Newsday Kickback Allegations Probed

Federal officials are investigating allegations that a former Newsday subcontractor was persuaded to kick back more than $1 million over a 10-year period to a high-ranking Newsday executive in order to keep millions of dollars of business his company did with the newspaper, according to sources familiar with the probe.

The investigation centers on allegations by James Cisek, a Center Moriches, N.Y., businessman, that he had to pay former Newsday Senior Vice President Louis Sito the money to keep contracts with the Long Island-based paper and its subsidiaries, the sources said. The contracts, which brought Cisek’s companies tens of millions in annual revenue, were to provide temporary help, payroll services, subscription sales and home delivery.

Sources familiar with the investigation said that key elements of Cisek’s story relayed to federal law enforcement officials have been matched by a colleague with knowledge of the operations and that federal authorities have subpoenaed the records of his company.

Sito’s attorney, Judd Burstein of Manhattan, denied that his client received any improper payments.

“From what I know, that is completely untrue,” said Burstein of Cisek’s allegations. Burstein said he did not want to “waste my time responding to second- and third-hand accounts of what somebody may be saying.”

In a previous interview, Burstein said Sito neither authorized nor received any improper payments, and noted that Sito was interviewed “extensively” by in-house investigators, along with other current and former employees, and none implicated him in any wrongdoing.

Cisek’s alleged account of the kickback scheme minimized his role in the creation of any illegalities, the sources said, and are considered part of an attempt to gain leniency if charges are filed.

Newsday is owned by Tribune Co., which also owns the Los Angeles Times.