Golden Oldies : Senator Alphonse D'Amato's One-Day $37k Stock Market Killing
Most Newsday readers of a certain age remember the Stratton Oakmont story from the '90s and Senator Alphonse D'Amato's involvement with the notorious pump and dump boiler room.
But how many people know that Jordan Belfort, Stratton Oakmont CEO, testified in court in 2000 that he lied to the Senate Ethics Committee in 1996 about whether he arranged Senator Alphonse D'Amato's one-day $37,125 stock-market killing?
Remember Senator Alphonse D'Amato? He's the one who investigated the Clintons for six years before New Yorkers got sick of his shit and threw him out of office.
Here's the story:
Newsday
By Susan Harrigan and Graham Rayman
10/26/00
"D'Amato Probe Called A Whitewash / Original complainant says committees protect senators"
In the wake of pump-and-dump boiler-room king Jordan Belfort's claim that he lied to the Senate Ethics Committee during the 1996 probe of former New York Sen. Alfonse D'Amato, the man who filed the original ethics complaint against the senator blasted the committee for failing to thoroughly investigate the allegations.
"It was pretty clear that there was never much of an investigation into the complaint," said Gary Ruskin, director of the Congressional Accountability Project, which initially filed allegations in June, 1996, over D'Amato's one-day $37,125 stock-market killing. The trades were made by Belfort's firm, Stratton Oakmont, a notorious Lake Success-based stock brokerage. "The biggest lesson of this is that both the Senate and House ethics committees does not investigate corruption. They are set up to protect senators."
Belfort testified Tuesday in the federal money-laundering trial in Brooklyn of former Stratton Oakmont accountant Dennis Gaito that he lied when he told the Senate Ethics Committee he did not arrange D'Amato's stock windfall. In his testimony Tuesday, he said he arranged the deal on D'Amato's request.
Belfort had also told federal investigators he arranged the D'Amato stock trade after he was indicted on securities-fraud and money-laundering charges in September, 1998, as part of negotiations over a plea agreement, according to documents. Belfort pleaded guilty to fraud charges last year.
In September, 1996, the Ethics Committee found no wrongdoing on D'Amato's part. D'Amato spokeswoman Lisa Dewald said yesterday, "The perjured testimony of a self-confessed swindler has absolutely no credibility. The SEC, as well as the Senate Ethics Committee, did investigate this matter and found no inappropriate conduct on the part of the senator...Everything the senator did was right and proper."
Belfort also told investigators that D'Amato friend Lawrence Elovich asked him to testify before the committee in support of D'Amato, according to documents. A few years later, Belfort sued shoe magnate Steve Madden. Elovich, a prominent Long Island lawyer, advised Belfort to move the suit to state Supreme Court in Long Island because he "knew all the judges," according to documents. Belfort won a multimillion-dollar settlement in the lawsuit.
Yesterday, Elovich denied having any conversations with Belfort about the D'Amato stock deal or the investigation.
"Jordan Belfort is a longtime drug addict, and he is an unmitigated liar and convicted felon. He will say anything in his hopes to get lower jail time," Elovich said. "What he said is absolutely untrue."
An Alabama securities commission official said yesterday that Belfort's account of D'Amato's one-day stock profit tracks with the findings of his investigation.
"What he's saying now sounds fairly accurate," said Joseph Borg, head of the Alabama Securities Commission, which investigated Stratton Oakmont in the early and mid-90s. "It [the D'Amato account] was listed as Belfort's account in the trade records. If what he's [Belfort] saying now is the truth, it at least matches the record. It would certainly sit in with the facts as we know them."
"Mr. Belfort is running true to form," said Joel Winograd, the attorney who represented Madden. "He was desperate, and he had to resort to political influence to fix a case against Mr. Madden."
Carl Loewenson Jr., who investigated the D'Amato deal for the Securities and Exchange Commission, declined to comment on Belfort's testimony, but he noted that Belfort refused to speak with him at the time for his probe.
"You doubted that Stratton was doing it for charitable purposes, but I never found evidence of a quid pro quo, either, that they had asked him to do something for him or that he had done something for them," Loewenson said.
According to the documents, that quid pro quo may have been the Madden settlement. Belfort also claimed that Elovich and D'Amato stepped in and prevented the state attorney general's office in 1998 from investigating Stratton Oakmont. Stratton Oakmont was shut down by federal regulators in December, 1996.





What the heck. As long as I'm going on about Senator Al, I might as well post Russ Baker's rant in Newsday about the new Long Island courthouse being named after a crook.
Newsday
By Russ Baker
5/7/02
"Judgment Day for Senator Pothole"
When I first heard about plans to name a federal courthouse after former Sen. Alfonse D'Amato, I thought it was a joke. And a pretty good one, at that.
I quickly learned otherwise. Today, the House of Representatives is expected to easily pass a bill from Rep. Peter King (R-Seaford) that will rename Central Islip's federal courthouse after D'Amato, thereby forever associating the administration of justice in these parts with the former three-term senator from New York.
D'Amato, who lost a reelection bid in 1998 and is now a lobbyist, avid golfer and squire of beautiful women to hot parties, has expressed delight with the honor. Others, including investigative reporters and prosecutors around the state and the nation, must be scratching their heads in disbelief.
Any regular reader of Newsday, the paper of record for D'Amato's hometown of Island Park, surely knows some of the details surrounding D'Amato's controversial career.
From my own days as an investigative reporter for The Village Voice, I recall a steady stream of "D'Amato stories." These typically involved some shady character who had been accused of doing something sordid with the tacit blessing, or even active involvement, of public servant Alfonse D'Amato. D'Amato is certainly familiar with courthouses, if only from the large number of his close associates who have been convicted of crimes. His mentor, then- GOP County Chairman Joseph Margiotta, was sentenced to two years in prison for an insurance commission kickback scheme. D'Amato was referred to in the indictment, but, as has been the case with other accusations, walked away a free man, leaving others holding the bag.
When a scheme requiring 1-percent kickbacks to the D'Amato-led local GOP from town employees came to light, D'Amato denied under oath to a grand jury that he knew anything about this illegal, Tammany Hall-style scam. He later essentially admitted knowledge of the kickback scheme, calling it a bad idea in retrospect.
In the Senate, to which he was first elected in 1980, D'Amato was famous among lobbyists for the astonishing directness of favors paid for and rendered. Time and again, he would get a big campaign contribution, then alter his stand on a vote of importance to the giver. For example, in 1985, D'Amato changed his position on legislation of keen interest to Michael Milken's Drexel Burnham junk- bond operation after receiving dozens of contributions from the firm.
As the master of (barely) plausible deniability, he always claimed ignorance of improper acts carried out on his behalf, like the illegal contribution from the scandalous military contractor Wedtech, that his campaign accepted in 1985. D'Amato allowed his brother Armand, a lobbyist, to use his Capitol Hill office to help a paying client, an act that earned the senator a 6-0 reprimand from the Senate Ethics Committee.
D'Amato's offenses against propriety, most of which must be assessed anecdotally since they always seemed to slip under the wire of foreknowledge and intent, include the $37,125 one-day profit the senator made from the purchase of a classic pump-and-dump IPO through Stratton Oakmont, a brokerage house that was subsequently revealed to be corrupt and put out of business by the SEC. Although the Senate Ethics Committee seemed poised to punish him, D'Amato got off Teflon-clean after Sen. Mitch McConnell, the Darth Vader of the anti-campaign finance reform forces, blocked any action.
D'Amato's legendary ability to beat a succession of raps was of little help to another of his shady friends, nightclub operator Philip Basile, who was charged with conspiracy in a mob-connected case. After D'Amato testified as his sole character witness in 1983, Basile was convicted.
Despite such a tawdry track record, D'Amato has lived a truly charmed existence, buoyed by the amusing opera buffa of his life, featuring Mama D'Amato's recipes and the senatorial rendition, at a budget hearing, of "Old McDonald Had a Farm."
Yet the courthouse matter is hardly amusing. Other courthouses have been named after respected jurists and founding fathers. Surely, the D'Amato anointment will represent a nadir of nomenclature.
Last year, for instance, U.S. Sens. Hillary Rodham Clinton and Charles Schumer successfully sponsored legislation naming the U.S. Courthouse in Manhattan's Foley Square after Thurgood Marshall, whose career ranged from fighting segregation as chief counsel of the NAACP to serving on the U.S. Supreme Court, where he became one of the 20th century's most influential, admired justices.
Others around the United States might think it a local matter, but associating public buildings with the names of public figures is serious business, as Henry David Thoreau understood: "If the fairest features of the landscape are to be named after men, let them be the noblest and worthiest men alone."
The only category in which D'Amato stood out as a public servant was sheer chutzpah in taking care of constituents, which earned him the nickname of Senator Pothole. Asked how he could justify diverting HUD antipoverty funds to the building of a swimming pool for his comfortable Island Park neighbors, he explained: "They wouldn't go in the ocean."
Since D'Amato helped get funding for the soon-to-be-named courthouse, he might consider it only fair to get permanent recognition above its entrance, although former Rep. Rick Lazio, a Republican whose district contains the building, preferred to name it after Theodore Roosevelt.
Assuming the House passes the D'Amato Courthouse bill - and many New York State Democrats say they will hold their noses and vote affirmatively, because of the federal pork D'Amato brought home - there is always the Senate. But who expects that old boys' club to do anything except honor a former colleague? After all, they're probably all scouring the available list for their own monuments.
April 20, 2007 4:06 PM | Reply | Permalink
Hi, Mrs. Pan,
I have been reading your posts with interest over the months. Off topic, but sincere question: Can you provide any insight about your name? I have been fascinated with it since I arrived here. I keep saying, Mrs. Pan, Mrs. Pan, Mrs. Pan. Any relation to Peter? I am an elementary teacher, so kindly bear with me. It's Saturday morning and it takes a few cups of coffee for me to get out of "kid mode" and into adult comportment. I'm pleased to meet you and thanks so much for your posts.
Best,
Ticia
April 21, 2007 10:47 AM | Reply | Permalink
Thanks for the compliment, Ticia! Mrs. Panstreppon is a character in a funny and very short story by H. H. Munro ("Saki) about an election in an English village, "Hyacinth." .
I think enough time has passed that I can tell you how I came to be "Mrs Panstreppon." Since 2001, I had posted online as 277fia in various forums including the TPM Cafe when it first began. But in late 2005, I wrote a series of posts here about some crooks including a couple on Wall Street which caused at least two people to complain to Josh Marshall. Josh, to his everlasting credit, went to the trouble of having his lawyer look at my posts before he deleted them and my 277fia account.
I wanted to keep posting in the TPM Cafe because I considered Josh Marshall and, hence his site, to be reputable. Late one night, I was skimming through Joe Queenan's "The Malcontents" looking for a good screen name and Mrs Panstreppon jumped off the page.
Being Mrs Panstreppon has been a lot more fun than being 277fia. Plus I really am a middle-aged, somewhat overweight woman which is how I imagine Mrs P might look.
"I feared the worst when I saw that butterscotch incident." - Mrs P
April 22, 2007 7:07 AM | Reply | Permalink