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The Espada Case

April 20, 2010

Appearances can be deceiving. There’s always another side to a story. People are innocent until proven guilty in a court of law.

Having said all of that, the Espada complaint is devastating. The Attorney General’s office has meticulously documented apparent misuse of charitable assets.

Defendants in such cases will attempt to argue the facts and the law. They try to dispute the information as inaccurate, and they argue that the law is unclear.

In this particular case, however, the allegations are based on an extensive review of a non-profit corporation’s financial records. While there is a possibility that forensic accountants might differ on some of what is being alleged, it’s not likely that the AG’s office is far off the mark in its read of the documentation.

With regard to the law: The officers of non-profit corporations in New York have a solemn obligation – a fiduciary duty – to place the interests of the non-profit ahead of their own personal interest. In fact, they are supposed to subordinate their interests to the greater interest of the charitable organization, with excessive personal gain being an obvious red flag.

This would appear to be a very strong case, so strong that it is surprising that it wasn’t settled. One would assume that the AG’s office tried to settle with Espada and he refused, but that is not clear. Whatever happened, it now looks like the case will be litigated. If so, the matter will drag on for many months.

In the meantime, all sorts of political questions will arise, not the least of which is: How will the Senate Democrats respond? Earlier this year, they ousted one of their own, Hiram Monserrate, who’d been convicted of a misdemeanor assault charge in a domestic violence incident.

That, of course, was a criminal case, while this is a civil matter. Still, the comprehensive nature of the apparent misuse of public resources, at a minimum, would seem to raise fundamental questions about Espada’s fitness to serve as Senate Majority Leader.

Keep in mind that Joe Bruno was accused of using his office for a personal gain of $1.4 million, while the Espada complaint alleges personal gain of ten times more than that — $14 million.

Senate Democrats are surely in another tough spot. While Espada is presumed innocent until proven guilty, his continued presence in the leadership ranks of the Senate will raise ethical questions and no doubt be used by Republicans in the fall elections.

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