Embattled State Senate Majority Leader Pedro Espada Jr. is defending himself against yet another investigation into his business dealings by Attorney General Andrew Cuomo.
Cuomo filed suit Wednesday against Espada and his son Pedro G. Espada for violating labor laws by allegedly creating a fraudulent job training program.
The civil suit charges that Espada created a for-profit company, Espada Management, as a way to steal money from his own non-profit Bronx health care clinic, Soundview.
Espada allegedly did this through a $400,000 contract allowing Espada Management to supply janitors to the clinics.
Cuomo says Espada and his son classified the janitors as trainees – working them for two weeks at illegally-low wages, some as low as $1.70 per hour. The current minimum wage stands at $7.25 an hour.
It employed more than 100 people over five years.
"Not only is Mr. Espada victimizing the state, violating the not-for-profit laws, he's defrauding people that this organization is supposed to be serving," said Cuomo at a news conference today. "People who are working for $1.70 per hour, some people $70 per week, these people are vulnerable, needy, desperate people who go for help, go for training, who are trying to better themselves and get a better life for themselves and their families, and they're exploited by Mr. Espada."
The suit says no pay stubs exist, no tax deductions were made, and workers compensation coverage was not paid. Even full-time employees were often not paid overtime wages.
The janitors were told they would be receiving full-time jobs and training, but most were eventually replaced by other so called "trainees."
The attorney general says the program was a sham, with the majority leader giving workers a certificate allegedly accredited by an organization that knew nothing of the program.
The suit seeks restitution and damages as well as the termination of the program.
Espada says the program is both legal and constructive, helping people gain skills while paying them a small stipend. And, he says the attorney general's allegations are part of a targeted plan to drive him out of office while Cuomo 8LINK='http://www.ny1.com/content/117589/story'>delays his own rumored run for governor.
"This is a political assassination or an attempt at a political assassination delivered in installments, and deliberately so,” said Espada.
This suit comes a week after Cuomo filed another civil suit accusing Espada and 19 others of stealing more than $14 million in taxpayer funds from Soundview and using the funds for a variety of expenses including vacation, rent and extravagant pay packages.
A team of FBI and IRS agents raided his Bronx clinic last week and Cuomo has said criminal charges could be coming.
Espada called the latest round of charges "boldfaced lies." He did not dispute that the training program existed, instead saying that these trainees were paid a stipend while learning because they were in need of work.
"Last week’s myth was $14 million; this week, it’s $1.75 an hour. The Attorney General’s political witch-hunt continues," said the senator in a statement. "How ironic that Andrew Cuomo chooses to attack institutions that help the poorest of the poor and medically indigent, while he cuts deals with the privileged, such as the Wall Street fat cats who got the state into this economic mess.”
Espada has denied all allegations of wrongdoing.