Kickback Scheme sends 4 to Prison

The former head of the NYC transit police union and top union lawyers were sentenced to prison on Jun. 30 for their roles in a kickback scheme involving millions of dollars in union funds. Ronald Reale, the former union boss, was sentenced to 7 years, and Richard Hartman, a leading negotiator for the union, was sentenced to 5 years. They were convicted for a racketeering conspiracy that involved the payment of more than $400,000 in bribes to transit union officers in return for more than $2 million in union money paid to the law firm of Lysaght & Kramer, which represented the transit union and other local police unions. The former sole partners in the law firm, James J. Lysaght and Peter Kramer were sentenced to 27 months each. Although the charges involved the transit police union, the lawyers and Hartman had also worked for the Patrolmen’s Benevolent Association, which represented officers in the City Police Department, and were instrumental in winning a series of lucrative contracts from the city.
Federal prosecutors subpoenaed 10 years of financial records last year from the PBA as part of a widening investigation into allegations of corruption. U.S. District Court Judge Deborah A. Batts said that Reale had “shamelessly abused” a “position of authority and trust for his own corrupt gains and those of others.” And she called Hartman “an architect of several of the kickback schemes,” which increased his business as well as “contributed to the corruption of the labor negotiation process.” Reale & Hartman had also been convicted of trying to defraud the city’s Campaign Finance Board of matching funds during Reale’s 1993 campaign for public advocate. U.S. Attorney Mary Jo White, said the convictions and sentences “are a warning to those individuals who corrupt the election system or steal from union members that they will be prosecuted and, if convicted, sentenced to lengthy prison terms.” She said the investigation was continuing. [NY Times 07/01/98]