NY senator charged with embezzling from his clinic

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Pedro Espada Jr. has been at the center of two of the most tumultuous years the two-century-old New York Senate has ever seen.

Now, the bold and charismatic Bronx Democrat who plied his way from freshman to majority leader in six months stands accused of embezzling state grants he directed to his Bronx health clinic in some New York's poorest neighborhoods to pay for a cool car and a hot night life.

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 son, Pedro Gautier Espada, 37, 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 are accused of embezzling more than $500,000 from clinic the senator founded for lavish spending, including a down payment on a $125,000 Bentley and $14,000 in tickets for sports and shows.

The indictment says Espada charged $110,000 in posh restaurants, including $20,482 at his favorite sushi place near his home outside his Senate District in Mamaroneck, and pony rides and a petting zoo at a family birthday party.

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

Cuomo, New York's governor-elect, 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.

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.

(This version Deletes extraneous 'rose' in 9th paragraph; corrects spelling of 'possess' in 14th paragraph.)