Bribery Case From Race for Mayor Winds Down

WHITE PLAINS, N.Y. — Daniel J. Halloran III, a former city councilman accused of taking bribes to help state Sen. Malcolm A. Smith, a Democrat, run as a Republican for mayor in 2013, testified all week that he accepted money only for work as a legitimate political operative.

Halloran finished his testimony Thursday. Smith and another of Halloran’s five co-defendants were recently granted a mistrial until January, but Halloran has chosen to press on. Through five days of direct examination and a cross-examination that lasted less than an hour, he maintained that he kept separate his duties as an elected official and his work for an undercover FBI agent and a government cooperator purporting to be real estate developers who wanted the city’s Republican establishment to embrace Smith.

“We’re using a hyper-technical term, ‘gift,’” Halloran said Thursday after an assistant district attorney, Douglas Bloom, asked how $5,000 in cash for personal expenses that he took from the men with no intention of repaying it could be considered anything else. “I received money.”

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Halloran, 43, was arrested in April 2013 as he was running for a seat in Congress. He was charged with bribery and wire fraud and faces up to 45 years in prison. He does not dispute that he took close to $40,000 from the undercover agent, known as Raj, and from the government cooperator, Moses Stern. (Stern was trying to gain leniency on a charge that he had defrauded Citigroup out of more than $100 million.)

Halloran maintained that his actions, in the context of building relationships with potential campaign donors, were commonplace.

“It’s regrettable this is the way politics works, but it’s not illegal,” Halloran testified. “This is New York City. This is the political maelstrom that goes on on a daily basis.”

Halloran smiled and talked directly to the jury during direct examination, but his face reddened and he raised his voice when he was questioned by the prosecution. He wore on his lapel a prominent pin with an Irish flag and an American flag, and at times on the stand he rubbed a memento shaped like a New York Police Department badge, given to him by his father. Vinoo Varghese, Halloran’s lawyer, said his client had not sought a mistrial because he was eager for his ordeal to be over.

Halloran testified that he was going through a divorce, and part of the reason he took the cash was his hope of refinancing the home he shared with his wife in Queens.

“I had to do something creative to buy her out of it,” he testified last week. “It looks really bad if you’re a congressperson who doesn’t live in your congressional district.”

Prosecutors played tapes of Halloran seeming to tell the undercover FBI agent and Stern that he would direct city money to an organization they said they ran if, in return, they would contribute to his congressional campaign. Halloran contended that he did nothing wrong because the city funds were never sent.

“You know, in politics it’s all about calling in favors,” Halloran said in reference to building a relationship with the men, who, he believed, were deep-pocketed donors. “Political negotiations are not pretty,” he said.He said he took a freelance job as a political operative for the same men and set up meetings with city Republican leaders on behalf of Smith. He organized a meeting held on Feb. 14, 2013, at Sparks Steak House in Manhattan with the government agent and two co-defendants, Joseph J. Savino and Vincent Tabone, city Republican leaders accused of accepting cash bribes to endorse Smith. Halloran testified that the money he took for facilitating the meeting was fair payment for legitimate political operative work.

“I’m acting as a political person, which I’m entitled to do,” he said.

Closing arguments begin Friday before U.S. District Judge Kenneth M. Karas.