Were contracts drawn up by senior officials of Brooklyn’s largest Jewish community council in response to subpoenas long after the work was supposedly done complete fabrications? Or was real work accomplished without agreements being signed at the time?
In the wake of testimony this week at the trial of Assemblyman Dov Hikind, it is virtually certain that point will be vigorously contested by prosecutors and defense lawyers.
A bookkeeper for the Council of Jewish Organizations of Boro Park testified Tuesday that top officials of the council made up the contracts as much as 20 months after purported consultant work by various individuals in order to satisfy subpoenas for those documents from government investigators.
The consultants, some of whom had close ties to Hikind, were then called in to sign the documents, Esther Jacobs testified at the federal corruption trial of Hikind and Rabbi Elimelech Naiman, a senior COJO official.
Defense lawyers, meanwhile, introduced testimony suggesting that at least some of the COJO expenditures that federal prosecutors charge show misappropriation of government funds were, in fact, made from private donations and bank loans. These private funds, they argued, were not subject to the government restrictions they are charged with violating.
It was the first week of testimony in the trial of Hikind, a prominent Orthodox community political leader representing Borough Park and Flatbush, and Naiman, who served as COJO’s No. 2 official. The two have pleaded not guilty to charges of conspiracy, fraud and embezzlement.
Hikind is charged with obtaining state funds for COJO in exchange for at least $45,000 in personal benefits and various political gains. Naiman is charged with misappropriating some $750,000 in these and other government funds.
A second COJO official, Paul Chernick, pleaded guilty to similar charges shortly before the trial. But under federal court rules, the prosecution may not refer to his plea before the jury.
Meanwhile, COJO has been forced to cease operations in the wake of the scandal.
The testimony of Jacobs, the prosecution’s second witness, appeared to be aimed at a central argument of the defense.
Naiman’s attorney, Benjamin Brafman, has conceded that the social service agency may have broken some rules during what he described as frantic efforts to meet escalating community needs. COJO’s mechanisms for handling the huge increases in government grants it won to meet those needs may also have been wanting, he said.
None of this, Brafman argued, was motivated by an intent to defraud or embezzle, or characterized by criminal conspiracy.
But Jacobs, testifying under a grant of immunity, told the court that Naiman and Chernick drew up contracts after the fact when government auditors demanded the agreements underlying numerous claims of expenditures on consultants by two COJO affiliates.
According to Jacobs, investigators from the city’s Department of Investigations subpoenaed these records in late 1995, after an article in The Jewish Week raised questions about the two COJO affiliates’ spending patterns and relationship with Hikind.
Assigned to gather documents in response to these subpoenas, Jacobs found that the requested agreements “were not in the files at that time,” she said.
“I reported to … Paul Chernick and Rabbi Naiman [and COJO executive director Rabbi Morris Schmidman] that I couldn’t find these contracts,” Jacobs said. “And they told me, ‘We don’t have them. We don’t have them.’ ”
But later, when auditors from state Comptroller H. Carl McCall’s office came demanding the same records, said Jacobs, Chernick told her she could obtain them from his secretary, Esther Kazelnick.
When Jacobs came to Kazelnick’s desk for them, she testified, Kazelnick “was making sure there were consulting agreements. … She was typing them up.”
Jacobs said she then assisted Kazelnick in contacting the purported consultants to come in for a meeting in order to sign the contracts. One of the contracts made up then, for Leah Schenker, the daughter of a Hikind staffer, was accompanied by a note in Jacobs’ handwriting with the date March 29, 1994 — 20 months earlier.
“That was probably the period when she did her work,” Jacobs said.Prosecutors said they expect to call the purported consultants to testify about the work in question. Jacobs, who often answered questions in a barely audible voice, shed only limited light on whether that work was actually done.
She testified that Hikind had assisted Community Service and Resource Development, a COJO affiliate, in getting so-called “member item” grants from the state Legislature. These are grants doled out to selected groups at the request of various lawmakers by legislative leaders.
Jacobs also testified about numerous checks she wrote out at Naiman’s instructions from CSRD’s account to various recipients, including Hikind, Hikind family members, Hikind staffers and members of their families.
She testified, too, about CSRD budget records she wrote up under Naiman’s direction that showed disbursements to many of the same people, and others. But asked whether Hikind and several others cited in these budget disbursements were consultants or employees of CSRD, she replied several times, “I don’t know.”
“I didn’t necessarily know all the employees,” she added.
In his initial cross-examination Tuesday afternoon, Naiman’s attorney, Brafman, did not challenge Jacobs on the consulting contracts or draw her out further on them.
Instead, he elicited testimony that Naiman had at times made personal loans to COJO and CSRD in order to help them meet their payrolls during difficult periods. Brafman also introduced into evidence several checks Naiman made out to the charities and suggested that Naiman had obtained the money by borrowing against his life insurance and pension.
Last week, the prosecution’s first witness, COJO bookkeeper Rachel Cooper, addressed charges that COJO helped pay school tuitions for the children of various individuals, including Hikind. In her own case, she testified, Naiman declined her request for a raise over 2 percent, saying the government contract under which she was working prohibited more.
Naiman then told her he would instead donate funds from the accounts of one of COJO’s affiliates to her child’s school while telling school officials to credit the sum against her tuition bills, Cooper asserted. Cooper testified that other employees did not get such treatment, and that she did not report it as income on her taxes.
But under cross-examination by Brafman, Cooper said that the accounts of these affiliates also contained substantial private donations not subject to the earmarked restrictions of the government funds.
No testimony was introduced addressing directly the charge that COJO paid for the tuition of Hikind family members.