NEW YORK CITY — State Attorney General Eric Schneiderman will donate the more than $100,000 in campaign contributions he received from a couple tainted by the Malcolm Smith bribery scandal to Hurricane Sandy charities, his office said Thursday.
As DNAinfo.com New York first reported, Schneiderman received tens of thousands of dollars in campaign contributions from Esther and Joseph Markowitz, who live in upstate Monsey.
While the couple has not been charged with any wrongdoing, their cash has been linked to an alleged plot hatched by City Councilman Daniel Halloran to funnel illegal cash into his campaign coffers using straw donors, which was revealed as part of a larger bribery investigation Tuesday.
“In light of reports that Mr. and Mrs. Markowitz are involved in an ongoing law enforcement investigation, out of an abundance of caution, the campaign will donate the full amount of their contributions to charities helping New Yorkers recovering from Hurricane Sandy," a spokesman for Schneiderman's office said in a statement.
The couple is also close to Moses (Mark) Stern, the key government witness who prosecutors say helped broker the bribery plot to get Smith, a Democratic state senator, on the Republican ballot for mayor.
Stern, 40, a member of the tight-knit Satmar Hasidic community, is a longtime political power broker and shady real estate developer with ties to Schneiderman, who helped politicians win office by directing tens of thousands of dollars of his allies' dollars to campaign coffers and rallying the Orthodox Jewish community's support, sources said.
He also kept dirt on politicians — in case of a "rainy day," a former associate said.
Stern, in fact, was introduced to Smith during the undercover sting by a rabbi who dropped Schneiderman's name when vouching for Stern's pull in the fundraising community, a law enforcement source said. The rabbi, according to the source, described Stern as a "macher" who raised a lot of money for Schneiderman and could, perhaps, do the same for Smith.
There is no record of Stern giving directly to Schneiderman's campaign, but he was personally invited to the attorney general's inauguration by fundraiser Marla Klinger, a source said.
Schneiderman was also photographed with Stern at a fundraiser held at a Monsey rabbi's home before his successful run in the primary against four other Democrats.
According to state campaign finance records, the Markowitzes contributed more than $90,000 to Schneiderman's 2010 campaign for attorney general. The pair, and corporations traced to them, have also given an additional $15,500 to Schneiderman’s 2014 campaign, the records show.
The money came as Schniederman and his Republican opponent, Staten Island District Attorney Daniel Donovan, were locked in a bitter fight for the AG's office in which Donovan frequently slammed Schneiderman for being too soft on corruption.
The Markowitzes' contributions came under scrutiny after Tuesday's federal criminal complaint reported that Halloran, a Republican, had met with Stern and an undercover FBI agent in a Manhattan hotel last September.
At the meeting, the agent allegedly said he had funneled $6,500 in illegal contributions to Halloran’s congressional campaign, by paying off straw donors so that the agent’s name wouldn’t appear in official documents.
One day later, Halloran received $6,500 in contributions, including $4,000 from Esther and Joseph Markowitz, Crain’s New York Insider first noted.
Smith also benefited from the Markowitzes, receiving more than $10,000 from the pair: $8,500 on Aug. 8, 2012, and another $4,000 on Sept. 12, 2012, records show.
Another politician who benefited from the Markowitzes contributions was Sherri Eisenpress, who represented Stern as his attorney in one of his many federal court battles over $126 million he owes Citigroup.
She received $11,000 from the Markowitzes, and was elected as a Family Court Judge with broad Orthodox support, even though she is openly gay.
The Markowitzes have also contributed to other city pols: Gov. Andrew Cuomo, state Sen. Simcha Felder, Assemblyman David Weprin and Isaac Abraham.
Calls to the Markowitzes home rang unanswered and nobody came to the door when a DNAinfo.com New York reporter knocked.
With additional reporting by Murray Weiss