not implicated in any illegal behavior, the campaign returned his contribution to avoid any potential appearance of a conflict." Roman has been a generous donor to a number of other candidates besides Gonzalez. A search of New York state campaign finance records over the last decade indicate that, since 2013, the Holmdel, New Jersey, resident has donated at least $69,995 to New York City politicians. No donations appear to have been given for political races outside of the city. The Brooklyn DA’s office has been of particular focus of Roman’s largesse. While New York City Mayor Bill de Blasio received $2,000 during his 2013 run, and local Democratic insider Ari Kagan's City Council bid got $650 that same year, the five-figure amounts have been reserved for DA candidates. Former long-serving DA Charles Hynes received two separate donations over two weeks for $15,845 and $10,000 during his battle against Thompson in 2013. After he won the contest, Thompson received three donations totaling $14,000 between October 2014 and May 2016. Roman’s December 2016 donation of $20,000 to Gonzalez appears to represent the single largest he’s ever made to a candidate. It also remains the single largest cash donation from an individual received by the campaign, according to the latest campaign finance records. Additionally, the local Brooklyn Democratic Party has received donations from Roman. The county committee itself received $4,000 in May 2016, while a state committee campaign account set up by the county chair, Frank Seddio, received $1,000 in March 2015. Roman’s connection to the Brooklyn Democratic Party extends beyond donations. For years, Quality Labs has been represented by Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara, Wolf & Carone. Currently, the law firm is waging a legal battle against the state on behalf of Quality Labs after the Office of the Medicaid Inspector General removed the company’s eligibility to participate in the system following Brook-Krasny’s arrest. Abrams Fensterman name attorney Frank Carone is a major force in the local Democratic Party. Officially, he serves as counsel to the county organization, but he’s effectively the most powerful political operative in Brooklyn, according to political insiders in the borough. “He’s the driving force of county politics,” said one veteran local political operative who asked not to be identified for fear of upsetting Carone. “He’s the guy behind the scenes; he’s the Wizard of Oz.” Carone himself has been a regular contributor to campaigns across the city. Since 2007, Carone appears to have given a single donation of more than $4,000 to a candidate only twice, according to a review of state campaign finance disclosures. The first was for $4,950 to the de Blasio re-election campaign in July 2016. The second was for $4,465 in August of this year, to the campaign of Gonzalez. At the time of his initial arrest back in April, Carone was identified as Brook-Krasny’s attorney in a statement to The New York Times. Carone and his firm are no longer representing Brook-Krasny. “My client understands the seriousness of the charges, and of course opioid abuse, but as for the allegations that he is somehow culpable is an incredible injustice,” Carone wrote about Brook-Krasny in an email to the reporter. In a statement provided to the New York Law Journal, Carone said that Roman and Quality Labs currently had no issues of concern before the Brooklyn DA’s office. “We have represented Greg Roman for many years, and know him as a man who supports quality candidates in Brooklyn and the city at large,” Carone said. Attempts to reach Roman at Quality Labs were unsuccessful. Questions over the nature and purpose of donations are all but inevitable in a system where prosecutors are also politicians running for elected office. Local district attorneys in New York City are not subject to the city’s campaign finance system, which provides a generous six-to-one match for qualified donations. Some good government advocates have noted that, were the system different, it would potentially allow DA candidates to be competitive without having to conduct the kinds of fundraising efforts that brought scrutiny to the campaigns of Vance and Gonzalez. However, currently, DAs are elected state officials, and so fall outside of the city’s intensive campaign finance system. They instead fall into the state’s loosely monitored and regulated version that provides no public financing for candidates, just reporting requirements and potentially high contribution limits. Given these realities, Gonzalez’s decision to return a donation, under the circumstances, is about as much due diligence as can be expected, according to Fordham University School of Law professor Bruce Green. “From what I can tell, the office couldn’t have done anything better than they did,” said Green, director of Fordham’s Stein Center for Law and Ethics. “They kept the investigation secret. They kept the investigation apolitical, and at the point where they realized that a contribution was made by a business associate of a target, they gave the money back. Not much more they could have done.”
