Wednesday, March 16, 2022

POLITICO New York Playbook: Why it’s not so easy to seize oligarch real estate

Presented by CVS Health: Erin Durkin and Anna Gronewold's must-read briefing informing the daily conversation among knowledgeable New Yorkers
Mar 16, 2022 View in browser
 
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By Erin Durkin, Anna Gronewold and Deanna Garcia

Presented by CVS Health

Since the Russian invasion of Ukraine, calls have been coming for the hundreds of millions of dollars worth of Manhattan real estate owned by Russian oligarchs to be seized by the federal government. But pulling that off is not quite so simple.

Our Janaki Chadha delves into the complex and lengthy process of real estate seizure, explaining that the legal process takes years in many cases. Not only that, but ownership of most, if not all, of the properties held by Russian oligarchs are shielded by shell companies, making it a complicated task to even figure out exactly what they own.

It's pretty simple to freeze someone's assets, something the government has already done to certain Russians slapped with sanctions. In the case of a fancy apartment or house, that means the property gets padlocked, cannot be sold, and the owner needs permission from the federal government to do something as simple as fix a leaky pipe. But to actually seize ownership of the property, the government has to show it is linked to an actual crime.

It's been tried before: In 2008, federal prosecutors brought a case against the owners of a 36-story office building in Midtown Manhattan they alleged was linked to the Iranian government, which had been slapped with sanctions by the United States. It took nearly a decade, until 2017, for a jury to conclude the feds could seize the building. And that was only a temporary victory. Two years later an appeals court tossed out the verdict.

Still, the oligarch set may already be moving to sell off their luxe pads ahead of possible sanctions. "If I had $20 billion and a Russian passport, I would be getting all of my assets out of every one of these jurisdictions as fast as I can," said Dj Wolff, a partner at the firm Crowell & Moring specializing in economic sanctions.

IT'S WEDNESDAY. Got tips, suggestions or thoughts? Let us know ... By email: EDurkin@politico.com and agronewold@politico.com, or on Twitter: @erinmdurkin and @annagronewold

WHERE'S KATHY? Making an announcement about sexual harassment and speaking at a Justice for Asian Women rally.

WHERE'S ERIC? Speaking at a training for one of the new NYPD anti-crime units, hosting a gun violence summit, speaking at a St. Patrick's Day event, honoring former Deputy Brooklyn Borough President Yvonne Graham, and attending the James Connolly Irish American Labor Coalition Luncheon.

ABOVE THE FOLD — " Health Agency Under Cuomo 'Misled the Public' on Nursing Home Deaths," by The New York Times' Luis Ferré-Sadurní: "The administration of former Gov. Andrew M. Cuomo failed to publicly account for the deaths of about 4,100 nursing home residents in New York during the pandemic, according to an audit released on Tuesday by the state comptroller, Thomas P. DiNapoli. The audit found that Health Department officials at times underreported the full death toll by as much as 50 percent from April 2020 to February 2021, as Mr. Cuomo faced increasing scrutiny over whether his administration had intentionally concealed the actual number of deaths. The 41-page report concluded that the Health Department often acquiesced to the narrative Mr. Cuomo and his top officials wanted to promote during the pandemic, sometimes failing to meet its 'ethical' and 'moral' imperatives to act transparently."

A message from CVS Health:

Throughout the pandemic, in New York and communities across the country, CVS Health has been there. We've opened more than 4,800 COVID-19 test sites, administered 41 million tests and given 59 million vaccines. We've expanded access to prenatal and postpartum care via telemedicine, increased remote access to mental health services and invested in affordable housing to help build healthier communities. We've been on the frontlines, making health care easier to access and afford. Learn more.

 
What City Hall's reading

Council calls on Adams to stop delaying plan to better regulate private waste haulers, by POLITICO's Danielle Muoio Dunn: The city's rationale for delaying new regulations for the private garbage industry is total trash, says a first-term crop of City Council members. In a letter to Mayor Eric Adams, first obtained by POLITICO, 18 Council members and other local officials said the city was wrong to push back its new regulatory plan that requires trash haulers to improve work conditions, safety protocols and recycling. The move shows that the newly-elected Council won't be silent to what they perceive as the industry's efforts to escape greater scrutiny by city agencies. "This letter really is to say this new coalition does care about this," said Council Member Sandy Nurse, chair of the sanitation committee, in an interview. "We will be carrying out oversight, we will be ensuring implementation of this, and it matters. It's not just the previous class that ushered this in — the new class will carry this over."

"New York mayor's crime plans reinforce 'worst parts of NYPD,' say experts ," by The Guardian's Gloria Oladipo: "While New York City's mayor, Eric Adams, has been defending his veganism and equating drug dependency to liking cheese, he has been escalating the city's police powers, deeply concerning civil rights advocates. Adams, the second Black person to serve as New York mayor, largely won the mayorship through securing the votes of Black, brown and working-class New Yorkers. Crime was an important issue in the election (and since then), and Adams's politically moderate solutions to crime, with an emphasis on critiquing the flawed New York police department but without campaigning on defunding or switching some funds away, swayed voters."

"Number of homeless people killed in NYC is increasing," by WNYC's Matt Katz: "The killer police say targeted homeless people in New York City and Washington D.C. is part of a disturbing trend: A growing number of unhoused people being murdered in the city. The New York Police Department reported Tuesday morning that the man they believe has shot at least five homeless people in New York City and Washington D.C. since March 3 — killing two — has been arrested in Washington D.C. They had not released further details Tuesday morning. Data compiled by city agencies shows that the killings are part of a larger pattern. Since 2018, the number of homeless people killed in New York City has increased 300 percent. Seven people were killed that year, 10 in 2019, then 11 in 2020, and finally 22 in the last fiscal year."

"TLC Blows by Deadline in Struggle to Get 50% of City Taxis Wheelchair Accessible," by The City's Jose Martinez and Suhail Bhat: "The city has yet to meet its mandate to make half of all yellow taxicabs accessible to people in wheelchairs and scooters — after blowing a 2020 deadline set nearly a decade ago by the settlement of a federal class-action lawsuit. The landmark 2013 deal, which called for 50% of the 13,587 medallion cabs to be accessible two years ago, was celebrated at the time as the 'first of its kind in the country.' But with the industry in a long-running state of upheaval due, in part, to the rise of the app-based services Uber and Lyft — whose number of vehicles went unchecked for years — there are fewer taxis on the road, with the stock of vehicles equipped for wheelchairs also dwindling."

"'Raise the Age' Youth Jail Consultants Get $1.2M Extension as Situation Worsened," by The City's Eileen Grench: "As juvenile detention centers continue to struggle through a severe staffing crunch, the consulting giant KPMG is getting an extension on its already four-year-old city contract to help manage the 'Raise the Age' transfer of teens from adult jails to juvenile detention centers and courts. The $1.2 million extension, to a total of $6.8 million, comes as staffing numbers continue to dive at the city's two 'secure detention' lockups for kids, Horizon in The Bronx and Crossroads in Brooklyn, forcing remaining workers into 12-hour shifts and overtime while dealing with potentially dangerous conflicts."

 

SUBSCRIBE TO NATIONAL SECURITY DAILY : Keep up with the latest critical developments from Ukraine and across Europe in our daily newsletter, National Security Daily. The Russian invasion of Ukraine could disrupt the established world order and result in a refugee crisis, increased cyberattacks, rising energy costs and additional disruption to global supply chains. Go inside the top national security and foreign-policymaking shops for insight on the global threats faced by the U.S. and its allies and what actions world leaders are taking to address them. Subscribe today.

 
 
WHAT ALBANY'S READING

ON THE CORRUPTION BEAT:

— "To force Cuomo to repay millions, ethics commission mulls new tactic ," by Times Union's Chris Bragg: "At a special meeting on Friday, commissioners of the state Joint Commission on Public Ethics may adopt a new strategy in their attempt to force ex-Gov. Andrew M. Cuomo to repay $5.1 million in book royalties, according to people with knowledge of the deliberations. Some of the ethics panel's commissioners are mulling a plan that would cut state Attorney General Letitia James out of the process of seeking the $5.1 million repayment. In December, James' office expressed concern that the commissioners could not seek Cuomo's 'disgorgement' of the royalties he earned in 2020 without a full investigation into whether he misused state resources to produce 'American Crisis: Leadership Lessons from the COVID-19 Pandemic' — an inquiry that could last months or years. Under the new plan being considered, JCOPE would issue an order demanding that the former governor quickly repay the money to the book publisher, Penguin Random House. And instead of James' office enforcing the order and deciding how to handle the sum — as JCOPE prescribed in an original Dec. 14 motion — the commission would potentially hire its own counsel to enforce the repayment."

— " Kaloyeros imprisoned where other convicted state officials served time," by Times Union's Larry Rulison: "Alain Kaloyeros has landed in a downstate federal correctional facility with floors that have been walked by a who's-who of corrupt New York officials. The founder of Albany Nanotech, who was convicted in 2018 on federal bid-rigging charges, has started his 3½-year prison sentence at a minimum-security camp in Otisville. For years, the Orange County facility has been the incarceration home to some of the most powerful state officials ordered to serve time for federal crimes."

Again — " Hiram Monserrate is attempting another comeback," by City & State's Jeff Coltin: "Tom Brady is coming back … and so is Hiram Monserrate. The former Queens state senator announced on Facebook that he's again taking on Assembly Member Jeffrion Aubry in yet another attempt to get back into legislative office. Monserrate, a former NYPD officer, was expelled from the state Senate in 2010 after being convicted on misdemeanor charges of assaulting his then-girlfriend. He later pleaded guilty in a corruption case."

IN OTHER NEWS: 

"Power Industry Quietly Pushes New York to Endorse Non-Renewable Energy," by New York Focus' Colin Kinniburgh: "The technologies most likely to benefit from the bill all involve burning some kind of fuel, whether hydrogen, 'renewable' natural gas, or simply fossil gas paired with carbon capture and storage. Environmentalists say that giving the state's stamp of approval to those technologies would amount to backtracking from the state's landmark 2019 climate law, the Climate Leadership and Community Protection Act (CLCPA). 'This legislation is the direct antithesis of the state's climate law,' said Anthony Rogers-Wright, director of environmental justice at New York Lawyers for the Public Interest, a nonprofit civil rights law firm that has lobbied against the bill. The bill's proponents – led by the Independent Power Producers of New York (IPPNY), the main trade group representing the state's power industry – counter that developing such technologies is critical to meeting the goals of the state's landmark climate law, given the inability of renewables like wind and solar to meet the huge electric grid demand on their own."

ASSEMBLYMEMBER MICHAEL Benedetto (D-Bronx) said in a Twitter video that he was bullied by housing advocates who visited his office building in support of Good Cause Eviction legislation. His primary challenger and advocates for undocumented and vulnerable workers today are planning to protest outside his Bronx office.

KEN BURNS writes to Kathy: Filmmakers Ken Burns, Lynn Novick and Sarah Botstein sent a letter to Hochul praising and pushing her proposal to repeal the ban on offering New York's Tuition Assistance Program to individuals in prison. The three shot the documentary College Behind Bars and said that experience showed them "restoring TAP for incarcerated New Yorkers is a moral imperative."

#UpstateAmerica: Sure, St. Patrick's Day is great. But nobody rings in St. Joseph's Day, two days after the more widely known holiday, like Rochester bakeries with their specialty breads and zeppole. Did we mention sfingi?

 

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Biden and the Boroughs

Raskin withdraws as Biden's Fed nominee, by POLITICO's Kate Davidson: Sarah Bloom Raskin has withdrawn as President Joe Biden's nominee to be the Federal Reserve's top Wall Street watchdog, according to a person familiar with the decision. Raskin, whom Biden tapped to be the Fed's vice chair for supervision, has been stuck in the Senate Banking Committee amid a GOP boycott of a committee vote on her nomination, effectively blocking her confirmation from advancing to the Senate floor. Sen. Joe Manchin (D-W.Va.) and moderate Republicans Susan Collins and Lisa Murkowski said Monday they would not support Raskin's nomination, imperiling her chances of confirmation.

AROUND NEW YORK

— A man accused of stabbing two Museum of Modern Art employees after he was denied entry was apprehended in Philadelphia. The museum reopened on Tuesday.

— The NYPD's high-ranking chiefs have been added to patrols of the subway system.

— Unvaccinated Yankees and Mets players are not allowed to play at home due to New York City rules.

— A roller rink is coming to Rockefeller Center.

— A planned appearance at SUNY Brockport by a man convicted of killing two police officers is drawing controversy.

— An accused Sarah Lawrence cult leader was rushed out of Manhattan federal court after suffering a seizure during his trial.

— The city's Department of Investigation asked for more people to probe the city government.

— Gov. Kathy Hochul got booed while dropping the ceremonial first puck at a New York Rangers game.

— A bill in the state Legislature would create a first-of-its-kind council to establish nail salon workplace standards throughout the state.

— "The city's health department is taking baby steps toward Mayor Eric Adams' campaign promise to provide coaches known as doulas to all first-time parents giving birth."

— A Queens lawyer known for being a key participant in the pro-democracy protests at Tiananmen Square was allegedly stabbed to death by a client.

— Adams waxed poetic about cryptocurrencies during a visit to Miami.

— Some New York City veterans are pushing back on a U.S. Department of Veteran Affairs' proposal to close medical center at Fort Hamilton.

 

DON'T MISS POLITICO'S INAUGURAL HEALTH CARE SUMMIT ON 3/31: Join POLITICO for a discussion with health care providers, policymakers, federal regulators, patient representatives, and industry leaders to better understand the latest policy and industry solutions in place as we enter year three of the pandemic. Panelists will discuss the latest proposals to overcome long-standing health care challenges in the U.S., such as expanding access to care, affordability, and prescription drug prices. REGISTER HERE.

 
 
SOCIAL DATA BY DANIEL LIPPMAN

HAPPY BIRTHDAY: AP's Julie Pace is 4-0 … MSNBC's Amy ShusterMatt GreenbergPatrick AppelMark Carney … former Rep. Joe Crowley (D-N.Y.) of Squire Patton Boggs is 6-0 … SKDKnickerbocker's Jason Rosenbaum Riccardo Reati … NYT's Neil Vigdor and Brian Rosenthal 

MAKING MOVES — Lauren Bale is now comms director for Brian Benjamin's reelection campaign for New York lieutenant governor. She previously was deputy press secretary for Eric Adams. … Charmaine Lee is now senior program specialist at Rise for Schmidt Futures. She most recently was development manager at the Asian Cultural Council and is also a vocalist and composer.

MEDIAWATCH — Jennifer Epstein, a POLITICO alum, will be covering New York residential real estate for Bloomberg. She has been a White House reporter for the outlet.

A message from CVS Health:

At CVS Health, we're more than 300,000 caring employees ensuring New Yorkers and millions of Americans can access health care services.

We have been offering COVID-19 vaccines at more than 9,600 CVS Pharmacy locations nationwide.

Nothing should stand in the way of mental health and well-being, so we have been increasing remote access to mental health services.

We have been supporting safer pregnancies and expanding access to prenatal and postpartum care via telemedicine.

Recognizing the strong connection between housing and health, we have been investing in affordable housing to support underserved populations and build healthier communities.

Every day, CVS Health works to bring quality, affordable health care into neighborhoods, homes and hands—so it's never out of reach for anyone.

Healthier Happens Together. Learn more.

 
Real Estate

"State receives additional $119M in federal rent relief," by Crain's Eddie Small: "New York has once again received much less in federal rent-relief funds than it requested. The U.S. Treasury Department has allocated about $119 million in additional money for the state, the agency said Tuesday morning. Although that is more than the roughly $27.2 million New York received last time, it is still significantly less than the $1.6 billion Gov. Kathy Hochul requested in January. Her office estimated that it will fund about 8,500 pending applications. Assemblyman Harvey Epstein said the $119 million will not be enough to meaningfully impact New York's need for rent relief. 'Unfortunately the federal government didn't give us the additional dollars that we requested,' Epstein said, 'but we're going to do what we can to pay the rent for as many tenants as possible.'"

"Legal Aid Society sues its own Brooklyn landlord for moldy office," by amNewYork's Kevin Duggan: "The social justice law firm the Legal Aid Society sued the landlord of its Brooklyn offices Tuesday because a years-old mold infestation has rendered its Kings County headquarters uninhabitable, the nonprofit said. The organization's nearly 500 staffers have not been able to return to their downtown Brooklyn workplace at 111 Livingston Street for two years in a row due to the extensive spread of the fungus caused by faulty ventilation."

 

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