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March 11, 2010
The mystery of Ridge Hill: however FCR avoided indictment, does the developer remain (as per ESDC) "a good corporate citizen"?
Atlantic Yards Report
It's a shame that Norman Oder chose the Atlantic Yards groundbreaking day to publish this must-read story about the Ridge Hill indictments and Forest City Ratner's role in the bribery scandal, since it will likely not get the attention it deserves.
Forest City Ratner, as a developer, is resilient and resourceful, able to renegotiate deals for the Atlantic Yards project with government agencies like the Metropolitan Transportation Authority (MTA) and the Empire State Development Corporation (ESDC).
But when it comes to the federal corruption case in Yonkers, which involves FCR's Ridge Hill mixed-use project but does not implicate the developer, FCR looks more than lucky.
After all, City Council Member Sandy Annabi changed her vote to approve the project and was indicted for accepting bribes. Her cousin, Zehy Jereis, was indicted for giving them.
FCR, which hired Jereis for an apparent no-show job, was not indicted and issued a statement indicating that it had been told by federal prosecutors that neither it nor its employees was a "target" of the investigation.
If so, that suggests either that prosecutors lack sufficient evidence to indict the developer and/or that they believe the developer's cooperation justifies not seeking its indictment.
Thus, FCR not only escaped sanction for some questionable behavior--it has never explained or justified the no-show contract--it also can continue to benefit from a zoning change that was, according to prosecutors, illicitly gained.
A confounded ex-prosecutor
Is the developer bulletproof?
I spoke to a former federal prosecutor experienced in investigating corruption and fraud. Though he’s no fan of the AY project, he also emphasized that any knowledgeable practitioner of criminal law--whether for the defense or for the prosecution--would read the indictment and be left with numerous questions about FCR's conduct.
The indictment, he said, leaves a reader wondering whether FCR has--or had--potential criminal exposure or even if not, whether it engaged in conduct incompatible with participation in a public-private development.
Posted by eric at March 11, 2010 10:49 AM