NEW YORK (AP) — Ahead of the 2022 school year, the education technology company 21stCentEd was seeking to expand its presence in New York City's public schools. So they turned to a man, Terence Banks, whose new consulting firm promised to connect clients with top government stakeholders.
Banks wasn't a registered lobbyist. His day job, at the time, was as a supervisor in the city's subway system. But he had at least one platinum connection: His older brother, David Banks, is New York City's schools chancellor, overseeing the nation's largest school system.
Click to Gallery
A police officer stands guard outside One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
A man styands outside One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
Police officers guard outside One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
A police officer sits at his car as he guards outside One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
Cars move along Park Row street next to the New York City Hall, bottom center, Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
A man walks outside One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
A police officer stands guard outside One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
A woman walks outside One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
A man leaves the One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
FILE - New York City Police Dept. Chief of Department Philip Banks attends a news conference, in New York, Jan. 30, 2014. (AP Photo/File)
FILE -- NYPD Police Commissioner Edward A. Caban is sworn in during a ceremony outside New York City Police Department 40th Precinct, July 17, 2023, in New York. (AP Photo/Jeenah Moon, File)
FILE - David Banks, chancellor of New York Public schools, answers a question during a House Subcommittee on Early Childhood, Elementary, and Secondary Education hearing on antisemitism in K-12 public schools, May 8, 2024, on Capitol Hill in Washington. (AP Photo/Jacquelyn Martin, File)
A police officer stands guard outside One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
Within a month of the hire, 21stCentEd had secured a private meeting with the schools chancellor. In the two years since that October 2022 meeting, more than $1.4 million in Education Department funds have flowed to the company, nearly tripling its previous total, records show.
The siblings — along with a third brother, Philip Banks, who serves as New York City’s deputy mayor of public safety — are now enmeshed in a sprawling federal probe that has touched several high-ranking members of Mayor Eric Adams' administration.
Federal investigators seized phones last week from all three brothers and at least three other top city officials, including Police Commissioner Edward Caban, who resigned Thursday. Tom Donlon, a retired FBI official, was sworn in Friday as the interim police commissioner.
The exact nature of the investigation — or investigations — has not been disclosed. Among other things, federal authorities are investigating the former police commissioner's twin brother, James Caban, a former police sergeant who runs a nightclub security business.
On Wednesday, a city operations coordinator was fired after a bar owner in Brooklyn told NBC New York that he had been pressured by the aide into hiring the police commissioner's brother to make noise complaints against his business go away.
Federal investigators are also scrutinizing whether Terence Banks’ consulting firm, the Pearl Alliance, broke the law by leveraging his family connections to help private companies secure city contracts, according to a person familiar with the matter. The person spoke to The Associated Press on condition of anonymity because they were not authorized to disclose information about the investigations.
All three Banks brothers have denied wrongdoing. David and Terence Banks have said they don’t believe they are the target of the investigation. But government watchdogs say the family’s overlapping work in the private and public sector may have run afoul of conflict of interest guardrails as well as city and state laws on procurement lobbying.
“It has the appearance of Terence Banks using his family connections to help his client and enrich himself,” said Susan Lerner, the executive director of Common Cause New York, a good-government group.
Timothy Sini, an attorney for Terence Banks, did not respond to specific questions about the consulting firm. But he wrote in an email, “We have been assured by the Government that Mr. Banks is not a target of this investigation.”
Speaking at a news conference Friday, David Banks said FBI agents had not returned his phone, and he declined to answer questions about his relationship to his brother’s consulting firm. “We are cooperating with a federal investigation,” he said.
City ethics rules ban relatives from lobbying each other. At minimum, David Banks would be required to secure a waiver from the city’s Conflicts of Interest Board before meeting with a company represented by his brother, according to John Kaehny, the executive director of the good-government group Reinvent Albany.
“It’s surprisingly arrogant or obtuse that David Banks, one of the city’s top government officials, would ignore this basic, commonsense, conflict of interest rule,” Kaehny said in an email.
Neither the Department of Education nor the Conflicts of Interest Board would say whether a waiver was requested.
A spokesperson for the Department of Education, Nathaniel Styer, said all spending linked to 21stCentEd had come from individual schools and districts, which can make purchases of less than $25,000 without the agency’s approval.
The Utah-based company trains teachers and provides curriculums focused on artificial intelligence, robotics, and automation.
Dylan Howard, a spokesperson for the company, said Terence Banks was hired “to help 21stCentEd present our STEM solutions and services to decision makers within New York City public schools.” He said they learned of his consulting firm through a 21stCentEd employee who has since left the company.
The spokesperson could not say how the meeting with the school’s chancellor came about or whether Terence Banks attended. He added that Terence Banks had provided “no value" to the company and that his contract was terminated last December.
21stCentEd was one of several companies with city contracts that hired Terence Banks' consulting firm, according to a website for the Pearl Alliance that was taken down after news of the federal investigations emerged last week.
Another listed client, SaferWatch, sells panic buttons to schools and police departments. Since August of 2023, it has been awarded more than $67,000 in city contracts, according to city records.
The third Banks brother, Philip Banks, maintains wide influence over the NYPD as deputy mayor for public safety. A spokesperson for SaferWatch, Hank Sheinkopf, declined to comment. The NYPD did not respond to email inquiries.
In total, the Pearl Alliance listed nine clients with millions of dollars in city contracts, including a software business, a grocery delivery start-up, and a company that specializes in concrete. At least seven of the companies have past or current contracts with the city.
It wasn't clear whether the federal inquiry into the consulting firm run by Terence Banks was part of the investigation into the police commissioner's brother.
Ray Martin, the city official who was said to have pressured a bar owner to hire James Caban, was “terminated for cause” Thursday after the mayor's office learned of the allegations, according to Fabien Levy, the deputy mayor for communications.
The bar owner, Shamel Kelly, told WNBC-TV that Martin gave him what felt like an ultimatum last year to either pay James Caban or risk having his business shut down. Kelly said James Caban demanded an upfront fee of $2,500. He said he had been interviewed Thursday by federal investigators and the city's Department of Investigation. The U.S. attorney's office and the Department of Investigation declined comment.
Attempts to reach Martin were not immediately successful. A cellphone number listed in his name was no longer working.
A lawyer for James Caban said he “unequivocally denies any wrongdoing” and has cooperated fully with law enforcement. Once the investigation is complete, lawyer Sean Hecker said, “it will be clear that these claims are unfounded and lack merit.”
Both David and Philip Banks remain in their government positions. An attorney for Philip Banks, Benjamin Brafman, declined to comment.
At a press briefing Tuesday, Adams noted his relationship with the Banks family dates back decades, to when he served in the police department under the brothers' father. He said he never met with Terence Banks about city business.
“I’ve known the Banks families for years,” Adams said. “And my knowing someone, I hold them to the same standard that I hold myself to.”
A police officer stands guard outside One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
A man styands outside One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
Police officers guard outside One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
A police officer sits at his car as he guards outside One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
Cars move along Park Row street next to the New York City Hall, bottom center, Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
A man walks outside One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
A police officer stands guard outside One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
A woman walks outside One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
A man leaves the One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
FILE - New York City Police Dept. Chief of Department Philip Banks attends a news conference, in New York, Jan. 30, 2014. (AP Photo/File)
FILE -- NYPD Police Commissioner Edward A. Caban is sworn in during a ceremony outside New York City Police Department 40th Precinct, July 17, 2023, in New York. (AP Photo/Jeenah Moon, File)
FILE - David Banks, chancellor of New York Public schools, answers a question during a House Subcommittee on Early Childhood, Elementary, and Secondary Education hearing on antisemitism in K-12 public schools, May 8, 2024, on Capitol Hill in Washington. (AP Photo/Jacquelyn Martin, File)
A police officer stands guard outside One Police Plaza NYPD Headquarters on Friday, Sept. 13, 2024, in New York. (AP Photo/Andres Kudacki)
WASHINGTON (AP) — Donald Trump has had few defenders in Congress as reliable as Matt Gaetz, who has thundered at one prosecutor after another for perceived bias against the president-elect and emphatically amplified the Republican's rallying cry that the criminal investigations into him are “witch hunts.”
That kinship was rewarded Wednesday when Trump named Gaetz as his pick for attorney general, turning to a conservative loyalist in place of more established lawyers who'd been seen as contenders.
In announcing his selection of Gaetz as attorney general and John Ratcliffe a day earlier as CIA director, Trump underscored the premium he places on loyalty, citing both men's support for him during the Russia investigation as central to their qualifications and signaling his expectation that leaders in his administration should function not only as a president's protector but also as an instrument of retribution.
The dynamic matters at a time when Trump, who will enter office in the wake of two federal indictments expected to soon evaporate and a Supreme Court opinion blessing a president's exclusive authority over the Justice Department, has threatened to pursue retaliation against perceived adversaries.
“Matt will root out the systemic corruption at DOJ, and return the department to its true mission of fighting Crime, and upholding our Democracy and Constitution. We must have Honesty, Integrity, and Transparency at DOJ,” Trump wrote in a social media post about Gaetz, a Florida Republican.
The rhetoric from Trump reflects an about-face in approach from President Joe Biden, who has repeatedly taken a hands-off approach from the Justice Department even while facing a special counsel investigation into his handling of classified information and as his son, Hunter, was indicted and convicted on tax and gun charges.
Democrats immediately sounded the alarm, with Sen. Dick Durbin, the Democratic chairman of the Senate Judiciary Committee, saying Gaetz “would be a disaster” in part because of Trump's threat to use the Justice Department “to seek revenge on his political enemies.” The president of Common Cause, a good government group, called the selection “shocking" and “a serious threat to the fair and equal enforcement of the law in our nation.” Even several Senate Republicans expressed concern about the Gaetz pick.
That Trump would openly value Gaetz's role in “defeating the Russia, Russia, Russia Hoax, and exposing alarming and systemic Government Corruption and Weaponization” is not altogether surprising. In his first term, Trump fired an FBI director who refused to pledge loyalty to him at a private White House dinner and an attorney general who recused himself from the Justice Department's investigation into potential ties between Russia and his 2016 presidential campaign.
“I think this selection indicates that President-elect Trump was looking for an attorney general whose views were closely aligned with him with respect to the appropriate role of the Department of Justice,” said former federal prosecutor Robert Mintz.
Ratcliffe, who served as Trump's director of national intelligence in the final months of his first term, rose to prominence on Capitol Hill as a staunch defender of Trump. He was a member of Trump's advisory team during his first impeachment hearings in 2019 and pointedly grilled multiple witnesses about the Russia investigation — including an FBI agent who led the inquiry but also traded anti-Trump text messages with a colleague.
That work was credited by Trump in his selection announcement, as he praised Ratcliffe for “exposing fake Russian collusion” and having “been a warrior for Truth and Honesty with the American Public.”
Gaetz would be the first attorney general in decades without Justice Department experience, and in recent years became embroiled himself in a federal sex trafficking investigation that ended without criminal charges.
Hours before the announcement, Gaetz said in a social media post that there needs to be a “full court press against this WEAPONIZED government that has been turned against our people.” He added: “And if that means ABOLISHING every one of the three letter agencies, from the FBI to the ATF, I’m ready to get going!” If confirmed as attorney general, he would oversee both the FBI and the ATF.
Advancing the theme of vengeance, billionaire Trump supporter Elon Musk weighed in on the Gaetz appointment with a post that said: “The Hammer of Justice is coming.”
Gaetz has used the seat in Congress he first won in 2016 to rail against the Justice Department, repeatedly decrying what he — and Trump — contends is a criminal justice system biased against conservatives. He has blasted law enforcement officials he has perceived as being either overtly anti-Trump or ineffective in protecting Trump's interests.
When Robert Mueller visited Capitol Hill to discuss the findings of the Russia investigation, Gaetz condemned the prosecutor for leading a team that the congressman said was “so biased.” The Trump Justice Department appointed a special prosecutor, John Durham, to examine errors in the Russia investigation, but Gaetz scolded Durham too for failing to uncover enough damaging information about the FBI's inquiry into Trump.
“For the people like the (committee) chairman who put trust in you, I think you let them down. I think you let the country down. You are one of the barriers to the true accountability that we need,” Gaetz said.
He's directed outright fury at FBI Director Christopher Wray, snapping at him last year that FBI applicants in Florida “deserve better than you” and at the current attorney general, Merrick Garland. In 2022, Garland appointed special counsel Jack Smith to investigate Trump's hoarding of classified documents at his Mar-a-Lago estate in Florida and his efforts to overturn the 2020 presidential election.
Both investigations ended in indictments expected to wind down before Trump takes office. Smith, too, is also likely to be gone by the time Gaetz arrives and a new FBI director is also expected to be appointed given Trump's lingering discontent with Wray, his own appointee.
“None of us can predict exactly what will happen there,” said Ryan Fayhee, a former Justice Department national security prosecutor.
He added: “I think it's just more of a question of the department continuing to be independent and largely resting on the broad shoulders of the career prosecutors and agents that have held themselves to the highest standards.”
FILE - Director of National Intelligence John Ratcliffe waits to board Marine One with President Donald Trump on the South Lawn of the White House in Washington, Dec. 12, 2020. (AP Photo/Patrick Semansky, File)
FILE - Rep. Matt Gaetz, R-Fla., speaks on Capitol Hill in Washington, March 12, 2024. (AP Photo/Nathan Howard, File)