20 October 2010 – LawFuel.com – United States Attorney
HIRAM MONSERRATE WITH CONSPIRACY AND MAIL FRAUD CRIMES
Hiram Monserrate Charged With Abusing New York City Council
Discretionary Funds To Advance His Own Political Campaign
PREET BHARARA, the United States Attorney for the Southern
District of New York, and ROSE GILL HEARN, the Commissioner of the
New York City Department of Investigation (“DOI”), announced today
the unsealing of an Indictment charging HIRAM MONSERRATE, a former
New York State Senator and New York City Council member, with
conspiracy and mail fraud offenses relating to the abuse of City
Council discretionary funds. Specifically, MONSERRATE is accused of
misusing more than $100,000 in discretionary funds he himself
directed to a New York City non-profit to finance his failed, 2006
campaign for the New York State Senate. MONSERRATE surrendered to
authorities early this morning, and is expected to be presented
later today in Manhattan federal court.
Manhattan U.S. Attorney PREET BHARARA stated: “As we move
into the heart of the political season, today’s indictment of Hiriam
Monserrate should serve as a reminder. No campaign should ever be
funded by fraud. Moreover, worthy non-profits are supposed to have
access to public money because they are meant to be a resource for
communities, not a piggy bag for politicians. Public officials who
act like they are above the law may get away with it for a while,
but eventually we will find you and we will prosecute you. Today’s
charges demonstrate – once again – that rooting out public
corruption is a top priority for this Office and for our partners at
the Department of Investigation. And our work is far from
finished.”
DOI Commissioner ROSE GILL HEARN stated: “This
defendant misused his elected office to fund a campaign hiring
hall at the expense of the City’s taxpayers and the community he
represented, according to the charges. This indictment makes
clear that City funds are for City purposes, not for the private,
political use of the legislator who allocates them. DOI thanks
the U.S. Attorney’s Office for the Southern District of New York,
our strong partner in attacking public corruption. And we thank
the Queens District Attorney’s Office for its assistance in this
case.”
According to the Indictment unsealed today in Manhattan
federal court:
Council Discretionary Funds
It has been the practice of the New York City Council
(the “Council”) to allocate millions of dollars annually to nonprofit
organizations. These funds, which are known as
“discretionary funds,” were typically allocated by the whole
Council in connection with specific Council initiatives.
Additionally, each Council member was allotted a certain amount
of discretionary funds annually that were to be distributed to
community-based, non-profit organizations for “local
initiatives.” The Council member then identified both the nonprofit
organizations to which he or she wanted to direct funds
and the amounts the organizations were going to receive. While
serving in the Council, Monserrate designated the Latino
Initiative for Better Resources and Empowerment, Inc. (“LIBRE”),
a tax-exempt organization that described its mission as including
working with “churches, civil rights organizations and community
organizations . . . to counsel and assist individuals to secure
their legal rights,” as a recipient of discretionary funds.
Monserrate’s Fraudulent Scheme
As alleged in the Indictment, during the fiscal years
2006 and 2007, while serving as a member of the New York City
Council, Monserrate directed approximately $300,000 in
discretionary funds to LIBRE, and then used approximately
$109,000 of LIBRE funds to finance his 2006 failed Senate
campaign. Specifically, the Indictment alleges that MONSERRATE
improperly used LIBRE resources in various ways to promote his
unsuccessful 2006 campaign for election to the New York State
Senate.
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The Indictment details three distinct ways in which
MONSERRATE directed that LIBRE fraudulently use Council
discretionary funds MONSERRATE himself had allocated in support
of his political campaigns:
C Voter Registration For 2006 Senate Campaign. In
order to vote in the 2006 primary election in
which MONSERRATE sought the Democratic Party’s
nomination for the Senate, individuals were
required to have registered to vote in person or
to have submitted a voter-registration application
by mail by August 18, 2006. In 2006, LIBRE, using
discretionary funds allocated by MONSERRATE,
conducted a voter registration drive focused on
the 13th Senate district for which MONSERRATE
sought the nomination. The LIBRE workers told the
newly-registered individuals that LIBRE would
submit the applications to the New York City Board
of Elections. However, at MONSERRATE’s direction,
LIBRE created a database containing the names and
contact information of the individuals and
provided this database to workers affiliated with
his Senate Campaign. MONSERRATE further directed
LIBRE to wait to submit the voter-registration
applications to the New York City Board of
Elections until shortly before the August 18,
2006, deadline for voting in the primary election.
MONSERRATE thus gained an advantage by being the
only candidate aware that these particular people
would be eligible to vote in the 2006 primary
election and that they should be targeted with
campaign messages.
C Petitioning And Canvassing For the 2006 Senate
Campaign. Under New York law, to be included on
the ballot for a political party’s primary
election, a prospective candidate must obtain
signatures of at least five percent of the
political party’s enrolled voters in the relevant
electoral district on so-called “designating
petitions.” Each designating petition has to be
signed by a witness who affirmed each of the
signatures. In June and July of 2006, at
MONSERRATE’s direction, LIBRE used Council
discretionary funds to pay workers to gather
signatures of registered voters on petitions
designating MONSERRATE as the Democratic Party
candidate for the 13th Senate District and to sign
those designating petitions as witnesses.
Thereafter, from July through September 2006,
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LIBRE used Council discretionary funds to pay
workers to canvass residents of the 13th Senate
District on MONSERRATE’s behalf.
C Payments To LIBRE Employees. From June through
September 2006, while MONSERRATE was seeking the
nomination of the Democratic Party to run for
Senate for the 13th Senate District, certain LIBRE
employees were paid thousands of dollars by LIBRE
to perform work on behalf of MONSERRATE’s
political campaign and performed no substantial
independent work for LIBRE during this period of
time.
In a related matter, Javier Cardenas, a LIBRE employee,
pled guilty in Manhattan federal court yesterday to mail fraud
and conspiracy to commit mail fraud.
* * *
The Indictment charges MONSERRATE with one count of
conspiracy to commit mail fraud, and one substantive mail fraud
count. Each count carries a maximum term of imprisonment of
twenty years.
Mr. BHARARA praised the investigative work of DOI and
the Criminal Investigators from the Office’s Public Corruption
Unit. He also thanked the office of Queens District Attorney
RICHARD A. BROWN for its assistance with the investigation.
The case is being handled by the Office’s Public
Corruption Unit. Assistant U.S. Attorneys BRENT S. WIBLE and
GLEN G. McGORTY are in charge of the prosecution.
The charges contained in the Indictment are merely
accusations and the defendant is presumed innocent unless and
until proven guilty.
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