Fashion Week Scandal: Pay to Sashay Scheme

A state employee stands accused of soliciting bribes from fashion house Marc Jacobs International and other exhibitors to ensure their ability to smoothly put on fashion shows and host other events at a historic Manhattan armory that is home to the Fighting 69th Regiment, according to an indictment filed in Manhattan State Supreme Court by the New York state attorney general.

The employee, James Jackson, allegedly accepted more than $30,000 from companies, including Marc Jacobs, Ramsay Art Fairs and the International Carpet Show in exchange for allowing use of the 69th Regimental Armory for events.

Jackson surrendered on charges of extortion and bribery in connection with the alleged scheme, officials said. He pleaded not guilty to those charges. His attorney, Alan Abramson, declined to comment on the case.

The first 24 of the 31-count indictment focus on Marc Jacobs International, which investigators and lawyers involved in the investigation told ABC News is at the center of the investigation.

According to New York Attorney General Andrew Cuomo, the Marc Jacobs firm allegedly used an intermediary to pay bribes to Jackson, the former superintendent of the armory, over the course of several years.

Two sources involved in the investigation told ABC News that the intermediary was KCD Worldwide, the public relations firm for Marc Jacobs, and that the bribes to Jackson were largely for amounts between $1,500 and $2,000.

"KCD is cooperating with the attorney general's investigation," said attorney Ken Breen, who is representing KCD.

A 30-year New York State Division of Military and Naval Affairs employee, Jackson ran the armory for about 10 years.

The armory's rental charges for a commmercial event are about $6,000 per day excluding utilities, security and insurance coverage. According to the attorney general, Jackson allegedly added to those costs by allegedly soliciting bribes in at least three ways:

- A company was allegedly told that for the payment of a fee he would assure its application to exhibit went smoothly;
- When a company needed early access to get ready for a show, he would allegedly solicit an additional fee;
- The night before a show he allegedly would notify an exhibitor of a problem with their contract, which, for a fee, could be smoothed over.

"In cases in which we find public employees abuse their positions for personal gain, it is not just a violation of law but a betrayal of public trust," said Attorney General Andrew Cuomo in a statement issued when Jackson was arrested.

The arrest came as Manhattan hosted Fall/Winter Fashion Week in nearby Bryant Park. During fashion week, the Marc Jacobs International company traditionally holds well-attended runway shows at the armory. This year one of those shows took place at the beginning of the week. Another is slated for Friday.

According to the New York attorney general, the indictment unsealed in New York Supreme Court today charges Jackson with 31 felony counts. Charges include multiple counts of grand larceny, receiving bribes, receiving reward for official misconduct and defrauding the government. Jackson pleaded not guilty before Judge Lewis B. Stone. If convicted, he faces a maximum sentence of more than 20 years in prison.

The investigation into the bribery scheme began when Jackson allegedly approached executives from the International Carpet Show with his scheme, and the company reported Jackson to the attorney general. According to sources, investigators believe the bribery scheme was widespread, and their probe continues.

Marc Jacobs' PR firm KCD Worldwide did not return numerous calls and e-mails for comment on the bribe scheme or the alleged involvement of the firm. A spokesperson for Marc Jacobs said, "We are aware of the charges against the superintendent of the Armory. We have been and are cooperating fully with the New York State Attorney General's office in its investigation of this matter. We are using the Armory for this week's fashion shows with the full knowledge and consent of the Attorney General's Office."

Jacobs received early notice as an up and coming fashionista while still a student, selling his first knitwear collection before graduation, according to published accounts.

He rose to fame in the late 1990s when he joined Louis Vuitton as artistic director. In his September Fashion Week show at the armory, Victoria Beckham was among the posh front-rowers.

Marc Jacobs International is a subsidiary of LVMH, the global luxury goods firm which holds a portfolio of companies, including Moet Hennessy, Louis Vuitton, Givenchy, Thomas Pink, Donna Karan International and a number of other luxury brands.

Since 1904, the armory at 26th and Lexington has been the headquarters of New York's Fighting 69th Regiment. It continues to be a home for military units deployed in Afghanistan and Iraq. About 44 members of the Army National Guard, 1st Battalion, 69th Infantry are currently in Afghanistan, officials said. Additional members of the unit are slated for deployment to Afghanistan in the spring.

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