Bruno Case Difference: It’s Quid Pro Dough

Joe Bruno’s criminal trial for improperly receiving more than $3 million from firms seeking either state or union business has veered into an area that by Albany standards qualifies as existential: when is a quid pro quo illegal, as opposed to standard operating procedure?

The consensus among several veterans of city and state government is that it hinges on whether there is a direct financial payoff, as opposed to less-tangible benefits that often can be far more lucrative in the long run.

One of them remarked, “If money’s not involved, they just look the other way.”

Or as Duke Ellington might have put it, “It ain’t quid pro quo if you don’t take that dough.”

Federal prosecutors have called a series of witnesses, including Correction Officers Benevolent Association President Norman Seabrook, in their attempt to prove that Mr. Bruno looked particularly kindly on unions that invested their money with a firm that over a 12-year period paid him more than $1.3 million in commissions, part of a total pot of $3.2 million they say he raked in by trading on his influence as Senate Majority Leader.

PAR FOR THE COURSE ON ALBANY SLOPE?: Former State Senate Majority Leader Joe Bruno may have broken the law by not disclosing his financial stake in an investment firm he recommended to union officials who needed his help on legislation. One government veteran said that in other respects, the favor-trading was not terribly different from the political support unions give to those who back their bills, and the attitude of officials toward such transactions was generally, ‘If money’s not involved, they just look the other way.’ May Not Have Disclosed Stake

An official from Wright Investors’ Service, with which COBA placed $10 million in union funds a decade ago a few months before Mr. Bruno helped pass a bill giving Correction Officers a Variable Supplements Fund, testified that the firm’s files did not have any of the disclosure statements regarding his connection to the firm that Mr. Bruno was required to issue to potential clients.

Mr. Seabrook testified Nov. 5 in Albany that Mr. Bruno never gave him such a statement and had never discussed Wright’s hiring with him. The union leader, who has not returned calls both prior to and since his testimony seeking further details, said he did not remember who recommended that he use the firm, which is based in Milford, Connecticut, but he testified that it had helped more than triple the holdings of the COBA annuity fund.

Several veterans of the legislative giveand take had mixed reactions to Mr. Seabrook’s account, in part because most transactions of this sort dwell in a gray area in which the favor-trading is implied, and words like “bribe” and “shakedown” are considered too vulgar for polite company.

“It’s nuances,” said one former city official, speaking conditioned on anonymity. “You go to Joe and say, ‘I’d like to get this bill passed,’ and he says, ‘Sure, and speaking of pensions, I know this great investment firm. . . ’ You don’t have to be blatant about it; Norman knows how to connect the dots, and so does Joe. It’s ‘show me the money and you can get your bill.’ ’’

But it isn’t alleged in this case that the union did anything improper, or that Mr. Bruno directly received money in return for his support of the measure. To a large extent, it appears the case will pivot on the issue of disclosure: whether he failed to inform the unions that he was working for Wright and stood to profit if they gave it money to invest.

Mr. Bruno began working for the firm in 1994. At the end of the year, after a coup was engineered against Senate Majority Leader Ralph Marino, he took over as the most powerful official in the Legislature’s upper house, and investments that unions made with Wright took off dramatically.

Much Courting, Few Questions

It’s unlikely that this was due to Mr. Bruno’s elevation having sent his confidence soaring to such a degree that he blossomed as a salesman. His newfound power to move or block legislation made him a man to be cultivated and courted, and if he asked for something, those seeking favors were generally not inclined to respond with questions.

This may account for the difficulties Mr. Bruno is having dealing with his trial judge, who last week admonished him because he believed he had showed his displeasure with a ruling in front of the jury, telling him, “For once in your life, you don’t control something —I do.”

The New York Times noted that aides to then-Mayor Rudy Giuliani had told reporters at the time a decade ago that the VSF bill was advancing at an alarming rate that they expected Mr. Bruno to be their firewall against its enactment. It’s not clear, however, why they counted on him to a greater extent than Peter Vallone Sr., the City Council Speaker who generally had a good relationship with Mr. Giuliani but secured a homerule message that allowed the bill to be considered in Albany, or Gov. George Pataki, a fellow Republican with whom the Mayor had mended relations after staunchly opposing his election five years earlier.

Both men described the bill giving correction officers in all ranks the same benefit that city cops and firefighters had enjoyed for the previous three decades as a matter of equity. There was a significant difference, however: the Police and Fire Department VSFs were created under legislation that also had a tangible benefit for the city, allowing it to invest money from the pension funds for uniformed members of those departments in the stock market. The correction unions comprised only about 10 percent of the membership in their pension fund, the New York City Employees’ Retirement System, which had long enjoyed the right to make stock investments by the time COBA pursued the VSF bill in earnest. This meant that not only wouldn’t the city derive any financial benefit from the correction union VSF; it would lose a portion of stock profits that would be siphoned from NYCERS to the new fund.

But the bill became law, and stood as a major coup for Mr. Seabrook—he testified that it was “the most significant piece of legislation” green-lighted during his 14 years in office. That remains true even though sluggish stock market performance forced the suspension of the benefit to retired correction officers four years ago, while different wording for the legislation covering cops and firefighters permits their retirees to continue receiving $12,000 a year. Regardless of how well the stock market performs over the next decade, beginning in 2019 the VSF payouts will become guaranteed for correction retirees.

Election Support Their Reward

The trade-offs by Mr. Vallone and Mr. Pataki with Mr. Seabrook seem more benign than what occurred with Mr. Bruno because there is no hint of financial bribery. COBA strongly supported Mr. Pataki’s re-election in 1998, a year before the bill moved through the Legislature, and again in 2002, and it has been speculated that the union backed George W. Bush for President in between as a further thank you to the Governor. Mr. Vallone had the union’s endorsement when he unsuccessfully sought the Democratic nomination for Mayor in 2001.

But the VSF bill carried a public cost, regardless of whether the officials who ensured its passage lined their pockets or simply furthered their political ambitions. Which may have been why U.S. District Court Judge Gary Sharpe last week told the two sides in the Bruno case that they should stop arguing about alleged quid pro quos and focus on whether the former Majority Leader’s actions were deceitful and enriched him at public expense.

One longtime legislative and political activist, who also did not want to be quoted by name, said it was hard to tie legislative decisions to improper arrangements simply because the rules for doing business had been entrenched for so long.

“Unless someone is accused of making money on the legislation, the legislative process is the legislative process,” he said. “It’s like sausagemaking: it’s complicated and sometimes it’s ugly. But that’s the way it’s tended to work.”

‘Advanced Union’s Interests’

Blair Horner, the legislative director for the New York Public Interest Research Group, agreed, up to a point. “Seabrook and his union are obviously important political players,” he said. “He could use his political action committee and volunteers to advance the political interests of the union.”

And all interest groups doing business in Albany share certain traits, he continued: “hot-wired lobbyists, they try to do favors for their [political] friends, and obviously they try to get their friends elected.”

Given Mr. Seabrook’s denial that he and Mr. Bruno ever directly discussed COBA’s placing money with the firm that was paying him for each referral or linked the investment to the VSF bill, the transaction looked, Mr. Horner said, “No worse than it always looks. We think it’s a lousy system. The key potential violation is really around Bruno’s failure to disclose on his [legislative] ethics forms” that he had the financial relationship with Wright.

Reassessing Ethical Borders

Political consultant George Arzt said this case and others were forcing elected officials to take a closer look at ethical boundaries. Agreeing that there was not a vast difference between what Mr. Vallone and Mr. Pataki did for the union in return for political considerations and what Mr. Bruno is accused of doing for financial gain, he said, “It looks like politics as usual, with one hand washing the other. But more and more prosecutors have been criminalizing political practices. They’re taking a harder line, and the public demands a harder line, against those who are enriching themselves at the people’s expense.”

In Mr. Bruno’s case, to this point there has been no smoking gun on the order of the taped conversations of former labor leader and Assemblyman Brian McLaughlin, or the conversations he subsequently recorded with his Queens colleague, Tony Seminerio, in which it became clear that they were engaged in criminal activity. His attorney has attempted to argue that what he did for COBA and other unions that invested with Wright was consistent with dozens of other legislative actions he took to benefit a variety of groups with no suggestion of impropriety in those dealings.

Can’t Promise, Only Consider

Mr. Arzt noted that there is a law against promising someone a job in return for political support, which is why prudent aspiring officeholders go no further than to say they will “consider” appointing someone they are courting, but occasionally someone is reckless enough to make an explicit pledge and risk being prosecuted.

There are situations politicians face, he said, where “you know if it doesn’t cross the line, it comes right up to the line, and you shouldn’t be doing those things. You have to be very careful. If Bruno is convicted, it will throw a chill into political practices.”

But that doesn’t mean the balancing act will be canceled, merely recalibrated, he said: “You have to figure out a safer way to do it.”