Despite Arrest, Espada May Get Clinic Money

ALBANY, N.Y. (CBS 2/AP) — It was at the FBI headquarters Wednesday that Bronx Senator Pedro Espada Jr. and his son, Pedro G. Espada, surrendered to face embezzlement and conspiracy charges.

The U.S. Attorney’s Office in Brooklyn and state Attorney General Andrew Cuomo on Tuesday indicted the 57-year-old state senator and his 37-year-old son on six charges stemming from the activities involving the Comprehensive Community Development Corp., a federally funded not-for-profit in the Bronx known as Soundview.

They were accused of embezzling more than $500,000 from the clinic the senator founded to pay for upgrades to his out-of-the district home in leafy Mamaroneck, lavish meals, including $20,000 alone at a Mamaroneck sushi restaurant, and tickets to the Yankees, Mets and Broadway shows like “The Jersey Boys.”

As CBS 2’s Marcia Kramer reports, despite his arrest, Espada Jr. may be entitled to much more cash from his clinic.

It may come down to who acts first, Espada Jr. or the feds, but Espada is entitled to collect a $9 million severance package if he quits his Soundview Health Clinic. That’s on top of all the money the feds say he embezzled.

Ironically Espada’s penchant for record-keeping helped the feds make their case. When they raided his Soundview Clinic last spring they found boxes and boxes of material, many labeled with tags that read “payroll record” or “check registers.”

One FBI agent found the material so engrossing he took out a chair and sat on the lawn to read.

“In these difficult economic times, the charged crimes are all the more reprehensible,” U.S. Attorney Loretta Lynch said.

Cuomo decried what he called looting and said the “cruel twist” was “they were using funds that were supposed to go to poor people.” “It’s one of the more outrageous abuses of public office that I have ever seen,” Cuomo said.

The governor-elect also said the case is an example of how he means to clean up Albany. “The days where Albnay politicians can victimize the people of this state are over. The days where state officials will abuse the taxpayers are over.”

Espada is just the latest Albany politician to be indicted in office, and the second Senate majority leader in three years. But like former Republican Majority Leader Joseph Bruno who is appealing a conviction charge for mixing private business with his state power, Espada vows to take his case to court. Espada called the investigation that lingered throughout his two-year term as a political “witch hunt” by Cuomo.

Few doubt Espada will carry out his threat. He rose from impoverished street fighter in Puerto Rico to Fordham University graduate and boldly manipulated Albany’s old-boy political power structure in the Senate. Within days of his election in 2008, his second stint in the Senate, the Democrat formed his “three amigos” coalition with two other Democrats to threaten his own Democratic majority. He demanded leadership positions in part for what Espada said was a needed Latino voice, or the three would join Republicans and end the Democrats’ first majority in a half-century.

Espada won.

Then in June of 2009, Espada and freshman Sen. Hiram Monserrate of Queens, then under investigation for a domestic violence incident that would later cost him his seat, carried out the threat. They joined the Republicans, with Espada gaining the title Senate president. More than a month of gridlock ensued, with neither side recognizing the others’ authority — even holding simultaneous sessions at one point and locking each other out of the chamber without a clear majority.

But when Democratic Gov. David Paterson appointed a lieutenant governor, in a constitutional gamble upheld in the courts, Espada returned to the Democratic fold. He also gained the powerful and lucrative majority leader’s post.

With his bold suits of gold pinstripes in the Senate long dominated by white men in dark blue, the Latino had a charismatic manner in English and Spanish with all lawmakers, and possessed a shrewd political sense.
He became “Pete” to senators of both parties, who voted for him and often castigated him later. Hours before his indictment Espada issued a year-end report of the majority leader expounding on the importance of state grants for nonprofit agencies and taking credit for reforms in the Senate to make lawmakers accountable.

“I am proud to have served as the catalyst for this reform,” he stated in a press release the Senate’s Democratic majority refused to pay for. After the indictment was released, Espada was immediately stripped of his majority leader title and removed as housing committee chairman.

“Thirty years ago Senator Espada founded the Soundview Health Care Center,” said his attorney, Susan R. Necheles. “Soundview has provided high quality health care to thousands of families, children and senior citizens in the Bronx. Today is a sad day for Soundview and a sad day for the Espada family. Senator Espada and his son deny any wrongdoing and we intend to fight the charges in court.”

Espada lost his seat in the September primary, with most Democrats clamoring to be seen opposing him. Republicans used Espada’s image in what appears to be their successful effort to win back the majority in the November election, pending an ongoing appeal of the vote.

Cuomo said taxpayer funds since 2005 were diverted for the Espadas’ personal use.

“There was no doubt he and his son were looting Soundview for a lavish lifestyle,” Cuomo, a Democrat, told reporters.

Cuomo said the Espadas could face up to 10 years in prison on each of five embezzlement charges, five years for the single conspiracy count and fines of $250,000 on each charge.

In earlier civil suits, which are still pending, Cuomo accused Espada of siphoning $14 million from his government-funded clinic, breaching his fiduciary duty, and seeking to remove him from the board. Authorities said the difference in amounts represents liabilities on the Soundview books not yet spent, including a severance package of at least $9 million.

“There’s a culture in Albany that has been too tolerant of legal violations and ethical absences,” Cuomo said.

(Copyright 2010 by The Associated Press.  All Rights Reserved.)



  • David Flores

    busted!!!!!!!!!!!!!!!!!!!enjoy making sweet love to big bubba!!!!oopppss dont drop the soap!!!!!!!!!!!

  • jtorres

    Really, is anybody surprised? He’s an arrogant, self-important thief and thug. I have a hard time understanding how he got as far as he has. But I guess that’s politics. He thought he was never going to get caught much less pay for what he was doing. News flash, babe. You and your whole family is going to pay and BIG. It’s all over.

  • Jake

    Unfortunately,he would probably be re-elected in his district if he ran.What does that say?

  • Gregg

    Corruption runs deep in both parties ! This is a bi-partisan situation !

  • Micha

    I hope they both go to jail. Is Pedra Espada so stupid to think people wouldn’t notice a senator is driving a bentley? Pieces of garbage like this are the reason why our democracy no longer works…

  • Liberal Jew

    What exactly is meant by “an impoverished street fighter from Puerto Rico” and why is it used to applaud the man’s accomplishments? It means he was a thug from the streets, so it should be no surprise then that he turned out to be a thug in the senate

  • A.S

    Funny how some people claim that America has moved past racism when cowards still use anonymous forums like these to express their hateful views. Racists use every opportunity they get to hate. These people were wrong and they will probably (hopefully) be put in jail for a long time but that doesn’t make racial slurs okay.

    • Michael H.

      With the hateful rhetoric people like our friend Mr. Goebbels spew on a daily basis around here, I’m amazed this is still an anonymous forum. They should really require registration in order to comment. I’m not asking that you be forced to use your real name, but being forced to open an account would at least give them something to ban.

  • todd

    Funny how the media always forgets to put the party affiliation when a DEMOCRAT is found out to be a crook. If this were a Republican it would have been the first word in the title.

    • Michael H.

      “Now, the bold and charismatic Bronx Democrat”

      Second sentence of the article. Is your attention span that short?

  • the bandid

    of cause Pedrito, Cuomo fiound you with the hands in the cookie jar and you din’t liike it, so now is time for you and you son to pay a visit to the big house for a long time

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