He's doing it for his donors

From the NY Post:

Hundreds of businesses that own land near the proposed Brooklyn-Queens trolley line stand to benefit from the project, but at least 10 have something else in common — they all contributed to a nonprofit promoting Mayor de Blasio’s “progressive” agenda.

The estimated $2.5 billion rail project, which would connect Astoria to Sunset Park and promises to send property values along its route soaring, is being pushed by the Friends of Brooklyn Queens Connector.

Developers such as Two Trees Management, Forest City Ratner and the Durst Organization all have representatives in the group and have either directed money to de Blasio’s re-election campaign or to the Campaign for One New York, which critics have derided as a mayoral slush fund.

Quinn oinks all over town

From the Daily News:

City Council Speaker Christine Quinn may not have Mayor Bloomberg’s billions, but she does have City Council millions.

As the Manhattan Democrat contemplates her campaign for mayor, she enjoys a political boon that has to make her opponents salivate — millions of dollars in pork that’s hers to hand out like party favors. And hand it out she does — to an Italian-American group in Brooklyn, a Hispanic center in the Bronx and an AIDS task force on Staten Island.

Like all Council members, Quinn has a pot of discretionary money to fund local concerns in her district, such as senior centers or nearby museums. But as Council speaker, she also controls a huge stash of $15.7 million that she can spread to groups around the city.

Sharing the wealth is part of her job as speaker, but as she plans to run for mayor next year, she’ll be able to boast of bringing home bacon to people far beyond her Chelsea apartment.

“Having tens of millions of dollars available to distribute to Council members and their constituents translates to votes,” said Baruch College political scientist Doug Muzzio. “It gives her an advantage, a significant advantage, as a matter of fact. The money helps her win support for legislative initiatives among Council members and also raises her profile among voters.”

Quinn spokesman Jamie McShane said the speaker doesn’t factor politics into funding decisions.

What Quinn should and could do

From the NY Post:

...the Seabrook scandal wasn’t an isolated action but part of a persistent pattern. The responsibility for deterring corruption in the City Council lies with Quinn, who has failed to hold her members accountable.

In April 2008, the putrid swamp of slush funds touched the speaker herself. Her office apportioned millions of member-item dollars for what The Post called “bogus” or “phantom” grant groups, so the speaker could ladle out the member-item gravy later, at more propitious political moments. Moreover, the speaker benefited from this trickery: The Post reported then that about a quarter of the mystery funds went to Quinn’s own district in Manhattan.

In June of 2009, it was revealed that Councilwoman Carmen Arroyo directed member-item dollars to a charter school headed by her nephew, who was forced to resign after being charged with embezzlement. The next month, Councilman Miguel Martinez resigned and pleaded guilty, admitting to stealing more than $100,000 that he had directed to a not-for-profit he controlled. More than half of those pilfered funds were member-item funds. Only after all that did the Seabrook case come to light.

A principled speaker would have connected these dots and moved decisively to close the doors for such abuses. But Quinn has instead preferred to go along to get along.

She keeps a breathless schedule of thinly veiled campaign stops, using her colleagues as validating props, rather than putting protections in place to protect taxpayers from her members’ avarice.

What could she have done differently?

First, set up an independent system to review the quality of member-item proposals. Independent eyes should provide a thumbs-up on substance before a project is funded.

Second, institute a system where no member item gets funded without a signed statement from the sponsoring member of the City Council. That statement would attest that the member (and also his or her family and staff) has no business relationship with and has received no money (even indirectly) from the entity receiving the member item.

Had this provision been in place, Arroyo and Seabrook’s actions would have been per se violations of City Council rules. This reform should be augmented by a state law, treating a violation as a felony.

Third, announce that no member items will be funded until both those reforms are enacted. Cutting off the slush-fund spigot would get her members’ attention.

In fact, if Quinn were serious about protecting taxpayers, she could put all three measures in place now.

NY Times editorial against "slush funds"

From the NY Times:

All members of the New York City Council have long enjoyed a slush fund, an annual allowance that is supposed to go to a soup kitchen or senior center or other nonprofit social program in the district. The amount of money for each district seldom depends on need; it comes courtesy of the Council speaker, who holds the purse.

This year, Speaker Christine Quinn has $49.6 million for the so-called member items: $13 million divided equally among Council members; $16.6 million for her own items; and almost $20 million more to spread as she pleases among the Council districts. At the top of her list was Domenic Recchia, whose Coney Island-Brighton Beach district got $1.6 million to spend. The Council districts that got the least — $362,000 — are represented by Helen Foster and Larry Seabrook of the Bronx.

The system is stacked politically. Nothing breeds good will — and more votes — in the local district like a new ballpark, courtesy of the Council member. It has also been an invitation to corruption. One former Council member, Miguel Martinez, was sentenced to five years in prison, partly for stealing member item money. Mr. Seabrook is awaiting trial on charges of illegally routing his share to friends, family and himself but still gets that $362,000.

Scott Stringer, the Manhattan borough president, recently issued a report that highlights the favoritism and capriciousness of the system and calls for scrapping member items altogether. Mr. Stringer, who reportedly has mayoral ambitions, insisted that the report was not aimed at Ms. Quinn, another potential candidate. His study immediately led reporters to ask about his own member items (borough presidents get them too) — $504,000 this year. Both he and Ms. Quinn have been rightly asked how they can justify receiving campaign contributions from some of the nonprofit groups seeking these grants.

Gov. Andrew Cuomo got the State Legislature to do away with its member item pot — $170 million worth — for this year. That was a budgetary move, not a recognition of the system’s inherent corruption. Ms. Quinn has worked to make the process more transparent and to require more accountability from groups receiving the money. It is not enough. The whole tainted system should be scrapped and the money doled out openly and fairly through regular city budgets.

Abolish member items!

From the Daily News:

When city government puts contracts or grants out to bid, New Yorkers have every right to expect that all qualified applicants will have the same chance of winning an award.

That's how things work - except in the City Council.

There, Speaker Christine Quinn and her members only pretend that everyone who applies for so-called member item funding - for Little Leagues, senior centers and other local programs - has an equal shot at success.

In fact, as far as the Council is concerned, some New Yorkers are much more equal than others.

Those who live in districts represented by Quinn's allies bring home far more money than do members who have broken ranks with the speaker. And the needs of any particular community are irrelevant as the speaker divides a $50 million annual pie.

...as has been said time and again, the solution is to abolish member items entirely.

Pol tries to hand out rancid pork

From the Daily News:

While awaiting trial on corruption charges, Bronx Councilman Larry Seabrook is trying to steer taxpayer money to an unlicensed, unproven after-school program run by a crony.

The $66 billion budget approved by the City Council last week includes a $10,000 earmark from Seabrook to "Maria Gems," which calls itself an "innovative community program" that provides "music and health nutrition services" to kids after school.

"I found out that children were not eating fruits and vegetables...so I created a healthy nutrition program," said director Johnnie Goff, a nursery school owner and longtime Seabrook supporter who has an unpaid job as the councilman's liaison to the local education council.

A member of Community Board 12 in the Bronx, Goff briefly ran against Seabrook in 2009 before ending her campaign and working for his reelection.

Maria Gems does not appear to be a licensed after-school program, city and state officials say.

It also has not registered as a charity with the state attorney general, meaning it cannot solicit government or private money.

That means Seabrook's efforts to send pork to the program could get snagged by the new screening process City Council Speaker Christine Quinn implemented after a Council slush-fund scandal.

Don't you find it amazing and sad that the Congressional Democratic leadership bullied Weiner out of his job for sending out raunchy pictures of himself but the Council Democratic leadership not only stays silent about this corrupt jerk but also approves his shady spending?

Monserrate and Shulman - 2 peas in a pod?

From the Neighborhood Retail Alliance:

The big news for us in the federal indictment against former state senator Monserrate, was the fact that the US attorney-along with the city's Department of Investigation-believes that politically diverting public money earmarked for not for profits is a criminal offense. As the NY Times reports: "Former State Senator Hiram Monserrate, who was expelled from office earlier this year and whose conduct was held up as an example of Albany’s dysfunction, was indicted on Tuesday on federal charges that accuse him of using workers at a Queens nonprofit group he financed to aid in his Senate campaign."

Ok, but what happens when the entire purpose of funding for a certain not for profit is for an illegal political use? This is the case of the allegations against Claire Shulman's Willets Point/Corona...LDC. In that situation the city ponied up over $500,000 for Claire to lobby and generate grass roots support for the mayor's Willets Point Development plan. It is an absolute illegality to lobby as a registered not for profit in NY State-not to mention a violation of federal IRS statutes as well.

But, we guess that Monserrate's sin was that he was doing this on his own behalf-and didn't raise quite as much money as Claire did: "In 2006 and 2007 when he was a city councilman, Mr. Monserrate, a Democrat, allocated approximately $300,000 in discretionary city funds to the group, the Latino Initiative for Better Resources and Empowerment Inc., or Libre, according to the indictment. Roughly a third of that money was used to pay employees of Libre, a tax-exempt social service agency, for time they spent on voter registration, petitioning and other campaign work."

So, tell us, is it worse for Monseratte to be self serving than it is for Claire-and the mayor as well-to divert public funds into promoting a development that will force scores of property owners and thousands of workers out of business? In our view, the law needs to be enforced fairly-and without fear or favor. The Monseratte situation appears to be the classic case of the beating of a dead horse. It takes a bit more moxie to go after Bloomberg and his toadies, now doesn't it?

And we love the comments from the US Attorney on all of this: "At the news conference, Preet Bharara, the United States attorney in Manhattan, noted that Mr. Monserrate was one of several elected officials charged with corruption over the past two years, and the third city councilman to be accused of misappropriating money intended for groups whose mission was to help the very communities they served. “No campaign should ever be funded by fraud,” Mr. Bharara said. “Worthy nonprofits have access to public money because they’re meant to be a resource to the community, not a piggy bank to politicians,” Mr. Bharara said."

But that is exactly what the WP LDC was for the mayor-a fraudulent piggy bank. And listen to the following remarks from the US Attorney: "Mr. Monserrate, he said, outsourced much of his 2006 campaign to a nonprofit group that he essentially controlled, using it as an “alter ego to his political operations.”

Piggy bank, alter ego-precisely what the mayor set up with his Shulman front group. Now let's see if justice is going to be even handed-and if the NYS AG's office is going to pursue the investigation even after the mayor's endorsement of his candidacy. If not, we have an active federal prosecutor who should be eager to jump in to break the piggy bank.

Photo by Steve Stirling on Flickr

Hiram may yet go to jail!

From Capital Tonight:

NY1 contributor Gerson Berrero is reporting that former State Senator Hiram Monserrate has surrendered to federal authorities in Manhattan.

According to Berrero’s report, federal charges will be presented today as part of an unsealed indictment. He reports the charges are a result of Monserrate funneling hundreds of thousands of city dollars to a not-for-profit in Queens called LIBRE, or Latino Initiative for Better Resources & Empowerment. This happened when Monserrate was a member of the city council.

Monserrate’s attorney Joe Tacopina just spoke to NY1 and told them that the former Senator has not turned himself in yet, but will shortly. He expects Monserrate will be in court later this afternoon. Tacopina says he does not know what the charges are at this time, but believes they are in connection to the slush fund scandal.

Photo from the Daily News
Hiram Monserrate Indictment

Names on cans go out with the garbage

From the Daily News:

After years of complaints from these quarters, the City Council seems to have kicked the dirty habit of plastering members' names on garbage cans.

The good news comes from the new list of Council slush fund projects - which shows that while four members have allocated tax dollars for extra street baskets, using them as free, publicly funded advertising isn't so popular anymore.

That's a break from the past 15 years, when the Council and one borough president spent more than $1 million - including $56,000 last year - to pay for thousands of cans with labels like "Sponsored by Council Member So and So."

This year's garbage cans are largely name-free.

Now that the practice appears over, the Council should outright ban it. City government sponsors enough garbage already.

Bloomberg's $104M slush fund

From the NY Observer:

...in the Bloomberg administration's two capital budgets released since, an allocation for the Javits Center is still there, though not necessarily for any expansion plans. Instead, the budget line for the scuttled plans seems to serve as a parking lot for funds that will ultimately be spent elsewhere. In last year's mayoral budget, there was more than $150 million less allocated to the fund, with the money apparently moved elsewhere (it also could have been seen as simply being cut, as the economic development capital budget was decreased this year). And in the mayor's proposed budget released last week, the money listed for Javits was down another $93 million, apparently taken out and moved around elsewhere in the budget. (Perhaps those projects receiving the funding were Brooklyn Bridge Park and the Greenpoint-Williamsburg waterfront, which appeared to get new funding.)

Previously, the mayor's staff has said money from the Javits fund would be used to fund Brooklyn Bridge Park and Governors Island.

To a certain extent, there is some reasoning behind this: The money was once earmarked for economic development, so why not let it get reallocated elsewhere, even if the Bloomberg administration hasn't yet figured out precisely where to put it?

But the lingering $104 million listed in the budget comes at a time when the city's operating budget is being slashed, the capital budget has already been cut back and the Bloomberg administration is apparently scaling back spending on repairs and maintenance, per a report from the Citizens Budget Commission.

Columbia's CBA is really just a giant slush fund

From the NY Post:

A $76 million windfall intended to help Harlem residents is in limbo -- and may never be paid -- because the politician-backed nonprofit in charge of distributing the money is in disarray, The Post has learned.

Although it formed four years ago, the West Harlem Local Development Corp. lacks a mission statement, has yet to get tax-exempt status from the IRS and doesn't even have a phone number.

The group already has received $500,000 from Columbia University -- part of a 16-year payout designed to assuage community fears over the school's expansion -- yet hasn't spent a cent on the neighborhood.

At least five people have quit the nonprofit, alleging that it was becoming a "slush fund" for Manhattan politicians.

The delay "threatens to undermine" the agreement and leave Harlem with nothing, Manhattan Borough President Scott Stringer charged in a scathing letter to the group.

The organization hasn't set up any guidelines for doling out the cash and ensuring accountability, yet its four-member executive committee is itching to write checks without "a formal application process, without public notices, without protocols for selection, without advice from a community advisory committee," Stringer said in the letter, addressed to then-West Harlem President Julio Batista.

Will she truly reform the council?

From the NY Post:

Embezzling $1.2 million in taxpayer cash -- as Bronx Councilman Larry Seabrook allegedly did -- violates even the ludicrously lax standards of the New York City Council.

According to federal prosecutors, Seabrook funneled the money to himself, his family members and a girlfriend by setting up a series of sham nonprofit corporations, which he then larded up with council pork.

But count on this: Seabrook never would've gotten away with it for so long if a lot of his council colleagues weren't neck-deep in much of the same muck.

All members get hundreds of thousands of dollars a year to slather all over their districts. It's a time-honored legislative tradition in New York.

Sure, most of them may not be lining their own pockets (as far as is known). At least some of the nonprofits they fund may even do valuable work.

Nonetheless, it's still profoundly corrupting -- with the bulk of the cash going straight to folks the pols know will be useful come election season.

What's more, it's no coincidence that such a system breeds Seabrook-level corruption. If everyone's gorged with pork, it's in everyone's interest to turn a blind eye to the worst apples.

Council Speaker Christine Quinn is especially culpable: She says she's instituted "reforms," but pork remains her No. 1 tool for enforcing discipline. She was even caught budgeting cash for made-up groups in order to quietly dispense it to allies later.

...at City Hall, Quinn can start cleaning house at once -- by cutting off all pork-barrel appropriations.

Sure, such a move would require her members to start representing the interests of their constituents, instead of acting like glorified cash machines.

But with the system's corruption exposed so fully, she'll have no better chance than this one.

It's your move, Madame Speaker.

DOI ain't done yet!

From the Daily News:

Councilwoman Maria del Carmen Arroyo, whose nephew Richard Izquierdo was indicted on charges of looting nonprofit groups she funded, hid behind a wall of aides and security officers as she entered and left the Council.

"I have no comment, no matter what you ask," Arroyo said.

From the NY Post:

City Council members and staffers yesterday predicted that Councilwoman Maria del Carmen Arroyo could be the next member of their body indicted in an ongoing "slush fund" probe that just snared fellow Bronx Democrat Larry Seabrook.

"Everybody I spoke to today thought she was next," said one council member, speaking on condition of anonymity.

Another said, "Everybody's speculating [about Arroyo]. There's lots of talk."

And a third council member noted that after Seabrook's arrest on federal charges Tuesday, city Department of Investigation Commissioner Rose Gill Hearn said the probe is not over.

Arroyo, who refused to answer questions yesterday, is a member of a powerful political family whose members have close and complicated ties to several nonprofit groups that have received taxpayer funds at the behest of her and her mother, state Assemblywoman Carmen Arroyo.

Councilman Larry Seabrook indicted by the Feds

From The Wonkster:

Councilmember Larry Seabrook, who served in the state Assembly and just started his third term at the City Council, is being charged with money laundering, extortion and fraud, according to an indictment released today by the U.S. Attorney’s Office for the Southern District.

Some of the charges directly stem from the City Council’s slush fund scandal — which brought down former Councilmember Miguel Martinez last year.

But they also go beyond that.

According to the indictment, Seabrook also solicited payments from a Bronx subcontractor competing for a boiler contract for the new Yankee Stadium and subsequently used the payments for personal expenses.

Beyond that, the indictment alleges Seabrook directed more than $2.5 million in the City Council’s discretionary funding to nonprofits he in fact controlled. Seabrook negotiated office space for the groups (which was reported in the Times last year) and often made decisions for the groups, the indictment states.

Through these nonprofits, Seabrook paid “hundreds of thousands of dollars” to his girlfriend, sisters, nephews and brother in consulting fees. At the same time, these groups fell far short of meeting goals laid out in the council’s discretionary funding initiatives.

War of words between Bloomberg and Manhattan D.A.

From NY Magazine:

The New York Times wouldn't reprint the word that Manhattan District Attorney Robert Morgenthau used for accusations from the mayor that the D.A.'s office inappropriately used two sets of books — including one that was not reviewed by the city comptroller's office — to manage their finances. The paper only murkily called it a "barnyard vulgarity." But the Post was all too pleased to tell us what Morgy said: "If you all weren't newspapers of record, I'd say these were chickenshit comments," he told a bunch of reporters.

According to the Times, Bloomberg and Morgenthau have always been polite in public, but have really never liked one another. But their private acrimony was unleashed when City Hall began pushing the D.A.'s office to reveal the accounting related to tens of millions of dollars accumulated through settlements, forfeitures, and grants — which the D.A. has traditionally kept in secret bank accounts where it can be tightly controlled and won't be scrutinized by the comptroller.

Inevitably, this non-story, meant to embarrass the DA, who is retiring at the end of the year, appeared in the Daily News Saturday, no doubt due to the vindictiveness of Mayor Bloomberg.

When will the slush puppies go down?

From Crime, Politics and Policy via Bloomberg Watch:

A quick recap: The controversy emerged with the discovery of the practice of allocating funds to a nonprofit group/entity which didn't really exist, in order to preserve the ability to reallocate such funds to a different, actually existing nonprofit entity later on.

Put into plain English: this is fraud. Doing something in order to obtain the money or goods of another, by false pretenses, generally falls under the definition of fraud. Wire fraud, mail fraud, honest services fraud, whatever. Somewhere, there is a federal felony where all the elements of said felony are satisfied by something or someone in connection with this slush fund mess. Even if the ultimate ends are benign, the undeniable implication is that candor, at the beginning, that nonprofit A was the intended destination of the funds would have resulted in the funds being denied to nonprofit A, therefore nonprofit B (for bogus) was "created" in order to procure (aka "steal") the funds for preservation and safekeeping for ultimate destination nonprofit A. Here's another word for the above: deception. There is a crime of "theft by deception" in many states.

Connecting the dots...

From TrueNewsFromChangeNYC.org:

Mayor's Conflict of Interest

Even campaign spokeperson former public relations group the Glover Park Group received 30,000 from Shulman fake non profit. Wolfson connection was of course left out of the NYT story and so was the connect of Parkside to the council member item investigation. At one point Parkside represented over 40 non profits receiving member item funding.

From True News A Letter to Garcia: (Michael) Garcia U.S. Attorney Room Eight ***
City Council investigated for slush fund ***
Queens Crap: DOI probing slush fund lobbyists

DOI Conflit of Interest

The city's DOI which is investigation the council Slush Fund along with the FBI is appointed and answerable to the same mayor whose administration set up a non profit to lobby on behalf of the mayor's plan to develop Willits Point. How can DOI investigate Parkside and another major council lobbyist Yoswein who received almost 200,000 from another non profit funded by the city to do the mayor's bidding in Coney Island.
True News from ChangeNYC.Org: Inspector Clouseau Investigates

Quinn Porks City Funds Beyond Member Items it is her right she believes, a lady who has never had a private sector job.
Speaker Quinn Pads Campaign Staff with Council Staffers (Village Voice)

Bloomie gave out slush fund money illegally

From the NY Times:

For years, aides to Mayor Michael R. Bloomberg routed hundreds of thousands of dollars in city money to at least two politically connected nonprofit groups in violation of government contracting rules, according to records and interviews.

The mayor’s office, from 2002 to 2006, gave $1.1 million to Agudath Israel of America Community Services and more than $400,000 to Ohel Children’s Home and Family Services, using a little-known pot of discretionary money that it controls.

By law, the mayor’s office can give the money only if it has been requested by a City Council member or borough president, but in these two instances, records and interviews show, the money was given by the Bloomberg administration and then later attributed to a council member without his knowledge.

Agudath Israel and Ohel provide services including career counseling and mental health care and are powerful institutions in the city’s Orthodox Jewish communities — political forces long courted by the mayor.

And the organizations have substantial ties to the Bloomberg administration: Mr. Bloomberg, since becoming mayor, has personally donated $200,000 to Agudath Israel, and a former top aide to the mayor is a lobbyist for Ohel.

Photo from the Daily News

Heat lamps turned up on Council

From the Daily News:

Hours after Councilman Miguel Martinez admitted being a thief, prosecutors and investigators emphasized their inquiry into City Council slush money was far from over.

Already on their radar screen is Bronx Councilwoman Maria del Carmen Arroyo.

Like Martinez, Arroyo funneled hundreds of thousands of taxpayer dollars from the slush fund into a nonprofit controlled by relatives.

The relative was her nephew, Richard Izquierdo, and the nonprofit was the South Bronx Community Corp. Last month Izquierdo was arrested for stealing money from an SBCC affiliate.

The charges included using funds from the nonprofit to pay for flights to Puerto Rico and other warm locales for Arroyo and her mother - and Izquierdo's grandmother - Assemblywoman Carmen Arroyo.

Izquierdo also had the nonprofit supply a new floor for the assemblywoman's Bronx office, a criminal complaint said.

Martinez pleads guilty in Federal court

From the Daily News:

In Manhattan Federal Court, Martinez admitted he had siphoned off $106,000 in public funds through several ruses, using fake invoices, shell corporations and bogus names on bank accounts.

"I received the monies as a direct result of the conspiracy," he said.

Martinez - who resigned suddenly on Tuesday - pleaded guilty to three federal conspiracy counts, including two involving mail fraud and one involving money laundering.

Under a plea agreement, he faces between 57 and 71 months in prison. He was released on $250,000 bond.

The disgraced pol admitted he was able to carry out the scheme "because I was a New York City councilman."