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Former Deputy Mayor Kevin Sheekey, who was involved in hiring Haggerty, took the stand first.

Deputy Mayor Patti Harris, the second-highest official in command at City Hall, who participated in Haggerty's hiring, testified after Sheekey.

Both Harris and Sheekey said the mayor is picking up the tab for their legal costs.

Prosecutors charge that Haggerty devised a fake ballot security operation during the mayor's 2009 re-election campaign.

Bloomberg's lawyers say Haggerty promised to hire 1,300 poll watchers but never hired anyone, using the money to buy a house instead.

However, the mayor did not pay for the service directly. He handed the money over to the state Independence Party, which in turn gave the money to Haggerty.

Haggerty's attorneys say the mayor is using their client as a scapegoat to avoid questions about possible campaign finance violations.

The defense contended today that after the mayor wrote a check to the State Independence Party, he lost control over how that money was spent.

"I would say that what we accomplished in general in the past two days is that we finally got this underway, that our client, who has pled not guilty and continued to profess his innocence, has finally got his day in court," said Dennis Vacco, Haggerty's lawyer. "We're looking forward to continuing this trial, and we're looking forward to making our arguments with the jury."

The Manhattan district attorney's office has said the mayor broke no laws.

Sheekey disputed the idea that funneling the money through a political party was an attempt to conceal the work.

On the stand, Sheekey took digs at Haggerty, calling him a loner who did not work well with others.

"I believe it has been well established that John did nothing," said Sheekey.

When Harris was asked what Haggerty did for the re-election campaign, she quipped, "I think I know what he didn't do."

Haggerty's attorney tried to keep the spotlight on the witnesses, rather than the defendant.

"I am more interested in what they knew about the ballot security operation. Or rather, what they didn't know about it," said Vacco.

The case is resuming next week, when Bloomberg is expected to testify.