Eric Adams Donor Construction Firm Escaped Past City Graft Tangles

Eric Adams Donor Construction Firm Escaped Past City Graft Tangles

By Greg B. Smith | November 5, 2023

The federal probe of Mayor Eric Adams’ campaign fundraising that exploded into public view last week centers on KSK Construction, a Turkey-tied engineering firm that delivered more than a dozen donations to the mayor’s 2021 campaign that are now a subject of the investigation.

But years before KSK’s involvement in this explosive inquiry became public, KSK CEO, Erden Arkan, ran another company called Kiska Construction that was at the heart of two other back-to-back corruption scandals involving bribery of city workers in 2007 and 2008.

Arkan spun off KSK while he was still helming Kiska and remained affiliated with both companies through the scandals of 2007 and 2008.

In the 2007 investigation, a Kiska executive got arrested and agreed to cooperate with law enforcement, wearing a wire to secretly record himself bribing two of city Department of Transportation (DOT) bureaucrats overseeing reconstruction of the Third Avenue Bridge.

At one sit down in a Long Island City restaurant, a Kiska executive working on the $118.1 million bridge contract happily agreed to numbers scribbled on a Post-It note spelling out how much his firm would have to bribe a mid-level agency bureaucrat to smooth the way for extra payments from the city.

In 2008 the two DOT employees ultimately pleaded guilty to bribery charges and later did prison time — but the company continued to get big public works contracts, going on to win more than $180 million in state work painting and repairing bridges.

That same year, the city Conflicts of Interest Board penalized two city Economic Development Corporation officials and a Parks Department employee for accepting forbidden meals and lodging from Kiska as the company sought to expand its more than $60 million in contracts to construct the High Line in Chelsea.

Even before the Third Avenue bridge bribery scandal, city DOT put Kiska on its so-called caution list, red-flagging several prior construction safety violations brought by the Occupational Safety & Health Administration (OSHA), including one related to a fatality.

In 2007 the Department of Investigation added more to the caution list, referring to the probe of the gifts given to EDC employees.

Then in March 2008, Kiska was tagged yet again, this time after a New Jersey indictment of 23 defendants with organized crime ties alleged that a foreman on a Kiska contract repairing the Goethal’s Bridge had ties to the Gambino crime family and had orchestrated a no-show job scam at the jobsite.

While the company appears to have stopped getting work with the city, it had no problem continuing to win multi-million dollar public works contracts — only now it was for the state of New York, THE CITY found.

An employee of KSK hung up Friday when THE CITY asked to speak with Arkan.

KSK’s entanglement in a political corruption investigation emerged Thursday when the FBI raided the Brooklyn home of Adams’ top fundraiser, Brianna Scruggs. According to a search warrant obtained by the New York Times, the ongoing probe focuses on whether the mayor’s 2021 campaign received illegal donations from foreign nationals via KSK Construction.

Campaign finance records show that KSK executives and staff raised $13,950 for Adams at a May 2021 pre-primary fundraiser organized by Arkan, KSK’s founder and former CEO of Kiska.

As THE CITY reported Thursday, at least one of the KSK employees listed as donating to Adams at this fundraiser said he did not recall making a donation, indicating the possibility that the KSK contributions were funded by another source.

Seeking a Payoff

Available details regarding the 2007 Third Avenue Bridge affair are particularly lurid. An unidentified Kiska executive recorded all his conversations with Balram Chandiramani, a high-ranking official at the city Department of Transportation whose nickname was Balu, and a second lower level DOT employee, Uday Shah.

In one rendezvous a city investigator sat in a parking lot secretly videotaping the executive handing an envelope to Shah, an engineer on the Third Avenue job.

Kiska wanted DOT to sign off on $16 million in added charges to the original contract for the bridge job. The scheme was crafted during several meetings between the executive and the bureaucrats, often at a restaurant near Kiska’s offices in Long Island City.

Ultimately the arrangement they worked out would have Chandiramani ushering through a compromise figure of $6.6 million in exchange for a $400,000 payoff. This math was memorialized during one restaurant face-to-face when the DOT official instructed the contractor to move from across the table and sit next to him.

Chandiramani then showed the executive a Post-It note. The executive couldn’t read it, stating, “I don’t have my glasses on. What is the number?” He looked closer and saw “400.”

“Four hundred thousand dollars? Okay. And that’s if I get what?”

“$6.6 million,” Chandiramani replied.

“I like that,” the executive said as his recording device picked up every word. “I’ve got no problem with that, Balu. If you can guarantee me 6.6, I’m going to give you 400 grand. No problem. Why didn’t we have this talk five years ago?”

Ultimately DOT agreed to pay the $6.6 million, and in November 2007 Chandiramani and Shah were arrested in an indictment  brought by the Brooklyn U.S. Attorney. Both pleaded guilty to bribery charges; Chandiramani got a one-year sentence, Shah got three years.

High Line Gravy

The High Line scandal of 2008 had lower stakes — and no consequences for Kiska.

Nazir Mir, vice president of capital programs at EDC, told city investigators he mentioned to a Kiska employee that his son was getting married and honeymooning in Europe, with a trip to Turkey in the itinerary.

The Kiska employee mentioned that Kiska’s parent company in Turkey owned several hotels, and he promised to make reservations for Mir’s son. Later the Kiska representative said Kiska would pick up the tab, but Mir claimed he told them his son would pay his own way.

The son stayed in a honeymoon suite at the Kiska-owned Marmara Hotel for five nights and when he tried to pay his bill as he was checking out, the hotel said it was already paid. Neither Mir nor the son ever reimbursed Kiska for the free hotel, or for the free transportation to and from the airport the son and his bride also received. The total cost came to $4,000.

Mir and another EDC vice president, along with a Parks Department project manager, acknowledged accepting free meals, including dinners at Moran Steakhouse in Chelsea and Turkish Kitchen in Murray Hill. All three paid a total of more than $14,000 in fines.

Mir insisted that he was not the instigator of the corrupt affair and that he provided nothing in return, stating in his 2009 settlement with the city Conflicts of Interest Board: “I did not solicit, accept or agree to accept any benefit described herein upon an agreement or understanding that my vote, opinion, judgment, action, decision or exercise of discretion as a public servant would thereby be influenced.”

All of these events involving bribery of city employees were publicly reported at the time, and in the case of the Third Avenue bridge, then-Mayor Michael Bloomberg cut off further payments to Kiska.

But that didn’t stop New York State from awarding the company millions of dollars in contracts. Two years after the Third Avenue bridge arrests and one year after the EDC and Parks Department’s settlements were made public, the state Department of Transportation awarded Kiska a $41.9 million contract to rehab the Robert Moses Causeway on Long Island.

That was followed by seven more DOT contracts painting or repairing bridges all over Long Island and upstate, including the Robert Moses Causeway, the Long Island Expressway and bridges across Orange and Rockland counties.

Glenn Blain, a spokesperson for the DOT,  responded to THE CITY’s email asking if the agency was aware of Kiska’s involvement in the bribery investigations that preceded the multiple contracts the agency awarded to the firm with a brief statement about the usual contract selection:

“The New York State Department of Transportation strictly abides by state procurement laws and only awards contracts to bidders that are deemed responsible under criteria established by state law.”

This story was published by THE CITY on November 5, 2023.

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