RPT-UPDATE 2-Ex-NY state Senate leader faces corruption charges

Fri Jan 23, 2009 11:51pm GMT

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NEW YORK Jan 23 (Reuters) - New York state's former Republican Senate Majority Leader Joseph Bruno was indicted on Friday by a federal grand jury on corruption charges.

The indictment charges Bruno with eight counts, including mail and wire fraud, linked to his obtaining brokerage business for unions and failing to disclose hundreds of thousands of dollars of payments and gifts.

Bruno resigned his post in July 2008 after 32 years of public service, saying it was time for him to move on. He has said that the lengthy probe of his business dealings would find he had done nothing wrong, a statement he repeated on Friday.

"I did nothing wrong. I broke no laws. We were a part-time legislature," Bruno, who represented Rensselaer and Saratoga Counties, said in a statement he read to Albany reporters.

Many of the indictment's charges allege that Bruno exploited his powerful public position for personal gain, depriving the state of his "honest services."

Lawmakers cannot accept gifts worth more than $75 if they could appear to be directed at gaining influence.

The U.S. indictment said Bruno contacted people or companies with business before the legislature or state agencies, "exploiting his official position for personal compensation and enrichment, knowing and believing that his reasonably perceived ability to influence official action would, at least in part, motivate those he contacted to enter into financial relationships beneficial to his personal financial interests."

Bruno was paid $3.198 million from 1994 to 2006 by two companies and three individuals, via their firms, the indictment said. It further charged that Bruno did not fully disclose his business dealings to the legislature, nor tell some of the companies that he had failed to do so.

Asked why no one else was charged, Andrew Baxter, the acting U.S. attorney, said: "You need to understand that this indictment does not charge anyone with bribery or with extortion."

Instead, the charges focus on what Baxter called Bruno's failing to disclose the financial interests that could have swayed his official actions.

Baxter added that Bruno faces up to 20 years in jail and a maximum fine of $250,000. But Baxter also wants Bruno to forfeit any property he is charged with wrongly obtaining.

In one instance, Bruno, who owns a horse farm in upstate New York, was paid $80,000 for a horse that "was virtually worthless," the indictment said.

Former Democratic Gov. Eliot Spitzer, a fierce rival of Bruno's, had previously alleged Bruno used state aircraft for trips that mixed business with fund-raising.

But Spitzer resigned in mid-March amid a prostitution scandal, saving himself from a grand jury probe into whether releasing that information was a political smear campaign.

The list of companies that paid Bruno included Wright Investors' Service of Milford, Connecticut, which advised union funds about investments, and McGinn, Smith & Co of Albany, an investment banking and brokerage firm.

The list of businessmen who paid Bruno included Jared Abbruzzese and Leonard Fassler, who have interests in technology companies, and Russell Ball, a contractor.

Wright Investors Service said it had done nothing wrong.

"Wright was unaware of any improper or unethical activities by Mr. Bruno in connection with Wright, our clients or prospective clients," the firm said in a statement.