BREAKING NEWS: Bruno Federal Corruption Indictment Expected Today

Bruno indictment expected
Details not yet known as federal officials assemble in Albany
The Albany Times Union by BRENDAN J. LYONS AND JAMES M. ODATO - January 23, 2009

ALBANY — A federal grand jury investigating former state Senate Majority Joseph L. Bruno is expected to vote today to indict Bruno on public corruption charges, according to numerous sources with knowledge of the case. Grand jurors have assembled inside the federal courthouse in downtown Albany. Acting U.S. Attorney Andrew T. Baxter, who is based in Syracuse, arrived at Albany's federal building just after 10 a.m. carrying two large briefcases and an easel. The work of the grand jury is secret; however, a possible press statement or press conference is being discussed by federal officials for later today. Bruno, who reigned for years as one of the most powerful lawmakers in New York, is expected to be charged with using his office to deprive the public of the honest services of government, though the details of the charges being considered remain a closely held secret. Action today by a federal grand jury in Albany likely marks the culmination of a three-year FBI investigation into the shadowy public and private dealings of the Brunswick Republican who rose through the ranks of state government and became one of the Capital Region's most iconic political leaders. Bruno, 79, who retired from his state Senate seat in July after 32 years in the post, will likely be asked to make his initial appearance on the indictment before a U.S. magistrate. The investigation had dogged Bruno during the last two years of his political career as information surfaced publicly about the FBI's deep foray into his real-estate dealings, investments, political decisions and his ownership and breeding of thoroughbred horses. Bruno's ties to labor unions, and his secretive work as a private business consultant for an unknown number of private clients, including a Connecticut investment firm, were at the heart of he probe.

The charges expected to be detailed in the indictment are believed to be built entirely on an ''honest services'' provision of federal statutes that has been used repeatedly by federal prosecutors to take down some of the nation's most corrupt government officials and lobbyists. The broadly written law, which was inserted into federal statutes 20 years ago by Congress, prohibits public officials from using the mail or interstate communications to deprivethe public of an inherent "right to honest services." The law has become a favored weapon of many prosecutors because it does not require a quid pro quo, which is often difficult to prove in the world of pay-to-play politics where multimillion-dollar deals and campaign fund payoffs are known to be arranged with winks and nods. The investigation began three years ago, when FBI agents from a white-collar crime unit in Albany began examining a series of private jet flights provided to Bruno by people with whom he did business both politically and privately, a source close to the case said. The chartered jet flights, in some cases worth thousands of dollars per hour, ferried Bruno to private vacations in South Florida, political fundraisers, government functions and at least once to Kentucky horse country. The FBI's interest in the flights was triggered, in part, by a related inquiry by the state's now-defunct lobbying commission, according to a source familiar with the investigation.

The FBI's examination quickly expanded and agents began sifting through bank records related to a private consulting firm Bruno ran from his Brunswick home. The hundreds of thousands of dollars that Bruno was paid through that firm serve as the foundation of many of the counts listed in the indictment. Bruno abruptly resigned from that firm, Wright Investors Service of Milford, Conn., last year. He has declined to disclose how much he was paid as their consultant over an approximately 10-year period. Still, the FBI has continued to look closely at Bruno's role in helping Wright secure contracts for investments from New York labor union pension and benefit funds. In September, several New York labor union officials were summoned before the federal grand jury in Albany and peppered with questions about their interaction with Bruno as it related to Wright Investors. Their appearances were part of a flurry of grand jury testimony before the federal panel over the past four months, including as recently as Friday. ''They wanted to know did Bruno recommend them (Wright) and did he disclose that he had an interest,'' an attorney for some of the labor officials, who testified before the panel in September, said. ''He didn't disclose his interest, but he didn't really push. He put in a word for them the same way you might recommend someone try a restaurant.''

At least one of Bruno's consulting customers included Loudonville resident Jared Abbruzzese, a wealthy businessman and horse racing enthusiast who also was behind a consortium that had vied to manage three of New York's storied but financially troubled horse racing tracks, including Saratoga. Abbruzzese, a close friend of Bruno's, bankrolled some of the jet flights, and his name also was listed in federal grand jury subpoenas that have been sent out over the past two years in the probe. Other horse racing enthusiasts and associates of Bruno's were listed in the subpoenas, which sought business records dating to January 2001. The former senator, now CEO for a Latham-based technology firm, CMA Consulting Services, has declined to disclose his income or clients of his home-based private business, Capital Business Consultants. Bruno also has declined to say whether any of his private clients had an interest in state government contracts or funding. The impending conclusion of the 3-year-old investigation has stoked some speculation in federal law enforcement circles that the timing may be tied to next month's change of administration in Washington, D.C., as the Bush era ends and President-elect Barack Obama revamps the Justice Department's leadership. Glenn T. Suddaby was the U.S. Attorney in New York's Northern District for most of the investigation. Suddaby recently was appointed a federal judge and his Justice Department post was filled by acting U.S. Attorney Andrew T. Baxter.

Five months ago, Bruno resigned from the Senate seat he held since 1976. To many, he left a legacy as an iconic Capital Region politician who rose from an impoverished childhood to become one of the three most powerful elected officials in state government. Yet over the past two years Bruno, a Korean War veteran who gained a reputation in the Senate as a hard-nosed fighter, has been dogged by the FBI probe. His former political aides were defensive at times when asked about the investigation, including Bruno's use of private jets. Bruno has repeatedly said he has done nothing wrong. Two years ago, Bruno publicly acknowledged the FBI probe in a hastily called news conference at the Capitol after reporters began asking questions about it. He said he was not a target, that it involved his outside business dealings and that he was cooperating fully. Then, before leaving public office five months ago, he again said he was not concerned by the grand jury investigation and that he's done nothing wrong. ''There is nothing there, and I am told by my lawyers, who I met with yesterday, there is absolutely nothing that we have done wrong,'' Bruno said in July. ''But would it be nice if people would just go on and let me live my life? Yes, that would be very, very nice.'' Brendan J. Lyons can be reached at 454-5547 or by e-mail at blyons@timesunion.com.