Legislator’s Fraud Conviction Could Hurt Cuomo Bid : Democrats: Speaker is expelled from N.Y. Assembly. Governor had counted on him to help solve budget dilemma.

A federal court jury on Friday convicted the Speaker of the New York state Assembly of fraud charges in connection with real estate transactions, a verdict that could have an impact on the presidential campaign plans of Gov. Mario M. Cuomo.

The jury’s decision not only effectively ended the political career of Mel Miller, New York’s second-most-powerful Democrat, but may have dealt a serious setback to Cuomo’s effort to bridge the state’s large budget gap.

Cuomo has said that the budget problem remains the last obstacle to his seeking the presidency, and Miller’s conviction could make it harder for state officials to agree on measures designed to close a looming deficit estimated at more than $800 million.

The verdict convicting Miller and his chief aide, Jay Adolf, came moments before the Assembly Speaker was to attend a crucial budget conference in the governor’s offices in the World Trade Center in Lower Manhattan.

The verdict means Miller, 52, is automatically expelled from the Legislature, depriving Cuomo of an ally in the budget-making process.

In a statement after the verdicts, Cuomo said: “The law is the law. But this is tragedy in many ways, most of all for Mel Miller and his family. We pray for their strength.”

Hours before Miller’s conviction, Cuomo reflected on how the budget problem could haunt him in a presidential campaign.

New York already has the third-lowest credit rating in the nation, behind Louisiana and Massachusetts. And Cuomo indicated any further lowering of the rating could push state bonds to the brink of the junk bond category. “We would be pushed to the edge of catastrophe,” Cuomo warned.

In such a climate, running for President would be extremely difficult, the governor said, noting that he could expect to be repeatedly questioned about New York being virtually bankrupt.

“I have said the budget is the great impediment for me,” Cuomo said. “If we don’t have something like the resolution of it, then our . . . credit is threatened. That means the credit of the city of New York, the credit of every school district, the credit of the authorities that borrow. . . . That is a serious problem if you want to run for President.”

And in comments to reporters last night, Cuomo reiterated that his immediate focus is on resolving the budget deficit. “Forgot about the presidency,” he said. “That is the least of our concerns. That is not relevant here.”

Miller and Adolf, 50, were convicted of mail fraud, conspiracy and using false names in documents in connection with a number of real estate transactions. Miller and Adolf withheld information from clients, cheated clients into paying grossly exorbitant fees and hid their personal investments in apartment buildings, prosecutors said.

Miller, looking stricken after the eight guilty verdicts were announced, said: “For those of you who are familiar with the opera, there’s a great opera called ‘Pagliacci,’ and as he ends his life at the end of the opera, he finishes with the words: ‘The comedy is over. . . .’ The jury has spoken. I don’t agree with it, but that’s still my prerogative.”

He added: “I think it’s a disgrace. I think it was a political witch hunt.”

Miller and Adolf face up to five years in prison and $250,000 in fines on each of the eight counts. They were acquitted of 11 counts of wrongdoing in two other real estate deals.