Democrat Dirty Laundry: Senior Democrat’s Ethics Violations Go Deeper

January 13, 2010

Senior Democrat’s Ethics Violations Go Deeper

Details Emerge on Congressman Gary Ackerman’s $100,000 Sweetheart Deal


SPIN CYCLE: Speaker Pelosi Vowed that Democrats Would Lead the “Most Honest, Most Open, and Most Ethical Congress in History”


“Our goal is to restore accountability, honesty and openness at all levels of government. To do so, we will create and enforce rules that demand the highest ethics from every public servant, sever unethical ties between lawmakers and lobbyists, and establish clear standards that prevent the trading of official business for gifts.” (Nancy Pelosi’s “A New Direction for America,” Page 21)


RINSE CYCLE: New Details Show Senior Democrat Rep. Gary Ackerman taking it to the bank with preferred loan


Rep. Gary Ackerman confirmed Monday he introduced Israeli officials to a defense contractor at the same time he was investing in the company.


The admission came in response to a Daily News investigation that disclosed Ackerman’s no-money-down investment in private stock of Xenonics Inc.


Ackerman released a statement to media outlets other than The News saying he introduced Israeli representatives to Xenonics’ “eight years or so ago.”


At the time, the firm’s biggest shareholder, a longtime friend of Ackerman’s named Selig Zises, loaned the congressman $14,000 to buy the firm’s private stock. The loan had no repayment schedule, no due date and no collateral requirements.


Ackerman refused for weeks to answer The News’ questions about the specific date of the meeting he set up between the Israelis and Xenonics’ founder, Alan Magerman. His statement still contained no date.

But the time frame raises questions about whether Ackerman used his political influence to benefit a company in which he stood to make money.


Ultimately, he paid back the loan to Zises with 6% interest and sold all the Xenonics stock when the company went public, making “around $100,000” on the sale.


It’s not clear whether Ackerman would have had to pay back the loan if the stock had collapsed, but Zises indicated he would not. In an interview with The News, he said, “Gary is one of my closest friends. I was only happy for Gary to make some money. If the thing succeeded, he paid me back.”


In his statement, Ackerman said, “I arranged a meeting in which I introduced representatives of Israel to Xenonics because I believed that the technology used by the company for night vision lighting could contribute to Israel’s national defense, and could save Israeli lives as it was already being used to save American lives in Afghanistan.


Meanwhile, a National Republican Congressional Committee spokesman said Ackerman should ask the House ethics committee to investigate the stock deal.


“If Gary Ackerman is so confident he has done nothing wrong, he owes it to New Yorkers to call on the House ethics committee to investigate,” said Republican Congressional Committee spokesman Paul Lindsay. (Benjamin Lesser and Greg B. Smith, “Rep Ackerman confirms he introduced Israeli officials to defense contractor Xenonics,” New York Daily News, 1/12/10)


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