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Rikers inquiry expands to include union chief’s financial dealings

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NEW YORK – Federal prosecutors have opened a new front in their investigation of Rikers Island, embarking on a far-reaching examination of the financial dealings of Norman Seabrook, the powerful president of New York City’s correction officers union.

The U.S. attorney’s office in Manhattan is looking into whether Seabrook has enriched himself over the course of his two decades running the union, according to a copy of a subpoena served on the union about two weeks ago that was reviewed by The New York Times.

In the subpoena, prosecutors directed the union, the Correction Officers Benevolent Association, to turn over a long list of documents. They included "cash deposits" from union funds "made into personal accounts" belonging to Seabrook, his wife and the union’s treasurer, Michael Maiello, as well as information about two trips to Israel that Seabrook took in 2010 and 2014.

Among other matters, the federal prosecutors appear to be investigating whether executive board members used union money to finance personal purchases. Prosecutors requested information on security systems that have been installed "in any private residence" of union board members.

The subpoena requested records of all the union’s political contributions, as well as travel vouchers for trips to Albany, New York, by members of the union’s executive board in 2014 and 2015.

Seabrook has amassed tremendous political clout as the head of his 9,000-member union and long used his endorsement of candidates, or the threat that he would not, as a wedge for leveraging better financial deals for the union, like higher pension benefits. During the last election cycle, the union gave out nearly half a million dollars in political donations, mostly to candidates for state offices.

The subpoena also demanded records concerning the union’s financial dealings with a disparate group of people and institutions, including Koehler and Isaacs, the union’s longtime law firm; the Simon Wiesenthal Center, an organization based in Los Angeles that focuses on Holocaust research; two hedge funds; and Philip Banks III, a longtime friend of Seabrook’s who was the New York Police Department’s top chief when he stepped down last year, about 10 months after being passed over for the job of commissioner.

Prosecutors often cast a wide net in their subpoenas, sometimes to obscure what they are really after, or to pressure certain people named to become cooperating witnesses, or simply to see what they can turn up. So it is unclear what conclusions can be drawn, if any, from the people and institutions named in the subpoena.

Seabrook did not respond to repeated calls and text messages seeking comment. No one from the office of Preet Bharara, the U.S. attorney in Manhattan, would comment on the investigation.

No evidence has been made public indicating that Seabrook or others named in the request were involved in any criminality. But the subpoena comes just months after Bharara sued the city over widespread abuse of inmates and malfeasance at Rikers.

While the lawsuit and an earlier report about jail brutality released by Bharara’s office last August were never critical of Seabrook, an investigation by The Times last year showed that the union president has long been an obstacle to reform efforts at Rikers.

He has resisted stiff punishment for officers charged with excessive force, meddled in investigations and fought stronger screening measures meant to stop guards from smuggling weapons and drugs into jails, The Times found.

For years, Seabrook has presided with nearly unchecked authority over his union, while becoming close to mayors and governors and exercising extraordinary influence over the city’s Department of Correction.

In that time, he has weathered many challenges to his authority. Early in his tenure, he faced allegations of sexual harassment by several women with whom he had worked, settling at least one of the suits. His opponents in the union have either been driven out or in some cases found themselves the subject of criminal prosecution.

But Seabrook has never faced a threat like Bharara, whose corruption investigations over the last year have led to the indictment of some of New York’s most powerful politicians.

Among the requests in the subpoena is for any records of "services provided to the union" by Banks, the former police chief. But it is unclear what, if any, connection he has had to the union. A search of business records by The Times did not turn up any ties to Seabrook.

Koehler and Isaacs, a law firm that the union has long kept on a retainer, most recently for an annual payment of $555,000, according to union financial disclosures, is also named. The subpoena asked for the union’s financial records involving the firm as well as the names of any executive board members who were provided credit cards by Koehler and Isaacs.

Michael Skelly, a spokesman for Koehler and Isaacs, said that the firm had never provided credit cards to members of the union’s executive board or any other client.

"Our firm is cooperating fully with the U.S. attorney’s office," Skelly said. "We have no indication that we are a target of the government’s investigation."

Also cited are two hedge funds, Platinum Partners and Centurion Credit Management. Centurion was founded by a financier named Murray Huberfeld and then subsumed by Platinum Partners. Huberfeld was convicted of fraud in 1993 for arranging for someone else to take his brokerage licensing exam. He was fined $5,000 and sentenced to two years of probation. In a separate case, in 1998, Huberfeld and a partner paid $4.6 million to settle a civil action alleging bank fraud brought by the Securities and Exchange Commission.

Questionable financial dealings are at the heart of a lawsuit filed against Seabrook this year by William Valentin, a union executive board member who was stripped recently of his annual union stipend of $84,000 by Seabrook. Valentin alleges that Seabrook invested $10 million of the union’s money into a hedge fund in March 2014 without consulting the board or even identifying the fund to them.

Richard Gilbert, Valentin’s lawyer, said, "It’s a violation of the union’s constitution and bylaws and raises serious questions as to whether Seabrook is making it up as he goes along to suit himself rather than serve the membership’s best interests."

It is not known whether Huberfeld is connected to the same hedge fund that Seabrook invested in. Huberfeld did not respond to telephone messages left at his home.

In an affidavit for the lawsuit, Seabrook acknowledged making the investment, but did not identify the hedge fund involved. He denied any wrongdoing and said that the investment had earned more than $475,000 over a three-month period. But that does not match the numbers in the union’s audited financial statements for 2014, which list a $47,529 return for the unnamed fund.

Huberfeld is on the board of the Simon Wiesenthal Center, which is also named in the subpoena. Prosecutors requested records of any payment made by the union to the center and its Museum of Tolerance.

In May 2014, 50 officers from the union, including Seabrook, took part in an orientation for tolerance training at the museum at a cost of $2,500, said Rabbi Abraham Cooper, an associate dean with the Wiesenthal Center. Cooper said it was the only fee the union had ever paid to the center. He said he that he knew nothing about a subpoena or criminal investigation.

Seabrook acknowledged in his response to Valentin’s lawsuit that he took two trips to Israel, saying the union paid for one trip and he paid for the other. He said that the trips helped him make important political connections that were beneficial to the union’s interests.

"My trip to Israel was immensely spiritually rewarding to me," Seabrook said.

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