By ADAM SICHKO
The Albany Business Review

Joseph Bruno, former majority leader of the New York Senate, faces prison time after being found guilty Monday on two of eight felony counts.

An Albany jury found the 80-year-old Bruno guilty on a count charging him with receiving 11 payments in 2004 for consulting work that he did not perform. Bruno was also found guilty of receiving $80,000 in payment for a racehorse that prosecutors alleged was worthless.

He faces a maximum sentence of 20 years on each count, and could also be fined $250,000. Sentencing was set for March 31.

The jury found Bruno not guilty on five other counts. On the final count, the jury was deadlocked, and no verdict was reached.

The trial wrapped up Nov. 23. That day, federal prosecutors and Bruno's defense attorneys spent five hours on their closing arguments, attempting to summarize evidence and testimony from 70 witnesses who appeared at trial.

Bruno's attorneys are preparing an appeal, which would delay the start of any sentence for months. Bruno's attorneys have 36 days to appeal.

The verdict ended the first round of the high-profile criminal trial of Bruno. The jury of seven women and five men deliberated for almost seven full days before delivering its verdict.

Federal prosecutors accused Bruno, an iconic politician, of intentionally and illegally covering up his outside business consulting activities while in office. Federal prosecutors say Bruno devised and carried out a scheme to hide his business dealings - which often included people or companies who had business before the state - by withholding information on annual disclosure reports that legislators must file with the state.

"We established at this trial that Bruno exploited his office by concealing the nature and source of substantial payments that he received from parties that benefitted from his official actions and the resulting conflicts of interest," said acting U.S. Attorney Andrew Baxter, who runs the Albany division of the U.S. Attorney's office.

By law, state legislators are part-time workers, enabling them to hold outside employment if they want.

Bruno has consistently maintained his innocence, saying he broke no laws. He did not testify at his trial.

"It goes without saying I'm very, very disappointed with the verdict I just heard," Bruno said outside U.S. District Court in downtown Albany, clearly stung by the jury's decision.

"The legal process is going to continue, and in my mind and in my heart, it's not over until it's over - and it's far from over," Bruno added, before stepping into a vehicle driven by Kay Stafford, who is Bruno's boss at CMA Consulting Services in Latham.

Three years ago, Bruno confirmed an ongoing FBI investigation into his outside business activities. He retired from the Senate in June 2008. He was indicted in January 2009.

Bruno was found guilty on a count of fraud involving 11 mailings of checks in 2004, sent by companies connected with Loudonville businessman Jared Abbruzzese to Bruno's firm, Capital Business Consultants.

Prosecutors said Bruno performed little to no work for the money, meaning that the payments should have been reported as gifts on Bruno's annual financial disclosure reports.

Bruno was also found guilty on a count of fraud involving a racehorse partnership with Abbruzzese. It involved Abbruzzese paying Bruno $80,000 for what prosecutors described as a nearly worthless racehorse; Abbruzzese testified that he bought the horse for that price to compensate Bruno for money he was supposed to get in a consulting contract with one of his companies.

Still, the jury acquitted Bruno of two other counts involving work allegedly performed for other businesses Abbruzzese was connected with. In all, Abbruzzese paid Bruno $440,000 from 2004-06 for work allegedly performed for at least four companies.

The jury also acquitted Bruno of any counts connected with McGinn Smith & Co Inc., an Albany brokerage firm that employed Bruno part-time from 1994-2006.

The jury was hung on one count involving other consulting work allegedly performed for other companies not connected with Abbruzzese. Federal prosecutors could choose to try Bruno again on that count; Baxter said his office will undergo "appropriate internal deliberation" before making that decision.

Good-government groups and ethics watchdogs say they are shocked at some of the revelations witnesses gave at the trial - such as that Bruno used his Senate staff to handle personal business matters and his Christmas shopping, or that legislators were advised to hand-deliver financial-disclosure reports to evade potential mail-fraud or
wire-fraud prosecutions.

The trial "pulled back the curtain on Mr. Bruno's shocking use of his public office for private gain, including using taxpayer resources to help build his business empire, relying on Senate staff for his private business dealings and using state offices to hold sales-pitch meetings," said Blair Horner, legislative director of the New York Public Interest Research Group.

"What is abundantly clear is that New York's legislative ethics is rotten," Horner said, calling for the creation of more detailed financial disclosure reports and a tougher, independent ethics watchdog committee for legislators.

Baxter, of the U.S. Attorney's office, also commented on the practices exposed during the trial.

"The prosecutors and agents involved in this case take no pleasure from what the trial revealed about the culture of the New York State Senate," he said. "Federal law enforcement ... will continue to strive to ensure that public officials who breach their public trust will be held accountable, notwithstanding the challenges presented by the state's inadequate legislative ethics and disclosure laws."