Steve Levy non-prosecution deal: Allegations involve campaign-fund issues, 'improper lobbying'

A two-page non-prosecution agreement between former Suffolk County Executive Steve Levy and former Suffolk District Attorney Thomas Spota resolved “allegations involving campaign-fund issues” and allegations of “improper lobbying,” according to a copy of the long-withheld document obtained by Newsday.

The document doesn't include any information to substantiate any of the allegations or provide Levy's response to the claims. It also includes a separate farewell statement by Levy approved by the district attorney.

The filing, which is labeled “Under Seal, Priviledged (sic) and Confidential,” has been kept under wraps since it was reached March 23, 2011. It was the subject of a three-year Freedom of Information Law request by Newsday and a subsequent court battle following a lawsuit by Levy against the former District Attorney Tim Sini's office, which had sought to release it.

A state Appellate Court in January upheld a lower-court ruling that the agreement be turned over to Newsday, noting that it included no language stipulating the terms of its sealing. Current Suffolk District Attorney Ray Tierney formally objected to its release in briefs filed with the court. 

The main portion of the document includes a “subject matter” section that states the district attoney’s investigation included allegations of “campaign fund issues,” including the “improper obtaining of [a] donor list.” Among those allegations, none of which is expanded upon in the document, also are “alleged ethics disclosure,” alleged improper tax filings, “alleged allegations of improper lobbying” and alleged improper activities involving real estate transactions.

The agreement does not specify the alleged improper activities involving real estate transactions. At the time, Levy co-owned one apartment building in Albany.

A statement emailed on Levy's behalf from his lawyer David Besso asserted that the final agreement between Levy and Spota “included various lines of questioning, regardless if they were speculative or dead ends. They were included by Mr. Levy's attorneys to ensure they could not resurface later, not because there was any admission to their veracity.” 

In the statement, Besso charged that Spota's inquiry “centered on campaign finances and a claimed ‘use of public resources’ related to a list of vendors allegedly downloaded out of a county computer. While this was public information, it was used as a ruse by the DA to threaten to freeze the county executive’s campaign account and prevent his reelection.” 

The statement said that “when confronted with losing access to his funds to wage a campaign and having to endure the continued spying on his family and staff, Mr. Levy felt compelled to enter into an agreement to put an end to the vendetta against him.” 

Besso noted the district attorney's statement at the time “conceded Mr. Levy fully cooperated and never personally profited from the matter investigated.”

The non-prosecution agreement states the district attorney agreed not to file charges against Levy on the condition that Levy “will not seek reelection” as Suffolk County executive, and turn over “all campaign funds: to the DA’s office, which would “determine the circumstances under which the money will be disposed of …” The campaign war chest was reported at the time to be nearly $4 million.

Spota appointed former Suffolk Treasurer John C. Cochrane to reimburse donors and give the remaining funds to charities.

Levy also agreed to turn over all computer-generated donor lists, including hard drives, to the district attorney, and to refile all necessary tax returns “in accordance with the law.”

Asked if Levy amended and refiled his taxes, Besso said, “Tax forms are amended all the time because of computation errors, mistaken inputs or duplications, or other unintentional discrepancies that are not criminal.”

“If there was nothing there, then why give back your campaign funds?” said Ben Zwirn, who worked as a deputy county executive under Levy.

Zwirn said he never understood why Levy gave up his campaign fund because Levy had been frequently mentioned as a possible candidate for governor.

Kirk Cronk, who worked in the County Attorney’s office during the Levy administration, said he cooperated with the district attorney’s office after he alleged he was pressured to call county vendors to contribute to Levy fundraisers.

Part of his job, he said, was to review county contracts. “I viewed it as a conflict,” he said of requesting contributions. “I refused to do that.” 

Cronk said he turned over “a great big box of materials” related to fundraising to district attorney investigators. One of the documents was what he called “a demand list. It was a list of county contractors and right next to it was the amount of money they were required to contribute in order to keep their contracts.”

John Zaher, a spokesman for Levy, responded, “There was never a demand list. Every elected official seeks donations and has lists of large donors and small donors. There is nothing improper about that.”

A Newsday investigation published in April 2011 found that contractors, their employees and trade unions working on a then-new $156 million jail in Yaphank contributed $924,746 to Levy’s war chest. The jail was the largest public works project in Suffolk County in 30 years.

Levy's statement attached to the agreement begins by saying he has been “blessed by having had the privilege of being a public servant for 25” of his then 51 years. The statement includes a sentence saying, “Questions have been raised concerning fundraising through my political campaign,” which he noted that “since this occurred under my watch, I accept responsibility.”

Release of the document to Newsday isn't the first report following Spota's investigation of Levy. Spota, who is serving a prison term on charges unrelated to the Levy case, in 2012 released a special grand-jury report that found that Levy manipulated the county’s ethics commission to wage attacks on political opponents, among other findings, according to a Newsday story at the time. (The report itself does not publicly name officials, but labels them with letters of the alphabet.)

Actions by Levy, certain members of his administration and the ethics commission constituted a pattern of misconduct that “completely destroyed the ethics infrastructure” in the county,” according to the report.

Last month, Zaher noted that Levy's original complaints to the commission were based on “a legitimate issue with a former employee previously involved in negotiations with the union immediately thereafter going to work for that same union, which seemed to be a clear conflict. This was not a misuse of the ethics commission.”

Spota at the time said the grand jury report “exposes behavior by public officials acting in the name of the ethics commission that was unprincipled and wrong, but not criminal.” He urged county legislators to “act to make certain that future public officials can be prosecuted for the behavior uncovered in this report.”