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Firm Run by Brother of Top N.Y.C. Officials Is Focus of Bribery Inquiry
Terence Banks opened a consulting firm and soon found work with companies that do business with the city agencies overseen by his older brothers.
Federal agents are investigating a possible bribery scheme involving New York City contracts and a consulting firm run by the brother of two top officials in the administration of Mayor Eric Adams, two people with knowledge of the matter said.
Prosecutors last week seized the phones of the two officials — the schools chancellor and the deputy mayor for public safety — and the consultant because they believed the devices might contain evidence of bribery and other crimes, the people said.
Those other crimes, the people said, were fraud and violations of the Travel Act — a federal offense that can encompass a wide range of conduct, including extortion and other violations of state law, and is frequently charged in corruption cases.
The inquiry appeared to be in its early stages, and the outlines of the suspected bribery scheme and whom it may have involved were not immediately clear. But it appeared to center on the consulting firm and its clients.
The investigation was separate from a federal corruption inquiry involving the New York police commissioner and his brother, whose phones were also seized, prompting the administration to seek the commissioner’s resignation. He remained in office as of Tuesday night.
Both investigations spilled into public view after federal agents on Wednesday took the phones of several officials, including the schools chancellor, David Banks, the deputy mayor for public safety, Philip B. Banks III, and their younger brother, the consultant Terence Banks.
The agents also seized the phone of Timothy Pearson, a retired police inspector who is one of the mayor’s closest confidants and who serves as a senior adviser. His responsibilities include helping to oversee security contracts at migrant shelters.
The actions were part of a burst of investigative activity on Wednesday that also saw investigators take the phone of the schools chancellor’s partner — the first deputy mayor Sheena Wright.
An electronic device was also seized from a person connected to at least one of nine companies that appeared to be clients of Terence Banks’s consulting firm, according to a person with knowledge of the matter.
None of the people whose devices were taken have been accused of wrongdoing, and the full scope of the investigation was unclear.
A lawyer for Terence Banks, Timothy D. Sini, said in a statement: “We have been assured by the government that Mr. Banks is not a target of this investigation.”
Benjamin Brafman, a lawyer for Philip Banks, said his client had done nothing wrong.
“I believe Phil Banks has zero criminal liability in this case — zero,” Mr. Brafman said.
On Friday, David Banks said in a statement that he was focused on the new school year, which began the day after federal agents seized his and Ms. Wright’s devices.
“I am confirming that I am cooperating with a federal inquiry,” he said. “At this time, I cannot comment any further on that matter.”
The investigation involving the Banks brothers is one of at least four separate federal corruption inquiries related to the Adams administration, investigations that have destabilized City Hall and raised questions about Mr. Adams’s political future as the Democratic mayoral primary approaches next year.
A second inquiry is focused on the police commissioner, Edward Caban, and his twin brother, James, who provides security for nightclubs.
A third is examining the mayor and his campaign fund-raising and first became public late last year.
All three of those investigations are being overseen by the U.S. attorney’s office for the Southern District of New York in Manhattan.
A fourth investigation involves the mayor’s special adviser and director of Asian affairs, Winnie Greco, whose homes were raided in February. Ms. Greco has been a prominent fund-raiser for Mr. Adams during his mayoral campaign and has close ties to the Chinese community in New York City.
That investigation is being handled by the U.S. attorney’s office in Brooklyn.
The inquiry involving the Banks brothers has embroiled a family with deep roots in New York City politics and government.
One element under scrutiny in that investigation are contracts issued under programs designed to encourage the city to do business with small companies owned by women and members of minority groups, one of the people said.
In July 2022, Terence Banks, a retired subway supervisor, formed a community and government-relations consulting company, the Pearl Alliance. One service offered by the firm was supporting clients who were seeking contracts under the minority and women-owned business programs, according to archived pages of its website.
The federal scrutiny of Mr. Banks’s consulting firm was reported earlier by The New York Daily News.
The company’s stated aim, according to archived pages of its website, was to bridge the gap “between New York’s intricate infrastructure and political landscape.” The site was recently taken offline.
Mr. Banks was also listed as legislative chair for the New York chapter of the Conference of Minority Transportation Officials, which works to advance contracting for minority and women-owned businesses.
Giving a leg up to such firms has been a priority for Mr. Adams, who last year issued an executive order aimed at breaking up building and construction contracts worth more than $25 million into smaller chunks of money that could go to firms owned by women or members of minority groups.
That initiative has been overseen by Ms. Wright, the first deputy mayor, whose phone was seized and who shares a home with David Banks in the Hamilton Heights neighborhood of Upper Manhattan. In a news release about the executive order, Ms. Wright was quoted as saying that the measure “empowers agency leadership to drive resources towards” the companies.
Before he became a government relations consultant, Mr. Banks’s younger brother, Terence, worked for the Metropolitan Transportation Authority, retiring in April 2023 as a train service supervisor in a union-represented job, said Tim Minton, a spokesman for the agency.
In that position, Mr. Banks would have been called upon to respond to train breakdowns and troubleshoot their causes.
Mr. Banks also had deep connections. His father was a lieutenant who served with the mayor when both men worked for the Police Department, and the elder Mr. Banks was a mentor to Mr. Adams, the mayor said during his weekly media availability on Tuesday.
And while Mr. Adams appointed both of Mr. Banks’s older brothers to high-level positions within his administration, he also had a relationship with Mr. Banks himself.
In the 2021 mayoral race, Mr. Banks raised money for Mr. Adams’s campaign, bringing in more than $70,000. The campaign paid Mr. Banks $1,633.12 for his work.
“No other candidate has been on the front lines like Eric has,” Mr. Banks said in a video put out by the Adams campaign in 2021.
Once Mr. Adams won the election, he appointed Mr. Banks to his transition committee.
Before too long, Mr. Banks could be seen working out of Nexus, a private club outfitted with a spa, restaurants and a Champagne bar just a short walk from his brothers’ offices.
Jay Root and Michael Rothfeld contributed reporting. Susan C. Beachy contributed research.
Dana Rubinstein covers New York City politics and government for The Times. More about Dana Rubinstein
William K. Rashbaum is a Times reporter covering municipal and political corruption, the courts and broader law enforcement topics in New York. More about William K. Rashbaum
Amy Julia Harris has been an investigative reporter for more than a decade and joined The Times in 2019. Her coverage focuses on New York. More about Amy Julia Harris
Bianca Pallaro is a Times reporter who combines traditional reporting with data analysis skills to investigate wrongdoing and explain complex issues by turning numbers into insightful information. More about Bianca Pallaro
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