TOPICS > Politics

Arrests Expose Widespread Corruption in Garden State

July 24, 2009 at 12:00 AM EDT
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A ten-year long investigation into sprawling corruption in New Jersey culminated Thursday after an informant's tips led to the arrests of 44 people, including three mayors and multiple rabbis. Dina Temple-Raston of National Public Radio examines the case with Margaret Warner.

JIM LEHRER: Now, a major corruption scandal in New Jersey. Margaret Warner has our story.

MARGARET WARNER: From city halls to synagogues, a sweeping federal probe of corruption in New Jersey netted mayors, assemblymen and rabbis yesterday. Forty-four people were charged in a years-long, two-track probe of international money laundering through Jewish charities and of bribe-taking by state and local officials.

The breadth and brazenness of the charges shocked a state that has become infamous for official graft. Ed Kahrer of the FBI.

ED KAHRER, FBI: New Jersey’s corruption problem is one of the worst, if not the worst, in the nation. Corruption is not only pervasive; it has become ingrained in New Jersey’s political culture.

MARGARET WARNER: The two tracks of the case were united by one FBI informant, a failed businessman named Solomon Dwek, arrested three years ago for attempted bank fraud. Dwek first helped build the money-laundering case against figures in the tight-knit Syrian Jewish community spanning New Jersey and Brooklyn, New York. Five rabbis allegedly laundered millions of dollars through charities they ran in exchange for a percentage.

Nabbed as part of this, a Brooklyn man accused of brokering human kidneys obtained from down-on-their-luck Israelis. U.S. attorney Ralph Marra.

RALPH MARRA, acting U.S. Attorney, New Jersey: His business was to entice vulnerable people to give up a kidney for $10,000, which he, in turn, would turn around and sell for $160,000.

MARGARET WARNER: Informant Dwek also helped build the political corruption case by posing as a real estate developer offering bribes to public officials. He apparently had plenty of takers. Among the 21 mayors, council members, city officials, and assemblymen arrested, the mayor of Hoboken, New Jersey, Peter Cammarano, who took office just weeks ago.

MAYOR PETER CAMMARANO, Hoboken, New Jersey: I look forward to a day in court to vigorously defend against these charges and to redeem my name and clear my name.

MARGARET WARNER: In all, more than 130 New Jersey officials have been found guilty of corruption in just the last eight years.

The case could reverberate in New Jersey’s upcoming governor’s race. A member of Governor Jon Corzine’s cabinet resigned yesterday after agents raided his home.

And for more on the story, we turn to Dina Temple-Raston. She’s been covering it for National Public Radio.

Dina, good evening. This is breathtaking in its scope, I mean, from money-laundering rabbis to politicians apparently eager to sell their influence. How did the FBI get on to all of this?

10-year investigation

DINA TEMPLE-RASTON, National Public Radio: Well, as your piece said, this really all started with a money-laundering investigation that started almost 10 years ago.

And as they were breaking into this money-laundering operation, in which synagogues were essentially taking dirty money and giving it back as cash, when that started happening, then it sort of expanded out to this political corruption case. But it all began with this money-laundering case.

MARGARET WARNER: And how did that work? I mean, when you're talking about dirty laundry -- dirty money, excuse me -- what do you mean? And how did the scheme actually work? How did they get cash back to the people trying to launder the money?

DINA TEMPLE-RASTON: Well, apparently, there were a number of cash houses in Brooklyn. But essentially what would happen is someone who had some money that -- the term of art this they used, that they got on tape was putting it through the washing machine, so people had money they wanted to put through the washing machine.

So they would write a check to a charitable organization connected with one of these synagogues or to the synagogue itself and give that to one of the rabbis who was involved. And then he would take that and, through a contact in Israel who had slush funds here or cash houses here in the United States, he would then return the money to -- he'd return cash to these people who'd written checks.

But there are little ironies or little oddities in this particular case. For example, they used to return the cash in cereal boxes. So, in one case, there was $97,000 that was stuffed into an Apple Jacks box. And there was a Cinnamon Toast Crunch box, as well. So some of the stuff you couldn't even make up.

MARGARET WARNER: Well, what you mentioned -- I was struck by the level of colorful detail. This informant seemed to have a zest for his job and got a lot of documentation.

DINA TEMPLE-RASTON: Well, you know, if you look at all the different complaints, what was really striking yesterday as we were going through them was how long each complaint on each individual was. They'd run to four, five, six pages with enormous amounts of detail, with conversations in quotes.

Now, my sources tell me that not only do they have a wire up on these people, but in some cases they were actually filming them, so they have video of this stuff taking place.

You know, I've seen these kinds of things before, and I was really quite struck by how much detail there was in this particular case.

Uncovering political corruption

MARGARET WARNER: Then on, I gather, a fairly different track was the political corruption case, and somehow this informant, what, met a crooked building inspector in Jersey City and got introduced into this whole new network? How did that work?

DINA TEMPLE-RASTON: Well, it's interesting. It's a little bit difficult to understand exactly how it worked besides the fact that somebody came and approached him and said, Hey, I hear you're a building developer. If you want to have these things go through the New Jersey city councils more quickly, I can help you. I can introduce you to people.

And then there started to be this sort of long line of New Jersey, East New Jersey politicians who sort of lined up to grease the skids, whether it was on zoning problems or inspections.

And it was interesting. In general, when we hear about these kinds of cases -- and, I have to tell you, we hear about them a lot, to the point that they're really almost mundane. I was saying to someone today that it was very similar to when the space shuttle first started going up, we watched every shot, and then after a while people don't even notice that the space shuttle goes up anymore.

That's what these corruption cases are like in New Jersey. Generally, you don't even notice them, because there are so many of them. And in these cases, interestingly, the bribes were fairly small. I mean, the average of a normal bribe in New Jersey political case is about $200,000. In this case, people were taking $10,000, $20,000 a pop for these various favors that they were doing for this cooperating witness.

MARGARET WARNER: Now, is there any evidence or was there any presented, anyway, that the politicians actually ever had to deliver? Because, after all, this Solomon Dwek, though he had once been a real estate developer, he wasn't really building anything, was he? I mean, so did these pols ever have to deliver?

DINA TEMPLE-RASTON: To be honest, I don't know. I don't think that they did. This started -- this part of the probe happened two years ago. But I don't know if they set up dummy buildings. At this point, you know, these people have not gone to trial. All we've seen is the complaint.

I don't know if they set up dummy buildings that they knew shouldn't pass inspections or whether these things were just, you know, signed right away.

Now, what's interesting about this controlling witness -- or cooperating witness is very often these types of people are real lowlifes, you know, drug dealers or people who are trying to prevent themselves from getting out of prison.

And what this cooperating witness did to get in trouble is bank fraud, was that he tried to write a $25 million check that he couldn't cash. And so he was quite eager...

MARGARET WARNER: I found that astonishing. I mean, who writes a $25 million check?

DINA TEMPLE-RASTON: That you can't cash.

MARGARET WARNER: Who was he? That you can't cash. Who was he?

DINA TEMPLE-RASTON: Well, he was, you know, somebody in that community. And I think there were a lot of people in the current building crisis that were writing a lot of checks they couldn't cash. And he clearly thought he could get away with it. And that's why he's been so eager to help the FBI and local law enforcement catch these other people.

Political reverberations

MARGARET WARNER: Well, as I said, he did seem to have a zest for the job. He must have been working 24/7. Now, how did the -- meanwhile, the selling of -- illegal sale of kidneys, donated kidneys, how does that relate? Is that just sort of a side thing here?

DINA TEMPLE-RASTON: You know, it isn't clear from the stack of complaints that we went through yesterday. It isn't clear at all, except that this person clearly had some sort of connection with the cooperating witness. We don't know how he's connected to other people in Brooklyn or whether he's connected to the synagogues. It's completely unclear.

But, you know, getting kidneys for $10,000 from people who are in desperate states and then selling them for $160 is pretty outrageous. And apparently, on one of the wires that they had, he boasted that he'd been doing this for 10 years. And it will be interesting to see whether or not that actually turns out to be true.

MARGARET WARNER: And briefly, is there any signs yet that this is having political reverberations? The former U.S. attorney under whom all of this started is Chris Christie, the Republican running against Jon Corzine, in the November election.

DINA TEMPLE-RASTON: Exactly. And he'd been slightly ahead in early polls anyway. This whole controversy is certainly not going to do Governor Corzine any favors as he seeks re-election. I mean, this reached into his cabinet and clearly, even though he's not part of this, you know, that casts a pall.

MARGARET WARNER: Well, Dina Temple-Raston, thank you so much.

DINA TEMPLE-RASTON: It's a pleasure to be here. Thanks.