‘BEAT’ COP AN UNTOUCHABLE SO FAR: Former NYPD Chief of Department Philip Banks sounded more like an outlaw than an ex-cop in declaring that he ‘beat’ probes by Federal investigators into more than $500,000 in undeclared income. He has so far escaped indictment even as close associates including Jona Rechnitz (center) made a deal with prosecutors to minimize his jail term and ex-Correction Officers Benevolent Association President Norman Seabrook (right) awaits a new trial in a scheme allegedly hatched while he was with Mr. Banks and Mr. Rechnitz on a trip to the Dominican Republic five years ago.

In the 3½ years since he stepped down as the NYPD’s Chief of Department, ostensibly because he considered a transfer from that position to First Deputy Commissioner a negative shift, Philip Banks III has increasingly seemed like The Teflon Cop, the man who got away as those with close ties to him were implicated in multiple scandals.

He was on vacation with his close friend Norman Seabrook in the Dominican Republic, along with Jona Rechnitz and Jeremy Reichberg, in December 2013 when the longtime president of the Correction Officers Benevolent Association allegedly declared, “It’s time that Norman Seabrook got paid.” According to Federal prosecutors, that set in motion the transaction under which Mr. Seabrook invested $20 million of his union’s money in a hedge fund run by an associate of Mr. Rechnitz in return for a $60,000 bribe.

Mr. Banks also, according to prosecutors, traveled to the Dominican with Hamlet Peralta, whose Hudson River Café in Harlem was one of his hangouts. Allegations were made that a high-ranking police commander ordered that cops serve as a kind of unofficial security force while also overlooking violations at the restaurant. Mr. Peralta, who was charged with running a $12-million Ponzi scheme in which he persuaded investors to buy into a liquor business while using their money to finance his lavish lifestyle, eventually pleaded guilty to wire fraud and is serving a five-year sentence in Federal prison. The Daily News reported that the scam helped fund a drug-trafficking scheme run by an associate of Mr. Peralta’s, but that there was no evidence that Mr. Banks, Mr. Rechnitz or Mr. Reichberg knew of this.

Quid Pro Promotions for Two Proteges

Mr. Banks, according to Mr. Rechnitz, helped ensure the promotions of two cops who had been helpful to him and Mr. Reichberg. One of those cops, ex-Deputy Chief Michael Harrington, pleaded guilty to the misappropriation of property belonging to an organization receiving Federal funds—the NYPD—in March and will receive little or no prison time when he is sentenced in June. The other one, James Grant, who was accused of sharing more than $100,000 in bribes with Mr. Harrington that came from Mr. Rechnitz and Mr. Reichberg, according to Mr. Rechnitz heard about his promotion to run the 19th Precinct in a call from Mr. Banks, who then put his financial benefactors on the phone to offer their congratulations.

Mr. Grant, a former Deputy Inspector, and Mr. Reichberg are scheduled to go on trial next week—although the case may be postponed because of additional evidence against them that recently emerged—with Mr. Rechnitz the key witness against them. That represents good news and bad news for the U.S. Attorney’s Office in Manhattan: Mr. Rechnitz has plenty to tell, but the multitude of schemes he was involved in, and his persona as a clueless rich kid allowed Mr. Seabrook’s lawyer to sufficiently discredit him with the jury to win a mistrial last November.

Oh, and apart from his extensive dealings—which allegedly included investing money with both Mr. Peralta and Mr. Rechnitz—with such unsavory characters, Mr. Banks was also the NYPD official who gave the order to Staten Island cops to make arrests for the selling of loose cigarettes that produced the confrontation from which Eric Garner died in July 2014.

Remarkably, he has absorbed relatively little criticism for repeated cases of abysmal judgment, both in the company he kept and in his decision that police action should be taken for what amounted to a civil violation—the selling of untaxed cigarettes. In fact, at the time that Mr. Banks announced that he was leaving the NYPD rather than take the position then-Commissioner Bill Bratton was offering him, the New York Post quoted sources who said that Mayor de Blasio’s wife, Chirlane McCray, blamed Mr. Bratton for forcing him out, telling her husband, “I told you we can’t trust him.”

Joint Denial of a Rift

The Mayor denied she said that, and Ms. McCray claimed she hadn’t had time to have a conversation with him, although whether making such a remark constituted a conversation created the possibility that this was a semantic evasion. Concern about the story ran strong enough that the Mayor and Mr. Bratton called an unusual Sunday press conference to deny there was a rift between the two men.

Mr. Banks at the time said he turned down the First Deputy Commissioner’s job because it would remove his authority, as the top uniformed commander in the NYPD, over the troops. What seemed ironic then was that the job’s powers had been diluted, in order to consolidate his own power, by the man who promoted him to Chief of Department, then-Commissioner Ray Kelly. During the administration of Mayor David Dinkins, Mr. Kelly initially served as First Dep and made the most of the position, notably at the tail end of the 1991 Crown Heights riots when he was given the authority to take back the streets after Mr. Dinkins grew angry with Police Commissioner Lee Brown’s sluggish response over the first three days of the disturbances. After succeeding Mr. Brown as Commissioner the following year, however, he quickly grasped that having too much power vested in the First Dep would come at the expense of his own prerogatives.

Mr. Bratton, who would succeed Mr. Kelly first when Rudy Giuliani became Mayor and later when Mr. de Blasio took over for Michael Bloomberg, apparently shared that view. What became eyebrow-raising only in retrospect were the two demands Mr. Banks reportedly made if he was to accept the transfer: that the new Chief of Department report directly to him rather than the Commissioner, and that he be given control over the Internal Affairs Bureau.

Demands Come Into Focus

What would subsequently be learned about Mr. Banks’s relationships with the likes of Mr. Peralta, Mr. Rechnitz and Mr. Reichberg puts a new light on his desire to control IAB. It also brings into clearer focus what seemed a questionable decision to retire from the NYPD rather than become First Deputy Commissioner.

At the time, it was already known that Mr. Bratton was unlikely to stay through the end of Mr. de Blasio’s first term, and Mr. Banks, no matter which high-ranking NYPD position he held, figured to be his most-likely successor. The Mayor was known to like him and had interviewed him for the top job before giving it to the man whose stature muted questions about whether Mr. de Blasio’s left-leaning positions could undercut the department’s prime mission of keeping the streets safe.

And so why bolt, and do it in a manner that reportedly bothered the Mayor, as well as NYPD commanders besides Mr. Bratton?

When Mr. Banks didn’t quickly secure a top law-enforcement position elsewhere, that offered what in retrospect was another clue that maybe the disagreement over responsibilities between him and Mr. Bratton went deeper than a territorial dispute, and may have been a blessing in disguise for Mr. de Blasio.

Charges Brought Clarity

This grew increasingly clear with the charges against two police commanders who previously had worked closely with Mr. Banks, along with revelations about his connections to others who had been criminally charged. The case against Mr. Seabrook, who was indicted in June 2016, shined a new light on positions the then-COBA president took during the 2013 mayoral campaign that at the time just seemed consistent with his flamboyant style and his own preferred candidate for that job.

In late September 2013, Mr. Seabrook, who had tried to convince Commissioner Kelly to run for Mayor despite the backlash he was facing over the excessive use of stop-and-frisk during his tenure, told this newspaper’s Mark Toor that he believed the best signal of a change in city government would be to “appoint a minority Police Commissioner.” And, he added, “Phil Banks would be at the top of my list to fill the shoes of Raymond W. Kelly. Who’s better to do the job than a man with four stars who worked his way up the ranks?”

A couple of weeks later, he gave COBA’s endorsement to Mr. de Blasio; a couple of weeks after that, the union honored Chief Banks as its “Man of the Year.” Less than two months later, Mr. Seabrook and Mr. Banks took the trip to the Dominican with Mr. Rechnitz and Mr. Reichberg that was cited by a Federal prosecutor in his opening argument against Mr. Seabrook as the beginning of the corrupt relationship that brought him in front of a jury on charges of selling out his members for a bribe.

Even as the Seabrook trial steamed through some stunning revelations but ended with a hung jury, and as Chief Harrington pleaded guilty and the trial of Inspector Grant and Mr. Reichberg grew closer, Mr. Banks remained largely under the radar. He remained the source of enough curiosity to become a topic of conversation with a ranking NYPD official at the cocktail party prior to the April 21 Inner Circle Show.

The Stash Hits the Fan

And then a day later, The Post ran a story online, under the headline “NYPD Boss’ $300K Stash,” about financial transactions by Mr. Banks over a seven-year period that an FBI Special Agent described as looking suspiciously like money-laundering.

“Specifically,” Special Agent Joseph Downs wrote in an affidavit filed in Manhattan Federal Court, “based on my training and experience, and participating in this investigation, I know that individuals who wish to conceal the illegal sources of financial proceeds often make efforts to conceal those proceeds by engaging in financial transactions with banks or by having third parties engage in such transactions that hide the true source of the proceeds of unlawful activity.”

The affidavit, according to the Post story, was part of an application for a cell-phone wiretap that was approved Oct. 30, 2014, the day before Mr. Banks rejected what Mr. Bratton presented as a promotion and announced his retirement. He said that leaving his job as Chief of Department “would take me away from where I could make the greatest contribution: the police work and operations that I love so much.”

It’s hard to imagine he was waxing sentimental about his decision a few months earlier to order arrests for selling loosies. That’s not to say he could have anticipated Mr. Garner resisting being arrested, an action that may have been spurred by indications that on that particular afternoon he hadn’t been plying the cigarette trade and had actually broken up a fight shortly before cops confronted him. Nor could Chief Banks have known that Police Officer Daniel Pantaleo, apparently frustrated that Mr. Garner’s girth thwarted his attempt to use a “seat-belt hold” to get him under control, then resorted to a chokehold that had been banned by the NYPD more than two decades earlier.

More Politician Than Cop

But the decision to make arrests for such a penny-ante crime owed less to clear-thinking police work—in an administration that came to power protesting the unfair use of stop-and-frisks—than to the mentality of a police commander who had attained the department’s top uniformed job because of his political skills.

Mr. Banks became Chief of Department after heading the NYPD Community Affairs Bureau, in which diplomacy is more important than tactical skills on the streets. Prior to that, he was the commanding officer of Patrol Borough Manhattan North and held several precinct commands.

In contrast, his successor as Chief of Department, James O’Neill—who eventually succeeded Mr. Bratton as Commissioner—after running numerous precincts had been the commanding officer of the NYPD’s Vice, Narcotics and Fugitive-Enforcement Divisions, and then was promoted to Chief of Patrol, where he began experimenting with what became the neighborhood-policing program.

While lacking the breadth of experience Mr. O’Neill had, Mr. Banks knew how to play politics: shortly after Mr. Kelly named him Chief of Department, the Village Voice did a story on his close ties to the Rev. Calvin Butts, longtime pastor of the Abyssinian Baptist Church, that detailed charges Mr. Banks had managed to squelch against a senior official in the organization’s construction unit following a domestic dispute.

Suited Kelly’s Needs

Commissioner Kelly had long cultivated close ties with the African-American community and was a regular presence at black churches on Sundays. His presence and his clear comfort level in such gatherings enabled him to keep his approval ratings high in the community even amid rising anger about the overuse of stop-and-frisk in some primarily black neighborhoods.

And so there was a distinct irony to a comment by Mr. Banks in an interview with The Post last week after he declined comment prior to the paper’s first story on the financial dealings that had attracted prosecutors’ notice for the period from 2007 through 2013, the year Mr. Kelly promoted him.

For the follow-up story, the ex-Chief of Department had plenty to say, telling a Post reporter that he left the NYPD rather than take the job offered by Mr. Bratton because the then-Commissioner had a white “old-boy network” and wanted “a local black just to color him.”

The paper quoted Mr. Banks saying, “He was using me. This n----r was going to be his f---king puppet.”

Even more remarkable than that language was his response when he was asked about a source’s claim that what prompted him to retire was that taking the First Deputy Commissioner’s job would have forced him to submit to a Department of Investigation background check that would have required explanations for his financial maneuvering over the previous eight years.

‘Beat All the Probes’

According to The Post, Mr. Banks replied, “I beat the IRS investigation, the U.S. Attorney Investigation and the FBI investigation. They found nothing. Why would I be concerned about a DOI investigation?”

What he didn’t mention was that those other probes all occurred after he left the NYPD. They concerned more than $500,000 in undeclared income, including about $300,000 in relatively small deposits in bank accounts controlled by Mr. Banks and his wife, as well as suspicions on the part of the FBI, which had wiretapped Mr. Rechnitz’s phone before turning him into a cooperating witness, that the top cop had invested $250,000 with Mr. Peralta using Mr. Rechnitz as the middle man.

Just as notable was the defiance he expressed in proclaiming that he “beat” three Federal probes. It’s a stance adopted by those in high-powered, legitimate jobs who have convinced themselves that the only crime in doing something shady lies in being caught.

The Post noted that the affidavits, including the one by Special Agent Downs, that got a wiretap of Mr. Banks’s cell phone approved contained a claim of “unexplained cash deposits into the accounts of Banks and his wife” and stated that he never reported more than $245,000 in rental income he received from tenants at properties he owned over the period from 2007 through 2013.

Special Agent Downs also stated that Mr. Banks and his wife filed tax returns separately, each claiming to be “head of household” and that she falsely listed her address as being one of the rental properties that he owned in attempts to reduce their tax obligations.

No Evidence of Bribes?

The Post quoted an unidentified “senior law-enforcement official” who said there was a potential case for money-laundering and tax-evasion charges but that prosecutors “did not feel they had anything that could stick in court and convict Banks.” Part of the problem, he said, was that “there was no evidence that we saw that he was taking any bribes.”

The lawyer for Mr. Banks, Ben Brafman, who at the time of the probe was also representing Mr. Peralta, told The Post that the money deposited by his client that the FBI deemed beyond what he could have produced from his salary stemmed from a combination of an inheritance, rent payments and poker winnings. The NYPD tends to frown on cops gambling because of the potential for them to be corrupted by a need for cash if they lose large sums, but given that Mr. Banks is beyond the department’s reach, the only potential damage done to him by Mr. Brafman’s claim related to a reputation that already had been badly bruised.

Arnold Kriss, a former NYPD Deputy Commissioner for Trials who was also an Assistant District Attorney in Brooklyn, said in an April 24 phone interview that however careless Mr. Banks may have been in his choice of associates, he may have been careful enough about the transactions to discourage the bringing of criminal charges.

“For the Feds to make a case, they need witnesses and they need corroboration,” he said. “They may not be able to prove guilt beyond a reasonable doubt; they may not have enough to bring down a [former Chief of Department] based on informants’ testimony.”

Hurts NYPD Internally

Even so, said Gene O’Donnell, an ex-cop and former prosecutor who’s a Professor of Law and Police Studies at John Jay College, the maneuvering by Mr. Banks is terrible for the NYPD’s image, particularly internally.

He noted that Mr. Rechnitz and Mr. Reichberg had gained clout within the NYPD long before their political support of Mr. de Blasio gave them entrée at City Hall because they were viewed as power brokers within the Orthodox Jewish community in Brooklyn’s Borough Park section. (Some of the favors they got from Chief Harrington and Inspector Grant were done on behalf of influential members of that community rather than to directly help Mr. Rechnitz and Mr. Reichberg.)

Referring to the 66th Precinct, which includes Borough Park within its boundaries, Mr. O’Donnell said, “It’s known that police commanders there have to be very compliant and very responsive to that community. And then you had the Mayor doing all sorts of business with those guys. There has to be a firewall...the calls from the Mayor to the Police Department need to be few and far between.”

And Mr. Banks, who was plugged into the community from his time in Brooklyn South long before he became Chief of Department, more than likely made clear to Mr. Harrington and Mr. Grant that their career advancement could be sped along through cooperation with key officials within the community. Perhaps, Professor O’Donnell said, the NYPD should consider “going back to what the Fire Department does, where promotions go through the civil-service system right up until Chief of Department.”

As radical as such a shift—which would rein in the promotion prerogatives of the Police Commissioner himself—might be, he continued, consider the current alternative: “Cops will tell you they’re watched on every ethical move they make, but here you have a Chief with $300,000 in unaccountable cash” yet apparently beyond the law.

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(1) comment


Excellent article on the "teflon chief," Mr. Banks. I think there is a good chance he will eventually be charged and will be convicted of at least one felony.

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