The Fall of Pedro Espada

After pleading not guilty to five charges of stealing more than a half million dollars from his Bronx network of healthcare clinics, Pedro Espada, Jr. -- the former New York State senator and a longtime power player -- took a moment to talk to reporters. His remarks were a reminder of the idealism that once seemed to guide Espada. 

The clinics he founded, said Espada, had "provided millions of visits over those years to people who would otherwise go without care." 

All very true. And there lies the great irony of Pedro Espada's life and career. This was not a man who set out to become rich or focus strictly on his own needs. Espada is man who worked hard to take care of the desperately poor people in his Bronx neighborhood. In the 1970s, he had been a community organizer both to the ease the poverty of New York's poorest people but also to increase their sense of empowerment. (Read more about his story here.)

Yet somewhere along the line, Espada turned. And, according to authorities, he began to enrich himself at the expense of the people he had dedicated his career to serving. It always hard to say what why dedicated public servants go wrong. Maybe it is a sense of entitlement -- a feeling that they deserve more financial rewards for their accomplishments. Maybe it is a sense of real financial need. Maybe it is a corruption so slow that even they don't notice -- whereby the division between their work and the personal expenses fades away in their mind and becomes one. In any case, here is what the government alleged in indicting Espada:

The various schemes allegedly executed by the defendants to convert Soundview income and assets include the following:

■ Pedro Espada caused Soundview to pay charges for his personal expenses on the Soundview corporate American Express card; those charges included: more than $100,000 in personal meals for Pedro Espada and his family members, window treatments for Pedro Espada’s home, and tickets to Broadway shows and sporting events;

■ Pedro Espada and Pedro Gautier Espada used a for-profit janitorial company known as Community Expansion Development Corporation (CEDC) and controlled by them to divert funds from Soundview and then spent such funds for personal use and political expenses; those expenses included: the rent for Pedro Espada’s campaign headquarters, printing costs for campaign materials, heating and air conditioning work done on Pedro Espada’s home, pony rides and a petting zoo for a family member’s birthday party, and a $49,000 check Pedro Espada attempted to use as a downpayment on a Bentley automobile;

■ Pedro Espada and Pedro Gautier Espada diverted rental payments owed to Soundview to two different entities – CEDC and another for-profit janitorial company known as Soundview Management Enterprises (SME) and also controlled by them, and thereafter used such funds to pay personal expenses for themselves and family members; and

■ Pedro Gautier Espada rigged the awarding of a Soundview janitorial services contract by providing false contract requirements to other bidders, thereby ensuring that SME was awarded the contract at an inflated price, thus enriching himself and Pedro Espada.

The total amount allegedly embezzled by the defendants exceeded $500,000.

“The indictment alleges that funds that could and should have been applied to purchase medical equipment and enhance health care services for an historically under-served population were diverted by the defendants for their personal use and to benefit friends and family members,” stated United States Attorney Lynch. “In these difficult economic times, the charged crimes are all the more reprehensible.” Ms. Lynch added that the government’s investigation is continuing.

In April 2010, Andrew Cuomo had made similar charges against Pedro Espada, but in the context of lawsuit. Cuomo's complaint was striking in that it alleged that a huge web of Espada's relatives and friends benefited from, or enabled, his actions. Here's the list provided by Cuomo:

The individuals named in today’s suit are:

• Pedro Espada, Jr., President and CEO of Soundview, Bronx NY and Mamaroneck, NY
• Kenneth T. Brennan, Vice President of Finance and CFO, Tarrytown, NY
• Lydia Almeyda, Bronx, NY
• Barbara Braxton, Bronx, NY
• Constance Bruno, Woodridge, NY
• Jacqueline Collazo, Bronx, NY
• Beverly Crosby, New York, NY
• John Feliciano a/k/a Juan Feliciano, address unknown
• Victor Feliciano, Bronx, NY
• Marzetta Harris, Bronx, NY
• Monica Harris-Coleman, New York, NY
• Evette Maduro Pagan, Bronx, NY
• Charlotte McDuffie, Bronx, NY
• Lidisbelle Pacheco, Yonkers, NY
• Lourdes Rivera a/k/a Lourdes Mocete a/k/a Lourdes Espada, Fairfield, CT
• Victor Sierra, address unknown
• Genoveva “Jenny” Torres, Bronx, NY
• Jeanette Torres, Mamaroneck, NY
• Andrew Yong, New York, NY

Doris Yong, Forest Hills, NY