Thursday, September 25, 2008
Mayor Gives $20M in Discretionary Funding
A City Council member endorsed by the mayor in the Democratic Senate primary, Simcha Felder, pulled in more money from the mayor for pet projects over the last six years than any other elected official.
Mr. Felder, who represents parts of Brooklyn, collected $5.66 million in discretionary funding from the mayor, according to a memo released by City Hall yesterday.
Over the past six years, Mr. Bloomberg has doled out about $20 million to council members for their member items, spending the most money in fiscal year 2006, when he gave out $5.6 million. That was the year Mr. Bloomberg was running for re-election.
For the first time, the mayor has released a list of the council members that received discretionary money from him, and the local organizations where the funding ultimately landed, places such as the Glendale Senior Center, Council of Jewish Organizations of Flatbush, and Brooklyn Housing and Family Services, among many others.
The council's Republican members also were regular recipients of city funds for their chosen organizations and programs. Mr. Bloomberg ran for mayor as a Republican, but dropped his party affiliation last summer to become an independent.
A former council member of Staten Island who is now a state senator, Andrew Lanza, collected $1.68 million from the mayor's discretionary funding pot over five years. The minority leader of the council, James Oddo, pulled in $1.372 million over six years, and a former Republican council member, Dennis Gallagher, collected $637,500 over three years.
The mayor disclosed in May that he had been giving money to council members through a process somewhat similar to the one used on the other side of City Hall, in which the speaker of the council gives away millions of dollars in discretionary funding each year for members to funnel to their favored organizations.
The distribution of discretionary funds by the speaker came under scrutiny earlier this year after it was disclosed that the council had been hiding millions of dollars behind fictitious groups in the budget to create a slush fund for the speaker. The funds were parceled out to council members for member items.
Two council aides were indicted on embezzlement charges for allegedly stealing money from a local group that received some funding from the speaker's slush fund.
The mayor is not giving out any discretionary funds this year because of the city's tight budget, an aide said. On Tuesday, the mayor called for all city agencies to cut their budgets over two years, for a projected savings of $1.5 billion.
Friday, August 15, 2008
Councilmen with own parking spaces spent NYC money on MetroCards, cabs
BY KATHLEEN LUCADAMO DAILY NEWS CITY HALL BUREAU, Friday, August 15th 2008
Talk about chutzpah!
Three City Council members who have reserved parking spots - which Mayor Bloomberg promised to end after the Daily News exposed the perk - spent hundreds of taxpayer dollars on MetroCards and cabs last year, documents show.
CLICK TO SEE HOW MUCH TAXPAYER MONEY YOUR COUNCILMAN/COUNCILWOMAN LEFT UNSPENT IN 2008
Councilwoman Helen Foster (D-Bronx) shelled out $737 on MetroCards even though she has reserved parking outside her district office, according to a catalog of Council spending for fiscal 2008, which ended July 1. When asked why she needs both, Foster replied, "Why not?" and called her use of them a "nonissue." Councilwoman Helen Sears (D-Queens), who also has a spot outside her office, coughed up $260 on MetroCards and $434 on cabs, records show. And Councilman David Yassky (D-Brooklyn), another lawmaker with the parking perk, spent $15.70 on taxis. Overall, Council members appear to be getting more than they need.
The 51-member body failed to use $733,662 in funds in 2008 - even though the lawmakers refused to reduce their district dollars. The leftover money is pumped back into the city's general fund. Councilman Vincent Ignizio (R-S.I.) had the most in unused funds - $103,371.
"I run my office like I want government run. I cut costs where I can and return what I can," he said. City Council Speaker Christine Quinn returned $53,737.
Each member received $277,336 for staff and office expenses although committee leaders got an additional $40,000.
The unspent cash had some watchdogs scratching their heads.
"I'm surprised the figure is so high, given the concern members have expressed about how little money they have to spend on their offices," said Dick Dadey of the Citizens Union.
Council aides said just because some members have a surplus doesn't mean it's wise to cut all members' funding because they may need the whole amount the next year.
Saturday, June 14, 2008
City Council's glazed ham is still porky - Lopez
When City Council members give money to nonprofit groups run by their relatives, we call it pork.
So what do we call it when a city agency gives away $2 million to help vulnerable people, and $700,000 of it goes to groups heavy with political clout?
How about glazed ham? It's better than pork - it's a prime slab of cash from a respected agency, untainted with the odor of Council member items. And it has a sweet, shiny coating to shield it from any hint of favoritism.
This glazed ham was served up in Williamsburg and Greenpoint, two Brooklyn neighborhoods where a big rezoning led to fears that greedy landlords would push out poor tenants. The Department of Housing Preservation and Development put aside $2 million to counsel and protect tenants, and said it would hire local groups to do the work.
A coalition of seven nonprofits from the neighborhood applied as one in a bid to handle the whole project. The city liked them well enough to give them $1.3 million and more than half of the area as their territory.
Who got the rest? Some went to United Jewish Organizations of Williamsburg, an Orthodox group that politicians like to court. It asked to serve the Orthodox parts of Williamsburg that it knows better than any other group, and got $216,570 to do it.
But how to explain the Ridgewood Bushwick Senior Citizens Council?
That group - synonymous with its founder, Assemblyman Vito Lopez, the powerful head of the Assembly Housing Committee - applied for areas it wanted. The city agreed and gave it $475,265.
"They said it was done through a blind process," said Paul Cogley of Churches United, one of the seven groups. "It seems like a very political decision."
Some wonder why a group based in Ridgewood and Bushwick is serving Greenpoint and Williamsburg. And some have noted that Lopez helped broker the rezoning deal that included the $2 million in the first place.
"Whether or not the group has clout, they put in a good proposal," said Bill Carbine, HPD's assistant commissioner for neighborhood preservation.
HPD said Ridgewood Bushwick's application got the highest score of the three, but didn't reveal the criteria or the results.
"They're looking for someone who has the capacity," added Lopez, noting that Ridgewood Bushwick already handles legal assistance work in Williamsburg. "I'm open to having a reasonable dialogue with anyone who wants to work on this."
Ridgewood Bushwick has a long history and a solid track record in its neighborhoods. It is also no stranger to pork, glazed ham and other choice cuts of your tax dollars: Ridgewood Bushwick has received almost $21.5 million in other city funds over the last three years.
There's much more at stake. The city is working on rezoning 19 acres of old factories for up to 1,000 new homes on a triangle of land where Williamsburg meets Bushwick meets Bedford-Stuyvesant.
When nonprofits get picked to develop those homes, they'll get money, staff and influence. And when HPD held a seminar last fall to figure out the future of the area, the invited groups included UJO and Ridgewood Bushwick.
It's not pork. It's glazed ham.
alisberg@nydailynews.com
Thursday, April 17, 2008
2 Council Aides Accused of Embezzling Funds
Published: April 17, 2008
New York Times
The tiny nonprofit group was said to be named for a girl who died of cancer and was intended to provide tutoring and other services in Flatbush. But when it applied for a grant from the city’s Department for the Aging, department officials noticed something odd: the group’s address was the home of the top aide to the city councilman sponsoring the grant request.
The department said it was a conflict of interest and would not issue the money. But the group, the Donna Reid Memorial Education Fund, was undeterred. It simply took its request to another city agency, the Department of Youth and Community Development, and got the money.
On Wednesday, federal prosecutors announced the indictment of the Council aide who oversaw the nonprofit agency and that of another Council staff member, on charges of embezzling at least $145,000 in city funds and sending some of the money to relatives in Jamaica.
But while the indictment focused on the Brooklyn agency, it also revealed a lack of control and oversight of the millions of dollars the city appropriates annually to nonprofit groups through council member earmarks, often referred to as pork-barrel spending. And it suggests likely areas of inquiry as federal prosecutors pursue their investigation of Council finances.
Prosecutors have been examining the Council’s longtime practice of appropriating discretionary funds to nonexistent organizations, which has allowed the speaker and other council members to tap the money later for favored programs without the mayor’s approval. On Wednesday, the United States attorney for the Southern District, Michael J. Garcia, said the budget maneuver was part of a system that “lacked controls and accountability.”
“Without transparency and accountability in the budget process, discretionary items are ripe for abuse,” Mr. Garcia said at a news conference announcing the indictment. “Taxpayer money allocated to fake nonprofit entities, organizations that do not even exist, is even more difficult to trace and more easily diverted for personal gain. This investigation will continue to take a hard look at this process.”
Since 2001, more than $17 million has been budgeted to fake organizations. City Council Speaker Christine C. Quinn, who has come under a firestorm of criticism for the practice and for her failure to publicly disclose it after she learned about it last fall, has insisted that the money ended up in the hands of legitimate organizations.
Ms. Quinn declined to respond to the indictments but said again that the Council was cooperating with the investigation.
On Wednesday, private lawyers retained by the Council to assist with the investigation briefed council members about the inquiry. But the briefings left many members frustrated and pressing for more information. The lawyers, with the firm Sullivan & Cromwell, told the members they did not know the scope of the investigation, exactly how it began, or whether more indictments were on the way, according to several people who were present for the briefings.
Councilman G. Oliver Koppell of the Bronx said the lawmakers needed to know, among other things, whether they would have to hire their own lawyers.
“Everybody needs a clear answer to this and other questions,” Mr. Koppell said.
The briefing did reveal that the Department of Investigation, which is looking into the budget practices along with federal prosecutors, contacted Ms. Quinn’s office last September. That was when Ms. Quinn hired the law firm. On Oct. 10, the department and the United States attorney’s office requested that the Council provide all correspondence from 2002 to 2007 about the member items, or earmarks.
According to Friday’s indictment, Councilman Kendall Stewart of Brooklyn directed about $356,000 from his discretionary funds to the Donna Reid Memorial Education Fund, which was overseen by his chief of staff and former campaign manager, Asquith Reid. About $14,000 of that sum was funneled through two fictitious groups: the New York Foundation for Community Development and the American Association of Concerned Veterans.
Under the city’s budgeting system, each council member designates funds for groups in his or her district. The money is then allocated to a city agency to distribute the money to the group. It is the city agency’s responsibility to make sure the group meets city standards for business integrity and is capable of doing the work. Another layer of protection comes from the city comptroller’s office, which certifies all city contracts over $25,000.
It is unclear why, after the Department for the Aging rejected the request from the Donna Reid Fund in June 2004 because of its ties to Mr. Reid, the agency was able to obtain funds later that year from Youth and Community Development.
According to the city comptroller’s office, the Department for the Aging’s concerns were never flagged on the city’s contract database, known as Vendex, which is maintained by the mayor’s Office of Contracts.
“Nearly two decades ago, the city developed a system to report and share information on vendors,” Comptroller William C. Thompson said in a statement on Wednesday. “The Department for the Aging should have reported its concerns in that system, but apparently failed to do so, allowing these alleged thefts of money to occur.”
The Donna Reid group filed a Vendex questionnaire in February 2005, but answered “no” to a question asking whether the organization had been disqualified for cause as a bidder for a city contract, city documents show. Mr. Reid’s name did not appear on the form.
Another procedure for catching problems is the requirement that financing agencies annually review contractors’ performance. Youth and Community Development found that the Donna Reid group had been “satisfactory.”
Spokesmen for the Department for the Aging and the Department of Youth and Community Development declined to comment. John Gallagher, a spokesman for Mayor Michael R. Bloomberg, said the administration was “working to further strengthen oversight” of nonprofit agencies.
The Donna Reid fund was incorporated as a nonprofit group in 1989, according to the state Division of Corporations, to “provide educational assistance to public school children by way of after-school tutoring.” It was named after Mr. Reid’s daughter, who died of cancer, said Michael Roberts, a spokesman for Mr. Stewart. But there is no record of the agency’s receiving city money until 2004.
According to the indictment, some of the money went toward its intended purpose. But at least $145,000 was used for personal or political purposes, the indictment said, including $31,000 that was sent to family members and friends in Jamaica and $21,000 for political fliers and a hall used for events for a political club that the indictment said was controlled by Mr. Stewart.
Mr. Reid, 64, who has been Mr. Stewart’s chief of staff since he took office in 2002, faces up to 80 years in prison if convicted on all counts, Mr. Garcia said. The charges include two counts of witness tampering, as he is accused of trying to influence the grand jury testimony of two unnamed co-conspirators.
Joycinth Anderson, 69, who worked part time in Mr. Stewart’s office on senior citizen matters, is accused of helping Mr. Reid in the scheme, and faces a 40-year sentence.
A lawyer for Mr. Reid, Michael A. Marinaccio, and a lawyer for Ms. Anderson, Elizabeth E. Macedonio, disputed the government’s contentions.
“He is a public servant,” Mr. Marinaccio said of Mr. Reid. “He runs a charitable organization, and that organization in turn provides a number of services to the community.”
Mr. Stewart, who was subpoenaed in the case in January and testified before a grand jury, was not charged and has said he is not a target of the investigation.
Mr. Stewart told reporters he did not pay attention to the inner workings of the Donna Reid Fund, despite its ties to his chief of staff and his district.
“How could I have oversight?” he said. The Department of Youth and Community Development, he said, determines whether the community organizations are qualified or not qualified. “It’s not my office that does that,” he said.
Mr. Stewart added that he had not received contributions from the Reid fund, but campaign finance records show that Mr. Reid and several family members were active contributors.
Asked how Mr. Reid and Ms. Anderson ended up on his staff, Mr. Stewart responded: “These are folks that were there, they’re community activists, folks who work in the community doing community service and they’ve worked with me in the past on different ventures, so I see their quality, I see their ability.”
Mr. Reid and Ms. Anderson have been suspended and will probably be dismissed, Council officials said.
Reporting was contributed by Russ Buettner, Diane Cardwell, Serge F. Kovaleski, William K. Rashbaum and Carolyn Wilder.
This article has been revised to reflect the following correction:
Correction: April 19, 2008
An article on Thursday about the indictments of two New York City Council aides on charges of embezzling funds from a nonprofit agency, and a related federal investigation into the Council’s practice of appropriating discretionary funds to nonexistent organizations, misspelled the surname of a Bronx councilman who attended a briefing about the inquiry with private lawyers hired by the Council. He is G. Oliver Koppell, not Koppel.
Sunday, April 6, 2008
QUINN-WIN $ITUATION-24% OF MYSTERY FUND WENT TO HER DISTRICT
Click image to enlarge.April 6, 2008 New York Post
Nearly a quarter of the City Council's secret slush fund went to organizations in Speaker Christine Quinn's district, records show.
Eleven groups in the Democratic lawmaker's Manhattan district - encompassing Greenwich Village, Chelsea and parts of Midtown - soaked up a combined $866,500 from the mysterious fund in fiscal year 2007. That was 24 percent of the pot's $3.6 million total.
One of the recipients in her district - Friends of the High Line, which has received $32.5 million in up-front council capital funding - got $290,000 from the secret stash, more than any other organization in the city.
The American Folk Art Museum on West 53rd Street garnered $150,000. The Callen-Lorde Community Health Center grabbed $125,000.
The only other lawmaker whose district received as many earmarks was Councilman Charles Barron (D-Brooklyn), but the funding for those 11 organizations totaled only $51,100.
No other district came close.
"The vast majority of these groups are not local groups but citywide organizations that happen to be headquartered in Chris Quinn's district. These are organizations and cultural institutions that serve a citywide constituency," said Quinn spokesman Jamie McShane.
Last week, The Post revealed the financial shell game played by the Speaker's Office, in which millions in taxpayer money was stashed away in the name of phony organizations so it could be parceled out later in the budget year to legitimate charities and community groups favored by legislators.
The phantom groups receiving hundreds of thousands of dollars included the "Coalition Of Informed Individuals," "Moving Up, Building Bridges" and "Firewood Senior Services."
In the spring of 2007, Quinn said, she ordered staffers to stop the practice of reserving funds in the budget for future use. The 2008 budget was passed in June, and Quinn said she learned "several months ago" that her decision to end the practice of holding funds had been ignored. That's when she also discovered the use of phantom organizations to hide those monies, she said.
The cooked books are now under investigation by the city Department of Investigation and the US Attorney's Office. Quinn said the fund was actually used since at least 2001 to correct errors and omissions in the budget.
Friends of the High Line, for example, was supposed to get money during the budget process and didn't, so Quinn said she corrected the "clerical error" by dipping into the fund.
But a source said the fund was used to thank or pay off political allies.
Records show that while some allocations were requested specifically by a council member, most were listed under the council as a whole, making it difficult to determine who asked for the money.
"These are legitimate organizations, but the question is, why did they get more money that wasn't vetted in the budget process?" said Queens Councilman Tony Avella, a vocal Quinn critic. "There's only one reason, and it's political. To be able to move the money without anyone seeing where it's going."
Two of the biggest slush-fund recipients have contributed to Quinn's expected 2009 mayoral run.
Eight members of Friends of the High Line board contributed a total of $18,775, according to city campaign finance records.
Three members of the board of the Tribeca Film Institute - which is not in Quinn's district but received $235,000 from the slush fund - also contributed $14,850 to Quinn's campaign.
melissa.klein@nypost.com