By Mark Hamblett,From New York Law Journal

In the latest federal indictment targeting what authorities say is a pay-to-play culture in Albany, New York state Senate Majority Leader Dean Skelos and his son, Adam Skelos, were arrested Monday on federal public corruption charges alleging bribes and extortion.

Skelos, a Long Island Republican and 30-year veteran of the Senate, and his son were named in a six-count criminal complaint that focuses on the relationship between the Albany power fixture and his son’s business deals.

Skelos, 67, and his son Adam, 32, were charged with conspiracies to commit extortion under color of official right and commit honest services fraud, and two counts each of extortion under color of official right and solicitation of bribes and gratuities.

The charges brought by Preet Bharara, the U.S. Attorney for the Southern District, echoed those lodged by his office against Democrat and former New York State Assembly Speaker Sheldon Silver in January for theft of honest services and extortion in connection with legislative favors and work that Silver allegedly never performed for two law firms. Silver is fighting the charges.

At a midday news conference, Bharara said Dean Skelos’ support for infrastructure projects and legislation “was often based, not on what was good for his constituents or good for New York, but rather on what was good for his son’s bank account.”

The pair appeared at FBI headquarters Monday morning and made their initial appearance before Southern District Magistrate Judge Henry Pitman with their attorneys at their sides: G. Robert Gage, a partner with Gage Spencer & Fleming for Dean Skelos and Christopher Conniff, a partner of Ropes & Gray for his son. Assistant U.S. Attorneys Jason Masimore, Rahul Mukhi, Tatiana Martins and Thomas McKay are prosecuting the case.

The Skeloses were released on their own recognizance with few restrictions. Dean Skelos was instructed to surrender a hunting shotgun and ammunition.

Outside of the courthouse, the elder Skelos told reporters, “I have the utmost respect for our judges and our juries and that’s why I will be found innocent, and my son will be.”

Conniff released a brief statement Monday, saying “Adam Skelos is not guilty of the charges and looks forward to fighting them in court.”

Dean Skelos, according to the complaint, earned $2.6 million working for the law firm Ruskin, Moscou & Faltischek since 1994, but “did not perform any actual legal work” for the firm. He instead referred clients, “including companies with business before the state,” and met with clients on legislative matters.

The complaint said that payments were funneled to Adam Skelos by a senior executive at a major real estate firm and an employee of AbTech, an environmental technology company based in Arizona.

Beginning in 2010, Adam Skelos, received a one-time $20,000 payment from the real estate company for title work he never performed and $4,000 per month in continuing payments from AbTech.

The payments from AbTech rose to $10,000 a month after Adam Skelos allegedly threatened to block a $12 million contract that Nassau County was considering awarding the company. Ultimately, payments from AbTech to the younger Skelos totaled $198,000. He was nominally paid the money for work as a “government relations consultant.”

The quid pro quo was legislative favors for both companies from the majority leader. For the real estate company, the favors came in the form of legislation on rent regulation and tax abatements, with Dean Skelos stifling legislation hostile to the developer’s interests. Adam Skelos also received business from political contributors to his father.

The elder Skelos allegedly pressured Nassau County officials to award the $12 million contract to AbTech, and worked to benefit the company by seeking to add funding for stormwater infrastructure projects and changes to state law that would have permitted “design-build” contracts.

The complaint also said that the managing director of a second unnamed real estate developer had a lunch meeting with Dean and Adam Skelos in February 2011 that resulted in Adam Skelos getting a job preparing a title report for a $250 million mortgage for the Chrysler Building complex.

Other favors included the younger Skelos getting title work for the refinancing of hundreds of millions of dollars in bonds for a large hospital system on Long Island that required the approval of the Nassau County Industrial Redevelopment Agency—and a grocery store owner who met with Dean Skelos and the next day awarded a signed contract for purchasing gas and electricity through Adam Skelos.

The case against them was put together by FBI agents who obtained wiretaps for the Skelos’ cell phones. The complaint stated that father and son used coded language to discuss their scheme and a “burner” phone to avoid detection by law enforcement. They allegedly “increased their acts of concealment” in January following the arrest of Silver.

The FBI used the real estate executive and a senior executive of AbTech as confidential witnesses. Both executives have entered into non-prosecution agreements with the U.S. attorney’s office.

Dean Skelos was alleged to have pressured Nassau County officials to make payments to AbTech, saying his son could lose his job if the payments were not made.

The complaint stated the elder Skelos was intercepted on one call complaining about Nassau County on behalf of Adam Skelos “somebody feels like they’re getting jerked around the last two years.”

On another intercepted call, Adam Skelos is allegedly heard telling one of the confidential witnesses that Nassau County was “burning bridges left and right” and that the “state is not going to do a f—–g thing for the county” because “they haven’t helped us with what we needed.”

In the wake of reports last month that federal authorities were eyeing Skelos and his son, Acting Nassau District Attorney Madeline Singas announced her office would review the county’s contracting practices.

On Monday, Nassau County District Attorney spokesman Shams Tarek said the office had no comment on the Skelos case. Still, Tarek said the office was taking a “broad look at county contracting practices” and that the investigation was “very active and ongoing.”

Dean Skelos has represented a portion of Nassau County on Long Island in the state Senate since he was elected in 1984. He has been majority leader since January 2011.

His arrest prompted a replay of the fallout following Silver’s arrest in January, with Democrats and government reform groups calling for Skelos to step down from his leadership position.

Sen. Andrea Stewart-Cousins, leader of the Senate Democratic conference, called the charges against her rival “deeply disturbing.”

“I cannot imagine him continuing to serve as leader as he deals with the cloud of corruption now effecting the top two Senate Republican leaders,” Stewart-Cousins, D-Yonkers, said in a reference to Skelos and Tom Libous, the Senate’s deputy Republican leader. Libous, of Binghamton, was charged last year of allegedly lying to federal prosecutors.

Bronx Democrat Jeffrey Klein, who leads a group of maverick Democrats who sometimes vote with Republicans on key issues, said “the burden now falls on the Republican conference to determine if new Republican leadership is warranted.”

Republican senators met behind closed doors starting Monday afternoon to discuss their conference’s leadership situation.

Speculation about a possible replacement for Skelos as leader of the Republican Senate leadership centered around John DeFrancisco of Syracuse, the chairman of the Senate Finance Committee, and John Flanagan of East Northport. Flanagan is chairman of the Senate Education Committee. Both men are attorneys.

The New York Public Interest Research Group was among the government reform advocates who said Skelos’ arrest continues to highlight the need for ethics reform in Albany. It said his case, that of Silver and of numerous other legislators demonstrate the need for a congressional-style ban to be imposed on state legislators so they may not earn income outside their legislative salaries.

IMAGE: State Senate Majority Leader Dean Skelos, left, and his son, Adam Skelos, arrive at the Jacob Javits Federal Building on Monday. Reuters/Eduardo Munoz

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