"Low-key aide in the spotlight - Longtime Bruno aide's testimony could be crucial to trial outcome"

By JAMES M. ODATO, Capitol bureau, Albany, New York Times Union

First published in print: Tuesday, November 3, 2009

ALBANY -- During his nearly 20-year career in the Legislature working closely with former Senate Majority Leader Joseph L. Bruno, Frank Gluchowski was a quiet and unassuming lawyer handling confidential ethics matters.

His recollections, however, could be central to saving or sinking his former boss: He'll be a prominent witness in Bruno's fraud trial.

"I expect to be called; at what time I don't know," Gluchowski said Monday, the first day of the trial.

Indeed, Bruno's defense lawyer referred to Gluchowski repeatedly in opening arguments, assuring jurors he will be telling them the senator sought guidance on what he could and could not do ethically.

The 61-year-old St. John's Law School graduate also is one of several legislative aides expected to provide fuel for the government's argument that Bruno committed felonies by taking millions of dollars in his outside business dealings by cashing in on his prominence as the leader of the Republican-dominated Senate from 1995 through 2008.

Gluchowski shows up on the prosecution's witness list, too.

Bruno has maintained his innocence, saying he relied on advice of lawyers to ascertain what he was doing was proper and correct.

Gluchowski will likely be asked to divulge previously confidential opinions rendered by the secretive Ethics Committee he worked for, as well as any advice he gave the majority leader.

Gluchowski served as counsel to the Legislative Ethics Committee (now called the Legislative Ethics Commission) from 1989 through 1996.

In 1997, he became legislative counsel to the Senate majority.

He dispatched ethics advice in both roles.

Often, his immediate boss, Chief Counsel Kenneth Riddett, served as a buffer to advice delivered to Bruno.

Riddett is another key witness.

Bruno lawyer Abbe Lowell said he will call Gluchowski, Riddett and another former Senate lawyer, Francis "Tim" Collins, to testify that the senator insisted on doing things right.

Gluchowski said he testified at length before a grand jury looking into Bruno's activities.

A criminal indictment was handed up in January.

"We talked about opinions the committee issued," Gluchowski recalled.

"We talked about advice that I gave Senator Bruno while he was majority leader."

"I expect to be asked about the ethics opinions."

"I will provide information as I know it."

"I'm not going to preview what my testimony is -- don't want to taint the trial."

Asked if Bruno received specific opinions from the Ethics Committee or from Senate lawyers about his business dealings, Gluchowski said, "I think that information will be brought out at the trial."

Other key witnesses, based on the indictment, will likely include investment house principals to whom Bruno reported, included Timothy McGinn of the Albany firm of McGinn Smith; union leaders whose labor organizations investment pension funds with the investment houses; and Bruno's business associates.

James M. Odato can be reached at 454-5083 or jodato@timesunion.com.

"Witnesses take stand on day 2 of Bruno trial"

November 03, 2009 2:10 PM

Marci Natale / CBS 6 Staff

ALBANY -- Day two in the trial of former Senate Majority Leader Joe Bruno has so far seen two witnesses on the stand.

Albany lawyer and lobbyist James Featherstonhaugh first took the stand Tuesday morning to testify about his business dealings with Bruno, which included a land purchase at Grafton Lake in Rensselaer County in the 1990s.

Featherstonhaugh was also questioned about lobbying rules in New York state the inner workings of the state legislature.

He stated, "A vast majority of legislators have outside business interests."

"A number of legislators belong to unions."

Bruno's Albany-based attorney William Dreyer conducted the cross-examination of Featherstonhaugh.

As of noontime, the federal government's second witness Tim McGinn of McGinn Smith and Companies was on the stand.

Bruno had done some work for McGinn Smith and Companies.

Bruno's Washington-based lawyer Abbe Loweell will conduct the cross-examination of McGinn.

Bruno was optimistic as he entered the courtroom this morning.

"It's going to be a good day," he said as he bantered with photographers outside the courtroom.

"The truth will prevail."

I KNOW JOE BRUNO QUITE WELL, AND WHAT THIS DEFENSE LAWYER IS SPEWING ABOUT JOE BRUNO BEING FOR THE PEOPLE IS PURE DRIVEL ....

JOE WAS OUT FOR JOE'S OWN POCKET FIRST ....

LAST ....

AND ALWAYS ....

And so ...

"Intent key as Bruno trial starts - Prosecutor and defense attorney lay out their cases for the jury; the first witness is expected today"

By BRENDAN J. LYONS, Senior writer, Albany, New York Times Union

First published in print: Tuesday, November 3, 2009

ALBANY -- The federal criminal trial of former Sen. Joseph L. Bruno began Monday with prosecutors and defense attorneys outlining a case that will come down to questions of intent and undisclosed conflicts of interest.

The defense contends Bruno played by the rules as they are set out for state officials.

Prosecutors claim he intentionally defrauded citizens and took steps at every turn to conceal private business dealings that netted him several million dollars over more than a decade.

The attorneys made their opening statements after spending the morning quickly picking the jury of seven women and five men that will hear evidence of the eight-count felony indictment facing Bruno.

The former senator studied the prospective jurors closely during the hours-long selection process, spinning in his chair at the defense table to scan the pool seated behind him and to his side; he appeared to lock eyes briefly with a few.

For the defense, attorney Abbe D. Lowell cast Bruno as a devoted lawmaker who grew up in a hardscrabble family and always had the interests of the working class at heart.

Lowell said Bruno had a legislative track record that did not waver in 32 years, whether or not his decision-making involved business associates or friends.

"The evidence will show that in this case, the prosecutors made a mistake by charging a man who will be shown to be a hardworking, honest public servant who was elected and re-elected 16 times -- often with no opposition -- to be somebody who would violate the public trust that he cherished so much," Lowell told the panel.

Lowell said prosecutors have overstated their case that Bruno used his office for financial gain by giving access and legislative favoritism to labor unions that invested their pensions with a Connecticut firm that put Bruno on its payroll.

"This is a case about intent," Lowell told the jury, explaining Bruno never intended to do anything against the law.

"It is wrong for public officials to violate the law, but it is equally wrong for an innocent man to be charged."

Assistant U.S. Attorney Elizabeth C. Coombe sketched a different portrait of Bruno.

Coombe took 25 minutes to sum up the government's case that the 80-year-old Rensselaer County Republican had purposefully manipulated state ethics disclosure laws to hide his business dealings with a web of individuals and entities with an interest in Bruno's decision-making.

"This case is about conflicts of interest."

"It's about failure to disclose conflicts of interest, and it's about concealment of information that might have exposed conflicts of interest," Coombe told jurors.

"During this trial, you will see and hear evidence about how Senator Bruno exploited his official position for his own personal enrichment and gain."

It began, Coombe said, when Bruno became Senate majority leader in January 1995.

That put him in a position as "of the three most powerful men in New York state."

In the years that followed, the people who needed his influence, and who paid him money through various companies and deals, "came to see Senator Bruno because he made things happen," Coombe said.

Before the opening remarks began, U.S. District Court Judge Gary L. Sharpe outlined in detail for the jury the four components of the case that the prosecution must prove.

Sharpe said they must show that Bruno devised a scheme to defraud the public; that he owed the public an intangible right to his honest services, and violated that trust; that he made material misrepresentations or omissions in his financial disclosure records; and that any portion of the alleged corruption used mailings or wires, which is an underlying but incidental component of the federal statute.

Coombe told the jury they will hear and see evidence that Bruno routinely mixed his public and private duties, including taking state helicopters on trips involving personal business.

He took in more than $3 million in illicit income over 13 years, she said, and used his position to exert influence over entities or individuals that needed to curry his favor in state government.

For instance, Coombe said, Bruno never disclosed his financial relationship with a Connecticut investment firm, Wright Investors Service, where he was on the payroll, or his dealings with businessmen Russell Ball, Leonard Fassler and Jared E. Abbruzzese.

Bruno's home consulting businesses were characterized by the government as sham entities that served as the vehicle for Bruno to vaguely report his outside income on the disclosure forms he was required to file with the Senate.

Lowell countered in his opening with computer graphics that he laced with emotionally charged anecdotes of Bruno's iron-fisted work ethic.

Bruno's father lost his job because he couldn't read, Lowell said, and that set the blueprint for a legislative agenda that would always put workers first.

Lowell's opening -- more than twice as long as Coombe's -- sought to dissect and cast doubt on each component of the government's case.

Bruno, he said, reported everything that was required under state law.

He consulted lawyers and ethics advisers at every step, never asked anyone to help him scheme or defraud the government or public and gave his staff full access to all of his financial records.

Lowell added that Bruno signed the disclosure statements as they were prepared by his staffers; and his business relationships, which in some cases involved longtime friends, were not documented in detailed invoices because he was providing almost intangible services that consisted of his business savvy and experience.

"Everything he did, he did pursuant to the ways the rules work."

"... There was never any pressure of Senator Bruno on anyone," Lowell said.

The government will open its proof today with the first of what could be more than 100 witnesses.

The fourth witness on their list, who has not been publicly identified, is a person who, like others testifying in the case, is appearing under an immunity order that enables him or her to testify without fear of prosecution over what is said on the stand.

The defense is seeking to block the jury from hearing about any immunity deals or cooperation agreements given to witnesses on the grounds those deals could unfairly bolster a witness' credibility.

The judge has said he would address it as each witness testifies.

Bruno was upbeat, smiling and chatting with various onlookers throughout the day Monday.

A row in the courtroom was filled by his relatives and supporters, including his brother, Peter, a sister, Florence, a son, Kenneth, and daughter, Catherine, who is slated to testify.

Kay Stafford, Bruno's business partner and close friend, also attended.

Brendan J. Lyons can be reached at 454-5547 or blyons@timesunion.com.

"Power jumps Bruno value - Witness: Pay boost as consultant follows new majority leader post"

By BRENDAN J. LYONS, Senior writer, Albany, New York Times Union

First published in print: Wednesday, November 4, 2009

ALBANY -- Witnesses called by the prosecution in the federal trial of former state Sen. Joseph L. Bruno laid out the origins of his late-blooming career as a business consultant -- a pursuit that flourished after he became majority leader in 1995.

Assistant U.S. attorneys Elizabeth C. Coombe and William C. Pericak used testimony from their first three witnesses, augmented by numerous documents, to retrace how Bruno in the early 1990s obtained agreements with three firms in deals that were never disclosed to the public.

In their questioning of witnesses, prosecutors attempted to show that Bruno had deliberately concealed key details of the business agreements from the legislative ethics committee.

They also raised questions about whether Bruno or others working on his behalf took steps to hide the identity of his clients in public filings.

The testimony of Bruno's former chief executive counsel, Francis Collins, who is now a state Court of Claims judge, showed that Senate staffers routinely handled the senator's private business matters.

Collins, who did not have a private law practice when he worked for Bruno in the Senate, received letters related to Bruno's consulting business at his home and provided legal advice on those matters, including editing the agreements before they were signed.

Still, "I was not involved with Sen. Bruno's business activities," Collins testified.

"I did not know who the clients were."

"... When things would pop up I would deal with them as best I could."

"... It was my responsibility to do what I was asked to do."

Collins admitted that he reviewed, wrote and re-crafted letter agreements that Bruno had signed with at least two companies for whom he did consulting work, Wright Investors Services of Connecticut and Sage Alerting Systems.

Sage was controlled by Bruno's friend and business associate, Leonard Fassler.

Collins said he also wrote a letter to the legislative ethics committee on Bruno's behalf seeking an opinion on whether his consulting work was proper.

The committee, which was then co-chaired by then-Sen. George Pataki, approved it.

But according to prosecutors, the request for an ethics opinion omitted key details about Bruno's work, including that he would be soliciting business from labor unions that deal with the Legislature.

Collins said Bruno did not instruct him to remove those details, but that he took it upon himself to summarize Bruno's work for the ethics panel.

Defense attorneys countered through their questions that Bruno's every move was checked by an attorney; according to the witnesses who testified Tuesday, he never asked anyone to do anything underhanded or secretive in connection with his consulting work.

Timothy McGinn, an Albany investment banker and chairman of the board for McGinn, Smith & Co., testified that he hired Bruno after a lunch meeting in 1992 that was arranged by Albany lobbyist James Featherstonhaugh, who was the government's first witness Tuesday.

McGinn said his decision to hire Bruno was based on the senator's political stature, business acumen, high profile in the community and work ethic.

McGinn said Bruno was preoccupied with clearing his private work with state ethics officials.

The government showed images of three paychecks of several thousand dollars each that McGinn, Smith issued to Bruno's home consulting firm, Business Consultants.

While the checks included the term "Inc.," Bruno's business was not, in fact, incorporated and had been filed in August 1992 as a simple "doing business as" or DBA notice in the Rensselaer County Clerk's Office.

That filing, according to Bruno's co-defense attorney, Abbe D. Lowell, underscores that Bruno was not seeking to hide anything and openly did business under that name.

The name also was listed on Bruno's financial disclosure forms, although none of the clients were given.

Still, the DBA status of Bruno's business may raise questions about whether Bruno or the companies that paid him money filed appropriate tax documents since he was effectively an employee and not an independent corporation.

Prosecutors questioned McGinn about why the paychecks weren't issued to Bruno under his name.

"I believe it was Sen. Bruno's request," McGinn said.

"I'm not sure he gave us any reasons."

McGinn also testified it was Bruno's idea to scuttle the firm's plans to announce his hiring through press releases and advertisements, and to introduce him to their top clients at a social gathering.

"I'm not sure he gave us any reasons," McGinn said.

"It didn't matter to us."

Bruno was hired by McGinn under an agreement that paid him at least $2,000 a month for work that included to "assist in the development of money management relationships with labor unions, pension plans, corporate accounts, and wealthy individuals."

Bruno successfully solicited two labor union pension funds to invest through McGinn, Smith and with Wright Investors Service.

McGinn testified that Bruno's salary jumped from $24,500 in 1994 to $72,000 in 1995 because he became Senate majority leader that January, which made him one of three of the most powerful people in New York state government.

"We felt that he was going to be more valuable to the firm," McGinn said.

On cross-examination McGinn said their firm wanted nothing to do with any business involving the state of New York, and that part of the reason they hired Bruno was because of his business experience.

"We were impressed," McGinn said of Bruno.

The trial continues today at U.S. District Court.

Helen George, an attorney for Wright Investors Service, is among the witnesses slated to testify.

Brendan J. Lyons can be reached at 454-5547 or blyons@timesunion.com.

"Ex-president recalls 'urgency' to compensate Bruno, wanted him gone"

November 4, 2009 at 3:02 pm by Robert Gavin

Albany, New York Times Union

The former president of the Connecticut investment firm that employed former Senate Majority Leader Joseph L. Bruno over several years told jurors this afternoon there was an “urgency” to compensate the senator for his work — and hoped he would be let go.

Eugene K. Helm, who left the Milford, Conn.-based Wright Investor Services in June after about nine years as president, described the relationship between Bruno and the firm as tightly controlled by three of the company’s top leaders.

Helm reported to CEO Peter Donovan.

“The compensation was important to Mr. Bruno,” Helm said, upon questioning from Assistant U.S. Attorney Elizabeth Coombe.

“There was a certain urgency to get that compensation to Mr. Bruno as quickly as possible.”

Helm said he believed it was “inappropriate” to keep the senator on the payroll when the company had already let go scores of employees because the market declined and due to lost accounts.

Helm noted he did not believe his firm should have been competing on the basis of “personal relationships,” adding, ”We should compete on the basis of professional excellence.”

And while Helm said it was nothing personal, he believed “Mr. Bruno should be terminated.”

The alleged promptness with which the firm wanted to compensate Bruno also arose during the testimony of Alex Smith, a former controller for Wright.

During his questioning by Coombe, a memo was noted in which a Wright executive allegedly stated it was “important that checks be moved to Mr. Bruno promptly at the close of the quarter.”

During cross-examination, defense lawyer Abbe Lowell questioned why there would be anything wrong with an employee getting paid for work.

Coombe had asked Helm about a newspaper article in the now-defunct New York Sun which was about New York state lawmakers with part-time jobs.

It quoted Helm speaking about Bruno and his employment at Wright.

According to Helm, he later learned from Wright executive Peter Donovan that Bruno expressed “discomfort or dissatisfaction” with the publicity.

“Mr. Donovan told me that Mr. Bruno was upset at the article – and, in the future, such inquiries should be directed at Mr. Bruno and his spokesperson,” Helm testified.

Earlier, Saratoga Performing Arts Center executive director Marcia White, a former top Bruno spokeswoman, testified about fielding the press call for the article.

So did the article’s author, Bill Hammond, now an editorial writer with the New York Daily News.

Hammond was grilled about the article by Lowell, who seemed to seize on the opportunity to prove the article was an example Bruno was hardly keeping his side employment in secrecy, as prosecutors have alleged.

"Witness: Bruno aide thought ethics clearance 'not a good idea'”

November 4, 2009 at 11:19 am by Robert Gavin

Albany, New York Times Union

An ex-lawyer for the Connecticut investment firm that employed former Senate Majority Leader Joseph Bruno testified today that a Senate ethics lawyer informed her it was “not a good idea” to have a legislative ethics panel consider his employment arrangements years after he started working there.

Helen George, retired legal counsel for the Milford, Conn.-based Wright Investor Services, said she initially believed the Legislative Ethics Commission had cleared Bruno’s employment with her firm.

But in 2006, she said, Senate ethics counsel Frank Gluchowski informed her otherwise, as it pertained to prospective clients of Wright with business before the state Legislature.

He told her, “It was not a good idea because after 12 years of not asking for such written documents (in relation to) conflict of interest, it could raise more questions than it answered,” George testified.

Upon cross-examination, George told defense attorney Abbe Lowell the exchange with Gluchowski came amid news reports of a “wide-ranging investigation into Mr. Bruno’s activities outside the Legislature.”

She told the lawyer, upon his asking, that she understood there was no reason for an ethics panel to render an opinion on Bruno’s work with Wright because it was “so commonplace.”

She also said, during the defense lawyer’s questioning, that she looked up New York’s public officers law to make sure there was no conflict of interest in which Bruno was approaching clients which receive possible funding from from the state.

None of Bruno’s clients did, she told Lowell.

Earlier today, George, a Brooklyn native and former school teacher, invoked her attorney-client privilege when Coombe questioned her on whether she had ever spoken to Bruno about his employment.

It was also revealed during the testimony that Bruno was an employee after initially being a consultant for Wright.

George testified that as an employee, workers such as Bruno would not have been required to document their involvement as an advisor to prospective clients, such as unions.

But as a consultant, however, they must do so.

Under questioning, George said she could find no records of any kind to show Bruno’s disclosure forms as a consultant - or those of any other employee.

Meanwhile, testimony revealed a letter sent to Bruno counsel Ken Riddett referring to Bruno’s relationship with the firm as either a solicitor or actual employee.

George, who said she had never met Bruno, at one point was asked if Bruno ever carried business cards.

She replied, “Not that I’m aware of.”

But Coombe, in turn, recalled George’s testimony before a grand jury in which she said said, “I’m sure he did not get a business card.”

At one point, Lowell also wanted to read back grand jury testimony from George, dating to July 31, 2008, to show an inconsistency.

Sharpe rejected the lawyer’s attempt, saying he would not allow cross-examination to show an inconsistent statement from George when there was no consistent one made in the first place.

“She’s been inconsistent 17 times with what she said,” the judge said, one of many courtroom zingers he has offered so far in the trial.

"Court of Claims judge grilled on witness stand in Bruno trial"

November 3, 2009 at 4:00 pm by Robert Gavin

Albany, New York Times Union

A Court of Claims judge in Saratoga County experienced a far different day in court today than usual.

Judge Francis “Tim” Collins, the third witness in the trial of former Senate Majority Leader Joseph L. Bruno, was grilled all afternoon Tuesday by a federal prosecutor about any possible involvement in the senator’s outside business dealings.

Assistant U.S. Attorney William Pericak not only pressed the former Senate counsel about a contractual agreement between Bruno and the Milford, Conn.-based Wright Investor Services – but descrepancies in letters to an ethics committee about the senator’s employment with the Albany-based McGinn-Smith and Company.

Pericak, at one point, asked Collins why he deleted language in a document between 1993 and 1998, taking out references to commission arrangements earned for Bruno to being classified as salary.

Collins said he wanted to eliminate the “potential for conflict,” which was notable during a testimony which dismissed many other questions about the 1990s, saying the time period was too long ago to correctly remember details.

Collins responded to many questions simply saying, “I don’t recall,” once saying, “Jeez, I don’t recall.”

He also told Pericak at one point, “Sir — it’s 1993."

"It is 16 years ago."

"Sixteen years later, I don’t recall.”

Upon cross-examination by Bruno defense attorney Abbe Lowell, Collins’ memory was clear that he was not part of any scheme to cover up Bruno’s side employment.

“In all the dealings that you had with (Senator Bruno) … did he ever not to disclose or conceal anything?” Lowell asked.

“Never — not once,” Collins answered, “and if he had, I would not have gone along with that."

"Never – not once.”

"Investment firm chief: Bruno preferred hush on side employment"

November 3, 2009 at 12:54 pm by Robert Gavin

Albany, New York Times Union

The chairman of an Albany investment firm whose employment of former Senate Majority Leader Joseph L. Bruno is under federal scrutiny told jurors today the company initially planned various means to publicly announce its business relationship with the senator — but Bruno shied away.

Timothy McGinn, the chairman of the board of McGinnSmith, testified that a press release and a described “tombstone” advertisement were planned after Bruno joined the company.

“I believe the senator deferred from making those public announcements,” McGinn testified.

“We just never got it done."

"Senator Bruno didn’t press it.”

McGinn added, “We didn’t do it largely because because Senator Bruno was not interested in doing it.”

Assistant U.S. Attorney Elizabeth Coombe, in turn, asked McGinn about a planned “engraved” announcement and dinner to announce the business relationship, neither of which transpired as well.

“Was that for the same reason,” the prosecutor asked.

“Yes,” McGinn replied.

Coombe read from a Dec. 17, 1992 letter which formalized the firm’s hiring of Bruno and noted the expected announcements.

The issue is key because federal prosecutors — who have charged Bruno in an eight-count mail and wire fraud indictment – allege Bruno solicited unions with business before the state while working for McGinn’s firm in a shroud of secrecy.

McGinn, among other details, also said Bruno was actually in the office at firm only about “half a dozen times” a year.

During cross-examination, defense attorney Abbe Lowell asked McGinn if there was anything unusual about an employee such as Bruno working such hours in the office, given the work done away from it.

McGinn said it was not unusual.

Lowell also asked about whether the employment was publicly filed.

McGinn said yes; it was done in Rensselaer County.

“Darn way to hide your existence as a business, isn’t it?” Lowell responded sarcastically, drawing an immediate objection from Coombe, who called it argumentative.

Judge Gary Sharpe agreed.

Lowell later asked if Bruno was publicly telling people he was working for McGinn’s company.

McGinn said yes, adding, “To the tune of $419,000″ in profits over years.

Earlier Tuesday, prominent Albany lobbyist James Featherstonhaugh testified that he introduced the senator to McGinn at a dinner in Albany.

McGinn confirmed that account, saying he thought Bruno could be a strong ally in a market that included labor unions spending large amounts of capital.

He said he believed Bruno was flattered but said he would need to check with his counsel and look at whether any ethics issues arose.

McGinn said Bruno once again made those statements when he became majority leader in 1995, but stayed on with what McGinn described as ”tacit support.”

McGinn testified paying Bruno $24,500 in 1994 alone - as well as additional payments to the senator operating as “Business Consultants,” which was listed as being on the same street in Rensselaer County.

McGinn said his firm did brokerage exchange business with the Milford, Conn.-based Wright Investor Services – yet upon questioning from Coombe, noted he was unaware Bruno was also working for that company as well, steering potential clients away.

Upon cross-examination by Lowell, however, McGinn said he introduced Bruno to the Wright firm.

He said he wanted to emulate Wright after it had ”beat us like a rented mule.”

McGinn also said, while questioned by Lowell, that it was not unusual in business to have individuals operating under more than one title.

Outside court, just after the trial broke for lunch about 12:10 p.m., Bruno told the Times Union the trial was “going well,” that has he broken no laws and he was pleased to see facts getting out.

"Ruiz star power is lost - GlobalFoundries project could be slowed by former CEO's alleged involvement in hedge fund insider-trading case"

By LARRY RULISON, Business writer, Albany, New York Times Union

First published in print: Sunday, November 8, 2009

MALTA -- Hector Ruiz was one of the rock stars of the Capital Region's growing technology economy.

He was a friend of governors and political and business heavyweights.

But the former chief executive of Advanced Micro Devices Inc. doesn't have many backers here now, after being linked to a $20 million insider trading scandal involving two Wall Street hedge fund firms.

Ruiz came to Albany three years ago and committed Sunnyvale, Calif.-based AMD to what has become a $4.2 billion computer chip factory at Luther Forest Technology Campus in Malta.

As an incentive, the project received more than $1.3 billion in state subsidies.

And Ruiz was the one who reassured New York political leaders that the project was on track when AMD was hemorrhaging billions of dollars due to a nasty war with Intel Corp.

Ruiz also helped negotiate a $3.6 billion deal with the government of Abu Dhabi to spin off AMD's costly manufacturing operations into GlobalFoundries Inc., a deal that solidified the Luther Forest project and could bring the venture up to $6 billion more in investment within the next five years.

But, in the blink of an eye, Ruiz is gone, and he isn't likely to return any time soon.

"Hector had a lot of stature, but most of the jobs for which showmanship is a requirement have been done," said Roger Kay, a semiconductor industry analyst based outside Boston.

"The deal is in place."

"It's time for the company to execute, and other people, maybe less flashy, will have to do that work."

An Oct. 27 story in The Wall Street Journal named Ruiz as the AMD executive recorded on federal wiretaps last year, leaking top-secret information about the GlobalFoundries deal to Danielle Chiesi, a trader with a hedge fund firm called New Castle Partners.

Chiesi was arrested along with five others on Oct. 16.

Ruiz has not been charged with any wrongdoing.

But the allegations, if true, raise serious concerns about Ruiz's ethical responsibility to shareholders and AMD, where he was employed at the time.

It also raises questions about whether Ruiz violated AMD's own internal rules that prohibit employees from disclosing confidential corporate information to others.

Local political and business leaders who worked closely with Ruiz in the past declined to comment on his departure for this story.

AMD spokesman Drew Prairie declined to comment on whether he broke company rules.

"We just began our investigation and don't have anything else to add," Prairie said.

Ruiz left AMD when the GlobalFoundries deal closed in March, becoming chairman of the GlobalFoundries board of directors and signing a two-year contract that paid him $1.15 million a year, plus bonuses.

The U.S. Securities and Exchange Commission has rules that prohibit executives at public companies like AMD from selectively disclosing non-public information such as a pending merger or spin-off with analysts -- unless they get the analyst to agree to keep the information secret.

However, it's a violation of insider trading laws if the analyst uses the information to trade on the stock.

Chiesi and the head of another hedge fund firm, Galleon Group, bought millions of dollars worth of AMD stock based on the information Chiesi received from Ruiz and others.

Ruiz offered his resignation to the GlobalFoundries board at the end of September, more than two weeks before federal agents arrested Chiesi and others allegedly involved in the insider trading case, including Robert Moffat Jr., the No. 2 executive at IBM Corp.

Ruiz took a leave of absence until his resignation takes effect Jan. 4.

Federal wiretap documents seem to suggest that Ruiz and Moffat met on at least one occasion during the summer of 2008 to talk about the pending GlobalFoundries deal.

IBM had to sign off on the use of IBM's chip fab technology by GlobalFoundries.

The documents also indicate that Chiesi was a friend of Moffat's, although it's unclear why Ruiz -- if he was in fact the AMD executive recorded in the wiretaps -- was talking to Chiesi so openly about the deal.

GlobalFoundries has declined to comment on Ruiz, and Ruiz has also declined comment through a spokesman.

What's most important to the Capital Region is whether the departure of Ruiz will hurt construction of what's known as Fab 2, the 1.4 million square-foot computer chip factory going up at Luther Forest that is expected to be completed in 2012.

The facility will employ 1,465 people and could create thousands of additional jobs.

"Now that the fab deal has been struck, it would be unlikely that a staff change, even at the top, would change this decision," said Rob Enderle, the principal analyst with Enderle Group, a technology consulting firm based in San Jose, Calif.

But that doesn't mean that everything will be as smooth as it has been until now.

After all, New York officials had grown comfortable with the soft-spoken Ruiz, who had even attended the Saratoga race meet with local business officials.

"In projects like this the top executives are used to help get through funding and government roadblocks, and Hector was seen as particularly useful in these areas, so his departure could slow the project," Enderle said.

Luckily for the Capital Region, the chief executive of GlobalFoundries is Doug Grose, a native of the town of Mohawk and a graduate of Rensselaer Polytechnic Institute in Troy.

Grose, who has a second home in the Adirondacks, has been a frequent traveler to the region as the Fab 2 project has gotten off the ground.

"The community should expect to see a lot more of him," said Richard Mintz, a spokesman for the GlobalFoundries board.

Larry Rulison can be reached at 454-5504 or by e-mail at lrulison@timesunion.com.

"Ex-union official: Firm paid to make Bruno ‘happy,’ get favors"

November 9, 2009 at 12:40 pm by Robert Gavin

Albany, New York Times Union

A Laborers official from Niagara Falls doing time for racketeering and extortion said today his union chose an investment firm that employed former Senate Majority Leader Joseph L. Bruno to make the senator “happy” in exchange for favors.

Mark Congi — a stocky witness who admittedly took orders to “hurt people” – also testified that his late union superior once joked about tossing Bruno from a helicopter as it flew above Niagara Falls.

Congi, serving a potential 15-year prison stint, told jurors his boss, late business manager Michael “Butch” Quarcini, believed using the Connecticut-based Wright Investors’ Services could pay off.

The firm employed Bruno.

“He felt that to make Mr. Bruno happy that we would invest in this company — and he would do us favors in return,” Congi testified.

Congi added, “He felt that the more money we gave to their company, the more help we’re gonna get from Senator Bruno.”

He said Local 91 invested 20 percent of its pension funds with Wright in 2001.

He said Quarcini, a union leader whose fierce reputation was well-known, had some time earlier taken Bruno for a ride above Niagara Falls.

He said Quarcini wanted to show Bruno the difference between the Canadian side of the famous location, which he said was doing well, compared to the New York side, which was experiencing serious decline.

Congi said Quarcini had joked that he told Bruno if the senator did not get more money for the depressed area he would “throw him out” the helicopter.

Congi said Quarcini, among other items on the agenda, had potential business before the state:

He wanted Niagara Falls to get a casino through an Oklahoma Indian tribe and wanted to secure work for a New York Power Authority job.

And he said Bruno never disclosed his involvement with Wright.

Congi said his job was to do “what Mr. Quarcini asked me to do.”

Among other notable parts of his testimony, Congi at one point said, “I know I did bad things."

"That’s why I’m serving 15 years in jail.”

Still, he described himself as a “pretty straight forward guy.”

Describing Quarcini, Congi said, “He was a very powerful figure."

"He wouldn’t just talk to anybody."

"He let people know who he is."

"He knew people.”

He said Sen. George Maziarz, for one, was well aware of Quarcini’s reputation and “catered” to him.

Congi also was asked by defense attorney Abbe Lowell about his past extortion in a case that also led to Quarcini’s indictment.

Congi classified extortion as a government term.

Asked by Lowell what he would call it, Congi replied, “Union activities – that’s what I would call it.”

On cross-examination, Congi said he and Quarcini did know Bruno was tied to the company.

He also said Wright’s predecessors were not performing up to par well before the Connecticut firm was chosen.

"Bruno collects for his advice - Former senator receives $468,000 but a witness is defensive about his work"

By BRENDAN J. LYONS, Senior writer, Albany, New York Times Union

First published in print: Saturday, November 7, 2009

ALBANY -- A telecommunications executive whose various companies paid former Sen. Joseph L. Bruno $468,000 for consulting work testified Friday that their financial relationship began in 1993 when Bruno said he needed ''more income.''

Leonard J. Fassler, 78, who has known Bruno since the early 1970s, spent more than five hours on the witness stand answering questions about his companies' efforts to win state contracts, his payments to Bruno over a period of years and the lack of written work product the senator produced for his income.

Prosecutors allege Fassler's payments to Bruno amounted to no more than cash gifts, that the dealings were hidden from the Senate ethics panel and the public, and that Bruno's public duties were enmeshed with his private business dealings.

Also, some of Fassler's companies did business with New York state, or, with companies that had interests before the Legislature.

In one instance, Bruno was instrumental in setting up a February 1995 meeting with Gov. George Pataki and a consortium, including IBM, that was vying for a state education contract with a Fassler company, AmeriData.

In the letter, Bruno did not disclose he was being paid $4,000 a month at that time as a consultant for AmeriData, and he did not mention AmeriData was involved.

Bruno used his official Senate letterhead to write the letter after a draft had been faxed to his Senate chamber by Joseph Magno, an AmeriData employee and Bruno business partner.

The letter to Pataki requested a meeting ''to discuss a potential partnership between IBM and the state.''

A year earlier, Bruno wrote a letter to Fassler requesting his $48,000-a-year consultant salary be augmented with stock options, as their contract allowed.

Bruno cited his success working with Magno, and for Fassler, to secure business entres with entities such as Off-Track Betting and Hudson Valley Community College, a state institution.

Bruno was paid more than $4,000 a month over a period of a decade from a series of companies owned, founded or chaired by Fassler, including Sage Alerting Systems, Sage Equities, Interaliant and VyTek Wireless Systems.

Vytek later vied for a piece of the state's $2 billion wireless network contract at a time when Bruno was on the payroll.

In a run-up to that effort Bruno hosted a meeting at his Senate offices with the businesses seeking the wireless contract, including VyTek, Motorola and IBM.

The meeting took place in April 2002 and, according to Fassler, Bruno did not disclose at the meeting he was working for VyTek.

At that time Bruno was being paid $3,000 a month by VyTek, records show.

Fassler testified that he regularly met with Bruno at his Senate offices.

He also faxed private business documents to Bruno's Senate chambers and regularly contacted Bruno through his Senate aides, including Pat Stackrow.

''Typically, she was very good at getting tickets at Saratoga Race Course,'' Fassler said of Stackrow.

Assistant U.S. Attorney William C. Pericak pressed Fassler about whether Bruno obtained clearance from a state ethics panel.

The issue was raised when the pair outlined their consulting deal in a 1993 letter signed by Fassler.

Citing Bruno's Senate post the letter stated:

''We also recognize that ethical considerations dictate that you should not represent us before any state agency.''

''He told me that he has clearance," Fassler said.

"I would not have signed that letter without that."

There's no showing Bruno obtained a review from the ethics panel, but Fassler defended the deal.

''He was an important consultant to me,'' he said.

''He helped me, in my opinion, to be a better executive.''

Pericak also asked Fassler about a 1997 stock deal in which Bruno purchased shares of a trucking software company, RouteMaster, on Fassler's advice.

Fassler said Bruno didn't have the cash to buy the stock so his company, Sage Equities, issued Bruno a $15,000 check for consulting work.

The jury was shown a handwritten in which Fassler instructed Bruno to send an invoice to justify the payment.

Bruno sent an invoice under his home-based "Business Consultants" header to Sage Equities stating he performed ''marketing, management, organization and conferences.''

''I thought this would be a company Sen. Bruno might be interested in,'' Fassler said of the investment.

''I said: 'I'll just give you a consulting fee of $15,000.'''

Under cross-examination, Fassler said his payments to Bruno were for intangibles that he learned from being around a man with ''unusual vision'' and ''unusual energy.''

''I thought he was a leader,'' Fassler said.

''Do you think in your head that there was anything that was a sham about this arrangement?'' asked Bruno's attorney, Abbe D. Lowell.

''No,'' Fassler answered, later adding: ''Were it not for the corporation I was working for I could have done it with a handshake.''

Brendan J. Lyons can be reached at 454-5547 or by e-mail at blyons@timesunion.com.

"Murky business dealings, ethics questions aplenty at Bruno trial"

November 6, 2009 at 3:46 pm by Robert Gavin

Albany, New York Times Union

A Westchester County business executive who employed former Senate Majority Leader Joseph L. Bruno invested in a company with Bruno that dealt with state government — and later sold the outfit to himself, evidence showed today.

Leonard Fassler told Assistant U.S. Attorney William Pericak he had interests in a business called Microknowledge, as did Bruno and third partners Joseph and Kate Magno.

He said “Brunswick Equities” had the controlling interest in the Microknowledge outfit when the company was sold to another Fassler-backed corporation, Vy-Tech.

“So you sold it to yourself?” Pericak asked.

Fassler did not quite agree.

He earlier testified that Microknowledge was doing business with the state.

It all came on an afternoon of murky testimony that revealed financial dealings between Fassler and Bruno after the senator ceased working as a consultant for Fassler’s InterData company in 1996.

At one point, Fassler sent Bruno money — but to his group called “Business Consulting Inc.,” testimony showed.

Another time, Fassler received a message from a Bruno staffer named “Pat,” an apparent reference to aide Pat Stackrow.

It had a return fax or phone number listed at his legislative office, the testimony showed.

Bruno had started working for Fassler in 1993 because, according to Fassler, the senator wanted more income.

Fassler recalled talk that Bruno was a part-time lawmaker and being asked, “Did I have anything available for him?”

He said he also asked Bruno, “Can you do this?”

According to Fassler’s earlier testimony, he believed he had assurances employing Bruno would not cross ethics lines when first hired the senator in 1993.

“We talked about the ethical consideration … we talked about a committee,” Fassler said.

He told Pericak, upon being asked, that Bruno did not show him anything from a legislative ethics committee — though grand jury testimony later showed inconsistencies in Fassler’s answer to that question.

Fassler later said Bruno actually told him he “had clearance” from either an ethics counsel or committee.

And he testified that he would not have signed on to Bruno without it.

"Is Marcellus Shale too hot to handle?

By ABRAHM LUSTGARTEN PROPUBLICA

First published in print: Monday, November 9, 2009

As New York gears up for gas drilling in the Marcellus Shale, state officials have made a potentially troubling discovery about the wastewater created by the process:

It's radioactive.

And they have yet to say how they'll deal with it.

The information comes from New York's Department of Environmental Conservation, which analyzed 13 samples of wastewater brought thousands of feet to the surface from drilling and found that they contain levels of radium-226, a derivative of uranium, as high as 267 times the limit safe for discharge into the environment and thousands of times the limit safe for people to drink.

The findings, if backed up with more tests, have several implications: The energy industry would likely face stiffer regulations and greater expenses, and have more trouble finding treatment plants to accept its waste -- if any would at all.

And the state would have to sort out how its laws for radioactive waste might apply to drilling and how the waste could affect water supplies and the environment.

What is less clear is how the wastewater may affect the health of New Yorkers, since the danger depends on how much radiation people are exposed to, and there is still disagreement over the effects of low-level doses on people.

The DEC has yet to address any of these questions.

But New York's Health Department raised concerns about the water samples in a confidential letter to the DEC in July.

"Handling and disposal of this wastewater could be a public health concern," DOH officials said in the letter, which was obtained by ProPublica.

"The issues raised are not trivial, but are also not insurmountable."

The letter warned that the state may have difficulty disposing of the drilling waste, that thorough testing will be needed at water treatment plants, and that workers may need to be monitored for radiation much as they might be at nuclear facilities.

Health Department officials declined to comment on the letter.

The DEC sent an e-mail response to questions stating that "concentrations are generally not a problem for water discharges, or in solid waste streams" in New York state.

But the agency did not directly address the radioactivity levels, which were disclosed in the appendices of the agency's environmental review of gas drilling in the Marcellus Shale, released Sept. 30.

The Marcellus Shale is an underground rock formation that extends into southern New York and contains vast amounts of natural gas.

What scientists call naturally occurring radioactive materials -- known by the acronym NORM -- are common in oil and gas drilling waste, and especially in brine, the dirty water that has been soaking in the shale for centuries.

Radium, a potent carcinogen, is among the most dangerous of these metals because it gives off radon gas and takes 1,600 years to decay.

The tests taken so far suggest the amount of radioactive material measured in New York is far higher than in many other places.

Recognizing this, the environmental review said radioactive waste licensing and special disposal processes may be required, but said more study is needed before the DEC can lay out precise plans to deal with the waste.

The review said the DEC could not calculate how much radioactivity people may be exposed to, even though such calculations are routinely completed by scientists studying radiation exposure and should be very easy to do, according to Charley Yu, who runs a national dose modeling program for the U.S. Department of Energy.

Yet the review concluded radiation levels were very low and the wastewater does not present a risk to workers.

DEC officials declined to explain their reasoning for this conclusion.

The DEC did not answer questions about whether the additional sampling has begun and whether the state would allow drilling before the radioactivity issues are resolved.

"I don't believe anyone has taken a look, seriously, at what the unintended consequences are to dealing with these kinds of materials," said Theodore Adams, a radiation remediation and water treatment consultant with 30 years of experience.

"It's got to go somewhere."

"It's not going to just go away."

The problem is particularly acute in New York because most other states that produce radioactive waste from drilling inject that waste back underground.

But injection disposal wells are uncommon here.

The EPA says none are licensed to receive radioactive waste or Marcellus Shale wastewater.

Instead, most drilling wastewater is treated by municipal or industrial water treatment plants and discharged back into public waterways.

But it is not clear which treatment plants, if any in New York, are capable of handling such material.

Asked for names of plants capable of removing the radioactive materials, DEC spokesman Yancey Roy said "there are currently no facilities specifically designated for treating them."

The state would review disposal plans submitted by drilling companies, but has not yet received any, he said.

"We do not know what treatment options are being considered or how effective NORM removal will be."

DEC officials have emphasized that the environmental review proposes testing all wastewater for radioactivity before it is allowed to leave the well site and that the volumes of brine water, which contain most of the radioactivity detected, would be far less than the volumes of fluid from hydraulic fracturing that are removed from the well.

Several plant managers in Syracuse and Endicott said they could not take the waste or were not familiar with the state's regulations.

Some plants in Pennsylvania can accept very low concentrations of radioactive metals, according to Rick Kessy, operations manager at Fortuna Energy, which produced five of the radioactive water samples in New York.

But if a solution isn't found to take the higher concentrations, it could be crippling, he said.

"If we did not have a viable option for it, our operations would just shut down," Kessy said.

"There is no other option."

Filtering the water is just one of several problems.

Plants that can filter out the radioactive materials are left with a concentrated sludge that has substantially higher radioactivity than the wastewater.

Sludge can also collect inside the pipes at well sites, in waste pits and in holding tanks.

Federal laws don't directly address naturally occurring radioactivity, and the oil and gas industry is exempt from federal laws dictating handling of toxic waste, leaving the burden on New York state.

New York has laws governing radioactive materials, but the state's drilling plans don't specify when they would apply.

Experts who reviewed the concentrations of radioactive metals found in New York's wastewater said leftover sludge is likely to exceed legal limits for hazardous waste and would need to be shipped to Idaho or Washington, to some of the only landfills in the country permitted to accept it.

The same may be required of some of the equipment used in drilling, which can eventually emit much higher levels of radiation than the water itself.

According to Fortuna's Kessy, that's an acceptable cost of doing business.

"We'll be willing, of course, to fund the necessary disposal means," he said.

ProPublica's Sabrina Shankman contributed to this article.

"Bruno pleads case on radio - Former Senate majority leader uses talk show to attack investigation"

By JAMES M. ODATO, Capitol bureau, Albany, New York Times Union

First published in print: Thursday, November 12, 2009

ALBANY -- Despite a judge's verbal warnings to refrain from public comments, former Sen. Joseph L. Bruno took to the airwaves Wednesday to complain about the government's "inappropriate" investigation of him, and pleaded for "objectivity" when asked about the federal court's handling of his case.

On a federal holiday, with a break in his criminal honest-services fraud trial, which resumes this morning, Bruno made a surprise five-minute phone call to The Fred Dicker Show on WGDJ-AM, "Talk1300" in Albany.

For seven days, prosecution witnesses have testified about what federal prosecutors describe as a scheme to hide his business dealings during his reign as Senate majority leader, which lasted from 1995 until he resigned in 2008 amid the FBI probe.

Bruno said the government may have spent tens of millions of dollars and used 87 agents to get his case to court.

"It just seems inappropriate," he said.

"I wasn't a terrorist ...."

"I never abused the public trust that people put in me."

"I never, never used politics to make money."

"I just didn't do that."

Paul Holstein, a spokesman for the FBI in Albany, said the bureau won't comment during trials, but may after the case is completed.

The source of Bruno's cost estimates and count of 87 agents is unclear, but according to court records, his attorneys have been provided with grand jury transcripts and other materials they are barred from revealing by a judge's protective order.

In recent years, the FBI district office in Albany, which handled the Bruno investigation, had as few two and at least as many as four full-time agents assigned to public misconduct investigations in general.

However, in any large case, numerous federal agents are typically tapped to serve subpoenas or assist in executing search warrants without any direct involvement in particular cases.

Talking with radio host and New York Post State Editor Fred Dicker, Bruno also blasted his prosecutors' use of the federal honest services statute, and noted cases challenging convictions under that law are scheduled for review by the U.S. Supreme Court.

Justice Antonin Scalia, Bruno said, seems to share his animosity for the statute:

In a lone dissent, Scalia called the law too wide-reaching and said it invited "abuse by headline-grabbing prosecutors in pursuit of local officials, state legislators and corporate CEOs who engage in any manner of unappealing or ethically questionable conduct."

One case heading to the high court involves ex-Alaska Rep. Bruce Weyhrauch, who was employed by an oil industry business as he voted in favor of a tax break that would benefit the business.

He has claimed his actions were legal under state law and the federal honest services statutes shouldn't be imposed on him.

Peter Henning, a former federal lawyer now teaching criminal law in Detroit and writing a book about honest services cases, said that if the Supreme Court supports Weyhrauch's argument, it could affect the Bruno case.

"If (Bruno) is found guilty, the district judge will be in the position of having to wait until Weyrauch is decided whether to sentence at that point," Henning said.

He said the federal government has an argument to pursue the Bruno conviction while the appeals proceed, because prosecutors can say they're policing honesty and not ethics.

In all eight of the separate criminal counts lodged against Bruno, prosecutors are alleging an underlying violation of New York state ethics laws -- violations that were never charged by the state Legislative Ethics Committee empowered with policing those laws.

"I suspect Mr. Bruno's attorney isn't all that happy with what he did today," Henning observed.

"He should not be talking to anybody but his lawyer."

"He's trying to generate a little sympathy for himself."

"The judge, I suspect, is not going to be happy about it."

During the radio show, Dicker cited a column in the Troy Record that noted Judge Gary L. Sharpe, a former U.S. Attorney who is presiding over the Bruno trial, has a son working for the U.S. Attorney's office in Albany.

Dicker asked Bruno if he was concerned about a pro-prosecution bias by Sharpe.

"The people that are there can see what is going on for themselves," Bruno said.

"I just appreciate fair reporting with objectivity."

Sharpe on Tuesday refused to allow Bruno's defense team to enter hundreds of member item grants from the senator into evidence.

They had sought to counter the government's focus on grants that went to entities tied to Bruno's outside income.

The trial has included testimony about Bruno providing grants to unions and private businesses, and dealing with legislation concerning organized labor while being paid to help a pension fund management company solicit union pension fund business.

The Joe Bruno Legal Defense Fund, set up by the former senator's supporters, is attempting to raise $2.5 million.

Henning said Bruno's comments may be in part calculated to assist that effort; he may also be venting the frustrations of a defendant "hearing people say nasty things about you."

On the air, Bruno said he proposed increasing the disclosure of personal business by public officials in ethics reform laws sought by ex- Gov. Eliot Spitzer.

He said Spitzer told him that some professionals could not reveal their clients.

Spitzer said Wednesday he could not recall his talks with Bruno.

But "I've always believed that full disclosure of outside income and the resulting transparency is beneficial and indeed necessary, and any proposal to increase that did have and would have had my full support," Spitzer said.

James M. Odato is at 454-5083 or jodato@timesunion.com.

"Bruno takes bruising - Clout said key to millions; clash with judge"

By BRENDAN J. LYONS, Senior writer, Albany, New York Times Union

First published in print: Friday, November 13, 2009

ALBANY -- Two top officials of a Connecticut investment firm that employed former Sen. Joseph L. Bruno testified Thursday that they used the majority leader's political connections with labor unions to obtain millions of dollars in pension fund investments.

Peter M. Donovan, CEO of Wright Investors' Service, and Kenneth Singer, a senior vice president, both testified under immunity-from-prosecution orders and endured searing questioning from Assistant U.S. Attorney Elizabeth C. Coombe.

Coombe repeatedly pulled out each man's grand jury transcripts to impeach sometimes evasive testimony they gave Thursday about Bruno's role at their firm, including his use of Senate connections to help them win multimillion-dollar investment clients.

The intense questioning by Coombe came before an explosive end to the eighth day of Bruno's trial on corruption charges.

U.S. District Judge Gary L. Sharpe cleared the jury from the courtroom just before 5 p.m. and blasted Bruno for remarks he muttered related to a ruling moments earlier that allowed Coombe to re-question a witness amid cross-examination by Bruno's lawyer.

"For once in your life you don't control something, I do."

"You ever do what you just did in the presence of that jury again, which is question any of my rulings, I will take measures to make sure you don't repeat that," Sharpe said.

"Do you understand me?''

"I understand very clearly what is happening here, judge, very clearly,'' Bruno shot back, his voice raising.

It all unfolded on a day when Bruno's defense team endured the withering testimony of Donovan and Singer who admitted their firm, which paid Bruno $1.37 million over a period of several years, had cashed in on Bruno's political stature in netting multimillion-dollar investment contracts with 10 New York labor unions that regularly had business before the state Legislature.

In many instances, they testified, Bruno opened doors to clients who otherwise weren't receptive to their sales pitches.

"Did you find that Sen. Bruno was helpful in arranging meetings with people?'' Coombe asked Donovan.

"Sometimes, yes,'' Donovan answered.

Coombe peppered Donovan and Singer with questions about Bruno's work for Wright Investors' Service as she showed them, and the jury, e-mails, memorandums and handwritten notes that prosecutors say documented the firm's use of Bruno's political leverage.

Singer, an aggressive investment salesman who was Bruno's handler at Wright, had Coombe pull out and read his prior grand jury testimony related to 10 separate questions that she said he answered differently on Thursday than when he was in front of the panel that indicted Bruno in January on eight felony counts of theft of honest services fraud.

Singer recounted that two or three times he was sitting in Bruno's office at the Capitol when the senator called union leaders to pitch for Wright Investors' Service and ask them to accept a call or visit from Singer.

Still, Singer testified that at least on those occasions Bruno told the unidentified union leaders that he was working for Wright and that he had clearance from the legislative ethics panel to do the work.

Prosecutors are building a case they believe shows Bruno did not disclose to numerous New York labor unions that he was on Wright's payroll when he was nudging their leaders to consider investing pension funds with the firm.

They also contend the company switched Bruno from a consultant to a part-time employee in 1998 when they realized he had not obtained signed disclosure forms from the unions documenting they knew of Bruno's role.

Donovan admitted Thursday that when he became CEO in 1996 he was concerned about the lack of disclosure forms, which are required for paid consultants and monitored by the federal Securities and Exchange Commission.

Several labor union leaders who were referred to Wright by Bruno have testified they weren't told Bruno was on Wright's payroll.

Earlier Thursday, Anthony Rumore, who retired in 2004 as president of Teamsters Local 812, Soft Drink & Brewery Workers Union of New York City, testified that he was in a box at Saratoga Race Course with Bruno and two other union leaders 10 years ago when the conversation turned to Wright.

Rumore said Bruno stood up for the firm and said:

"If you happen to look up Wright let me know what you think of them.''

Two years later Rumore's union invested $48.8 million with Wright, which received $208,588 in fees.

Rumore testified he did not know Bruno received $58,000 for the deal.

Singer repeatedly testified he could not remember why he wrote certain things in internal company e-mails or memorandums related to Bruno's political muscle.

One entry, in a confidential January 1995 memo to his boss, Albert Meric, explained how a former Service Employees International Union (SEIU) president, David Patrick, "seems to be moving at a faster pace'' because Bruno was appointed Senate majority leader that month.

When pressed by Coombe about what he meant by Patrick "moving at a faster pace'' Singer was vague.

"It's just an opinion,'' Singer said.

Coombe kept pressing and asked Singer why he would make a written statement to his boss if it was simply speculative.

"There was nothing to back it up,'' he replied.

"I was just stating an opinion."

Singer admitted Bruno gave him access to clients who would ignore his calls but return Bruno's.

In a letter to Bruno in June 2000 Singer outlined their "strategy for 2nd half of year 2000'' and the senator's efforts to help land a western New York carpenters' union closely aligned with Niagara County's Local 91.

At the time, Local 91's business manager and pension trustee, Michael "Butch" Quarcini, was lobbying state lawmakers to include union labor mandates in legislation enabling the development of Indian-run gaming casinos.

"Everything depends on their perception of how hard you win/fight for them on issues in Niagara Falls," Singer wrote.

Coombe asked Singer what he meant and whether Bruno's work for Wright related to his work as a senator, as the letter implies.

"That was just my opinion," Singer said.

"I'm just a sales guy who throws things out ..."

"It's what I wrote but it's not what I meant."

Coombe rattled off a half dozen contracts with labor unions that Singer admitted his firm got because Bruno provided them the introduction.

Singer said Bruno also put him contact with state senators William Larkin Jr., R-New Windsor, and George Maziarz, R-North Tonawanda, to get their help contacting labor union leaders in those lawmakers' districts.

But Singer initially testified Bruno's legislative assistant, Patricia Stackrow, was his main conduit to Larkin.

But Coombe read from his grand jury transcript which showed Singer admitted Bruno set him up with Larkin.

"You didn't tell the grand jury that Pat was involved, did you?" Coombe said.

"No," Singer answered.

The blow-up between the judge and Bruno occurred at about 4:40 p.m. after Coombe ended questioning of Singer.

The judge was about to dismiss the jury for the day, but Bruno's attorney, Abbe D. Lowell, asked for five minutes to start his cross-examination.

The judge relented and Lowell asked several questions of Singer challenging whether prosecutors had pestered Singer by putting him before the grand jury three separate times and being unhappy when he didn't "give the answers they wanted to hear."

Lowell told the jury "see you tomorrow.''

But Sharpe said he would allow Coombe to ask a few more questions of the witness.

As Coombe stood Bruno apparently said something that Sharpe overheard.

The judge quickly dismissed the jury and scolded Bruno.

His voice raised as he sternly declared: "Let me explain something to you once Mr. Bruno and I will not explain it again.''

The judge did not specify what action he would take as he warned Bruno not to repeat his conduct.

Brendan J. Lyons can be reached at 454-5547 or by e-mail at blyons@timesunion.com.

"Bruno pal: Senator got $270,000 for ‘motivation’ talk"

November 13, 2009 at 12:46 pm by Robert Gavin

Albany, New York Times Union

The ailing head of a Manhattan-based road contracting business said he today he paid former Senate Majority Leader Joseph L. Bruno $270,000 for “motivation” — dismissing evidence that showed the powerful senator provided no written work and once contacted a Long Island utility tied to state government.

Russell Ball, a longtime Bruno friend who ran Roadway Construction, started paying Bruno in March 2004 as a consultant.

The payments were sent to Bruno’s Capital Business Consultants through Ball’s BB Gardner Management Corporation.

Under questioning by Assistant U.S. Attorney Elizabeth Coombe, Ball portrayed Bruno more as an inspirational speaker than consultant raking in thousands of dollars.

He even compared Bruno to inspirational guru Tony Robbins at one point.

“Help change the culture of the company,” Ball said, “and that was the main thing that we wanted to get from him.”

Ball also said, “Motivation is a big factor … I could walk away knowing I could get the company back on track.”

Ball, who has suffered three heart attacks, is considered very ill.

He nearly testified from downstate and later had his appearance delayed and pushed to today.

Ball’s outfit had done most of its work with Consolidated Edison, the utility for New York City ( and, in an unrelated case not referenced in testimony, Ball is accused of paying kickbacks to Con Ed employees).

Ball argued that using Bruno’s services would change the dynamic that existed within his ranks.

But under questioning from Coombe, Ball had trouble distinguishing work Bruno had actually performed other than attending meetings and the “motivation” talk.

It was revealed that Bruno contacted the Long Island Power Authority – whose board includes some members appointed by the Senate majority — on behalf of the company.

Ball also said he understood Bruno had clearance from an ethics committee to work for him, even making a reference to the state’s public officers law.

“That was no problem,” he said.

The court broke for lunch after his testimony.

"Bruno's Senate secretary handled sideline business"

Associated Press

Last updated: 6:05 p.m., Monday, November 16, 2009

ALBANY -- Former New York Senate leader Joseph Bruno's longtime statehouse secretary says she handled paperwork and accounting for his sideline consulting firm without being paid by the business but helped herself to some Bruno money.

In testimony at Bruno's federal corruption trial, Patricia Stackrow says she kept accounts and wrote checks from the account of Bruno's firm, Business Consultants, to his personal bank account and also took some.

She testified Monday with immunity from prosecution.

In grand jury testimony, she said it was "retaliation" for Bruno sometimes treating her in a "demeaning" fashion.

Bruno is accused in eight fraud counts of using his state influence to enrich himself.

He says he had a right to conduct business.

"Was theft born of ire? - Aide says she stole from Bruno while handling his personal matters"

By BRENDAN J. LYONS, Senior writer, Albany, New York Times Union

First published in print: Tuesday, November 17, 2009

ALBANY -- The longtime executive assistant to former Sen. Joseph L. Bruno testified Monday that she handled much of Bruno's personal banking, shopping and business matters while working for him in the Legislature.

Patricia M. Stackrow, 66, who retired from her roughly $100,000-a-year state government job in December, said she was Bruno's executive assistant for 24 years and served as his "gatekeeper" until those duties were handed to another Senate employee several years ago.

"I balanced his checkbooks, I wrote all of his checks, I kept track of his financial dealings, I prepared information for his accountant to do his taxes," Stackrow said under questioning by Assistant U.S. Attorney William C. Pericak.

"I balanced his wife's personal checkbook."

"... I did a lot of his personal shopping."

"I did a lot of shopping for his wife or his family periodically over the years -- Christmas shopping, gifts for his family, gifts for his wife."

The revealing testimony came as Stackrow was forced to disclose publicly that she had used her access to Bruno's personal accounts to steal his money.

Stackrow's disclosure sent a shock wave through the Capitol, where she was widely known.

Bruno is on trial on eight counts of theft of honest services fraud, accused of using his former Senate majority leader post to enrich himself.

Pericak asked Stackrow about her theft from Bruno near the end of his questioning, but he did not press her about how much money was involved.

The prosecutor suddenly informed the court, and the jury, that Stackrow was testifying under an immunity order that prohibits prosecution of her based on anything she said on the witness stand.

She is the 12th person at Bruno's trial to testify under an immunity order.

When Pericak asked Stackrow why she took the money, she replied, "I don't know," adding she had "no idea" when it started.

Pericak then read an excerpt of Stackrow's prior grand jury testimony in which she had revealed -- under oath and in the secret proceeding -- that she stole money from Bruno as "retaliation for the way he treated me at times ... demeaning and very degrading."

Outside court, at the end of the day, Bruno called the government "despicable" for bringing up Stackrow's theft.

He described it at as a "personal matter" between him and his former legislative assistant, and said he believes it's irrelevant to his trial.

It was the culmination of an explosive atmosphere in the courtroom Monday -- the trial's 10th day -- as prosecutors and defense attorneys argued heatedly outside the presence of the jury about several boxes of Senate documents, including some of Stackrow's personal notes, that Pericak said were turned over by the defense over the weekend.

Under a prior court order, all discovery materials should have been shared by the sides before the trial began.

Defense attorneys said the government already had many of the materials, and others were turned over by Stackrow and her personal attorney.

An argument between Pericak and Bruno's co-counsel, Abbe D. Lowell, continued after the courtroom cleared at the end of the day.

During Lowell's cross-examination of Stackrow, which began around 4 p.m., Stackrow explained that many of Bruno's Senate financial disclosure forms -- which are a key component in the government's case -- were cobbled together in a process that involved Bruno but mostly herself and Senate attorneys.

"You'd give him the form days before it was due and he would sign it?," Lowell asked.

"Yes," Stackrow said.

She agreed with Lowell's assertion that Senate lawyers who handled much of Bruno's private business matters, and his public disclosure forms, were "sensitive to the rules."

Lowell showed the jury a series of Stackrow's typewritten notes to "JLB" in which she indicated that Senate lawyers, such as Kenneth Riddett or Francis Gluchowski, had approved the contents of financial disclosure forms before Bruno signed them for submission to the Legislative Ethics Committee.

Some of the notes showed that drafts of the forms were still under review by the attorneys within days of their filing.

Issues they checked included whether Bruno needed to disclose his consulting clients, certain gifts or whether he should reveal a free flight he got from Pepsi.

Another document related to the drafting of the financial forms included a Bruno notation to Stackrow to check with the attorneys whether he needed to disclose ownership of a house where one of his daughters was living.

In a document from 1996 -- an interoffice note between Bruno and Stackrow -- Bruno wrote "do attorneys know of all income from Ameridata, Wright, McGinn-Smith."

"Is it recorded OK?"

Those three companies -- Ameridata, Wright Investors' Service and McGinn, Smith & Co. -- are among several Bruno worked for as what he has described as a private consultant.

The government alleges Bruno hid his employment with those companies from the public.

Stackrow testified that while she was deeply involved with Bruno's private business affairs, for the most part she did not know what type of work he did.

At one point, she was shown a document by Pericak in which a Wright official wrote a letter to Bruno welcoming an employee with the title "client service officer."

Stackrow said she was aware Bruno's role with Wright Investors' Service included setting up contacts for one of their investments salespeople with officials from colleges, institutions, hospitals and labor unions.

Prosecutors allege nearly all of those contacts by Bruno involved groups with business before the Legislature.

Dozens of paychecks mailed to Bruno were payable to "Joseph Bruno" rather than to his home-consulting firms, Business Consultants and Capital Business Consultants, according to documents shown to the jury.

The government alleges Bruno had a duty to disclose to the public whom he was working for and what he was doing.

The defense contends Bruno did everything required under state law, and that his decisions were guided by Senate lawyers.

The financial disclosure forms were filed annually each May and reflected the private business dealings of state lawmakers and other governmental officials from the prior calendar year.

Stackrow's testimony also veered into numerous documents she prepared for Bruno related to horse-breeding deals he had with two friends, Jerry Bilinski of Columbia County and Jared Abbruzzese of Loudonville.

In addition to being a horse-breeding partner with Bruno, Abbruzzese or companies he was affiliated with or owned also paid Bruno hundreds of thousands of dollars as a "consultant."

Bilinski and Abbruzzese broke off their horse partnership with Bruno when they became part of a consortium vying to run three state thoroughbred tracks: Aqueduct, Belmont and Saratoga.

Lowell is scheduled to continue his cross-examination of Stackrow when the trial resumes this morning in U.S. District Court.

Riddett is slated to testify after Stackrow, prosecutors said.

Reach Lyons at 454-5547 or blyons@timesunion.com.

"Exec on Bruno’s ‘consultant’ work and exit: ‘I don’t know’"

November 18, 2009 at 3:04 pm by Robert Gavin

Albany, New York Times Union

An executive of a company that paid former Senate Majority Leader Joseph L. Bruno $160,000 as a “consultant” knew nothing about his work, which was being linked to a vague effort to lobby the Federal Communications Commission, his testimony showed today.

Christopher Downie, the former chief operating officer of the Motient Corp. and a subsidiary called TerreStar, said he reported to Loudonville businessman Jared Abbruzzese, a key figure at Bruno’s federal corruption trial.

But the Dartmouth-educated Downie had no answers when Assistant U.S. Attorney Elizabeth Coombe repeatedly quizzed him about Bruno’s work — as well as his subsequent break from the Abbruzzese-backed companies.

“I don’t know,” Downie testified replied to several questions.

Evidence showed Bruno was being paid $20,000-a-month by the company for six months in 2005 — and later an additional $40,000.

Exchanges between employees at the companies showed a lack of knowledge of what Bruno did — and that his involvement was listed under his group, Capital Business Consultants.

It was revealed that Bruno was allegedly used to “assist on lobbying efforts” to the FCC, but Downie had little knowledge of what the senator’s involvment included.

And other evidence showed that when a company employed checked with a contact in Washington to see what Bruno’s lobbying included, the person was unaware of it.

Downie was initially said to be testifying under immunity, but the judge later clarified to the jury that was not the case.