Espada Convicted of Theft

Pedro Espada, the former Bronx state senator whose party-switching scheme sabotaged the reform of rent laws in 2009, was convicted May 14 on four counts of embezzling more than $500,000 from Soundview Health Care Network, the chain of health clinics he ran in the Bronx.

The jury deadlocked on the other four charges, which included conspiracy and fraud. Federal prosecutors announced June 5 that they would retry Espada on those charges. 

The theft charges accused Espada of using Soundview money for vacation trips, expensive seafood dinners, and lavish family parties. He faces up to 10 years in prison on each one.

In 2008, after Democrats won a 32-30 majority in the state Senate, tenants believed they would finally be able to get pro-tenant legislation enacted, including repealing vacancy decontrol. But before the legislative session began, Espada and three others threatened to join the Republicans, a ploy that got him named chair of the Housing Committee in exchange for staying with the Democrats. (Three of those four have since been convicted of corruption-related felonies: Espada, Carl Kruger of Brooklyn, and Hiram Monserrate of Queens.)

In June 2009, the day before the Housing Committee was supposed to vote on a bill to repeal vacancy decontrol, he switched parties, deadlocking the Senate for two months. He rejoined the Democrats after they agreed to name him majority leader. In early 2010, trying to claim credibility as pro-tenant, he proposed a bizarre “rent freeze” scheme in which the state would cover rent increases affecting tenants making less than $45,000 a year—with the funds coming from letting landlords pay to deregulate thousands of apartments. It went nowhere.  

He was defeated in the 2010 Democratic primary by Gustavo Rivera. Almost half of his campaign contributions came from real-estate interests, including $25,000 from Stellar Management. 

“If he hadn’t been there, I think it’s clear that there would have been more bad legislation enacted,” Joseph Strasburg, president of the Rent Stabilization Association landord lobby, told the Wall Street Journal before the primary. “He may be radioactive in the PR level, but he is who he is, and he’s been a guy who supports you more often than anyone else does.”