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DA: NYC Mayor Testified In Probe Into Politico

NEW YORK (AP) - A grand jury that indicted a political operative on charges of fleecing Mayor Michael Bloomberg out of more than $1 million got part of the story directly from the highest source - the mayor himself, prosecutors said Tuesday. But at least for now, no one's disclosing what Bloomberg had to say.

John Haggerty was indicted last year, but mention of the mayor's testimony emerged for the first time in a court hearing Tuesday as prosecutors and Haggerty's lawyers fleshed out their sides of the complex case involving the billionaire mayor, a state political party, a well-regarded political consultant and big money that passed among them.

Haggerty, 42, has pleaded not guilty to grand larceny and other charges. Tuesday's hearing was technically about his bid to get the case thrown out; a judge is due to rule next month. But Tuesday's session turned into a lengthy airing of allegations, counterarguments and evidence, complete with more of a peek into what the grand jury saw than typically would be made public at this stage in a case.

Arguing that grand jurors had had plenty of evidence to indict Haggerty, Manhattan assistant district attorney Eric Seidel said they'd heard from witnesses including people who worked on Bloomberg's 2009 campaign - "and I'll reveal this, Mayor Bloomberg testified in the grand jury," Seidel added.

Deputy Mayor Howard Wolfson confirmed that the mayor had testified but declined to elaborate, as did the DA's office. Bloomberg has declined to comment on the case.

Haggerty, a Republican, is well-known in political circles as a campaign consultant. The mayor's team was interested in tapping his expertise on "ballot security" - essentially, poll-watching and other efforts to prevent election fraud - for Bloomberg's 2009 bid for a third term, prosecutors and defense lawyers say.

Prosecutors say Haggerty got the Democrat-turned-Republican-turned-independent Bloomberg and his political advisers to give $1.1 million from the billionaire mayor's personal fortune to finance a state Independence Party ballot security effort in the fall of 2009.

"(Independence Party officials) are aware and fully cooperative.. The money needs to be wired as soon as possible, and the operation is attached, along with a projected budget," Haggerty wrote to two Bloomberg campaign officials in an October 2009 e-mail with "ballot security" as its subject, Seidel said Tuesday.

Independence Party Chairman Frank MacKay declined to comment. The party - a Ross Perot-inspired group that is now the state's third-largest political party - reported a total of $1.2 million in contributions from Bloomberg to its housekeeping account, which can be used for various purposes but not directly to benefit a specific candidate or campaign.

The party hired Haggerty for the anti-election-fraud work and paid $750,000 to his company, Special Elections Operations LLC, but he used the money instead to buy his late father's home and pay for plane tickets and lawyer's fees, prosecutors said.

Later, after a New York Post reporter began asking questions about Bloomberg's contributions to the Independence Party and the $750,000 expenditure, Haggerty provided a Bloomberg campaign lawyer with copies of checks he said documented payments to poll-watchers, but the checks weren't legitimate, prosecutors say.

"It's a story of greed, It's a story of lies and it's a story of arrogance," Seidel said Tuesday. "Greed because the defendant wanted to buy a house and didn't have the money. Lies because he invented a story and invented a budget to get the money. And arrogance because he tried to cover up, thought he could and failed."

Haggerty's lawyers say he did his job, and the party and Bloomberg got the ballot security operation they wanted. And, they say, there's no way the money could have been stolen from the mayor if he'd indeed donated it in accordance with campaign finance laws.

"We're not claiming that Michael Bloomberg did violate any of these laws. Our point is: He didn't, and neither did Mr. Haggerty," said Raymond Castello, one of Haggerty's lawyers. "A political contribution was made. Once it's made, you lose total control over it."

Nonetheless, "one could make the argument that this process was the least transparent way that the campaign could go about funding ballot security," said another Haggerty lawyer, Dennis Vacco, who is a former New York attorney general. He suggested the Bloomberg campaign might have wanted to distance itself from ballot security operations, sometimes criticized as a pretext for suppressing certain votes.

If convicted, Haggerty could face up to 25 years in prison.