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Questions Abound After Reported Secret Payout Involving Speaker Silver, Assemblyman Lopez

NEW YORK (CBSNewYork) -- There are serious questions and a growing demand for answers about a hush-hush payout of tax dollars to settle a sex harassment case.

Two New York power brokers are involved -- Assembly Speaker Sheldon Silver and Brooklyn Democratic boss Vito Lopez.

On the streets of Brooklyn, Lopez's power as Democratic Party chair is legendary.

"Vito has ruled Brooklyn politics with an iron fist for decades," activist Lincoln Restler told CBS 2's Tony Aiello on Tuesday.

Restler said Assemblyman Lopez influences who becomes a judge and his hand-picked candidates almost always win elections.

But now, the 71-year-old power broker is threatened by scandal. The New York Times said in June, powerful Assembly Speaker Silver quietly approved a secret payout to at least one Lopez staffer, who accused him of sex harassment.

There was minimal paperwork and the payout was $103,000.

Daniel Feldman, a former assemblyman, said Silver's OK of a secret payout is troubling.

"I would very much like to know what is the legal justification for this expenditure out of the public view," Feldman said.

"I don't understand why there wouldn't have been an investigation by the Assembly Ethics Committee, if that in fact is the protocol that the Assembly was supposed to follow," Restler added.

Silver's spokesman said the case was not sent to the Ethics Committee. It was kept "confidential at the express insistence of the victim."

But Gloria Allred, the victim's attorney, begs to differ, saying "We have never insisted that a legislative committee not proceed with an investigation."

Tuesday, Gov. Andrew Cuomo called on the Joint Commission on Public Ethics to probe the Lopez scandal.

Lopez stayed out of view Tuesday, but did announce he will step down as party chairman, while keeping his seat in the Assembly.

Assemblyman Lopez said he's never harassed an employee. But after the secret settlement, two other staffers filed complaints.

Last week, Lopez was formally censured and stripped of his committee chairmanship.

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