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March 16, 2011

Resource Recycling Electronic Newsletter

Recycling connection in New York corruption probe

The latest political scandal to rock New York state has a connection to beverage container recycling. State senator Carl Kruger (D-Brooklyn) and registered lobbyist Richard Lipsky are among those named in an indictment exposing a scheme to accept money for political favors.

Allegedly, Kruger accepted cash payments from Lipsky for favorable outcomes on a range of issues that benefitted his lobbying clients, including beverage distributors opposed to revisions to the Empire State's beverage container deposit bill. The indictment alleges Kruger advocated against an expansion of the bottle bill after receiving direct funds from Lipsky.

Federal prosecutors have outlined charges of money-laundering and conspiracy, saying in the indictment:

"On April 3, 2009, the 2009-2010 State Budget, which included a portion of the Bigger Better Bottle Bill, was unanimously passed by the Senate. However, in or about April 2009, following the passage of the budget, Kruger introduced legislation to push the start date for the [bottle bill] provision of the bedget back to January 1, 2010, delay the imposition of the deposit law and remove a plan to require new bottles to have a New York-specific bar code… [Kruger and Lipsky] have been intercepted discussing the bottle bill issue, as well as Lipsky's clients, on the telephone."

According to New York's database of registered lobbyists, Lipsky's clients included the Retail Wholesale & Department Store Union, the Neighborhood Retail Alliance and the Red Apple Group — a marketing firm — in New York City, and the White Rock Products Corporation — a bottled water and beverage distributor — at the state capital in Albany. New York State records show Lipsky specifically lobbied on the bottle bill on behalf of these organizations. Lipsky also lobbied on behalf of an organization called the Neighborhood Retail Group regarding plastic bags.

Other clients in the beverage industry include the Empire State Beer Distributors Association, the Independent Beer Wholesalers of New York and various local supermarket chains, but records do not indicate Lipsky lobbied on recycling laws on behalf of these clients. The indictment does not accuse any of Lipsky's clients listed above of any wrongdoing.

In addition to Kruger and Lipsky, others indicted by Federal Prosecutors include Aaron Malinsky, a New York real estate developer; healthcare consultant Solomon Kalish; former hospital owner Robert Aquino; David Rosen, CEO of MediSys Health Network; New York Assemblyman William Boyland Jr. (D-Fairport); and Dr. Michael Turano, OB/GYN.

A March 7 search of Lipsky's residence and office by Federal agents revealed $102,000 cash in a safe at Lipsky's house, and $4,000 cash in the pocket of Lipsky's suit.


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