New York

New York is a state of the United States whose capital is Albany and whose largest city, New York City, has its own page. The state bodies that recur in the vault's record are the banking regulators (the Banking Department and its successor, the Department of Financial Services), the attorney general, the Department of Mental Hygiene and the New York State Psychiatric Institute, the prison system, the governors' offices, and the upstate and Long Island institutions that held federal contracts. The Manhattan district attorney is a county official of the state court system and appears here for that reason.

Banking Regulation and the Bank of Credit and Commerce International

John Heimann was New York's superintendent of banks when the Bank of Credit and Commerce International (BCCI) first tried to buy a New York bank. New York law required the superintendent to approve any change of control of a New York chartered bank. According to the Senate subcommittee's 1992 report, the first applicant was a young Pakistani national whose uncertified statement showed total assets of $4.5 million, $3 million of it a loan from his sister, and who said he would rely on BCCI for advice.¹ Heimann put a hold on the application because BCCI had no central regulator and divided its audits between two auditors, so no consolidated financial report existed. A second application through a second nominee for a second New York bank met the same result, and Agha Hasan Abedi then approached Heimann directly. Heimann's statement to the subcommittee was that "I expressed my concern that BCCI did not have a primary regulator, and that, until it did, my office was reluctant to permit entry into the US." The report concluded that New York, "the most important U.S. banking market for BCCI, would be closed to BCCI so long as Heimann was its chief regulator."²

Heimann was appointed Comptroller of the Currency in 1977. The subcommittee report says that the Office of the Comptroller of the Currency still had the most information about BCCI among federal bodies, and that "the main historical accident that placed OCC in this position was the coincidence of John Heimann" having run New York's banking supervision during BCCI's attempts on the state.³

In 1981 and 1982 the investors who had bought the Financial General Bankshares group's New York banks were required to divest the bank in New York City and created First American Bank of New York to replace it. The report places the matter in the state's proceedings, which included an application to the New York State Banking Board that, "due to strong opposition," ended with the investors agreeing to divest. It quotes a statement contending that "BCCI has not in any way controlled First American Bank of New York."⁴

The case against BCCI in New York began with the Manhattan district attorney, Robert Morgenthau. In the late spring of 1989 Jack Blum, formerly chief counsel to a Senate subcommittee on drugs and foreign policy, went to New York after the federal prosecutors in Tampa had not acted on what he had brought them. Morgenthau had testified to the same subcommittee in February 1988 that "some $5 billion to $10 billion a year" was being laundered through New York banks.⁵⁶ Blum said he "essentially told him what I knew" and that Morgenthau's office produced the indictment on the same evidence.⁷ Morgenthau's chief of investigations, Michael Cherkasky, later said that Blum's account, when first heard, had seemed unlikely: "Blum's story was ridiculous. [He said] the entire Third World was involved and that they had bought and sold entire governments and maybe some United States officials."⁸

The district attorney's office could subpoena BCCI records held by BCCI New York and by First American in New York, but not the records held in the United Kingdom, Luxembourg, the Cayman Islands, Panama and Abu Dhabi. The report records that the Serious Fraud Office refused to provide documents and that the U.S. Department of Justice also refused. Morgenthau obtained the Price Waterhouse audit reports after contacting Eddie George, then deputy governor of the Bank of England: "We are going to charge this bank."⁹ The Federal Reserve Board was the one agency that cooperated; Morgenthau testified in May 1991 that "[t]he one organization that has been very helpful to us is the Federal Reserve Bank of New York and the Federal Reserve Board in Washington."¹⁰ Federal Reserve investigators Richard Small and Thomas Baxter went to Abu Dhabi and found the documents showing BCCI's secret ownership of First American through nominees, which were passed to the district attorney's office.¹¹

A New York State grand jury indicted BCCI on July 29, 1991, in the Supreme Court of the State of New York, County of New York. The indictment alleged a scheme in which BCCI relied on the reputations of prominent nominees, including ruling families of Middle Eastern states, and used Luxembourg and Cayman Islands subsidiaries to avoid consolidated regulation.¹² By December 1991 BCCI's liquidators had pleaded guilty to the first six counts. The report's authors wrote that the Bank of England had begun BCCI's international closure in June 1991 because of the probability of the New York indictment, which "proved sufficient to shut down a $23 billion criminal bank operating in some 73 countries."¹³

The Department of Financial Services and the Epstein Accounts

The Banking Department's successor, the New York State Department of Financial Services (DFS), licenses and examines the New York branches of foreign banks. Credit Suisse's annual report states that its New York branch is licensed by the New York Superintendent of Financial Services and examined by DFS, and that in May 2014, as part of a settlement of US cross-border tax matters totaling $2,815 million, the bank agreed to pay $715 million to DFS, $2,000 million to the Justice Department and $100 million to the Federal Reserve, after pleading guilty to one count of conspiracy to assist US customers in presenting false income tax returns.¹⁴

The consent order between DFS and Deutsche Bank was signed on July 6, 2020 by Associate Counsel R. Bruce Wells and Superintendent Linda Lacewell among others for the department, and the department announced it on July 7, 2020.¹⁵ It imposed a $150 million penalty and covered three relationships: Jeffrey Epstein's accounts, and correspondent banking with Danske Bank's Estonia branch and with FBME Bank. The order records that Deutsche Bank held Epstein and related individuals and entities as clients from August 2013 until December 2018; that the relationship "officially began" on August 19, 2013, when the bank opened brokerage accounts for Southern Trust Company Inc. and its subsidiary Southern Financial LLC; and that Epstein, his entities and his associates eventually opened more than 40 accounts. It refers to Gratitude America as "Mr. Epstein's private charity."¹⁶ The department's release called the action the first enforcement action by a regulator against a financial institution for dealings with Epstein. It lists payments to individuals publicly alleged to have been co-conspirators, settlement payments totaling over $7 million, payments to law firms totaling over $6 million, and periodic cash withdrawals of more than $800,000 over about four years. Lacewell is quoted in the release as saying that "despite knowing Mr. Epstein's terrible criminal history, the Bank inexcusably failed to detect or prevent millions of dollars of suspicious transactions."¹⁷

DFS also entered a consent order with PayPal on January 23, 2025, with a $2,000,000 penalty, on its handling of a December 2022 event in which a message online claimed an exploit to obtain Social Security numbers from Form 1099-K documents on PayPal's platform.¹⁸

The Attorney General

In August 2002 PayPal signed an Assurance of Discontinuance with the New York State Attorney General after the attorney general's inquiry into payments to online gambling merchants. PayPal agreed to stop processing payments from its New York members to online gambling merchants by September 1, 2002 and to pay penalties of $200,000 to the State of New York. PayPal said it was acting in voluntary cooperation and was not admitting a violation of law.¹⁹

Mental Hygiene and the New York State Psychiatric Institute

The New York State Psychiatric Institute (NYSPI), a Columbia University affiliate, held contracts with the Army Chemical Corps under which it tested a mescaline derivative on human subjects so that the Corps could determine its suitability as a chemical warfare agent. A CIA inspector general's memorandum of August 13, 1975 states that the Army's Special Operations Division at Fort Detrick had a two-year contract with the institute for 1952 and 1953 "to test various mescaline-related and other drugs that the Army was interested in," and that CIA funds had been transferred to the Army on an annual basis starting in fiscal year 1953 in support of a mutual program.²⁰

Harold Blauer, 42, entered NYSPI voluntarily in December 1952 for depression. The Second Circuit's later opinion records that he died on January 8, 1953 after an injection of the compound by institute personnel, one of a series; the CIA inspector general's memorandum puts the dose at 450 milligrams of EA 1298 and the interval before death at two and a half hours. The New York City medical examiner's death certificate gave the cause as "Coronary arteriosclerosis; sudden death after intravenous injection of a mescaline derivative." The institute's record described the drug study as "for diagnostic and therapeutic purposes." The contracts barred NYSPI from disclosing information developed under them.²¹

Blauer's estate sued the State of New York in the New York Court of Claims in April 1953. David Marcus, then an assistant attorney general, was assigned to defend the case, and his investigation uncovered the Army's role. The Court of Claims authorized production of NYSPI's records and examination of its doctors on January 4, 1954. Marcus conferred with the Army's litigation division on January 13 and 14, 1954 about a settlement in which the federal government would pay part. After the Justice Department was informed, a conference of federal counsel and medical personnel in early July 1954 recorded apprehension, expressed by Dr. Amedeo Marazzi of the Chemical Corps and by Paul Hoch, the NYSPI medical official in charge of administering the compound to Blauer, about anticipated malpractice claims. At a July 12, 1954 meeting in Washington, Hoch stated that he would not have used the new compound for experimental purposes but for the institute's contract with the Army. George S. Leonard, first assistant to the Assistant Attorney General for the Civil Division, advised that the case was worth $60,000 to $75,000 if the circumstances were revealed and should be settled to avoid disclosure of the Army's interest. An Army Judge Advocate General attorney, Harris J. North, recommended moving the Chemical Corps contracts from New York to the Chemical Corps Procurement Agency in Maryland, where "they would be beyond subpoena power."²²

A tentative settlement of $15,000 was raised to $18,000 after Marcus told the Court of Claims judge about the Army's involvement in an ex parte conference. Hoch testified that the injection caused the death and was not in accordance with generally accepted medical practice. The estate alleged that he also testified falsely that the drug was given "for diagnostic purposes," and that, "in fact, according to the estate, Dr. Hoch was well aware that the mescaline derivative was a new compound not being administered for diagnostic or therapeutic purposes but as an experiment to study its effect for chemical warfare purposes." The Court of Claims entered the $18,000 order on July 7, 1955; the Army had paid $9,000 of it to the State on June 9, 1955. The release signed for the estate covered the "governmental body or agency which furnished the drug."²³ The CIA inspector general's 1975 memorandum gives different figures, stating that the estate sued New York State for $500,000 and that the claim "was settled out of court for $125 K."²⁰

The Army's role became public through the Secretary of the Army on August 12, 1975. Blauer's daughter, as successor administratrix, failed in an effort to reopen the Court of Claims case (Barrett v. State of New York, 1976) and brought three actions in the Southern District of New York. On July 31, 1986 the Second Circuit upheld Marcus's absolute immunity as a state attorney defending the state, and held that if the estate proved its allegations the four federal attorneys would not be entitled to absolute or qualified immunity.²⁴ The Senate Select Committee on Intelligence and the Subcommittee on Health and Scientific Research printed a note in the August 3, 1977 MKULTRA hearing stating that Blauer "died of circulatory collapse and heart failure following an intravenous injection of a synthetic mescaline derivative while a subject of tests conducted by New York State Psychiatric Institute under a contract let by the U.S. Army Chemical Corps."²⁵

Averell Harriman was elected governor in 1954. Mary Lasker, in her Columbia oral history, recalled that Harriman asked for suggestions for a commissioner of mental hygiene soon after the election, that Lester Markel, the Sunday editor of the New York Times, telephoned to ask whether she knew Hoch, then in charge of research at the institute, and that the appointment was "finally announced in July of '55." A 1956 University at Albany record identifies Hoch as Commissioner of Mental Hygiene, the official who oversaw the state's psychiatric hospitals.²⁶²⁷

Willowbrook State School

The Department of Mental Hygiene also ran the state schools for people with intellectual disabilities. Saul Krugman wrote in 1986 that studies of the natural history and prevention of viral hepatitis were initiated at Willowbrook State School in 1955 and that "during the subsequent two decades there was considerable controversy regarding the ethical aspects of these studies"; he had published an account, "Experiments at the Willowbrook State School," in The Lancet in May 1971.²⁸ In 1972 Geraldo Rivera broadcast an exposé of the school's conditions on television.²⁹

The federal class action New York State Association for Retarded Children v. Rockefeller was heard by Judge Orrin Judd of the Eastern District of New York. His memorandum of April 10, 1973 granting a preliminary injunction found a resident population of 4,727 on December 10, 1972, down from a high of 6,200 in 1969; found that "conditions are still inhumane"; and noted a hiring freeze from December 1970 to November 1971 and legislative reports of overcrowding dating from 1964. It named Governor Nelson Rockefeller as a defendant, individually and as governor.³⁰ The case ended in a consent judgment, with Governor Hugh Carey as the defendant, approved on May 5, 1975. It was negotiated with the Civil Rights Division of the Justice Department and the state attorney general, with a 29-page appendix of standards in 23 areas and a Review Panel to monitor compliance.³¹

Human Ecology and the Mind-Control Contracts

The 1977 MKULTRA hearing record defines the cryptonym QKHILLTOP as a project assigned in 1954 to study Chinese Communist brainwashing and to develop interrogation techniques, stating that "most of the early studies are believed to have been conducted by the Cornell University Medical School Human Ecology Study Programs" and that the Society for the Investigation of Human Ecology, later the Human Ecology Fund, "was an outgrowth of the QKHILLTOP."³² The Cornell medical school, Cornell University Medical College, was in Manhattan. The same hearing record includes testimony about CIA safehouses in New York City and San Francisco, a transfer of money for the use of the Federal Bureau of Narcotics in an apartment in New York, and the trip to Manhattan on which Robert Lashbrook and Vincent Ruwet took Frank Olson to see Harold Abramson.³³

The Luciano Commutation and the State Prison System

In May 1942 Charles R. Haffenden of Naval Intelligence asked the state Commissioner of Correction, John A. Lyons, in writing to move Charles Luciano from Clinton Correctional Facility at Dannemora to a more accessible prison for intelligence purposes, after Colonel Murray Gurfein had cleared the plan with District Attorney Frank Hogan. The transfer to Great Meadow Correctional Facility at Comstock took place on May 12, 1942, during the administration of Governor Herbert Lehman.³⁴ The report by William B. Herlands, the state Commissioner of Investigation, records that the arrangement ran through Luciano's lawyer, Moses Polakoff, and Meyer Lansky, and that for about two years Luciano's visitors at Great Meadow included Polakoff, Lansky, Joe "Socks" Lanza, Mike Lascari, Frank Costello, Willie Moretti and Mike Miranda; other participants who did not visit him included Joe Adonis, Jerry Sullivan and Johnny "Cockeye" Dunn. The network was used to report on the waterfront and to place Naval Intelligence agents through union books and cards. Herlands titled the arrangement the War-Aid Project, and a letter of July 26, 1954 from Rear Admiral Carl F. Espe, director of Naval Intelligence, confirmed it.³⁵

On December 3, 1945 the state Board of Parole recommended that Luciano's sentence be commuted solely so that he could be deported. Thomas Dewey, as governor, commuted it on January 3, 1946 on the express condition that he be deported at once, and in the same action commuted the sentences of six other alien criminals for the same purpose; Luciano was deported to Italy on the SS Laura Keane on or about February 9, 1946. Herlands' report to Dewey, dated September 17, 1954, reviewed the wartime arrangement. The Dewey papers that hold it are kept at the University of Rochester.³⁶

Governors

Nelson Rockefeller was elected governor in 1958. Berent Friele, who had served as Rockefeller's private representative in Brazil for three decades, was appointed as his formal advisor on international affairs at that time, a post he held through Rockefeller's governorship and his later vice presidency under Gerald Ford. The account is drawn from Friele's papers at the Rockefeller Archive Center.³⁷

The state's 1973 narcotics statutes were enacted in Rockefeller's governorship. In People v. Broadie (June 18, 1975) the Court of Appeals described the challenge to laws that classed street sales of heroin and cocaine as class A felonies with a mandatory maximum of life imprisonment and lifetime parole. The opinion cites Rockefeller's 1973 annual message for the premise that rehabilitation efforts had failed and that the epidemic of drug abuse could be quelled only by the threat of inflexible, and therefore certain, exceptionally severe punishment, and states that "drug dealing in its present epidemic proportions is a grave offense of high rank."³⁸

Risa Heller, a former press secretary to Senator Chuck Schumer from 2005, later held a similar post under Governor David Paterson.³⁹

Attica

Between September 9 and 13, 1971, forty-three people died at Attica Correctional Facility. The report of the state's Special Commission on Attica, chaired by Robert B. McKay and set up by Rockefeller and legislative leaders through Chief Judge Stanley H. Fuld of the Court of Appeals, states that "thirty-nine of that number were killed and more than 80 others were wounded by gunfire during the 15 minutes it took the State Police to retake the prison on September 13," and that "with the exception of Indian massacres in the late 19th century, the State Police assault which ended the four-day prison uprising was the bloodiest one-day encounter between Americans since the Civil War." On September 15 Rockefeller announced that Deputy Attorney General Robert E. Fischer would supersede the local district attorney to investigate. The commission's narrative records that on the Sunday of the standoff the governor decided there would be no assault that day, that Commissioner Russell G. Oswald and a state police general recommended that Rockefeller come to the prison, that the governor asked whether it would be productive and save lives, and that Rockefeller finished a press release explaining why he would not come.⁴⁰

Spiritualism: Hydesville and Lily Dale

Modern Spiritualism began in New York State. The sisters Margaret and Catherine Fox, living in a small house at Hydesville in the town of Arcadia, Wayne County, reported rappings there in 1848.⁴¹ Reuben Briggs Davenport wrote in 1888 that "the first so-called phenomena came to the two youngest girls in 1848, at Hydesville, in this State," and that their elder sister Leah, "twenty-three years older than Margaret," gave exhibitions in "all the principal cities, which were attended by the most eminent men and the most brilliant women in the country."⁴² Davenport described an investigation by three members of the University of Buffalo faculty, Austin Flint, Charles A. Lee and C. B. Coventry, who attributed the noises to the knee joint and who, in his view, "hit upon the right principle at the inception of the inquiry, but were misled into a wrong application of it."⁴³

On October 21, 1888 Margaret Fox Kane read a statement at the Academy of Music in New York City, published that morning in the New York World, saying that the raps had been produced by the sisters. Davenport's book printed her account and that of Catherine Fox Jencken, and reproduced an article of October 11, 1888 on the pressure brought on Kane to retract. In November 1889 Margaret recanted the confession, stating that she had made it under pressure from opponents of Spiritualism.⁴⁴ Addresses delivered "under the auspices of the Cassadaga Lake Free Association, Lily Dale, N.Y.," were published in 1894.⁴⁵

NXIVM

Keith Raniere founded NXIVM around 2003 as a self-styled executive coaching and self-help organization. The Eastern District of New York announced his arrest in a release describing NXIVM as a purported self-help organization based in Albany.⁴⁶ In 2015 Raniere created the secret society DOS, structured as a pyramid with himself at the head, whose "slaves" were expected to provide "collateral." After a six-week jury trial before Judge Nicholas G. Garaufis, Raniere was convicted of racketeering conspiracy, racketeering, forced labor conspiracy, wire fraud conspiracy, sex trafficking conspiracy, sex trafficking and attempted sex trafficking, and was sentenced to 120 years. Clare Bronfman is a co-appellant in the Second Circuit's opinion of December 9, 2022, which affirmed the sex trafficking convictions, and the opinion names Allison Mack as a DOS "master"; each of Raniere's co-defendants pleaded guilty.⁴⁷

Upstate Installations and Institutions

George Estabrooks headed the psychology department at Colgate University in Hamilton and advised the military on the uses of hypnosis from the early 1930s, a role described in John Marks's account of the agency's mind-control programs.⁴⁸ Allen Dulles, later director of central intelligence, was born in Watertown, New York.⁴⁹

The Air Force's Rome Air Development Center at Griffiss Air Force Base, later the Rome Laboratory and now the Air Force Research Laboratory's Information Directorate, appears in the vault in two contract chains. In December 1973 the Braddock, Dunn and McDonald firm, later BDM Corporation, delivered report RADC-TR-73-325, "Hertzian Generator Development," under contract F30602-72-C-0388 for the center, on a "frozen wave" concept for electromagnetic wave generation.⁵⁰ On June 8, 2022 the Air Force awarded Radiance Technologies a position on the indefinite-delivery contract FA875022D1005, "Agile Cyber Technology 3," issued from Rome.⁵¹

Long Island and Western New York

The 1953 Robertson Panel, a CIA advisory group on unidentified aerial reports, included Samuel Goudsmit of Brookhaven National Laboratories on Long Island. Records in the panel file propose the Navy's Special Devices Center at Sands Point, Long Island, as a channel for the panel's work.⁵²

Bill Moore and Jaime Shandera wrote that in early March 1983 Moore received a telephone call telling him to "go and pick up" information. At a motel on the edge of a mid-sized city in upstate New York, a man delivered a sealed envelope containing eleven pages of a purported document headed "Executive Briefing, Subject: Project Aquarius." That account is the authors' own.⁵³

Criminal Cases and Other Appearances

In November 2022 Payton Gendron pleaded guilty in Erie County court to first-degree murder, second-degree murder as a hate crime, attempted murder as a hate crime and domestic terrorism in the first degree, arising from the 2022 Buffalo Supermarket Shooting. On February 15, 2023 Judge Susan Eagan sentenced him to life in prison without parole, because the state does not use the death penalty. Gendron also faced a federal indictment on 27 charges, including hate crimes resulting in death.⁵⁴

Nicholas Tartaglione, a former officer of the Briarcliff Manor Police Department in Westchester County, was convicted in federal court in White Plains in April 2023 of the murders of four men in 2016, whose bodies were buried on his property in Otisville. In June 2024 he was sentenced to four consecutive life terms.⁵⁵ The Justice Department inspector general's report on Epstein's custody states that from July 2019 he shared a cell in the Special Housing Unit at the Metropolitan Correctional Center, New York with Jeffrey Epstein.⁵⁶

Hassie Hunt, the son of H. L. Hunt, was placed in an institution in New York State after a lobotomy in the late 1940s, according to Harry Hurt III.⁵⁷ Ricardo Cañete told FBI agents in May 1977 that an associate wrote on a restaurant guest check the papers he wanted, among them a New York State temporary security card in the name Frederick Pagan.⁵⁸

New York in Federal Office and Elections

Hillary Clinton served as a senator from New York from January 3, 2001 to January 21, 2009, and sat on the Senate Armed Services Committee.⁵⁹ Irving Ives, also a New York senator, spoke on the Senate floor on July 21, 1950 on the majority report of the subcommittee that examined Joseph McCarthy's charges against the State Department.⁶⁰

In the 2026 Democratic primary for New York's 12th congressional district, the Assembly member Alex Bores, sponsor of the state's RAISE Act, was the target of Think Big, the spending vehicle of the super PAC Leading the Future. The Federal Election Commission's aggregation for his candidate committee shows Think Big spending $8,155,897.68 in opposition in 56 transactions, and the Jobs and Democracy PAC, funded through Public First Action, spending $15,026,937.99 in support.⁶¹