Tag Archives: Andrew Farkas

Paladino’s “Issues”

23 Oct

The Paladino campaign has apparently turned its critical eye to the important issues facing New York State and Albany.  Issues like…obscure millionaires you probably never heard of before.


There’s no confirmation that the AG granted Rattner any immunity for testimony or cooperation in connection with the prosecution of former comptroller Alan Hevesi.  The AG sued Pedro Espada on the state’s behalf to recoup millions Espada allegedly took from the taxpayers, which was supposed to go to his Soundview Health centers.  Because the AG’s investigation is ongoing, there has been no decision made on criminal prosecution.

Farkas? The New York Times writes:

But in 1997, he and Mr. Cuomo were more like crown princes of the housing world. Mr. Farkas, the heir to the Alexander’s department store fortune, had spent years amassing apartment portfolios, building Insignia into the nation’s largest owner and manager of multifamily property. Mr. Cuomo had just taken over at HUD, with promises to clean up fraud and waste.

In a campaign with the Justice Department, Mr. Cuomo authorized a lawsuit against A. Bruce Rozet, a notorious HUD landlord, accusing him of taking kickbacks from the management company he had hired to run his buildings. Insignia had taken over that management company, and continued the arrangement, turning over one-third of its HUD fees to Mr. Rozet.

Insignia was not named as a defendant in the lawsuit, but the allegation that it had broken the law by splitting its fees inflamed Mr. Farkas and threatened his company. “The finger was being pointed directly at Farkas, and the charge was led by Cuomo,” said a former Insignia executive. “It couldn’t have gotten more personal.”

Insignia settled in 1998, paying a total of $7.4 million — the government had alleged $7.6 million in kickbacks — and providing evidence against Mr. Rozet. The former executive said Insignia feared that the government could otherwise bar it from handling HUD properties, a crippling blow.

A prosecutor in the case, speaking on the condition of anonymity, said Insignia had received no special treatment; rather, HUD and the Justice Department were less aggressive with Insignia than with Mr. Rozet because Insignia had inherited the fee-splitting arrangement and because of a lack of evidence that it had intended to break the law.

Farkas and Cuomo later reconciled their differences and became friends and business associates. Like they say, Andrew’s prowess is legendary.

But it’s great to see Paladino expanding upon his 8-sentence-long prescription for what ails New York (with a tip of the hat to Tom Ragan from Shredd & Ragan)