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May 12, 2011
From Humble Lumber Sellers to Clout-Wielding Developers: An Immigrant Tale
Federal Indictment of a Local State Senator Shines Light on Bruce Ratner’s Brooklyn Redevelopment Project
Forward
by Neil deMause
The Field of Schemes author writes a counterpoint to last week's Real Deal puff piece.
When federal prosecutors charged New York State Senator Carl Kruger with taking more than $1 million in bribes in March, few were surprised to see seven others indicted with him. The colorful Kruger, who represents the heavily Jewish Brooklyn neighborhoods of Brighton Beach, Gravesend and Sheepshead Bay, has long attracted media attention for high-profile deal-making among a wide network of politicians and lobbyists.
But the scandal has also swept into its purview an affiliate of one of the country’s most prominent real estate developers, throwing a spotlight on the storied Jewish family that controls it.
Among those indicted was Richard Lipsky, a state lobbyist, who is alleged to have offered bribes to Kruger in exchange for political favors. In FBI wiretaps, Lipsky allegedly conspires with Kruger to share Lipsky’s lobbying fees in exchange for legislative approval of his clients’ projects.
One of the clients the indictment alleges Kruger helped in response to Lipsky’s payoffs is a company labeled “real estate developer #1” that was “spearheading an over $4 billion, multi-year, mixed-use commercial and residential development project in Brooklyn.” That company has been identified in multiple news reports as Forest City Ratner, the developer behind the Atlantic Yards project, a 22-acre residential and retail complex in Brooklyn. An executive for FCR is also captured on wiretaps talking with Kruger about seeking state money for development projects, and this conversation is included in the indictment.
Prosecutors did not charge anyone at FCR with wrongdoing, and there is no indication that FCR knew of Lipsky’s alleged actions. The company’s spokesman emphasized to The New York Times that the indictment “does not suggest that Forest City Ratner behaved in any way that’s inappropriate.” (The spokesman, Joe DePlasco, told the Forward that FCR was not commenting further on the Kruger matter.)
Nevertheless, the Kruger scandal has brought new attention to the business practices of a family-run firm whose real-estate developments have long attracted controversy for using public cash to support private projects.
At the center of the dispute: Bruce Ratner, the camera-shy scion of a storied Cleveland real estate family, who has gained attention in New York for building the new New York Times building, buying the New Jersey Nets with the intention of moving the team to Brooklyn, and remaking the Brooklyn skyline with a series of skyscrapers that are both lauded and reviled by locals. To his defenders, Ratner is a hero of Brooklyn’s rebirth; to his critics, he’s a businessman who has made a career of using his political connections to secure large government subsidies for his development projects.
Posted by eric at May 12, 2011 12:39 PM