ALBANY, N.Y. (AP) — New York Lt. Gov. Brian Benjamin resigned Tuesday in the wake of his arrest in a federal corruption investigation, creating a political crisis for Gov. Kathy Hochul seven months after she selected Benjamin as a partner to make a fresh start in an office already rocked by scandal.

Benjamin, a Democrat, was accused in an indictment of participating in a scheme to obtain campaign contributions from a real estate developer in exchange for Benjamin’s agreement to use his influence as a state senator to get a $50,000 grant of state funds for a nonprofit organization the developer controlled.

Facing charges including bribery, fraud, conspiracy and falsification of records, Benjamin pleaded not guilty Tuesday at an initial appearance in Manhattan federal court. He was released and bail was set at $250,000. The terms of his release call for his travel to be restricted and bar him from returning to the state capitol in Albany.

He submitted his resignation to Hochul hours later.

“I have accepted Brian Benjamin’s resignation effective immediately. While the legal process plays out, it is clear to both of us that he cannot continue to serve as Lieutenant Governor. New Yorkers deserve absolute confidence in their government, and I will continue working every day to deliver for them,” Hochul said in a statement.

Two lawyers representing Benjamin said he was suspending his campaign to focus on defending his actions in court and said the grant in question was used to buy school supplies.

“There was nothing inappropriate about this grant. He will focus his energies on explaining in court why his actions were laudable — not criminal. He looks forward to when this case is finished so he can rededicate himself to public service,” the statement said.

Hochul in September plucked Benjamin, then a state lawmaker, to serve as second-in-command when she became governor, taking over for Democrat Andrew Cuomo, who resigned amid allegations he sexually harassed 11 women, which he denied.

Hochul, also a Democrat, was Cuomo’s lieutenant governor. She is now running in this year’s election to try to remain governor. Benjamin had been her running mate.

Hochul’s office and campaign did not respond to messages Tuesday evening about her plans moving forward for a new lieutenant governor and running mate.

Benjamin was the state’s second Black lieutenant governor. During his state Legislature career, he emphasized criminal justice reform and affordable housing. His district included most of central Harlem, where he was born and raised by Caribbean immigrant parents.

New York law makes it tough to remove Benjamin from the June primary ballot: He could move out of New York to disqualify himself from running for state office, or the state Democratic party could let him run for a down ballot office.

Democratic Party Chair Jay Jacobs said the party is exploring its options.

“I’m not ready at this time to outline what we are considering, suffice it to say we will look at the options expeditiously,” Jacobs said.

Two months after Benjamin became lieutenant governor, a real estate developer who steered campaign contributions toward Benjamin’s failed bid for New York City comptroller was indicted. Federal authorities accused Gerald Migdol of wire fraud, conspiracy to commit wire fraud, and aggravated identity theft in illegally giving donations to Benjamin’s campaign.

The indictment said Benjamin and others acting at his direction or on his behalf also engaged in a series of lies and deceptions to cover up the scheme that stretched from 2019 to 2021.

They falsified campaign donor forms, misled municipal regulators and provided false information in vetting forms Benjamin submitted while he was being considered to be appointed as lieutenant governor, the indictment said.

Prosecutors had previously not made any accusations against Benjamin, and his campaign said at the time of Migdol’s arrest that it had forfeited any improper donations as soon as they were discovered.

More recently, reports came out saying subpoenas had been issued to Benjamin regarding the financial issues even before Hochul picked him as lieutenant governor.

Before Benjamin’s arrest and resignation, Hochul had defended him, saying last week she had the “utmost confidence” in him. She said last week that she didn’t know of the subpoenas when she tapped Benjamin to be her No. 2.

Top Republicans and at least a dozen of Benjamin’s fellow Democrats in the Legislature called on him to resign by Tuesday afternoon.

Senate Leader Andrea Stewart-Cousins, a Democrat, is taking on the duties of lieutenant governor — a role she took before Benjamin’s appointment last year when Hochul became governor.

Two candidates for governor, Democratic U.S. Rep. Thomas Suozzi and Republican U.S. Rep. Lee Zeldin, blasted Hochul’s judgment for selecting Benjamin in the first place despite longstanding concerns about his potential campaign finance violations.

Immigration advocate Ana Maria Archila, a Democrat running for lieutenant governor alongside New York City public advocate and gubernatorial candidate Jumaane Williams, said Albany politicians have traded “favors for money” for too long.

“Today is a dark day, with Albany at its worst on display for all New Yorkers to see,” Archila said.

The scandal is the latest in a long history of lawmakers and other Albany leaders who’ve been engulfed in allegations of wrongdoing.

Cuomo’s resignation as governor came not only amid allegations of sexual harassment but that his administration misrepresented the number of New Yorkers who died in nursing homes from COVID-19.

In 2008, then-Gov. Eliot Spitzer resigned amid a prostitution investigation.

Former New York Assembly Speaker Sheldon Silver, one of the most powerful figures in state government, resigned in 2015 after he was arrested on federal corruption charges.

Former Republican state Senate Majority Leader Dean Skelos, who for a time shared power with Silver, was convicted of extortion, wire fraud and bribery.

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Hays reported from New York. Associated Press writers Deepti Hajela, Michelle L. Price and Larry Neumeister contributed from New York and Michael Hill contributed from Albany.

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