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Bribery plot exposed

Sen. Malcolm Smith (c.) leaves White Plains federal court with his lawyer Gerald Shargel (r.) after being released on bail for charges related to bribery. Photo by Christina Santucci
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State Sen. Malcolm Smith (D-Hollis), City Councilman Dan Halloran (R-Whitestone) and Queens Republican Vice Chairman Vince Tabone were arrested Tuesday and charged with a mayoral bribery scheme so outlandish it left many in the borough scratching their heads.

U.S. Attorney Preet Bharara outlined the charges, contained in a criminal complaint, at a Tuesday news conference after the trio was arrested along with the Bronx GOP leader and two Rockland County officials.

“Today’s charges demonstrate, once again, that a show-me-the-money culture seems to pervade every level of New York government. The complaint describes an unappetizing smorgasbord of graft and greed,” Bharara said.

Smith, 56; Halloran, 42; and Tabone, 46, were charged with corruption, bribery and several counts of wire fraud. Smith and Halloran face a maximum sentence of 45 years in prison each for all the charges if convicted, according to prosecutors, while Tabone faces a maximum of 25 years behind bars if he is found guilty of the counts. They were arraigned in White Plains Tuesday afternoon and each required to post $250,000 in bail.

Smith agreed to steer $500,000 in state transportation money to an upstate project in exchange for the bribes paid on his behalf, according to the complaint, and in total Halloran allegedly accepted upward of $60,000 in bribe money while Tabone pocketed $25,000, prosecutors allege.

Members of Queens political circles were shocked at the news — especially because the scheme seemed so absurd.

“This is the height of stupidity,” said one borough GOPer, who did not want to be named. “It’s ridiculous what they thought they could get away with.”

Smith is a registered Democrat, but wanted to run for mayor on the Republican ticket. To do so, he would need what is known as a Wilson Pakula certificate signed by three of the five borough GOP chairmen.

Tabone told Halloran and the two men working with the FBI that he could deliver the Wilson Pakula for Queens, and was recorded saying, “I run the Queens County Republican Party. Nobody else runs the party,” the complaint said.

Tabone later frisked an undercover FBI agent for a wire, which he missed, and then stepped outside into the agent’s car and accepted $25,000 in cash, prosecutors said, with the promise of $25,000 more.

But Chairman Phil Ragusa is the head of the Queens GOP. He told TimesLedger Newspapers that only he would have the authority to sign a Wilson Pakula, and Bharara made clear in a news conference that Ragusa was not implicated in the investigation.

Secondly, Smith did not necessarily need to bribe party officials to get a certificate, according to a longtime member of an insurgent faction in the Queens Republican Party.

“Some people raise money for the party or they contribute to the party’s coffers,” said lawyer Tom Ognibene. “There is a fundamental difference.”

The complaint, a document that details evidence gathered by the FBI, reads like a Hollywood script, with Smith allegedly brokering deals in restaurants and hotel rooms to get on the mayoral ballot and Halloran allegedly eyeing job titles like deputy police commissioner or deputy mayor in a fantasy Smith administration.

At one point, Smith is recorded in a restaurant telling Halloran, who had allegedly finished negotiating several bribes, “You’ve been busy.”

In another instance where Halloran allegedly accepted illegal campaign contributions and agreed to steer taxpayer money to a fake company, he raised his glass with a man secretly working for the FBI, who said, “Pleasure doing business with you.”

“I think there is much more to this story,” Smith’s attorney, Gerald Shargel, said Tuesday. “I ask anyone reading this or reading about this to withhold judgment. We intend to enter a plea of not guilty if and when an indictment is returned.”

Kevin Ryan, spokesman for Halloran, said the lawmaker is “looking forward to clearing his name.”

The entire case revolved around two people working with the FBI: a Rockland developer who was acting as a cooperating witness and an undercover agent posing as a wealthy real estate developer.

Smith allegedly tried to use these two people and Halloran to bribe the GOP leaders. First he promised the undercover agent and the cooperating witness that he would direct $500,000 in state transportation funds to a Rockland project he thought was real, but was in fact fabricated by the feds, the complaint alleged. In exchange for the state money, the duo would pay for and carry out the bribes.

The pair then enlisted the help of Halloran, who in a series of recorded meetings, allegedly did the leg work of sorting out which counties could be bought and how much to pay them, the complaint said.

In an unrelated incident, Halloran also pledged to steer $80,000 to a shell company operated by the cooperating witness and the undercover agent in exchange for cash bribes and fake donations to his unsuccessful 2012 congressional campaign, which he lost to U.S. Rep. Grace Meng (D-Bayside).

“You can’t do anything without the f-----g money,” Halloran was recorded saying to one of them during a Sept. 7 meeting at a Manhattan eatery. “Money is what greases the wheels — good, bad or indifferent.”

James McClelland, chief of staff to Republican-turned-Democrat Councilman Peter Koo, of Flushing, said Halloran’s claim that he could steer $80,000 of city money to a fake company set up by the FBI seemed far-fetched.

“That would raise a big red flag,” McClelland said, citing the lengthy vetting process and large amount of paperwork a recipient — almost always a nonprofit — would need to complete to get city discretionary funds, which more typically are doled out in parcels of several thousands dollars and not close to $100,000.

Reach reporter Joe Anuta by e-mail at januta@cnglocal.com or by phone at 718-260-4566.

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