There’s More That Mamdani Should Do To Clean Up NYC’s Corrupt Real Estate Industry Than Freeze Rents

NY Landlords & Developers Want To Defeat Mamdani, Reelect Adams

More than ever in my long lifetime, corruption is an overwhelming feature of American politics. For sure, before the Trump era, American politics had seen several periods marked by overt corruption, tied to patronage and weak oversight. Among the easiest to identify were 

• New York’s Tammany Hall era (1850s-1870s), led by William “Boss” Tweed, epitomizing urban machine politics, leading to embezzlement of hundreds of millions of dollars through inflated contracts, kickbacks, patronage jobs and voter fraud. Chicago and Boston had similar machines persisted in cities like Chicago. 

• The Gilded Age (1870’s-1890s) starting during the corruption that marked the Grant Administration, like the Crédit Mobilier (railroad stock bribes to congressmen) and the Whiskey Ring (tax evasion by distillers). Senators were routinely bought by corporate interests via state legislatures with the spoils system patronage fueling cronyism.

• Harding’s Teapot Dome Scandal and his administration’s nearly Trump-like flagrant corruption came to define the Republican Party of the Roaring Twenties.

• More recently was Nixon’s Watergate Era (wiretapping, slush funds, and “dirty tricks.” ), very serious but not on a level of Trumpism.

Obviously not all of today’s corruption is about Trump, even if he personally and his family and cronies are at the center of most of it. The biggest, richest city in the country always has more than its share of corruption and today’s Eric Adams administration— now tied in with Trump— is worse than most. And the real estate billionaires and their lackeys will do anything to keep him in power— and Zohran Mamdani out of power. Should this Wall Street Journal headline have surprised anyone who has an inkling of what corruption is: NYC Real Estate Execs Throw Money Behind Adams to Counter Rise of Mamdani. The most corrupt characters in NYC, from the segment Trump grew up and operated in, are doing what they always do: trying to buy off government. Craig Karmin and Rebecca Picciotto reported that “New York City real-estate executives are throwing support and money behind incumbent Mayor Eric Adams in their fight to block Democratic mayoral nominee Zohran Mamdani, who campaigned on a rent freeze to help solve the city’s housing crisis. Marc Holliday, chief executive of the New York-based real-estate investment trust SL Green, is hosting an Adams fundraiser Wednesday at One Madison, one of his office towers. He is inviting dozens of the city’s real-estate executives to a cocktail event on the Manhattan building’s rooftop, according to two people planning to go. Those who attend will pay about $2,000. ‘There’s going to be a lot of these fundraisers,’ said Noble Black, a New York City luxury real-estate broker. ‘Everyone is talking about how much wealth is aligning against Mamdani.’”

In heavily Democratic New York City, Mamdani, as the winner of the Democratic primary, typically would be considered a strong favorite to win in the general election. The growing industry support for Adams, who is running for re-election on his own ballot lines, marks a pivot from only weeks ago, when the real-estate business mostly backed former Democratic New York Gov. Andrew Cuomo [every bit as corrupt as Adams]. The industry spent millions of dollars on behalf of Cuomo’s primary campaign, according to public filings.

Even after he lost in the primary to Mamdani, Cuomo hasn’t ruled out running on a third-party ticket in the general election in November. But he is thinking about waiting until at least September to officially launch that campaign. 

Much of the real-estate industry is now ready to back a different horse. On Saturday, real estate power couple Kenneth and Maria Fishel co-hosted an Adams fundraiser in the Hamptons with New York City billionaires John and Margo Catsimatidis, real-estate investor Jared Epstein and others.

Epstein is planning other events for Adams in August, including a private dinner. He is also experimenting with digital-media tactics to rival the TikTok and Instagram strategies that Mamdani successfully employed in his primary run. Epstein said he is organizing campaign events in Montauk on Long Island, and Brooklyn to target young voters where social-media influencers will be in the audience to take photos and videos.

Adams faced calls to resign last year after federal prosecutors brought corruption charges against him. The Justice Department under President Trump earlier this year ordered prosecutors to drop those charges,  but Adams remains a polarizing figure in the city.

Still, many in the real-estate community say they see him as their best bet for blocking Mamdani’s path to City Hall. 

Black, the luxury broker, said that at smaller parties he attended in the Hamptons over the July Fourth weekend with real-estate, tech and Wall Street leaders, his conversations were partly focused on how to pressure Cuomo to step down to avoid fracturing the anti-Mamdani coalition. 

Mamdani, a 33-year old assemblyman from Queens, won the primary largely by appealing to young New Yorkers on cost-of-living issues. His democratic socialist campaign featured a proposed rent freeze on the city’s one million rent-stabilized apartments.

While he has won some support from certain younger millionaires, the real-estate pushback against him shows the tough road ahead for Mamdani if he hopes to win over the city’s wider business community— and especially its leaders.

Mamdani recently has made an effort to soften his stance and has spoken of working with private developers. Some of his other housing policies could more closely align with the interests of landlords, such as expediting land-use reviews, opening public land for development and rezoning for more residential projects. 

His campaign also reached out to set up meetings with business trade groups such as the Real Estate Board of New York and the Partnership for New York City.

“With Eric Adams’ administration mired in financial scandals, these donors may want to reconsider where they’re placing their trust,” a Mamdani campaign spokesperson said. “Zohran is focused on bringing people together.” 

For now, at least, Mamdani has failed to attract developer support, and industry leaders remain deeply skeptical. 

Landlords say his rent freeze would suffocate their operating revenue and kill new investment to the city, though the law wouldn’t automatically apply to newly constructed housing units. Many developers also oppose Mamdani’s plans to raise taxes on companies. 

Corruption in the NYC real estate development industry is legendary, even without counting the notorious Trump family  into the mix. NYC real estate, particularly luxury properties, has been a hub for laundering illicit funds. Nearly half of homes nationwide worth over $5 million are purchased through shell companies, obscuring the true owners. This practice is prevalent in Manhattan, where anonymous LLCs own 37% of properties, five times the state average. The Treasury’s Financial Crimes Enforcement Network has noted that NYC’s real estate market attracts corrupt actors, including foreign oligarchs and politically exposed persons, due to minimal oversight. Putin-connected Ukrainian oligarch Ihor Kolomoisky, for example, used NYC real estate to launder funds. Until 2024, real estate professionals were exempt from anti-money laundering requirements under the Patriot Act, creating a loophole that allowed illicit funds to flow unchecked

Recent investigations have uncovered bribery schemes involving city officials and real estate professionals. In October 2024, the Manhattan DA’s office launched a probe into Adams and his aides, focusing on commercial leasing practices suspected of involving bribery and money laundering. A 2023 case saw 24 construction executives charged with bribery and kickbacks related to luxury building projects in Manhattan. Building superintendents in NYC have been reported to accept kickbacks from contractors, a practice described as “normalized” in the construction industry. In 2024, Nir Meir, former managing principal of HFZ Capital Group, and other executives were indicted for stealing over $86 million from investors and subcontractors in a failed luxury condo project, “The XI,” in Manhattan. The scheme involved falsifying records and diverting funds to cover unrelated financial shortfalls. Last year real estate executive Kevin Gao was charged with a $30 million bank fraud scheme, creating unauthorized accounts to siphon funds from a Manhattan development project.

As you would probably guess, NYC’s real estate industry wields significant political clout, with developers and lobbyists spending heavily to influence lawmakers. From 2019 to 2023, the real estate lobby spent $13.6 million on campaigning and lobbying in New York State. While some politicians, like Mamdani ally Comptroller Brad Lander, have rejected developer donations, corrupt politicians like Cuomo and Admas solicit them and accept them freely, raising concerns, to put it mildly, about conflicts of interest.

Adams, indicted in 2024 for corruption, is accused of leveraging city connections for personal gain, especially in real estate dealings. His criminal activities weren’t only about Turkey. Adams was indicted in September 2024 on five federal counts related to public corruption, including bribery, wire fraud, conspiracy and soliciting campaign contributions from foreign nationals. While the indictment primarily focuses on illegal campaign contributions and favors tied to foreign entities. Other investigations and allegations surrounding his administration have raised questions about his connections to the real estate industry, with some probes touching on related issues. A notable case involves Erden Arkan, a businessman who solicited straw donations from 10 employees of his firm, KSK Construction, for Adams’ campaign. These donations helped Adams fraudulently obtain over $10 million from NYC’s Matching Funds Program, which matches small donations from city residents but prohibits contributions from foreign nationals or corporations.

A February 2024 FBI raid on KSK Construction’s offices, as part of the broader Adams investigation, indicates scrutiny of real estate-related financial activities. Separate from the indictment, a 2024 Manhattan DA investigation into Adams’ administration has explored commercial leasing practices, suspecting bribery and money laundering. While details remain sparse, this probe suggests misuse of city authority in real estate transactions. Ingrid Lewis-Martin, Adams’ former chief adviser, was indicted in December 2024 for accepting $100,000 in bribes from businessmen Mayank Dwivedi and Raizada Vaid to intervene with the city’s Buildings Department on construction projects. 

In case you weren’t paying attention at the time, Adams pressured the NYC Fire Department to approve the opening of a 36-story Turkish Consulate building in Manhattan in September 2021, despite safety concerns that would have caused it to fail a fire inspection. In exchange, Adams received over $100,000 in benefits, including free or heavily discounted luxury travel on Turkish Airlines and stays at high-end hotels like the St. Regis in Istanbul from Turkish nationals and officials.