Democratic State Senator Pedro Espada Jr.—who was just caught illegally residing outside his Bronx district in tony Mamaroneck—is in the hot seat again for what one Bronx political veteran describes asdoing "a cha-cha around the campaign finance law—spirit and letter." After the Daily News's scathing report on Espada's conduct, Senate majority leader Malcolm A. Smith called him into a closed-door meeting, giving Espada one week to rectify illegalities with his campaign committee. But Smith is also downplaying the severity of the brewing scandal, telling the Times, "I don't think it's raining problems, the fact that a member has a challenge with his campaign finances, which he's had for awhile. So basically, he's got to correct it. He has until this time next week to correct it, or else I will take some action." Woah—a promise of action in Albany!

As the Bronx DA looks into Espada's residency issue, State Attorney General Andrew Cuomo has launched an investigation into whether he illegally used a nonprofit group he controls—Soundview Health Clinic—to promote his political campaigns. And it's hardly the first such investigation into Espada's alleged malfeasance: In 2000, he was acquitted on charges of using $200,000 from a Soundview HMO to pay off a 1996 campaign debt, and in 2005, six Soundview employees were convicted of multiple counts of misusing the clinic's taxpayer funds to aid the campaigns of Espada and his son.

Yesterday, Espada met with the News for an interview "dressed in a pink shirt with monogrammed French cuffs, powder blue floral tie and matching pocket hankie," and dismissed Eliot Spitzer's previous investigation into his employees as a political hatchet-job: "Do you think for one minute that Mr. Steamroller was after these ladies? No! He was after me! And I was totally cleared!" Besides his suspicious use of the non-profit for his political campaign, the new complaints about Espada include his failure to pay the New York City Campaign Finance Board over $60,000 in fines for violations related to his 2001 Bronx Borough President campaign.

The CBS 2 HD reporter who broke the residency story by staking out Espada's $700,000 Westchester home dared approach the Senator yesterday and ask him about the money he owes the campaign finance board, to which he replied on camera, "You violate standards of decency. Are you proud of that?" Oh, and Cuomo is also investigating Assemblyman Peter Rivera for steering $1.3 million in taxpayer money to the non-profit group Neighborhood Enhancement for Training Services, where his son and top political aides worked. According to the News, it remains a mystery where the bulk of the public money went.