McLaughlin Pleads Innocent to U.S. Charges

BY RUSSELL BERMAN - Staff Reporter of the Sun

October 18, 2006

A Queens assemblyman who is one of the city's top labor leaders is facing a lifetime in prison after federal prosecutors charged him with stealing $2.2 million from the state government, union members, a political club, and a Little League baseball association.

The assemblyman, Brian McLaughlin, the president of the New York City Central Labor Council, surrendered to authorities yesterday at federal district court in Lower Manhattan and became the latest in a series of state legislators from New York City to come under criminal charges. He pleaded not guilty to 44 counts of racketeering, embezzlement, conspiracy, and fraud.

The U.S. Attorney for the Southern District, Michael Garcia, said Mr. McLaughlin's alleged crimes "add new meaning to the term ‘hand-in-the-till.'"

A 186-page indictment alleges a complex scheme that Mr. Garcia called "stunning in its breadth and its scope." Prosecutors charge that Mr. McLaughlin, 54, accepted hundreds of thousands of dollars in kickbacks from city street lighting contractors, installed his cronies in fictitious positions with the state Assembly and the labor council to funnel cash to himself, and laundered money to hide his crimes and evade law enforcement.

Mr. McLaughlin allegedly used the money to buy an $80,000 Mercedes-Benz, purchase a wide-screen plasma television for a friend, and pay an initiation fee and membership dues, totaling at least $28,600, for a Long Island country club. The indictment also alleges he used the money to finance his son's wedding and make payments on his residences in Albany, Queens, and Long Island.

The charges signal a steep fall for Mr. McLaughlin, who was once talked about as a potential candidate for mayor. The authorities yesterday portrayed him as a man motivated by greed who used each of his leadership positions as a money-making venture.

"The Midas touch turned everything into gold. The McLaughlin touch made money disappear into his own pockets," the special agent heading the FBI's New York criminal division, Andrew Arena, said at a press conference announcing the indictment.

No one else was named in the indictment, but Mr. Garcia said the investigation was ongoing and did not rule out further charges.

Mr. McLaughlin did not comment in response to the accusations. "The case is now in the court of law, so we're going to save our comments for the courtroom," his lawyer, Jonathan Bach, said after Mr. McLaughlin was arraigned before federal Magistrate Judge James Francis IV yesterday. Two of the 44 counts are filed under the Racketeer Influenced and Corrupt Organizations Act, which some have criticized when it is used in cases that don't involve traditional organized crime families.

The assemblyman was released on $250,000 bond. The maximum prison sentence for the 44 counts totals 535 years.

With yesterday's indictment, Mr. McLaughlin becomes the ninth state legislator representing the city to face charges in the last three years. Two others were charged in the last three months. State Senator Efrain Gonzalez Jr., a Democrat of the Bronx, was accused in August of using $37,000 in funds from a nonprofit group for personal expenses, including buying Yankees tickets and vacationing in the Dominican Republic. In July, Assemblywoman Diane Gordon, a Democrat of Brooklyn, was indicted for allegedly soliciting a $500,000 bribe. Both have pleaded not guilty and are seeking re-election.

First elected to the Assembly in 1992, Mr. McLaughlin is not seeking an eighth term this year, having said that he wanted to devote more time to union duties. He represents the 25th district in Queens, which includes Flushing, Whitestone, and Jamaica. Mr. McLaughlin has been a prominent supporter of Mayor Bloomberg and has backed several of his major development projects. A spokesman for the mayor declined comment yesterday.

The federal investigation of Mr. McLaughlin dates back years and became public in March when the FBI launched an early morning raid of the Central Labor Council's offices, removing boxes of documents.

As president of the council, Mr. McLaughlin led more than one million city union members. The umbrella group is the nation's largest municipal union association and is an affiliate of the AFL-CIO. Its leadership offered support for Mr. McLaughlin yesterday.

"Everyone should keep in mind that Brian McLaughlin has not been convicted of a crime and will be afforded the opportunity to respond to and defend himself against these allegations," the chairman of the council's executive board, Denis Hughes, said in a statement. Mr. Hughes is the president of the state AFL-CIO.

Union leaders held a conference call early yesterday to discuss how to respond to the accusations against Mr. McLaughlin, a spokesman for the state AFL-CIO, Mario Cilento, said. Although Mr. McLaughlin took a sixmonth paid leave of absence beginning last month, he will remain as president of the labor council pending the charges, Mr. Cilento said.

While the investigation and the possibility of criminal charges against Mr. McLaughlin were well known to union leaders, some were said to be shocked by the extent of the alleged scheme.

The charges also put the Democrat running to replace Mr. McLaughlin in the Assembly, Rory Lancman, in a political quandary. Mr. Lancman is close to Mr. McLaughlin and had posted on his campaign Web site a photographic "tribute" to the assemblyman. That tribute has since been removed, although photos of Mr. McLaughlin remain on the site.

"Everyone is entitled to the presumption of innocence in America, but the government's allegations are extremely disturbing." Mr. Lancman said yesterday, adding that it was a "sad day" for the community.

According to the indictment, Mr. McLaughlin, over more than decade, used a variety of nefarious methods to steal money from several organizations, including the labor council, the Assembly, and his political campaign committee. He also allegedly stole more than $140,000 from a division of the union he ran, Local 3 of the International Brotherhood of Electrical Workers. And he allegedly pocketed $95,000 that was intended for the Electchester Athletic Association, a Little League baseball program created for the children of union members.

The indictment further accuses Mr. McLaughlin of promoting a relative to head a labor council panel called the Commission on the Dignity of Immigrants. The relative was a chiropractor who had no experience working with immigrants, and there was no evidence he did any work for the commission. His entire salary went to Mr. McLaughlin, according to the indictment.

Prosecutors also say Mr. McLaughlin made union members perform menial tasks for him, treating them like his own "private workforce." Union members chased rodents in Mr. McLaughlin's basement, shoveled snow and hung Christmas lights for him, the indictment alleges.

The schemes and the servants allowed Mr. McLaughlin to "support his own version of ‘Lifestyles of the Rich and Famous,'" the commissioner of the city's Department of Investigation, Rose Gill Hearn, said.

October 18, 2006 Edition > Section: New York

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