Israeli Fund-raising, New York Style:
nytimes.com
March 1, 2002
Clients Reel at Indictments in Tax Scheme
By CHARLES V. BAGLI
Albert Schussler, the wealthy executive at the center of a widening bribery scandal over tax assessments in New York City, apparently did not discriminate among luxury hotels, battered garment center buildings, McDonald's franchises and skyscrapers, as long as he got his fee, according to investigators.
Mr. Schussler, who was a tax consultant to dozens of property owners, paid city tax assessors millions to slash his clients' annual property tax bills, prosecutors said.
None of the owners, who considered Mr. Schussler a friend and a shrewd tax expert, have been implicated in the scheme, and many of them are still reeling from the news of Mr. Schussler's indictment this week on federal racketeering charges, along with 17 current and former tax assessors.
Still, his work on their behalf stretches from Lower Manhattan through the Upper East Side to Harlem and resulted in illegal tax cuts worth at least $160 million over the last four years, according to James B. Comey, the United States attorney in Manhattan.
A look at the 545 properties in Manhattan that were involved in Mr. Schussler's scheme indicates that some of the city's wealthiest and most powerful owners and developers — Leonard Litwin, Stephen L. Green, the late Stanley Stahl, Burton P. Resnick, Sheldon H. Solow — were multiple winners in what prosecutors have described as a tax sweepstakes.
The Bamford, the Stratford, the Pavilion and the Lucerne are all luxury high-rise apartment buildings on the East Side of Manhattan that are owned by Mr. Litwin's Glenwood Management company, and each got illegal tax breaks, according to investigators.
So did two towers owned by Mr. Solow, including 9 West 57th Street, the 50-story skyscraper that offers spectacular views of Central Park and some of the highest office rents in the city.
The office buildings owned by Mr. Green, chairman of the publicly traded SL Green Realty, are more modest, but he has at least 16 properties on the list.
There are nine properties owned by Mr. Resnick's family, including a downtown development site and an apartment house at 422 East 72nd Street.
Cohen Brothers Realty has five buildings on the list, including 622 Third Avenue and 750 Lexington Avenue, the 33-story tower clad in blue glass and granite at 59th Street.
Perhaps the largest beneficiary of the operation was one of Mr. Schussler's real estate partners, Mr. Stahl, who died in 1999 at age 75. He owned at least 16 properties in Manhattan that are on the list.
Mr. Schussler, Mr. Stahl and Jesse Krasnow, another real estate investor, were partners in the landmark Ansonia Hotel. Mr. Schussler and Mr. Krasnow also run a company, Lefferts-Fore, that manages buildings they own, some of which also received illegal tax breaks, according to investigators.
Few of Mr. Schussler's clients and friends were willing to discuss him. But the quiet 85-year-old executive, who once was a public tax assessor himself, traveled in the highest circles of the real estate industry in a city where skyscrapers are king.
"He's been suspended from all activities," said Steven Spinola, president of the Real Estate Board of New York, the industry's influential lobbying organization.
Mr. Schussler's ties to his real estate brethren were social and political. He is a fund-raiser and the interim president of the American Friends of the Israel Philharmonic Orchestra, while Judith Resnick, the wife of Mr. Resnick, chairman of the Real Estate Board, is a director.
Mr. Green, who was a prime fund- raiser for his brother Mark's unsuccessful mayoral campaign last year, solicited $10,000 from Mr. Schussler, his wife, Claire, and another family member, according to a report issued by the Green campaign.
"They've all told me they had not the slightest inkling of any wrongdoing on the part of Schussler," said Howard J. Rubenstein, a publicist who represents Mr. Green, Mr. Resnick and Mr. Solow. "They were all stunned when the accusations were made."
Some owners said that Mr. Schussler charged a flat retainer for his services, ranging from $200,000 to $400,000 for a portfolio of buildings. Taxes represent the largest single cost of operating a property in New York, so owners are keenly interested in tamping down the city's annual assessment.
"I recommended Schussler because he was a good guy and he delivered, just like my lawyer," said one major property owner. "I didn't know about any bribery."
According to the indictment, Mr. Schussler offered bribes of thousands of dollars to city tax assessors for 35 years in exchange for reducing assessments on particular buildings. This year alone, the city expects to raise about $8.5 billion in property tax revenues.
Mr. Spinola of the Real Estate Board acknowledged that the taxes were cut on some buildings, but he said many others on the prosecutor's list seemed to be at the proper rate.
"I think he ran a scam," Mr. Spinola said. "He used his knowledge to scare his clients into believing that taxes were going up and he had to go in and fight real hard to deal with it."
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