Bloomberg Not Victim in Alleged $1.1M Fraud, Says Defense
MANHATTAN SUPREME COURT — The billionaire mayor of New York was not the victim of theft by a former campaign worker charged with swindling $1.1 million from contributions to the Independence Party during the 2009 election, the worker's lawyer argued Monday.
Michael Bloomberg, in the course of self-financing a 2009 third-term mayoral campaign that exceeded $100 million, had no right to the money he'd contributed to the party that backed him and may have committed fraud when he told the party how to spend it, argued Raymond Castello, attorney for former worker John Haggerty.
Haggerty, 42, is accused of funneling $1.1 million through a shell company called Special Election Operations. Prosecutors say he used it to purchase a Queens home. He is charged with grand larceny, money laundering and falsifying business records.
Prosecutors said the Independence Party hired Haggerty and his company on Bloomberg's behalf to perform poll watching and ballot security on election day at 1,300 polling sites throughout the city. Instead Haggerty performed very little security and pocketed most of the hefty contribution.
Castello said his client could not be guilty of any of those charges because Bloomberg by definition had given a gift to the party and therefore could not legally designate what the money was spent on.
"There is fraud here but it's campaign fraud by Mr. Bloomberg and his people. He committed campaign finance fraud because he made an expenditure related to his campaign and he didn't report it," Castello argued.
"They got a get-out-of-jail-free card," he added during his opening statement.
A spokesperson for the mayor blasted Haggerty's defense team for making the claim in a statement distributed after the morning's proceedings.
"The [DA] has said the Mayor did not break any law ... the evidence will show [Haggerty] stole money from Mayor Bloomberg through outright lies," said mayoral spokesman Jason Post.
"Mr. Haggerty and his legal team are prepared to say anything to avoid prison," he added.
Prosecutors argued Monday at the much-anticipated trial that the former campaign worker exploited his access to the billionaire's fiances, and also to Bloomberg's campaign staff, so he could buy out his brother's share of a home in Forrest Hills, a home that Haggerty and his brother inherited from their late father.
Haggerty needed about $1 million to do this, the prosecutors said.
They argued Haggerty left an email trail that shows he lied about having used the funds for their rightful purpose and that he was clearly covering up his fraud.
"After he stole this money and was confronted by those who trusted him, [Haggerty] tried to cover it up with lies and phony checks," Assistant District Attorney Brian Weinberg said.
Haggerty's trial, before Manhattan Supreme Court Justice Ronald Zweibel, is expected to span about one month.
Bloomberg and several current and former high-ranking staff members are expected to testify at the trial.
Former deputy mayor Kevin Sheekey was the first witness to take the stand on Monday afternoon. He testified about the early discussions with Haggerty concerning ballot security operations and the need for them in the 2009 campaign.
Sheekey, who worked on all three of Bloomberg's mayoral campaigns, said Bloomberg has always paid for ballot security and poll watching by contributing money for it to his party.
In 2001 and 2005 he did it through the Republican party, and in 2009 he did so through the Independence Party after he switched over as a "recommendation" as to what the money would be spent on, in this case ballot security and poll-watching services on election day.
"My understand was it would be used in complete accordance with the plan John had presented," Sheekey testified, adding that he understood that neither he nor the mayor ultimately had no control over how the party spent its money.
Ballot security is controversial because it is seen as discriminatory but is also considered necessary by many candidates who want to guard against voter fraud and vote tampering, Castello explained in his opening statements when describing the services Haggerty provided and his career in politics.
He faces up to 25 years in prison if convicted of the top charge.