Mayor Was Key Grand Jury Witness in Case of Indicted Aide, Prosecutors Reveal

Mayor Bloomberg was a key witness before a grand jury that indicted one of his political consultants for stealing more than a million dollars from him, according to prosecutors in state Supreme Court in Manhattan on Tuesday.

The fact that Bloomberg had testified before the grand jury was news to defense lawyers for Republican political operative John Haggerty.  Prosecutors allege Haggerty induced the mayor to give money to the state Independence Party to pay for election fraud monitoring during Bloomberg's 2009 re-election campaign.

The District Attorney said Haggerty then laundered the money to pay for a childhood home in Queens and other personal expenses.  He also allegedly wrote fraudulent checks from a phony company called Special Elections Operations LLC to cover up his theft.

"This is a story of greed," prosecutors told the judge.  "This is a story of lies. And it's a story of arrogance."

The defense case rests on a central argument: Haggerty didn't steal money -- Bloomberg merely overpaid for the job. Defense lawyers said Bloomberg wanted to pay for election monitoring and Haggerty performed the work that was expected of him.    

Lawyer Raymond Castello said the mayor allotted more than a million for "the Rolls Royce of ballot security" but got a "Toyota" in the end.  And, he said, the fact that ballot security expenses came under budget does not mean something criminal happened.  Castello said the balance of the $1.2 million dollars Bloomberg forked over that wasn't spent on ballot security was a "political contribution" the mayor made to the Independence Party, and the mayor couldn't earmark that leftover money for specific purposes.

"A political contribution was made," Castello told the judge. "Once that's done, you have no control over it."

Co-counsel Dennis Vacco said spending a little over a million dollars on ballot security was just one example of repeated overspending by the mayor in his re-election campaign, which ended up costing Bloomberg about $110 million.  

"That $1.2 million was just a drop in the bucket of the overspending of this campaign," said Vacco.  "He has the financial wherewithal to do it, the law provides him the opportunity to do it, so there's nothing wrong with that."

Prosecutors would not comment on the substance of the mayor's testimony, which is confidential, but they referred to his testimony in telling the judge the state has enough evidence to prosecute Haggerty for grand larceny and other charges.  

The judge said he'll announce whether he will dismiss the indictment on March 14.