Photo Courtesy of NY Senate Media Services
Lt. Gov. Brian Benjamin resigned on Tuesday, April 12, following his arrest on campaign finance corruption charges. In a statement issued on Tuesday evening, Gov. Kathy Hochul said, “I have accepted Brian Benjamin’s resignation effective immediately. While the legal process plays out, it is clear to both of us that he cannot continue to serve as lieutenant governor. New Yorkers deserve absolute confidence in their government, and I will continue working every day to deliver for them.”
The U.S. Attorney’s Office for the U.S Southern District of New York announced Benjamin’s arrest earlier on Tuesday. It comes after several weeks of speculation amid an investigation into the lieutenant governor’s campaign finance dealings. NYC Campaign Finance Board (CFB) executive director, Amy Loprest, released the following statement on Tuesday morning.
“Today, the Southern District of New York issued an indictment against Lt. Governor Brian Benjamin which includes allegations of fraudulent contributions to his 2021 [City] comptroller campaign. As the indictment makes clear, in February 2020, the CFB’s audit reviews identified potentially fraudulent contributions prior to issuing any public funds payments. Those contributions were not matched with public funds, nor did they factor into the campaign qualifying for public funds payments,” she said.
Loprest continued, “We have been working closely with the Southern District of New York office in this matter. We appreciate the work of the SDNY prosecutors, the F.B.I., and the NYC Department of Investigation and will continue to review their findings. The matching funds program allows more New Yorkers to run for office and helps ensure that our government better reflects the diversity of our great city. To protect taxpayer funds, the program requires rigorous audits, including post-election audits for all campaigns. The 2021 post-election audits are underway. As our audit process proceeds, we will continue to monitor developments in this case.”
The CFB confirmed to Norwood News that Tuesday’s indictment refers to contributions to both Benjamin’s State senate campaign (for the 2020 elections) and contributions to his campaign for city comptroller in 2021. With respect to the latter contributions, those are reflected in the summary attached further below.
The contentious contributions referenced in the statement from CRB appear in the summary as both contributions and as contribution refunds. A CFB representative said, “This is because when we flagged those contributions we asked the campaign to refund them, which they did.”
We reached out to the State Board of Elections for comment. They did not have any.
The U.S. Attorney’s Office for the Southern District of New York held a press conference on Tuesday and outlined the details of the investigation and related charges. The full press conference can be watched here. [It begins at approximately 15.12.]
Authorities provide an update on the arrest of Lt. Gov. Brian Benjamin https://t.co/rkjxalPwKw
— Norwood News (@NorwoodNews) April 12, 2022
NYGOP chairman, Nick Langworthy, issued the following statement on Tuesday in relation to Benjamin’s arrest. “In her first major decision as governor, Kathy Hochul chose a dirty politician to serve as her partner in government and running mate. Brian Benjamin’s shady dealings and corruption were well-documented, but Hochul turned a blind eye and put him a heartbeat away from the governorship.”
He continued, “This decision was not just dangerous incompetence, it is proof that her tolerance for corruption runs deep in her veins, which is no surprise given she dutifully served with Andrew Cuomo for seven years. Just days ago, she continued to say she had ‘full confidence in him.’ She does not possess the judgment nor the moral code to serve as governor. The only way to wipe clean the Cuomo-Hochul stench is to throw the entire corrupt cabal out of office this November.”
As reported, Benjamin received the endorsement of the Bronx County Democratic Party on Thursday, Feb. 24, 2021, in his bid to win the seat for New York City comptroller. Representatives for the Party said at the time the party was committed to helping elect Democrats across the borough who “continue to fight for progress and for the residents of the community.”
The party’s representatives said the endorsement was based on Benjamin’s extensive experience handling investments, and his background in finance, a crucial skill, they said, for the job of city comptroller. Combined with his work as chair of the Budget and Revenue Committee in the state senate, they said Benjamin was the only candidate with the ability to handle investing the City’s money while protecting the pensions of retirees.
The endorsement was among many others the senator received in The Bronx, including those from U.S. Representative Adriano Espaillat, former Bronx Assemblymember and Democratic National Committee vice chair, Michael Blake, Assemblymember Kenny Burgos, Assemblymember Chantel Jackson, City Councilmember Diana Ayala, and candidate for New York City Council District 16, Althea Stevens.
Bronx Democratic Party chairman, State Sen. Jamaal T. Bailey, said the party was honored to endorse Benjamin for the role, and added that in the midst of an unprecedented fiscal crisis, Benjamin was exactly the experienced, forward-thinking leader needed to oversee the City’s economic recovery based on a plan, he said, that had to be centered upon a bold vision for the future of The Bronx.
Source: NYC Campaign Finance Board
“Whether it’s fighting to bring accountability to policing, maximizing pension returns for New York’s retirees, investing in M/WBEs, rooting out waste in city agencies, or delivering the resources our communities deserve, Brian has the proven experience to manage our City’s finances and make government work for all New Yorkers,” Bailey said at the time.
He continued, “As chair of the Senate Budget and Revenues Committee, he successfully fought to protect affordable housing, strengthen tenant protections, and expand criminal justice reforms. Prior to serving in the State Senate, Brian put his financial management background to work for his community – building affordable housing, helping young people develop work skills, and serving as chair of his Community Board.”
Bailey concluded by saying that he had no doubt Benjamin was prepared to tackle the tough challenges ahead as the next comptroller, and that he would be proud to work alongside him for a more just and equitable New York City.
Reacting to his endorsement by the Bronx Democratic Party at that time, Benjamin said he was honored to be endorsed by the party. “My campaign has quickly gained the support of The Bronx, and I look forward to working with this influential group and all the Bronx legislators that have already endorsed my candidacy in building a stronger New York City as your next comptroller” he said at the time.
According to his campaign for city comptroller, Benjamin was running for the position to chart a new course for New York’s financial future in what he described as “difficult times,” one that would protect New Yorkers’ retirements while upholding the values of decency and justice for all.
His campaign team said he gained crucial insight into financial management by working as an investment advisor at Morgan Stanley before deciding to apply his skillset for the greater public good.
According to the NY Daily News, Morgan Stanley borrowed $107 billion, the most of all banks, during the 2008 financial company bailout. This was clearly at great cost to the taxpayer, though it also saved many jobs and helped stabilize the economy.
Some criticized the government’s actions at that time in allowing Lehman Brothers, another major U.S. brokerage firm, to fail in the immediate aftermath of the crisis, and only later bailing out other banks and brokerage firms like Morgan Stanley, as reported in The Guardian.
Though it is clear, and has been widely reported that inadequate regulation and government oversight of Wall Street contributed to the 2008 crash, it is also true that those investment advisors with the remit to invest money on behalf of their clients had a fiduciary responsibility to adequately weigh up the risks of certain investment decisions.
Robert Lenzner wrote in a 2012 Forbes opinion piece, four years after the crisis, that, “the banks and investment banks were using reckless amounts of leverage (borrowing). They borrowed, in many cases, $30 to $40 of debt for every dollar of capital they had. In truth, this was a recipe for disaster, since a decline of only 4 percent in their capital put them on the road to insolvency. It was as if you bought a million dollar house, put down a payment of $30,000 and borrowed $970,000. What sense of irrational optimism allowed this mad way of doing business?”
Of course, Morgan Stanley was not unique in applying such a leverage policy as part of its operating model. Most investment advisors working at brokerage and investment firms, across the board, adopted similar investment strategies in efforts to maintain competitiveness. Norwood News asked Benjamin’s campaign at the time what was the maximum leverage percentage Benjamin approved for his clients’ investments when he worked as an investment advisor at Morgan Stanley.
A representative responded saying the leverage percentage he authorized for his clients’ investments was standardized by Morgan Stanley, which operated based on industry-wide standards. The representative added that they were not sure, therefore, they could provide a maximum, especially since it was back in 2007.
Of his time at the firm, Benjamin himself was quoted as saying, “I gained crucial insight into financial management by working as an investment advisor at Morgan Stanley. During my time there, I advised high net worth individuals and institutions, charging rates that were standardized industry-wide based on the type of investment. Through this, I gained experience managing assets similar to those handled by the city Comptroller for New York’s hard-working retirees. As the next city Comptroller, I will bring the qualifications and experience necessary for the job.”
After his time working in the financial services sector, Benjamin’s campaign team said that while working at a minority-owned business to build affordable housing, the senator helped create over one thousand affordable and environmentally sustainable units, all while helping young people develop work skills and securing good construction jobs through community youth programs.
As a member of the New York State Senate, Benjamin has led on criminal justice reform, introducing legislation to close Rikers Island and divest the state pension fund from private prisons in his first year.
In the face of the COVID-19 pandemic, Benjamin advocated to pass the Rainy Day Fund law, which aimed to ensure New York City could meet its financial obligations when the next crisis hit. Benjamin committed, if he won the role of city comptroller, to work to ensure New Yorkers’ retirements would be protected, that agencies like NYCHA, DOE, MTA and the NYPD would face sufficient oversight, and that investments in the pension fund would reflect New York City values.
Benjamin was born in Harlem and raised by Caribbean immigrants. He holds a degree in public policy from Brown University and a Master’s degree in business from Harvard. After earning his MBA, he returned to Harlem to start his career. In 2017, he was elected to serve as state senator to New York’s 30th Senate District. He was appointed lieutenant governor in August 2021, following the resignation of then Gov. Andrew Cuomo, when then lieutenant governor, Hochul, ascended to the role of governor.
Other candidates who ran in the 2021 city comptroller race were CNBC journalist, Michelle Caruso-Cabrera, a former Republican who most recently ran and lost against Congresswoman Alexandria Ocasio-Cortez in New York’s 14th congressional district June primary race, businessman and historian, Chris J. McNickle, Iraq war veteran, Zachary Iscol, City Councilman Brad Lander representing District 39, former economic analyst at The Port Authority of NY & NJ, Terri Liftin, college student and former “groundskeeper” at the New York City Housing Authority, Alex K. Pan, State. Sen. Kevin S. Parker representing District 21, Manhattan Community Board 6 vice-chair of the Budget and Government Affairs committee, Reshima P. Patel, City Councilwoman for District 6 in Manhattan, Helen K. Rosenthal, and New York State Assemblyman for District 24, David I. Weprin.
The race was ultimately won by Lander, as reported. The former city comptroller, Scott Stringer, who ran for the position of New York City mayor in 2021 and who, as reported by Norwood News, had been initially endorsed by State. Sen. for District 34, Alessandra Biaggi, withdrew from the race amid allegations of sexual harassment.
Editor’s Note: The New York Times and others reported in December 2022 that Stringer filed a defamation lawsuit against Jean Kim, who had accused him of alleged sexual assault when she worked for him as an intern. Stringer claimed the allegations were fake and cost him the 2021 mayoral bid.
In March 2023, The NY Post reported that Kim has filed a lawsuit against Stringer under the New York’s Adult Survivors Act, which opened a one-year window for adult victims of sexual abuse to sue even if their claims fell outside the statute of limitations. Stringers denies any wrongdoing.
In August 2023, a Manhattan Supreme Court Judge rejected an attempt by Scott Stringer to sue the woman who accused him of sexual misconduct for defamation. Judge Richard Latin granted a motion to dismiss filed by defendant Jean Kim, finding Stringer’s claims were time-barred.
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Welcome to the Norwood News, a bi-weekly community newspaper that primarily serves the northwest Bronx communities of Norwood, Bedford Park, Fordham and University Heights. Through our Breaking Bronx blog, we focus on news and information for those neighborhoods, but aim to cover as much Bronx-related news as possible. Founded in 1988 by Mosholu Preservation Corporation, a not-for-profit affiliate of Montefiore Medical Center, the Norwood News began as a monthly and grew to a bi-weekly in 1994. In September 2003 the paper expanded to cover University Heights and now covers all the neighborhoods of Community District 7. The Norwood News exists to foster communication among citizens and organizations and to be a tool for neighborhood development efforts. The Norwood News runs the Bronx Youth Journalism Heard, a journalism training program for Bronx high school students. As you navigate this website, please let us know if you discover any glitches or if you have any suggestions. We’d love to hear from you. You can send e-mails to norwoodnews@norwoodnews.org or call us anytime (718) 324-4998.
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