Hevesi Bribe Charge: How a Family Battle Involved Comptroller

City Comptroller and Mayoral candidate Alan Hevesi stood before a bank of cameras on the fifth floor of the Municipal Building on Aug. 17, denouncing an allegation that had appeared on the front page of that day’s New York Post . Accompanied by a headline that screamed “Hevesi Bribe Claim,” the story disclosed that a former employee of one of Mr. Hevesi’s contributors claimed to have seen the Comptroller accept cash in exchange for his help in pursuing a business deal.

As Mr. Hevesi angrily denied the accusations, political insiders around the city were wondering if this was a one-day story or the first chapter in one of those lurid municipal narratives that eventually wreck political empires–the sort of story that once brought ruin upon the rulers of the Queens clubhouses that gave rise to Mr. Hevesi a generation ago.

“It is an absolutely despicable lie,” Mr. Hevesi told reporters. “It is an outrageous lie. A bold-faced lie. It is an ugly smear, plain and simple.”

The story involved a woman now living in California, Shawn Bullock; a wealthy importer and Hevesi supporter named Maurice Lowinger, who died in March; and an envelope full of cash. Ms. Bullock, an administrative assistant for one of Lowinger’s companies, claimed that Lowinger handed Mr. Hevesi $6,000 in cash at a 1997 meeting during which Lowinger asked for the Comptroller’s help getting a contract with Bell Atlantic to make telephones. The accusation is included in court papers concerning a divorce case that has ripped apart the Lowinger family. In two exclusive interviews with The Observer , Ms. Bullock stood by crucial aspects of the story she first told to lawyers representing one of the Lowinger factions.

Beyond the she-said, he-said version of the Lowinger-Hevesi meeting are several other issues that may yet resurface in the Mayoral campaign’s final weeks. For one thing, Mr. Hevesi has not fully addressed questions about the propriety of directing a staff member to help further the business interests of a major contributor. For another, The Observer has learned, Ms. Bullock is prepared to reiterate her account to investigators for Manhattan District Attorney Robert Morgenthau, whose office is examining the allegations.

Mr. Hevesi has confirmed that he met with Lowinger and discussed the Bell Atlantic contract, and said he subsequently directed a member of his staff to help Lowinger get a meeting with the company, now called Verizon. In adamantly denying the allegations of a payoff, which were also detailed in Newsday, Mr. Hevesi has attacked Ms. Bullock’s credibility and stopped just short of accusing a lawyer who filed an affidavit containing the charges, R. Scott Greathead, of extortion.

But, in her interviews with The Observer three weeks ago, Ms. Bullock repeated crucial aspects of her account. Asked by The Observer whether she had any doubt that Lowinger had handed Mr. Hevesi an envelope, Ms. Bullock said: “None at all.” Asked whether it was the same envelope into which she had seen one of Lowinger’s office workers stuff cash, she said: “I have no doubt.”

When asked to recall other details about the meeting, however–such as the exact amount of the cash allegedly exchanged–Ms. Bullock conceded that her memory had dimmed. It has been three years since she gave her detailed account during a 1998 interview in connection with the Lowinger divorce case.

On Aug. 10, a week before the story broke, Mr. Greathead visited Ms. Bullock in California to discuss her testimony, he told The Observer . “Ms. Bullock was very clear in standing by the accuracy of everything she said in her 1998 statement, including the account of the meeting between Mr. Hevesi and Maurice Lowinger,” said Mr. Greathead, a well-known human-rights attorney who served as first Assistant Attorney General under Robert Abrams from 1984 to 1990.

“She told me that she saw what she described in that affidavit,” he said, “and that she’s prepared to discuss it with the District Attorney, and no one else.”

Mr. Greathead added that he spoke with Ms. Bullock again after the story came out. “She knows that reporters are trying to get in touch with her, and she’s not interested in talking to them,” he said. “But she’s prepared to talk to investigators about what she saw at that meeting, and answer all of their questions about it. It is now the job of the District Attorney to determine what did or didn’t occur.”

Deputy Comptroller Jack Chartier, who was present at the meeting between Lowinger and Mr. Hevesi, has denied that any cash exchanged hands.

Ms. Bullock’s allegation surfaced unexpectedly amid a bitter court battle, Lowinger v. Lowinger . Lowinger’s former daughter-in-law, Kay Lowinger, and her three children have successfully sued Edith Lowinger, Maurice Lowinger’s widow, for financial support. The case is now in the damages phase in State Supreme Court in Manhattan. Mr. Greathead and a colleague, Norman Solovay, are representing Kay Lowinger’s interests.

The Lowingers have known the Hevesi family since their days in Hungary. The two families share a bond born of the Holocaust: Mr. Hevesi’s grandfather was chief Rabbi of Budapest during the horrors of the 1940’s; Lowinger was tortured by Hungarian police for his efforts on behalf of Jews languishing in the Budapest ghetto, according to his self-published autobiography, Miracle in the Ashes .

Members of the Lowinger family have donated more than $60,000 to Mr. Hevesi’s campaigns since he was first elected to citywide office in 1993. And just three months before his meeting with Mr. Hevesi to discuss the Bell Atlantic contract, Lowinger’s relatives contributed more than $25,000 on two successive days to Mr. Hevesi’s campaign.

Those donations alone would seem to raise questions about the propriety of the favor that the Comptroller did for Lowinger–questions that have been eclipsed by the controversy over the bribe allegations.

Mr. Hevesi has conceded that after Lowinger asked him for help obtaining a meeting with Bell Atlantic, the Comptroller asked then-Deputy Comptroller Steven Newman to call company executives and request that they meet with Lowinger. (In the end, Lowinger didn’t get the contract.) Mr. Hevesi has defended this action, saying that as Comptroller he facilitates such business deals “all the time.” And he has added that his office in no way pressured Bell Atlantic. “We didn’t follow up, we didn’t pursue,” he told reporters at the Aug. 17 press conference.

Cathie Levine, a spokeswoman for the Comptroller, said that Mr. Hevesi “appropriately introduced one New York company to another. It is something public officials do every day. Helping New York businesses is what public officials do.”

Immense Influence

Still, the episode goes to the heart of questions about the proper use of the Comptroller’s powers. Mr. Hevesi wields an immense amount of influence over companies that do business with the City of New York–his office signs off on billions of dollars of pension-fund investments, approves most contracts between the city and private companies, and decides whether to audit those contracts. Bell Atlantic did a great deal of business with the city, as does its successor company, Verizon.

The affair raises the question of whether Mr. Hevesi should have asked a company over which he wields a measure of power to meet with a contributor.

“City ethics law prohibits public officials from using office personnel or resources for a non-city purpose,” said Mark Davies, the executive director of the city Conflicts of Interest Board. “The question is, was it a city purpose or not? We would answer that question either in the context of a request for advice, or in an enforcement action.” He declined to say whether the board was examining the episode

In an interview with The Observer , Mr. Newman, who left the Comptroller’s office last year, allowed that while big contributors might on occasion have better access to Mr. Hevesi’s office than non-contributors, that was true of other public officials as well.

“Do you believe that any public official won’t pick up the phone when a major contributor calls?” said Mr. Newman, who worked for Mr. Hevesi for seven years. He added that he now believes campaigns should be entirely funded by public money: “How can anybody not think that contributing money doesn’t buy you some ability to talk to people?”

Then, of course, there is Ms. Bullock’s allegation. She first surfaced as part of the Lowinger v. Lowinger case in 1998. She had worked with the Lowingers for nearly eight years before quitting after a blow-up with another employee. Several months after leaving, she approached Mr. Solovay, the lawyer for Kay Lowinger, offering to testify about the holdings of Lowinger’s companies.

Ms. Bullock sat for two long, taped interviews with Mr. Solovay, transcripts of which are in the court papers. (According to Mr. Greathead, investigators for the Manhattan D.A. have requested, and received, the tape.) The Hevesi episode came up amid a discussion of Lowinger’s penchant for doing business in cash.

In the interview with Mr. Solovay, Ms. Bullock described witnessing, before the meeting, a colleague named Maria Laterza being told to withdraw cash from a nearby bank. “Maria got the $6,000 in cash,” Ms. Bullock said in the taped interview, according to the transcript filed in court papers. “Handed the envelope to Mr. Lowinger who folded the envelope in half and stuck it in his pocket. And then he had a meeting with Hevesi. And he handed Hevesi an envelope …. He handed Hevesi the envelope folded up when he shook his hand.”

Maria Laterza refused to speak to The Observer , despite numerous phone calls and a visit to the Madison Avenue office building where she still works for the Lowingers. Richard Dolan, a lawyer for the Lowingers, did not respond to a request for an interview with Ms. Laterza. In a separate conversation, he dismissed Ms. Bullock’s recollections, calling them an “absolute lie.”

In her interviews with The Observer , Ms. Bullock reiterated key parts of her earlier account. She said that Lowinger had had little success getting the meeting with Bell Atlantic he desired. “Maurice–God, he wrote so many letters to Bell Atlantic, to try to get them to award him the work to do the phones,” she said. “He was not successful.”

Ms. Bullock said that Lowinger was excited about Mr. Hevesi’s visit. “Everything had to be perfect,” Ms. Bullock said. “They had a woman who cleaned the kitchen and set up the table and put the dishes out. It was around lunch time, so they prepared lunch for him.” (An entry from Mr. Hevesi’s private schedule for Feb. 27, 1997, obtained by Mr. Greathead through a Freedom of Information Act request and included in the court file, reads: “Lunch with Maurice Lowinger.”)

Ms. Bullock told The Observer that an office worker had been sent to the bank before the meeting. “[The workers] went to the bank, brought the money back and gave it to Mr. Lowinger,” she said. “He folded it up and put it in his pocket.” Later, Ms. Bullock added: “I remember, he had it in his left hand, and he switched it to his right hand, and he put it in that pocket, because he knew, and this is only my thought, that he had to shake hands with his right hand.”

Ms. Bullock, however, said she no longer recalls some other details of the meeting. For instance, she said she no longer remembers which office worker was sent to the bank, although in her 1998 statement she said it was Ms. Laterza. And while she remembered that Lowinger was having trouble getting a meeting with Bell Atlantic, she could no longer say whether that was one of the purposes of Lowinger’s lunch with Mr. Hevesi. (That part of the story, however, is not under dispute.) Nor could she recall the amount of money involved, or the date of the meeting.

Lingering Questions

Ms. Bullock’s 1998 testimony leaves some question as to whether she actually saw an envelope holding cash handed to Mr. Hevesi. But when asked by The Observer if she was certain that Mr. Hevesi was handed the same envelope into which a co-worker had placed the cash, she said: “I have no doubt.”

At another point, asked again by The Observer if she was certain about what she saw, she replied: “Now, you know, as time passes, you kind of doubt yourself. But I’m not a liar, and if I said something, it was true. I remember the envelope. I remember Maria–I think it was Maria–going to the bank, I can’t remember which one. But I remember him passing it from one pocket to the other very vividly.” Asked if she was sure it was the envelope with the money, she said: “Yeah.”

Asked why Lowinger would hand off an envelope of cash in plain sight, Ms. Bullock insisted that the Lowingers thought she and others weren’t “smart enough” to understand what was happening. “That’s what unnerved me about them,” she said. “They never respected the fact that people were smart.”

Mr. Hevesi, and lawyers for the Lowingers, have dismissed Ms. Bullock’s recollections, saying that she is a disgruntled former employee who is trying to embarrass her former bosses. In her interviews with The Observer , Ms. Bullock did seem embittered by her experience, although she showed no animus towards Mr. Hevesi.

Ms. Bullock told The Observer that she became involved in the Lowinger court case only out of sympathy for Kay Lowinger and her children, after she read that Kay Lowinger had turned to the courts to win financial support from the family. Kay Lowinger’s lawyers believe Ms. Bullock can shed light on how the family businesses operate and how much money the family has, which is why they’re trying to have her admitted as a witness in the damages phase of the case. Because her primary interest is Kay Lowinger and her children, she said, she is having second thoughts about being drawn into a political controversy.

“My probably biggest mistake was being too honest and too up-front and even mentioning Alan Hevesi,” she said.

Mr. Hevesi has pointed out that two of his Democratic primary opponents, City Council Speaker Peter Vallone and Bronx Borough President Fernando Ferrer, as well as Republican candidate Michael Bloomberg and former Mayor Ed Koch, have called him to express both sympathy and a dose of skepticism about Ms. Bullock’s charges.

At the Aug. 17 press conference, Mr. Hevesi strongly implied that Mr. Greathead included the allegations in his affidavit as part of an effort to extort him into pressuring the Lowingers to settle the lawsuit favorably for his client. Mr. Hevesi had his special counsel, Robert Brackman, detail a number of phone calls he said he received from Mr. Greathead, warning that he was preparing to include the charges in court papers.

But Mr. Greathead, a co-founder of the Lawyers Committee for Human Rights, said he was merely trying to verify what he could of Ms. Bullock’s account. He added that he already knew that his co-counsel, Mr. Solovay, had reported the allegations to the D.A. back in 1998. (Mr. Solovay confirmed to The Observer that he had reported the allegations to investigators three years ago; a spokesman for Mr. Morgenthau declined to comment.) Mr. Greathead said the threat of extortion was preposterous.

“The statement had already been included in court papers and given to the District Attorney two years earlier,” Mr. Greathead said. “It had already gone public. There’s nothing I could have threatened Hevesi with.”

There is an historical footnote to the affair. At his press conference, Mr. Hevesi complained that the allegations had been made public at a particularly delicate time. “It is very interesting timing, coming three and a half weeks before the primary,” he said.

Mr. Hevesi himself benefited from a last-minute controversy when he was elected Comptroller in 1993. In the final stretch of that election, investigators from the city Department of Investigation leaked a report alleging that his opponent, incumbent Comptroller Elizabeth Holtzman, had borrowed money at a low interest rate from a bank that did business with her office.

One of the principal authors of the D.O.I. report was Mr. Brackman, Mr. Hevesi’s aide, who defended the Comptroller at the Aug. 17 press conference. Mr. Hevesi hired Mr. Brackman in early 1994 as a special counsel for ethics–six months after Mr. Brackman helped complete the report that helped lead to Ms. Holtzman’s defeat.

(Additional reporting by Anna Jane Grossman) Hevesi Bribe Charge: How a Family Battle Involved Comptroller