Spitzer's suddenly cloudy future

From CNN

(CNN) -- New York Gov. Eliot Spitzer's political future clouded abruptly Monday with his admission that he had violated the trust of his family and the public in the wake of reports a federal investigation had linked him to a prostitution ring.

Gov. Eliot Spitzer, with his wife, Silda, by his side, apologizes to his family and to the public.

Authorities are looking into whether Spitzer, 48, met with a prostitute in a Washington hotel, two sources with knowledge of the investigation told CNN.

Spitzer did not specifically address the allegations in his appearance Monday, and did not take questions.

Before his announcement, three Democratic sources -- one in New York's capital, Albany; one in New York; and one in Washington -- told CNN a top Spitzer aide had told them the governor would resign.

He did not do so Monday.

Spitzer, a Democrat, rose to prominence as a hard-charging attorney general hailed by Time magazine as "Crusader of the Year." He was nicknamed "Eliot Ness" by the New York tabloids in reference to the incorruptible hero of "The Untouchables." He was known for rooting out corruption within Wall Street and on the streets. See a timeline of his life »

He made several high-profile prosecutions of Wall Street figures, extracting billions of dollars in fines from investment banks, mutual funds and brokerage houses.

He also made a name for himself by busting prostitution rings.

Taking office as governor January 1, 2007, after a landslide victory, Spitzer declared: "We must transform our government so that it is as ethical and wise as all of New York."

CNN's senior legal affairs analyst Jeffrey Toobin, who went to Harvard Law School with Spitzer, said the prostitution allegation was a surprise.

"To say this is a shock is an understatement," he said.

Brooke Masters, author of the 2006 Spitzer biography "Spoiling for a Fight," said she was "really surprised that [the scandal is] about personal ethics." Watch Spitzer apologize »

She said Spitzer's opponents on Wall Street accused him of a "holier-than-thou" attitude.

"He would say they had conflicts of interest while ignoring his own conflicts of interest. He certainly got a bit of criticism for having a bit of a double standard," she said.

Don't Miss

• Sources: Spitzer under investigation

"He would use his power of attorney general for what the business people thought was holding them hostage and giving them fines. They thought he was too virtuous."

Once seen as a rising star within the Democratic party, Spitzer had a rocky first year as governor. He was accused in July of using state police to keep tabs on a political rival, state Senate Majority Leader Joseph Bruno, and was forced to drop a plan to issue driver's licenses to undocumented workers in November amid public outcry.

The driver's license plan briefly gained national attention when presidential candidate Sen. Hillary Clinton of New York appeared to endorse it, then backed away from it. Spitzer has endorsed Clinton.

"It's not as though it's hitting him at a moment of strength," Masters said of the prostitution allegations. She said it is too early to write off Spitzer's political career, "but this is not a good time."

Spitzer considered himself an heir of reformers such as Theodore Roosevelt, whose portrait he kept in his office as attorney general, Masters wrote in her biography.

"I invoke him for the notion that capitalists understand when the market needs to be tamed," he said, specifically aligning himself with the early 20th century Progressive movement rather than the more radical Populists represented by William Jennings Bryan.

Spitzer was raised in the affluent neighborhood of Riverdale in the Bronx, New York. He met his wife, Silda, when he was in law school and they married in 1987. They have three daughters.

She appeared with him when he made his statement Monday, but did not speak.

Spitzer worked as an attorney in the public and private sectors before he was elected attorney general, including serving as an assistant district attorney in the Manhattan district attorney's office from 1986 to 1992.

He also worked for the New York City law firms of Paul, Weiss, Rifkind, Wharton & Garrison; Skadden, Arps, Slate, Meagher & Flom; and Constantine & Partners, according to his official biography on the New York governor's Web site.

Spitzer was born June 10, 1959, in the Bronx. He graduated from Horace Mann School, received his undergraduate degree from the Woodrow Wilson School at Princeton University and his law degree from Harvard Law School, where he was an editor of the Harvard Law Review.After law school, he clerked for U.S. District Judge Robert W. Sweet, the official biography says.

If Spitzer resigns, Lt. Gov. David Paterson would complete his term, in accordance with the New York state constitution.

NYC: Yellow Rat Bastard's owner turns out to be a scumbag

Everything on the Yellow Rat Bastard site has an original price with a slash trough it, thats great, because it would make one think that the real original price is the marked down price in which they are now advertised. $22 dollars for a Brooklyn t-shirt, marked down no less, you gotta be kidding me right? I guess not. So there you see the methods in which the owner of the chain operates, I for a fact know that the company is quite a bit underhanded, having known someone who worked there, who claimed that they allegedly had contests which no one ever won, and worked in a rat infested water leaking basement office space without windows. So what I just read isn't very surprising. Yellow Rat Bastard has been paying its employees below minimum wage, without overtime, without taxes and has retaliated against employees who complained.

The New York Times reports:

Yellow Rat Bastard, a trendy apparel retailer based in SoHo, has agreed to pay $1.4 million to settle a lawsuit over unpaid wages and overtime, the state attorney general, Andrew M. Cuomo, announced on Monday.

The settlement grew out of a lawsuit that Mr. Cuomo’s predecessor, Eliot Spitzer, filed 14 months ago, seeking more than $2 million on the grounds that Yellow Rat Bastard’s flagship store in SoHo and its 10 affiliates had repeatedly cheated its employees.

Donald Paul, who worked in the company’s main warehouse, applauded the settlement. Mr. Paul said he worked 60 to 70 hours many weeks, but was hardly ever paid extra wages for overtime. He said he was often paid $5.25 an hour, even when the state minimum wage was $6.75.

“Everything was off the books,” he said. “The settlement is great. We’re going to get the money we deserve.”

The lawsuit covers more than 1,000 current and former workers, not just at the flagship store at 478 Broadway in SoHo, but also at the chain’s other stores in Manhattan, Brooklyn and Queens. Those stores include Boys and Chicks, Dirty Jane/Sloppy Joe, Rubber Sole, Antique Orange, Tempo, and FAT Jeans and Shoes. Because of concerns that the company’s founder, Henry Ishay, was hiding assets, Mr. Cuomo’s office persuaded a state judge to freeze nearly $1 million in bank assets held by Mr. Ishay’s wife, Alla Levy.

They should throw this Piece of sh.t in jail, just paying money he owed isn't enough. Don't get me wrong, I'm glad they caught him but it took a lot of work by independent agencies to do it. According to a press release by the RWDSU a branch of the Commercial Food Workers:

The Retail Action Project fights to improve the working lives of NYC retail workers.

Retail, Wholesale and Department Store Union represents 100,000 workers throughout the U.S. and Canada. The RWDSU is affiliated with the United Food and Commercial Workers.

The Good Old Lower East Side fights for housing and economic justice in the Lower East Side.

New York cracks down on 1099 employee misclassification

From: Change To Win's Web Blog:

We told you back in September about a task force set up by New York Governor Eliot Spitzer to investigate "misclassification" -- the scam where employers weasel out of paying for their workers' health care and benefits by claiming them as "independent contractors", even though they work full time for their company -- in New York State.

Well, yesterday we saw the first results of that task force's work -- a crackdown on misclassifying companies that found millions of dollars in owed payments that New York employers had held back:

In 15 enforcement sweeps, state investigators found $19 million in wages that were not reported to the state and $3 million in underpayments to workers, the state’s labor commissioner, M. Patricia Smith, said at a news conference. Investigators also uncovered nearly $1 million in taxes that had not been paid to the state’s unemployment insurance fund...

In their sweeps, which investigated 117 companies, state officials found that 2,078 employees had been misclassified as independent contractors. The task force also found 646 workers who were owed minimum and overtime wages totaling about $3 million.

Commissioner Smith noted at the announcement that the corporate crooks they caught were just the tip of the iceberg:

“I wouldn’t doubt that 10 percent of the state’s workers are either misclassified as independent contractors or work off the books,” Ms. Smith said.

The task force also published a report on their findings to date -- unfortunately it doesn't seem to be posted on any of the various state government sites yet, but once I track down a copy I'll link it in from this post.

Posted by Jason Lefkowitz on February 12, 2008 at 11:02 AM |

Huge win, myself and the fellas at UnionReview have been covering this story for quite a while, you can see the links with a search at UR for Misclassification. The intra-agency communication in the misclassification task-force is a big part of it working. Looking forward to seeing this report.

According to the NY Times 2-12-08

Ms. Smith noted that soon after being visited by the task force, one employer began paying unemployment insurance taxes for 205 employees it previously had not reported.

The employers that were found in violation of various state labor laws will be required to pay back taxes, back wages and unpaid workers’ compensation premiums, with state officials often assessing additional penalties.

The sweeps were undertaken by the state’s Labor and Tax Departments, Workers’ Compensation Board and attorney general’s office, and the New York City comptroller’s office.

Already facing 2 years in jail, NY sweatshop construction contractor arrested again.

Intra agency communication helps to arrest sweatshop construction contractor who's already facing 21-27 months in jail for Tax Evasion. This time he allegedly defrauded Workers Compensation. Now facing up to 4 more years.



Gary Woltmann, the president of Woltmann Associates, who previously pleaded guilty to 20 counts of Tax Evasion while employing undocumented workers off-the-books has been arrested again. This time for 2 counts of felonious Workers' Compensation fraud.
From Workers Compensation Info.com:

...allegedly used an off-the-books payroll scheme to avoid paying $150,000 in workers' compensation premiums to his insurer, American International Group, in the policy years 2002-2003 through 2006-2007. He also allegedly defrauded New York State out of $36,000 in payroll taxes.

Woltmann faces two Class E felonies: one count each of fraudulent practices and offering a false instrument for filing in the first degree. Under New York state penal law and workers' compensation law, businesses with employees must carry insurance to cover workers who may be injured on the job. These charges are punishable by one and a third to four years in prison, fines up to $50,000, and restitution.

"Protecting employees with workers' compensation insurance is not optional in New York," Chair Zachary S. Weiss said. "When employers avoid that insurance, they're jeopardizing their workers, and counting on honest businesspeople to bail them out."

On Sept. 17, 2007, Woltmann pleaded guilty to 20 charges that he avoided $220,000 in federal payroll taxes in this same case. While he has not been sentenced yet, he faces 21 to 27 months in prison under federal sentencing guidelines for that offense. Woltmann will also repay those federal payroll taxes.

"The charges in the federal case alerted us to the possibility of the workers' compensation case," Fraud Inspector General John Burgher said. "This is the result of cooperation between state, county and federal entities."

The Board was brought into the investigation last May by the office of Suffolk County District Attorney Thomas Spota. It worked with that office and the Internal Revenue Service Criminal Investigations Division in both these investigations.

"Workers' compensation is a lifeline for injured workers who are physically unable to earn an income," Thomas Spota said. "The goal of our partnership with the Workers' Compensation Board and federal law enforcement is to protect New Yorkers from the higher operating costs, higher prices for goods and services, and higher insurance premiums that result from insurance fraud."

In 2006, investigations by the Workers' Compensation Board Office of the Fraud Inspector General resulted in 119 arrests and prosecutions, while the Compliance unit referred another 113 prosecutions to the attorney general. The Board also returned a record $6.2 million to victims of fraud.

The charges in this case are merely accusations and the defendant is presumed innocent unless and until proven otherwise by a court of law. The Workers' Compensation Board equitably and fairly administers the provisions of the New York State Workers' Compensation Law on behalf of New York's injured workers and their employers. To report workers' compensation fraud, call 888-363-6001.

Go Suffolk County District Attorney Thomas Spota, who I have met and shaken hands with when at a union meeting he explained hi NY Spota bill, which has passed the Senate and is as far as little birdies tell me is "in limbo with Gov. Spitzer"

(1)...tighten loopholes in New York State's Labor Law.
Clarifying the responsibilities of contractors' and subcontractors to comply with the statute, tightening local government's record-keeping obligations and increasing penalties for offenders are some of the changes under
consideration.

Specifically, the legislation provides provisions which:

• Treat the theft of prevailing wages from workers similarly to other thefts under the penal law.
• Require that certified payrolls be filed and that the willful failure to file them is a felony.
• Strengthen the responsibility of government agencies awarding contracts by requiring that an individual in each agency be designated to receive, collect and review certified payrolls and that, in the event an agency fails to designate such an individual, the buck stops at the desk of the chief policy-maker of the agency, establishing plain and unavoidable accountability.
• Require that when the spread between the low bidder and the second low bidder is 10% or more, or when the low bidder has been involved in a prior prevailing wage violation, the low bidder must submit a sworn statement and detailed cost estimate attesting to the fact that the prevailing wage law will be complied with, including a personal guarantee to make up any under-payments of prevailing wages and an agreement on cases where liability is determined to cover government investigative and enforcement costs and court and enforcement costs incurred by aggrieved workers and entities.

Why it's sitting unsigned on Mr.Spitzers desk is beyond reasoning. He had done well with his Executive order against Misclassification of Workers.

(2) One would think that our previous NY State administration would have at least taken interest in the economic burden being placed on its citizens yet, nothing was done. It seemed *ESRCC representatives were swimming against an incoming tide. With the election of Eliot Spitzer as Governor however, the “big stick” ESRCC reps needed arrived. As New York State Attorney General, Spitzer had brought enforcement actions against employers guilty of misclassification. When he received the Cornell study on the economic result of misclassification, once again he did not hesitate to act. Within seven months of the study’s release he announced an interagency task force that, for the first time in New York State, all interested state parties would be required to share information regarding contractors guilty of payroll violations. Laws are now being enforced. Those contractors who would erode our quality of life are being convicted. Bid fields are leveling out and conscientious contractors are able to compete. This all translates into more work for ESRCC members, more contributions to retirement and health care plans, anda more stable economy for New York State.

Elliot Spitzer should step up once again and sign the Spota Bill, helping to end the sweatshop construction practices here in NY.

*Eastern State Regional Council of Carpenters
Sources:
(1) NYS Building and Construction Trades Council
(2) NYS Carpenters.com PDF file
Original Story at UnionReview:
NY: Contractor Convicted - Paying Immigrant Carpenters Off The Books