Conviction of Milton Balkany Marks Fall of Oft-Investigated Ultra-Orthodox Power Broker

The storied career of an indomitable ultra-Orthodox political fixer appears to have entered its final phase this week with the conviction of Rabbi Milton Balkany, known to the press as the Brookyn Bundler.

Balkany was found guilty on November 10 of attempting to extort $4 million out of Steven A. Cohen, a hedge fund manager. The rabbi is home on $1 million bail, allowed to attend synagogue once a week as he awaits sentencing.

Balkany, whose only official job is dean of a Boro Park girls’ yeshiva, has been known for decades as a major donor to conservative politicians, capable of bringing home significant government cash to pet causes in the Orthodox community. He has also escaped conviction in a litany of scandals involving government money.

His fall began in May, when he was indicted on charges that he had threatened to reveal alleged instances of insider trading involving Cohen, who runs the hedge fund SAC Capital Advisors. Balkany said that he was in touch with an inmate in an upstate New York federal prison, who would talk to federal investigators unless Cohen paid Balkany off – $2 million to his girls’ yeshiva, $2 million to a second yeshiva. According to the indictment, Balkany told lawyers for Cohen’s firm that cash to the second yeshiva would eventually be repaid.

In surreptitiously recorded tapes of conversations between Balkany and representatives of SAC Capital played during the trial, Balkany boasted of his political connections. “Every six weeks, a different senator from Washington comes to my house for lunch or dinner,” said Balkany on the tapes, citing senators and former senators, including Oren Hatch, Joseph Lieberman, Arlen Specter, Ted Kennedy, and Max Baucus, according to the Village Voice.

There’s little cause to assume Balkany to be exaggerating. The catalog of boldface political players gives a hint as to the level of Balkany’s access, carefully cultivated through years of donations. Dubbed the “Brooklyn Bundler” by the now-defunct Common Cause magazine in 1990, Balkany has been known as a major giver with ties to deep ultra-Orthodox pockets and a regular on the political benediction circuit.

He is tied by marriage to the Rubashkin clan, which ran the kosher meatpacking firm Agriprocessors until it was hit by a number of lawsuits in 2008.

But Balkany is also known for being party to a series of funding scandals, and for escaping blame in all but the latest incident.

A 2000 Daily News report found that Balkany, a major donor to the campaign of then-New York mayor Rudolf Guiliani, was charging Jewish families for help accessing a day care voucher program for low-income families. There report raised suspicions that applications submitted via Balkany received special consideration from the city; the vast majority of day care vouchers issued through the program had gone to one Brooklyn zip code in Boro Park, where Balkany’s school and several others he helped were located. This was more than triple the number of vouchers distributed in Manhattan and the Bronx combined. Balkany was never charged in this case.

In 2003, Balkany was the subject of a federal indictment charging him with misuse of $700,000 granted to his yeshiva by the U.S. Department of Housing and Urban Development, which was intended to be used to pay the mortgage on a new building for disabled preschoolers. Instead, the complaint alleged, the money was used for other expenses, including $78,000 that he simply signed over to himself.

At the time the grant was made, the secretary of HUD was Andrew Cuomo, currently the governor-elect of New York State.

The charges in the 2003 indictment were not pursued by prosecutors after Balkany cut a deal, admitting he was wrong and agreeing to travel restrictions and to pay restitution to HUD.