NY State Senator Charged With Fraud
The Associated Press
Friday, August 25, 2006; 10:49 PM

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NEW YORK -- A New York state senator was charged with defrauding a nonprofit organization to pay for baseball tickets, college tuition and other personal expenses, according to a federal indictment.

Sen. Efrain Gonzalez Jr., 58, a Democrat from the Bronx, pleaded not guilty Friday to mail fraud and was released on $25,000 bond. If convicted, he could receive up to 20 years in prison and a fine of $250,000.

"I'm going to fight this case," the senator said outside court.

The indictment accuses Gonzalez of defrauding the West Bronx Neighborhood Association Inc., a group organized to promote civil and community affairs and improve efficiency in local, state and national government.

While an honorary board member, Gonzalez "devised a scheme ... to mail West Bronx bank account checks payable to credit card companies and private vendors" to pay for $37,412 in personal expenses from November 2000 through May, the indictment said.

The expenses, the indictment stated, included rent for residences in Monroe and the Dominican Republic; New York Yankees tickets, membership fees at a Dominican vacation club, clothing and college tuition.

Gonzalez owns cigar company in the Dominican Republic.

Federal prosecutors and the city had been investigating Gonzalez since 2004.

Gonzalez, a former city bus driver, was first elected to the Senate in 1989, making him one of the city's longest-serving state legislators.

© 2006 The Associated Press

A tangled web
The indictment of a Bronx state senator exposes a possible link to member items
First published: Times UnionTuesday, August 29, 2006

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It's a sad but very revealing commentary about the state Legislature that criminal indictments of its members are more common than their defeat in their campaigns for re-election. Just as unflattering is the way the leaders of that Legislature try to hide from the public the potentially embarrassing details of how the political slush funds known as member items are spent. And now, thanks to Sen. Efrain Gonzalez Jr., there's a possible connection between those dubious distinctions.

Mr. Gonzalez, a Democrat from the Bronx, was indicted on fraud charges last week. He stands accused of taking $37,000 from a local charity that shares an address with his district office and to which he serves as an honorary adviser. According to the indictment, handed up by a federal grand jury, Mr. Gonzalez used that money to pay for Yankees tickets, clothes, college tuition and rent and vacation club membership fees in the Dominican Republic.

And now come the questions. The organization Mr. Gonzalez allegedly stole from, the West Bronx Neighborhood Association, is supposed to be promoting civic and community affairs and improving efficiency in local, state and national government. Where, then, does it get the money to do so?

One source of its funding is another New York City nonprofit group, known as Pathways for Youth. It has sent at least $112,000 to the West Bronx Neighborhood Association. And where does Pathways for Youth get its money?

Well, it has received at least $30,000 from Mr. Gonzalez's share of member item money. Another beneficiary of the money, also for $30,000, that Mr. Gonzalez is allowed to hand out like it's his own is a group known as the All in One Foundation. The group is headed by Miguel Castanos, who is listed as living at the same address as Kenia Castanos, who, in turn, is listed as a secretary to the West Bronx Neighborhood Association.

Interesting what an examination of public records, conducted in this case by Times Union Capitol Bureau reporter James M. Odato, can reveal.

Is that why, we wonder, Senate Majority Leader Joseph Bruno and Assembly Speaker Sheldon Silver are so determined to hide the details about member items from public scrutiny? They've declared the names of individual legislators and their sponsorship of pet projects to be beyond the reach of the Freedom of Information Law. That's why the Times Union has had to go to court in its ongoing attempts to tell the full member items story.

Member item money possibly linked, even indirectly, to a criminal indictment of a legislator is one more reason why Mr. Bruno and Mr. Silver should come clean immediately on this $170 million-a-year enterprise. Time for full disclosure, gentlemen.

Inquiry Puts Bronx Senator in an Unfamiliar Place: Under a Spotlight
By Al Baker, The New York Times, July 4, 2005

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State Senator Efrain Gonzalez Jr. of the Bronx, first elected to the Senate in 1989, at a 1999 event. Don Hogan Charles/The New York Times.
Though he is the third-highest-ranking Democrat in the State Senate, it was not unusual that Senator Efrain Gonzalez Jr. of the Bronx missed the leadership's final news conferences of the legislative session last month.

In the 16 years that Mr. Gonzalez, a former city bus driver, has been walking the marble hallways of the Capitol, he has never been one to seek the spotlight. His Senate Web site lists no news releases. His aides say he is more comfortable flying below the radar, working person-to-person in informal settings.

Even the neighborhood organization he has long served as a benefactor and mentor is a decidedly low-key affair. Seldom has the organization, the West Bronx Neighborhood Association, been mentioned in news articles. Few in the borough know much about its work.

For months, though, Senator Gonzalez and the organization have been the recipients of unwanted notoriety, as subjects of a joint city and federal investigation whose premise and possible consequences remain unclear.

Last August, investigators from the United States attorney's office in Manhattan arrived with subpoenas for the neighborhood organization, which occupies an office next to the senator's on the first floor of a commercial building on the Grand Concourse in the Bronx.

Since then the senator, who has shared staff members and $32,000 of his campaign money with the organization over the years, has also turned over records, according to his lawyer, Murray Richman.

Over the past few months, city and federal investigators have questioned several people associated with the neighborhood association or the senator, but they will not disclose what has piqued their interest. Emily Gest, a spokeswoman for the city's Department of Investigation, which is involved in the inquiry, said, "We decline comment due to the ongoing investigation."

But Mr. Gonzalez's lawyer said the finances of the neighborhood organization appeared to be a focal point. "They are just looking at the allocation of moneys," Mr. Richman said.

Last month, as the senator went home for the summer to prepare for surgery to remove a tumor from his right kidney, allies and friends said the specter of the investigation still hung in the air.

"There are all these accusations flying around," said Michael Jones-Bey, an aide to Senator David A. Paterson, the Democratic minority leader. Mr. Jones-Bey said of Mr. Gonzalez, "He said there is nothing there."

Just a few weeks ago, Attorney General Eliot Spitzer skipped a fund-raiser for Mr. Gonzalez for which he had been listed as a host. An aide to Mr. Spitzer, Paul Larrabee, said that the attorney general had never agreed to serve in such a capacity. Mr. Larrabee attributed the mix-up to confusion that occurred in the planning of the event.

Allies and friends of Mr. Gonzalez, who describe the investigation as unfair, say the senator is bearing up well under the scrutiny. They describe him as a tough and savvy man, a former union official who has survived adversity in the past and is facing the investigation, like his illness, with perseverance.

"That cloud has been there," said Lynette Perez-Gonzalez, the senator's daughter. "But he just goes about his business, his daily life, doing what he's always done."

Mr. Gonzalez, who declined to be interviewed for this article, is one of the city's longest-serving state legislators, having been first elected to the Senate in 1989. Though he is chairman of the Senate's Democratic conference, he has also exhibited a distinct tendency to reach out across the aisle. In the past, his diplomacy has extended beyond bipartisan détente and he is known for having endorsed Republicans like Alfonse M. D'Amato and Rudolph W. Giuliani.

A native of Puerto Rico, Mr. Gonzalez entered politics after serving as a union representative for the Transport Workers Union and the Teamsters. Friends describe him as a jovial man with the core skills of a natural politician, a good memory, a way with people and a generous sense of humor.

At times, the senator will hand out cigars as he works a room. He has his own cigar company in the Dominican Republic, where his wife lives and where he is a housing adviser to the government.

It is in the Bronx, though, that the senator has fashioned himself into a powerful presence through his close ties to the borough's Democratic leaders and through his efforts to lure corporate support for economic development and increased opportunities for Hispanics. He is the president of the National Hispanic Policy Institute, which he has described as an organization to advance the interests of Hispanic-Americans. It is located, like the West Bronx Neighborhood Association, just down the hall from the senator's office at 1780 Grand Concourse.

The West Bronx organization, a nonprofit group founded in 1993, has been run for several years by people associated with the senator. The vice president of its board, Jose M. Nicot, is Mr. Gonzalez's former chief of staff. Lucia Sanchez, who was listed as its secretary in 2003, is a close friend of the senator's. She now works in his office as a legislative aide, and her salary is paid through the Senate leadership.

The West Bronx organization's small office is identified by two sheets of white paper with its name that have been taped to the front door. No one answered a knock last week, but Mr. Nicot later answered questions by phone and described Senator Gonzalez as the organization's "rainmaker."

"Efrain is the guy who has all of the relationships that make it rain," he said. "He's the guy that brings the money in."

Mr. Nicot said that, structurally, the West Bronx group was set up like a trade association or a political action committee, not a charity. It does not receive public money, he said, but relies on corporate contributions.

"When business has called and said, 'We have issues,' he has been there and he has solved those problems," said Mr. Nicot.

In recent years, the West Bronx group has raised about $200,000 annually, according to its tax returns on file at the attorney general's office. Of the $222,336 it raised in 2002, the last year for which it had filed the forms, costs included: $23,593 for telephone; $20,544 for travel; $92,796 for conferences, conventions and meetings; and $20,500 for "annual gala expenses."

Several people who said they knew Mr. Gonzalez well, however, said they were not familiar with the organization.

"It doesn't ring a bell," said Gwynn Smalls, the interim executive director of the Bronx Heights Neighborhood Community Corporation, a housing management and tenant advocacy group, who has known the senator for many years.

Mr. Nicot said publicity was not a measure of effectiveness, and he ticked off a list of efforts in which the association has been involved, including helping young women compete in beauty pageants, paying tuition for students at parochial schools and underwriting summer trips for neighborhood children.

He said money had also gone to support Ramitas de Borinquen, whose members twirl batons in the annual Puerto Rican Day Parade, and to help ship donated city fire trucks, ambulances and buses to the Dominican Republic after Hurricane Georges in 1998.

37G 'LOOT & BUY' SPREE FOR BX. POL
By HEIDI SINGER

August 26, 2006 -- A veteran state senator used a charity he founded as his personal piggy bank, dipping into its coffers to pay for Yankees tickets, clothes, tuition, rent and a vacation club in the Dominican Republic, the feds charged yesterday.

State Sen. Efrain Gonzalez Jr. (D-Bronx) paid his credit-card bills with more than $37,000 from the West Bronx Neighborhood Association, according to an indictment unsealed yesterday by Manhattan U.S. Attorney Michael Garcia.

The Bronx politician, in office since 1989, turned himself in to Manhattan federal authorities yesterday, after a yearlong probe in which a grand jury indicted him on one count of mail fraud. The indictment alleges that he used the mail to send checks from the West Bronx Neighborhood Association to pay his credit-card bills.

He also used the money to help pay rent at homes in Monroe, in upstate Orange County, and the Dominican Republic, according to court papers.

"Instead of using government funds to help the community he represents, this defendant served his own interests while allegedly siphoning government money into his own pockets," said Rose Gill Hearn, commissioner of the city's Department of Investigation.

But in an interview with The Post, the 58-year-old senator insisted he was the victim of politically motivated attacks.

"Of course I'm innocent - I've done nothing wrong," he said, while waiting to meet his lawyer in front of the federal courthouse.

"When you're a public figure, you're fillet mignon. This is the Bush administration - if they can do it to (outed CIA agent) Valerie Plame, they can do it to anyone."

Gonzalez scoffed at reports the feds were looking into whether he gave jobs to family members and their cronies.

"Corrupt?" he snorted. "We're just trying to get better housing, we want a nice house, a good life for our families. If that's a conspiracy, so be it. They just want us to be the peons, not the managers and professionals."

He also hinted that his work on Latin American affairs might have angered the wrong people.

Asked later whether he intended to stay in elected office, Gonzalez said, "Sure."

His son, Efrain Gonzalez III, claimed his father was being targeted because he made powerful enemies in Washington.

"I gather that people with money and power have a big influence on how government goes after people," the son said. "I just don't see how a poor state senator from The Bronx, if he had all that cash they say he had, people don't see it."

The Puerto Rico native is close to party leaders in The Bronx and is a member of numerous organizations promoting Hispanic and Latin American causes.

"People can't believe it," said his son. "He lives very humbly. He's a community guy."

After surrendering his passport and agreeing not to travel beyond the city and Albany, Gonzalez was released on a $25,000 bond. He faces up to 20 years in prison and a $250,000 fine.

heidi.singer@nypost.com

AIR AMERICA'S DIRTY DOUGH

$$ TRAIL TO 'AIR AMERICA' KIDS CLUB
By MURRAY WEISS

August 26, 2006 -- The indictment of state Sen. Efrain Gonzalez is the tip of a massive corruption probe into taxpayer-funded programs, including the scandal-scarred youth group that lent $875,000 to launch liberal radio network Air America, The Post has learned.

Federal prosecutors and the city Department of Investigation are zeroing in on ties between the West Bronx Neighborhood Association - which Gonzalez is accused of using as his piggy bank - and the Gloria Wise Boys & Girls Club and its affiliate, Pathways for Youth.

The Co-op City-based Gloria Wise, with an annual budget of $10 million, was one of the largest social-service providers in The Bronx before its city contracts for youth and elderly services were terminated when the astonishing Air America loan was disclosed in July 2005.

Gloria Wise also made a mysterious $112,500 payout to Gonzalez's West Bronx Neighborhood Association in 2001, writing the cash off for "consultant" fees, according to Internal Revenue Service records.

Probers want to know why Gloria Wise needed to use "consultants" at the West Bronx association, located in the same Grand Concourse building as Gonzalez's office.

The Air America "loan" was arranged by one of the station's founding partners, Evan Montevel-Cohen, who was at the same time a $74,000-a-year development director at Gloria Wise Boys & Girls Club. Montevel-Cohen has since resigned both posts.

Boys & Girls Club May Vote To Drop Bronx's Gloria Wise Club Next Month

Brian York on Air America's "Radiogate"