Assemblyman's kin gain from pork fund

Diaz Jr. plows $1.2M into nonprofit employing father, mother, others

JAMES M. ODATO Capitol bureau
Section: Main,  Page: A1

Date: Thursday, April 20, 2006

ALBANY - Assemblyman Ruben Diaz Jr. steered more than $1.2 million from the Legislature's secretive pork fund to a Bronx organization that employed family members, according to state officials and the assemblyman.

The nonprofit Soundview Community in Action employed Diaz's father, Sen. Ruben Diaz Sr., his father's wife and his father's ex-wife, who is the assemblyman's mother, the Democratic assemblyman acknowledged Wednesday. The senior Diaz quit as CEO of Soundview after getting elected to the Senate in 2002. The not-for profit organization offers programs in technology education and job readiness for at-risk youth in the South Bronx. Its funding came from a series of "member items" implemented by the state Office of Children & Family Services and Empire State Development Corp., officials at the agencies said.

Member item funds, discretionary spending privately arranged to suit politicians, come from a pot of $200 million typically inserted annually in the budget at the discretion of legislative leaders and the governor. The Times Union reported Sunday that budget officers for the Senate, Assembly and Gov. George Pataki's budget division sign a confidentiality pact that shrouds in secrecy the process of choosing who will get taxpayer money from member item accounts.

Sen. Diaz recently repaid more than $2,000 to Children & Family Services because some of the member item money was misused by the nonprofit Soundview organization, Attorney General Eliot Spitzer's office said.

Spitzer's office conducted a nearly two-year investigation into allegations made by Soundview workers who charged Sen. Diaz misappropriated funds and misused Soundview employees to augment the senator's campaign activities. Spitzer's investigators, after interviewing 11 people, found Sen. Diaz needed to pay back two government agencies a total of $4,221 because he benefited from some misspent funds, said Paul Larrabee, a Spitzer spokesman. The money paid for furniture and loudspeakers for the senator's Senate office in the Bronx, he said.

Assemblyman Diaz, a member of the Assembly since 1996, said he was responsible for seven years of member item money sent to Soundview starting in 1998 and one Senate member item to Soundview from 2003 was from his father. Sen. Diaz's wife was the first CEO from 1998 to 1999, followed by Diaz Sr. She resumed the post after he husband went to the Senate.

Larabee said he was unaware if Spitzer's agents from the Charities Bureau and the Public Integrity Unit looked into nepotism involving the member items funds directed to Soundview during the seven-year period.

Edward Padilla, the current Soundview CEO, said Wednesday Leslie Diaz was a no-show during her second tour of duty as was the senator's ex-wife, Assemblyman Diaz's mother, Didionilda Vega, who was on the payroll for a short time but was shifted to a consultant.

"It benefited the community," Assemblyman Diaz said when asked about his member item funds paying for the employment of relatives.

He said the allegations of misdeeds came from untrustworthy people who took control and mismanaged Soundview after Leslie Diaz left the organization and it became headed by Padilla about 30 months ago. Padilla said Assemblyman Diaz became angry with him after Padilla tried to get Vega to show up for work.

Assemblyman Diaz was unsure of the salary paid his father and Leslie Diaz when they were CEO - a sum Padilla said was $65,000 a year - but said his mother received just $2,000 as a consultant to advise on "community events."

Padilla said Vega was on the payroll for $16,000 a year but collected just about $4,000 in weekly checks and consulting fees. He and others at Soundview criticized Spitzer's investigation.

"It's like saying: I'm taking your money, money that was given to me for the community, and ... giving it to your family," said Israel Cruz, outreach director at Soundview.

Larrabee said the resolution of the case came after investigators could not collect "consistent, credible testimony to support every allegation that was made."

Sen. Diaz wrote checks from his campaign fund to pay Children and Family Services and the U.S. Small Business Administration for grant money provided Soundview that was misused, Larrabee said. Empire State Development Corp. officials said $1 million in member item funds went to Soundview, all in Assemblyman Ruben Diaz's name, except $225,000 in the 2002 fiscal year credited to Assemblyman Luis Diaz, also a Democrat from the Bronx. Children and Family Services lists $417,625 in state member items funds going to Soundview, eight of which are from an assemblyman and $15,000 from a senator.

Sen. Diaz did not return telephone calls.

James M. Odato can be reached at 454-5083 or by e-mail at