Another only-in-New-York story

William Rashbaum has an article in The New York Times about yet another crooked official:

A senior official at the New York City agency that helps build affordable housing used his position to conduct a racketeering enterprise, federal prosecutors charged, saying he took about six hundred thousand dollars in bribes and kickbacks from developers who hid the cash in golf ball boxes, coffee cups, and overnight envelopes. The official, Wendell B. Walters (photo), the assistant commissioner at the Department of Housing Preservation and Development responsible for new construction, was arrested on charges that he took money from developers involved in building about $22 million in moderately priced housing overseen by the agency in the Bronx, Queens, and Brooklyn since 2002.
The authorities said Walters, 49, steered contracts the developers’ way in exchange for the cash, which he pocketed at meetings at locations around the city, including a golf driving range and a parking lot. Developers and contractors involved in the scheme then passed the cost of the kickbacks and bribes on to the city with inflated invoices, the authorities said.
The charges against Walters— racketeering conspiracy, extortion, bribery, wire fraud, and money laundering— represented another black eye for the administration of Mayor Michael R. Bloomberg, whose third term has been clouded by controversies involving senior officials. They include the tumultuous tenure of Cathleen P. Black as schools chancellor, and the abrupt departure of Deputy Mayor Stephen Goldsmith, who said in August that he was leaving to work in municipal finance, but had been arrested in Washington on a domestic violence charge days earlier, a fact that neither he nor the mayor mentioned in their announcements.
Six developers, two of them lawyers, were also charged. One, Stevenson Dunn, 50, a high school friend of Walters, was also charged with racketeering conspiracy. The others were charged with bribery, extortion, wire fraud, and money laundering: Lee Hymowitz, 60, and Michael Freeman, 64, the lawyers; and Sergio Benitez, 51, Robert Morales, 52, and Angel Villalona, 52. All seven defendants pleaded not guilty and were granted bail ranging from $300,000 to $500,000.
The case was announced in a news release by the United States Attorney for the Eastern District of New York, in Brooklyn, Loretta E. Lynch, and officials from the FBI, the Internal Revenue Service, the Labor Department, and city investigators.
“These defendants saddled the city’s affordable housing program with a criminal pay-to-play scheme, lining their pockets at the public’s expense,” Rose Gill Hearn, the city’s commissioner of investigation, said in a news release.
Walters used some of the kickbacks, prosecutors said, to renovate a town house on West 139th Street, in Harlem’s Strivers’ Row. He received the house, investigators alleged, as a form of bribe from a developer who has since died, but who had obtained help from Walters in obtaining “lucrative HPD contracts.”
Investigators said that a straw buyer was used to conceal the bribe; according to property records, the buyer was Ed Pinckney, a star of the 1985 Villanova basketball team that pulled a stunning upset over Georgetown. Walters, a towering figure known as “the Tall Guy” and “the Big Man”, according to the indictment, played basketball himself, for Iona, about the same time, and one investigator said the men were good friends.
Pinckney was not charged. Attempts to reach him through the Chicago Bulls, where he is now a coach, were not successful. A message left at Pinckney’s home in suburban Chicago was not answered.
Walters rose to the upper ranks of the housing agency, which the city calls the nation’s largest municipal builder of affordable housing, during the scheme, city records show, and his salary rose from $71,501 in 2002 to $131,983 in 2006 through a large merit raise and several smaller increases. His salary has not changed since then, according to city records.
He became a central figure in one of Bloomberg’s signature initiatives: an $8.5 billion plan to preserve or build 165,000 apartments for middle-class and working-class New Yorkers. Another of Bloomberg’s major projects, an automated payroll system, is the subject of a corruption investigation by federal prosecutors and the city’s Department of Investigation that has so far resulted in the indictment of several consultants.
Bloomberg, speaking at the opening of Twitter’s new East Coast headquarters, suggested that the case did not indicate any broader problems in the city’s work force. “We have 330,000 employees in this city, and I’d love to tell you that they were all honest, perfect, and whatever,” he said. “I can tell you that the vast majority are. I’ve had experience in both the public and private sector, and I can tell you this as good a work force as I’ve ever seen.” He said that Walters had been suspended without pay and that the developers had been disqualified from the city’s housing program, adding, “We just have no tolerance for corruption for anybody in city government.” Bloomberg said his Department of Investigation had uncovered the case, an assertion that an FBI official disputed, saying that the matter grew out of an unrelated 2008 FBI case,involving the extortion of Polish construction workers in Greenpoint in Brooklyn.
The program that Walters oversaw, called the New Housing Marketplace, has so far reached three-quarters of its goal, according to the city. And it has attracted such fanfare that Shaun Donovan, who spearheaded the initiative when he was Bloomberg’s housing commissioner, was appointed by President Obama as the secretary of housing and urban development.

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