Ex-Rep. Floyd Flake, Cronies Get More Media Scrutiny (Queens, NY)

National Legal & Policy Center ^ | June 19, 2010 | Peter Flaherty

[jazusamo]

Rev. Floyd Flake, a former member of Congress, is a political force in Queens where he is the pastor of a 23,000-member church.  His protégés include U.S. Rep. Gregory Meeks and state Senator Malcolm Smith, both under a grand jury investigation apparently triggered by NLPC’s expose of a charity called New Direction Local Development Corporation, and Meeks’ sweetheart deal on a home.

According to a story by Russ Buetther in yesterday’s New York Times, Flake and his partners ended up as owners of two eight-story apartment buildings that were “built and subsidized with public money.” In addition, the 300 units were “well maintained by one of the church’s charities.”

According to the Times:

The purchase required no cash investment from the partnership, and it was not open to bidding from others. The deal, which included plans for the renovations, was financed with $21.3 million in loans and cash from government programs intended to pay for the rehabilitation of apartment buildings for low-income elderly people. It is unclear how much of that work was ever accomplished.

The required approval, when a charity sells “substantially all” of its assets, by the New York Attorney General and the State Supreme Court in Queens went without a hitch. The Times continues:

Joan E. Flowers, a Queens lawyer, filed the petition with the attorney general’s office on Nov. 9, 2006, two days after the election that elevated Mr. Spitzer and Mr. Paterson to governor and lieutenant governor. Ms. Flowers was at the time a consultant to Mr. Spitzer’s campaign and the treasurer for Mr. Paterson’s.

Two days later, Ms. Flowers filed the petition with the State Supreme Court in Queens. In a handwritten note, she requested an emergency decision.

Flowers appears to be a key figure in the current corruption probe by Manhattan U.S. Attorney Preet Bharara. She has served as campaign treasurer for Meeks, Smith and Paterson. From 2002 to 2008, the address of the charity that stiffed Katrina victims was her law office. Flowers was "terminated" on March 31 from her $145,000-a-year Senate post as Smith's counsel in the wake of media reports of the investigation.

As reported in the April 2 Daily News:

One subpoena revealed for the first time that prosecutors are looking at the housing and social service empire built by the Rev. Floyd Flake - Meeks' predecessor in Congress and political mentor to Smith and Meeks.

The grand jury also wants records related to a Springfield Gardens commercial building owned by Joan Flowers…

Meanwhile, there is additional fallout from Paterson’s ill-fated award of a lucrative video-gambling franchise at Aqueduct Raceway to a company called the Aqueduct Entertainment Group (AEG), in which Flake was an “investor.”

The Aqueduct deal is now under investigation by the New York state Inspector General. The state withdrew the award when the investigation was launched.

The New York Post http://www.nypost.com/p/news/local/top_dem_id_as_slots_leaker_jNl2gbeS3K... ">reported yesterday that New York state Senate Democratic leader John Sampson last fall leaked information about competing bids to AEG’s lobbyist Carl Andrews, a former state Senator.

According to Post reporters Brendon Scott and Carl Campanile:

Sampson's role in the Aqueduct scandal emerged as state probers concluded in bombshell court papers that the deal was rigged.

The court papers also mentioned the fact that Gov. Paterson met with a key AEG partner -- influential Queens pastor and former Congressman Floyd Flake -- just days after the governor announced AEG won the contract.

Among other irregularities, New Direction raised funds for Katrina victims who never received them. The controversy brought scrutiny the AEG bid because both involved the same characters.  In addition to Flowers, there's Darryl Greene, a former business partner of Smith. His wife was a founding New Direction board member, along with Smith's wife. Greene also was convicted in 1999 of ripping off a New York City program of $500,000.

While in Congress, Flake stood trial for 17 counts of fraud, embezzlement and tax evasion. According to Politics in America:

In April 1991, the government’s case against Flake — which consisted of charges that he embezzled funds from a housing project run by his church and evaded taxes — was dismissed after a federal judge barred prosecutors from presenting what one called “the heart” of the case to the jury.