Volume 20, Number 28 | The Newspaper of Lower Manhattan | November 23 - 30, 2007
FormerTrust chairperson pleads guilty to tax fraud
By Lincoln Anderson
Was hubris the cause? It may never be known. But James Ortenzio the classics-quoting former chairperson of the Hudson River Park Trust last week pleaded guilty to a felony tax charge, as well as a misdemeanor violation of the states Public Officers Law.
Ortenzio, 62, chaired the Hudson River Park Trust from 1999 to 2003, leaving the Trust after becoming Republican Party Manhattan County Committee chairperson. Both incidents occurred after he had left the Trust.
According to a Nov. 15 news release by Manhattan District Attorney Robert Morgenthau, in June 2004, Ortenzio was retained to arbitrate a business dispute between two helicopter companies Air Pegasus of New York and Sightseeing Tours of America that were using the West Side Heliport at W. 30th St. Ortenzio was paid about $80,000 in 2005 for his arbitration services. However, according to the D.A., Ortenzio filed false and fraudulent 2005 personal New York State tax returns by intentionally failing to disclose the income received from his mediation services.
According to the Daily News, the dispute Ortenzio was asked to arbitrate involved delinquent rent payments by the helicopter companies to the Trust.
In addition, according to the Manhattan D.A., in September 2004, Ortenzio was paid $100,000 by Fisher Brothers Management Co. for certain consulting services. As chairperson of the Republican County Committee, Ortenzio was required to file an annual statement of financial disclosure with the states Ethics Commission. Yet, according to the D.A., while Ortenzio did file his 2004 disclosure form, he intentionally omitted his payment from Fisher Brothers Management in an effort to prevent disclosing that he received the money.
The Daily News reported that Ortenzio was a consultant on the Fishers effort to buy public land across from the nonprofit Intrepid Sea, Air and Space Museum at W. 46th St. The Fishers led the effort to berth the Intrepid on the West Side and have poured millions of dollars of their own money into the decommissioned aircraft carrier.
A source with deep roots in the Hudson River Park said he believed the property in question was acquired in 1999 by the state from Con Edison which had used it for a refueling facility for its current use, tour bus parking for the Intrepid.
Both the heliport and the Intrepid are based in the 5-mile-long Hudson River Park, though the Intrepid currently is not in the park, but in dry dock undergoing repairs.
Under the plea agreement, on Jan. 9, 2008, Ortenzio will receive a sentence of five years probation and will file amended tax returns for 2004 and 2005.
Ortenzio lives on Bank St. in the West Village. A major player in the Northeastern meat industry, he is known as the Mayor of the Meat Market, even though he moved his Long Island Beef company out of the Gansevoort Market years ago. He still keeps an office in the Gansevoort Market Co-op building, where most of the Markets remaining meat businesses operate.
Ortenzio and his attorney, Randy Mastro, a deputy mayor under Rudy Giuliani, did not return calls for comment.
Ortenzios plea is the latest, and apparently final, fallout from an anonymous letter sent to the Manhattan District Attorneys Office about two years ago. The letter was sent following the Trusts selecting the team of the Witkoff Group and Cipriani to redevelop Pier 57 in the Hudson River Park. Under the Trusts request for proposals, or R.F.P., process, Chelsea Piers also submitted a bid for Pier 57, which is located between W. 15th and 16th Sts., just south of Chelsea Piers multi-pier athletic complex.
This July, as a result of the same investigation, Arrigio Cipriani, the Cipriani family patriarch, and Giuseppe Cipriani, president and C.E.O. of Cipriani USA, Inc., pleaded guilty to tax evasion, and were sentenced to repay $10 million in back taxes. This May, Dennis Pappas, a former Cipriani vice president, pleaded guilty to attempted insurance fraud for defrauding insurance companies out of $1 million; Pappas was sentenced to 1? to 4? years in prison and payment of $1 million.
The D.A.s statement noted that Ortenzio was a significant distributor of meat and other food products to Cipriani restaurants. Ortenzio had openly championed the Witkoff/Cipriani bid for Pier 57 over Chelsea Piers proposal. However, Cipriani subsequently pulled out of the partnership with Witkoff, feeling the piers redevelopment process was moving too slowly. The Related Companies then joined Witkoff on the project, but the process has since remained stalled. Its unclear whether things will start moving again now following Ortenzios guilty pleas.
Former Parks Commissioner Henry Stern, a Trust board of directors member, defended Ortenzio.
I think James Ortenzio is a valuable public servant and I have high regard for him, Stern said. The charges, on their face, do not justify a felony conviction. Hes a Renaissance man thats why his park name [given to him by Stern] is Leonardo. This is a man with much depth of understanding. He speaks a lot of languages. Hes a polymath. In the years that we were together, he never did anything that was not in the best interest in the park.
Stern said more than a few people suspected the anonymous letter sent to the D.A. might have come from Chelsea Piers.
Its generally believed it was Chelsea Piers, Stern said. The natural rival to Pier 57 was Chelsea Piers. However, he added, [Trust] board members thought independently that Cipriani was better because [the board members] didnt want to give Chelsea Piers a monopoly. People wanted diversity. There was a feeling Chelsea Piers had six blocks, the biggest concession [in the park]. Cipriani was more arts and culture oriented. The board was pretty solid for Cipriani. The only person who was against it was [former State Parks Commissioner] Bernadette Castro, who voted for Chelsea Piers on the instruction of [former Governor] Pataki. Nobody voted for Cipriani because Ortenzio told them to. He did not influence [the vote] in any way if he did, his influence was subliminal.
It seemed to be the will of the community, Stern added. The community wanted Pier 57 not to go to Chelsea Piers because of various disputes over the years.
On Monday, Erica Scheitinger, a Chelsea Piers spokesperson, issued Chelsea Piers response to the suspicions regarding the letter that triggered the whole investigation.
We did not send the letter, Scheitinger said.
Arthur Schwartz, chairperson of Community Board 2s Waterfront Committee and a longtime Hudson River Park advocate, said Ortenzio always had the parks best interests at heart.
He didnt plead to any offenses that had to do with his tenure as chairperson of the Trust, Schwartz said. I guess this ends the allegations, and I guess well never know what the complaint was that initiated the investigation.
Schwartz said Ortenzio deserves a lot of credit for getting Pataki to focus on building the park and also for helping get the artificial-turf ball fields installed on Pier 40s roof and in its courtyard.
However, Schwartz said, Some of the strengths that he brought as chairperson also turned the park into a very political entity and created the impression that there were a lot of behind-the-scenes decisions being made
out of public reach.
He was very hands-on, Schwartz added, on the other hand. He was at the Trusts office every day. He was really running the Trust. As far as his indiscretions, I think he should be remembered for his good works.
Barbara Thompson, a Morgenthau spokesperson, indicated the entire investigation is over.
As to Ortenzio, its finished, she said. As to Cipriani, its finished. Theyve pled, so its finished.
What sparked the investigation, it was a letter over the transom, she said. It was an anonymous letter. We were never able to determine who the guy or woman was who sent it.
Julie Nadel, another Trust board member, said the upshot of the investigation is that the whole Pier 57 process should now be revisited.
The Trust should rethink the current disposition of Pier 57, either bidding it out again or creating another process for making the pier open and available to the public as part of Hudson River Park, Nadel said. Its been almost three years since the R.F.P. was voted on. What is going on there now, if anything, is a far cry from what board members voted for in 2005. The public deserves better than this.
Nadel added of Ortenzio: He was in the park all the time and did pay attention to what was going on, which was good. That stopped when he left, and
there was a great, big lack of vision and leadership, which the park Trust is still recovering from.
Christopher Martin, the Trusts spokesperson, issued the following statement regarding Ortenzio: Based on the press release from the District Attorneys Office, the investigation started in 2005, two years after Mr. Ortenzios term on the Trusts board had expired. The Trust cooperated fully with the district attorneys investigation. James Ortenzio was a great supporter of the Hudson River Park and to the best of our knowledge, always put the interests of the park first during his tenure as chairperson. We will remain grateful for his accomplishments on behalf of the Trust.
With regard to the Pier 57 process, Martin said: We continue to review the project with the current developer with the goal of moving forward with the development.
As for the heliport which is currently in violation of the Hudson River Park Act because it is located east of the bulkhead (i.e., on land, as opposed to on a pier) Martin said: The heliport is currently on a 30-day automatic renewal permit. We are currently working with the city and the state to develop an R.F.P.
According to a source, Friends of Hudson River Park, the parks leading advocacy group, will file a lawsuit next week over the West Side Heliport.